Klamath Water Users Ass'n v. Patterson

• Citation: 15 F.Supp.2d 990
• Decision Date: 27 April 1998
• Docket Number: No. Civ. 97-3033-HO.,Civ. 97-3033-HO.
• Parties: KLAMATH WATER USERS ASSOCIATION, et al., Plaintiffs, v. Roger PATTERSON, Director, Bureau of Reclamation, PacifiCorp, et al., Defendants.
• Court: U.S. District Court — District of Oregon

15 F.Supp.2d 990

KLAMATH WATER USERS ASSOCIATION, et al., Plaintiffs, v. Roger PATTERSON, Director, Bureau of Reclamation, PacifiCorp, et al., Defendants.

No. Civ. 97-3033-HO.

United States District Court, D. Oregon.

April 27, 1998.

Richard S. Fairclo, Proctor Puckett & Fairclo, Klamath Falls, OR, Paul S. Simmons, Andrew M. Hitchings, Stuart L. Somach, Donald B. Mooney, Donald B. Gilbert, DeCuir & Somach, Sacramento, CA, for Klamath Water Users Protective Association, Klamath Drainage District, Henzel Properties, Ltd., Sam Henzel.

Kristine Olson, U.S. Attys. Office, Portland, OR, Maria A. Iizuka, U.S. Dept. of Justice, Sacramento, CA, Stephen M. MacFarlane, Dept. of Justice, Environment & Nat. Res. Div., Sacramento, CA, James L. Sutherland, Asst. U.S. Atty., Eugene, OR, Lois J. Schiffer, U.S. Dept. of Justice, Environment & Natural Resources Div., Washington, DC, David W. Harder, Environmental & Natural Resources Div., U.S. Dept. of Justice, Denver, CO, for Roger Patterson, Karl E. Wirkus, Eluid Martinez, Patricia Beneke, Bruce Babbitt, Bureau of Reclamation, U.S.A.

Barbara Dean Craig, Richard S. Gleason, Stoel Rives, Portland, OR, for Pacificorp.

William C. Carpenter, Jr., Eugene, OR, Michael R. Sherwood, Earthjustice Legal Defense Fund, San Francisco, CA, for Northcoast Environmental Center, Pacific Coast Federation of Fishermens Associations, Institute for Fisheries Resources, Klamath Forest Alliance, Mazamas, Oregon Natural Resources Center, Wilderness Society, Waterwatch of Oregon.

Marianne G. Dugan, Western Environmental Law Center, Eugene, OR, Richard Allen Cross, Alexander & Karshmer, Berkeley, CA, for Yurok Tribe.

ORDER

HOGAN, District Judge.

The central issue before the court is whether plaintiffs are third party beneficiaries to the 1956 contract between PacifiCorp (formerly Copco) and the Bureau of Reclamation (Reclamation) regarding the operation of the Link River Dam located at the outlet of Upper Klamath Lake in Southwest Oregon.

Plaintiffs filed this action on June 4, 1997, alleging four claims. This court subsequently denied plaintiff's motion for injunctive relief, granted Reclamation's motion for summary judgment on plaintiffs' National Environmental Policy Act (NEPA) claim, and, by stipulation, dismissed plaintiffs' remaining claims without prejudice.

PacifiCorp's amended counterclaim is the sole remaining substantive matter before the court. The counterclaim seeks a declaration of plaintiffs' rights under the 1956 contract [# 147].

BACKGROUND

The Klamath Project, located within the Upper Klamath and Lost River Basins in Oregon and California, was authorized by Congress in 1905 pursuant to the Reclamation Act of 1902 (32 Stat. 388). In 1905, in accordance with state water law and the Reclamation Act, the United States appropriated all available water rights in the Klamath River and Lost River and their tributaries in Oregon and began constructing a series of water diversion projects.

In 1917, the United States and Copco entered into an agreement under which Copco would construct the Link River Dam and then convey the dam to the United States. In return, Copco and the United States entered into a fifty-year contract (1917-1967) which gave Copco the right to operate the dam. The contract was amended in 1920 and 1930, and was renewed in 1956 for an additional fifty years (1956-2006). The 1956 renewal of the Link River Dam contract remains in effect and is the subject of dispute here.

The 1956 contract states it was entered into pursuant to the Reclamation Act and "acts of Congress relating to the preservation and development of fish and wildlife resources." Federal Defendants' Memorandum in Support of Motion for Summary Judgment on Defendant PacifiCorp's Counterclaim [# 163], Exhibit 1, p. 1.

Article 6 of the 1956 contract, highlighted by plaintiffs, states:

No Klamath Water shall be used by Copco when it may be needed or required by the United States or any irrigation or drainage district, person, or association obtaining water from the United States for use for domestic, municipal, and irrigation purposes on Project Land....

Id. at p. 5.

Article 15 of the 1956 contract, relied upon by defendants, states the contract:

binds and inures to the benefit of the parties hereto, their successors and assigns, including without limitation any water users' organization or similar group which may succeed either by assignment or by operation of law to the rights of the United States hereunder.

Id. at 8. The United States and Copco are the only named parties to the 1956 contract. The United States has not assigned any of its rights under the 1956 contract to any water users' organization, nor has any such organization succeeded to those rights.

The 1956 contract also states:

Copco may regulate the water level of Upper Klamath Lake between the elevations 4143.3 and 4137, ... except at such times, and on such conditions, as may be satisfactory to the Contracting Officer [the United States]: Provided, That the Contracting Officer from time to time may specify a higher minimum elevation than 4137 if in his opinion such must be maintained in order to protect the irrigation and reclamation requirements of Project Land.

Id. at p. 3.

Since completion of the Klamath project, Reclamation and water users in the basin have entered into over 250 water delivery contracts, also called repayment contracts. The vast majority of these repayment contracts provide:

On account of drought, canal breaks, inaccuracy in distribution, or other causes, there may occur at times a shortage in the water supply provided for herein for lands of the District and, while the United States will use all reasonable means to guard against such shortages, in no event shall any liability accrue against the United States ... for any damages, direct or indirect, arising therefrom....

Declaration of Karl Wirkus [# 163] Ex. B, pp. 12-13.

It is not disputed that Reclamation arranged for Link River Dam to be built in significant part to help it satisfy its contractual obligations to water users in the basin, such as plaintiffs. However, the project served other federal purposes, such as impounding water to flood the adjacent wildlife refuges. Copco's interest related primarily to controlling the flow of water to the Copco-owned hydroelectric facilities downstream from Link River Dam. In 1961, the Federal Energy Regulatory Commission required Copco to release water from Link River Dam to provide certain minimum flows for fish downstream (called "FERC" flows).

Operation of Link River Dam is also subject to the requirements of federal statutes, such as the Endangered Species Act. The coho salmon of the lower Klamath River has been listed as threatened and two species of sucker fish, the Lost River and shortnose suckers, located in and around the Klamath Project, are listed as endangered. In 1992, the United States Fish and Wildlife Service issued a Biological Opinion that required certain minimum elevations for Upper Klamath Lake to avoid jeopardy to protected species.

In addition, the Secretary of Interior has recognized that a number of tribes, including the Klamath, Yurok and Hoopa Valley tribes, hold fishing and water treaty rights in the basin. These rights appear to have a priority date of either "time immemorial" or the date of the respective treaties, making them senior to any water rights obtained by the United States or irrigators in the Klamath Project. See, e.g., United States v. Adair, 723 F.2d 1394, 1412 (9th Cir.1984).

In recognition of the federal government's various obligations related to the Klamath Project, Reclamation initiated a public process to establish a new operating plan for the Klamath Project. According to representations made to the court during oral argument in this matter, for the next several years, Reclamation intends to issue one-year interim plans while formulating a long term plan.

Pursuant to this policy, on April 25, 1997, Reclamation circulated to interested parties, a draft of its proposed 1997 interim plan for the Klamath Project. On May 1, 1997, Reclamation issued its final 1997 interim plan. Soon after, PacifiCorp stated it would not implement the plan because the required flow levels would force it to violate its FERC license. PacifiCorp's FERC license required FERC flows in September at 1,300 cubic feet per second (cfs), while Reclamation's 1997 plan allowed for only 1,000 cfs.

Irrigation groups were aware that PacifiCorp and Reclamation were attempting to negotiate a resolution of this impasse. On June 2, 1997, at the irrigators' request, PacifiCorp attorneys met with members of the irrigation community to discuss implementation of the 1997 plan and the 1956 contract. Large portions of the meeting were tape recorded by members of the irrigation community and later transcribed.

On June 3, 1997, Reclamation and PacifiCorp agreed upon a short-term modification to the 1956 contract. The modification directed PacifiCorp to implement the 1997 plan, contingent upon FERC concurrence. Plaintiffs were not included in the negotiations that led to this modification.

On June 4, 1997, plaintiffs filed this action seeking a temporary restraining order and alleging four claims, including a claim for breach of the 1956 contract based on their third party beneficiary status.

On June 17, 1997, this court denied plaintiff's motion for a temporary restraining order [# 40]. PacifiCorp filed a counterclaim on July 7, 1997, seeking a declaration of rights with respect to plaintiffs' standing under the 1956 contract [# 60]. On July 29, 1997, following briefing and oral argument, the court granted Reclamation's motion for summary judgment on plaintiffs' NEPA claim [# 132].

On September 25, 1997, plaintiffs moved for voluntary dismissal without prejudice of their remaining three claims [# 137, 139]. Pursuant to stipulation of the parties, the court granted dismissal of plaintiffs' claims...