Payette-Boise Water Users' Ass'n v. Cole

• Decision Date: 21 July 1919
• Docket Number: 640.
• Citation: 263 F. 734
• Parties: PAYETTE-BOISE WATER USERS' ASS'N, Limited, v. COLE et al.
• Court: U.S. Court of Appeals — Ninth Circuit

263 F. 734

PAYETTE-BOISE WATER USERS' ASS'N, Limited, v. COLE et al.

No. 640.

United States District Court, D. Idaho, Southern Division.

July 21, 1919

[Copyrighted Material Omitted]

J. B Eldridge, of Boise, Idaho, and H. A. Griffiths, of Caldwell Idaho, for plaintiff.

J. L. McClear, of Boise, Idaho, Will R. King, of Washington, D.C., and B. E. Stoutemyer, of Boise, Idaho, for defendants Cole, Fisher, and Weinkauf.

Thompson & Bicknell, of Caldwell, Idaho, for Riverside Irr. Dist. and Pioneer Irr. Dist.

Hugh H. McElroy, of Boise, Idaho, for Nampa & Meridian Irr. Dist.

DIETRICH District Judge.

The suit relates to the Payette-Boise reclamation project, near Boise, Idaho, an enterprise undertaken by the government about 1906, under the provisions of the Reclamation Act and amendments thereto (32 Stat. 388, 33 Stat. 706, 33 Stat. 1032, 34 Stat. 116, 34 Stat. 519, 36 Stat. 592, 36 Stat. 835, 36 Stat. 902, 36 Stat. 917, 36 Stat. 925, 37 Stat. 265, 38 Stat. 686 (Comp. St. Sec. 4700 et seq.)). The individual defendants are the manager and other local officers of the project, and the corporations are irrigation districts organized under the state laws. The plaintiff is a corporation organized by the settlers upon the project, at the request of the Reclamation Service, with general authority to represent and act for the settlers or water users. In respect to parties and in certain other particulars, the case is closely analogous to Magruder v. Belle Fourche, etc., 219 F. 79, 135 C.C.A. 524, to which resort may be had for a more detailed explanation especially of the organization and functions of the plaintiff company. The provisions of law most directly involved are found in section 4 of the original Reclamation Act (June 17, 1902 (Comp. St. Sec. 4703)), which is as follows:

'That upon the determination by the Secretary of the Interior that any irrigation project is practicable, he may cause to be let contracts for the construction of the same, in such portions or sections as it may be practicable to construct and complete as parts of the whole project, providing the necessary funds for such portions or sections are available in the reclamation fund, and thereupon he shall give public notice of the lands irrigable under such project, and limit of area per entry, which limit shall represent the acreage which, in the opinion of the Secretary, may be reasonably required for the support of a family upon the lands in question; also of the charges which shall be made per acre upon the said entries, and upon lands in private ownership which may be irrigated by the waters of the said irrigation project, and the number of annual installments, not exceeding ten, in which such charges shall be paid and the time when such payments shall commence. The said charges shall be determined with a view of returning to the reclamation fund the estimated cost of construction of the project, and shall be apportioned equitably.'

The precipitating cause of the present litigation is doubtless a notice published by the Secretary of the Interior on July 3, 1917, purporting to be the notice authorized by this section that the settlers would be required to pay, as the cost of their water rights, at the rate of $80 per acre. Many of the plaintiff's stockholders or members had been irrigating their farms from the partially completed system for several years, and, it appearing that water would be furnished for the season of 1918 only to those who executed applications by which they consented to pay such price and agreed to certain other conditions therein expressed, plaintiff, acting upon behalf of the water users, filed its bill to restrain the officers from enforcing the requirement. Certain temporary injunctive relief was granted, but that is no longer of importance for the cause is now submitted upon the merits.

Questions of jurisdiction and of the capacity of the plaintiff to maintain the action have heretofore been ruled adversely to the defendants, and I am not disposed again to consider them. Identical issues were raised in the Belle Fourche Case, and with the conclusions there reached and heretofore stated I am content.

The principal question both of law and of fact relates to the justness of the charge for water rights. In considering it we must, of course, recognize the rule that, in so far as the action of the Secretary in establishing the price involves the exercise of a discretion conferred upon him by law, it is not subject to review in the courts.

The first and most sweeping contention of the plaintiff is that upon July 2, 1917, the Secretary was wholly without power to establish rates, for the reason that the time had passed for taking such action, and further that the authority conferred by law, especially by section 4, above quoted, had been once exercised and was functus officio. It urges that under this section the cost is to be estimated and public notice of the apportionment thereof given before the construction of the works and settlement upon the land, and not after, and that it is the 'estimated' rather than the 'actual' cost which is to be returned to the reclamation fund.

The project was first set on foot in 1904 and 1905, and construction work was carried on more or less continuously from 1906 up to 1917. The original plans were altered from time to time and certain units were added and others abandoned. In 1917 the system as finally decided upon was substantially complete. Many settlers went upon the public lands included in the project as early as 1905 and 1906, made improvements thereon, and procured title thereto under the provisions of the act. A full supply of water for some of the lands and a partial supply for others has been furnished from the system, though incomplete, for a number of years. One of the claims of the plaintiff is that in the earlier years, especially in 1904, 1905, and 1906, representations were made by officers of the government to owners of land within the contemplated project, and to prospective settlers upon the public lands embraced therein, that the cost would not exceed $25 or $30 per acre, and that these representations, considered together with the proceedings before and taken by the Secretary in letting the first contract, constitute the 'estimate' and 'public notice' authorized by the statute. The evidence upon this issue took a wide range, and I do not attempt to set forth a detailed analysis; in the main ultimate conclusions must suffice.

But first as to the law: Generally speaking, it is thought that plaintiff's construction of section 4 of the act is correct. The primary purpose of the law, of course, is to secure the settlement and reclamation of arid public lands. In its administration the first step is an investigation for the purpose of determining the feasibility of a proposed project. Such investigation necessarily involves some consideration of the probable cost, but apparently Congress was not content to have the Secretary base his estimate upon the opinion of engineers alone; he is first to let contracts for construction, and then he is to estimate the probable cost, and equitably apportion it to the lands to be reclaimed. Of this estimate and apportionment he is to give public notice, and thereupon prospective settlers may determine for themselves whether they will or will not settle upon the lands, and thus bind themselves to pay the published price for water. In case of settlement under such conditions, it is incompetent for the Secretary to increase the price at a later date, even if it turns out that the published estimate is insufficient to cover the actual cost.

Admittedly, there was no formal compliance with this provision of the law in the present case, but it is the plaintiff's contention that certain acts and statements done and made by the Secretary of the Interior and representatives of the Reclamation Service are to be deemed to constitute a substantial, though informal, compliance; and further, as an alternative position, that, it having been the duty of the Secretary to make and publish his estimate before commencing construction, he must now make the estimate as of such time, basing it upon information then available, and accordingly that the highest possible price which in reason he could establish would be $30 per acre.

Neither view is thought to be tenable. The evidence wholly fails to establish the claim that the statements and acts of the government officials were intended or understood to be final or binding upon the government. By an overwhelming preponderance of the circumstantial as well as the direct evidence, I am convinced that it was generally understood that the settlers would be required to pay the actual cost, whatever that might turn out to be. Without doubt in the beginning the belief prevailed that the cost would not exceed $30, and many, it may be assumed, relied without question upon the tentative estimates which were widely published in cultivating sentiment favorable to the undertaking. Neither have I any doubt that to many, if not most, of the settlers, the announcement by the Secretary in 1917 of $80 per acre came as a great surprise. But we are concerned, not with the hopes and disappointments of the parties, but with their mutual understandings, and it is impossible to explain the conduct of the plaintiff's officers and of the representatives of the Reclamation Service, except upon the theory that all parties understood that ultimately the settlers would reimburse the government for its actual and necessary outlay.

The Arrowrock dam was not thought of until long after the project was undertaken, and, of course, its cost in no wise entered into the computation upon which the earlier estimates were based. It is...