United States v. State of Cal.

• Decision Date: 07 October 1980
• Docket Number: No. CV 80-27-EDP.,CV 80-27-EDP.
• Citation: 521 F. Supp. 491
• Parties: UNITED STATES of America, Plaintiff, v. STATE OF CALIFORNIA, Defendant.
• Court: U.S. District Court — Eastern District of California

521 F. Supp. 491

UNITED STATES of America, Plaintiff, v. STATE OF CALIFORNIA, Defendant.

No. CV 80-27-EDP.

United States District Court, E. D. California.

October 7, 1980.

William B. Shubb, U. S. Atty., Francis M. Goldsberry, Asst. U. S. Atty., Sacramento, Cal., for plaintiff.

Roderick Walston, Deputy Atty. Gen., of Cal., San Francisco, Cal., for defendant.

MEMORANDUM AND ORDER

PRICE, District Judge.

I NATURE OF THE CASE

In preparation for the construction and operation of the New Melones Dam on the Stanislaus River as a component part of the Central Valley Project, the plaintiff (hereinafter "United States") made application to the State Water Resources Control Board of the State of California (hereinafter "Board") for permits to appropriate certain unappropriated water from the Stanislaus River watershed. In addition to the original applications filed by the Plaintiff, it also sought appropriative grants based on prior applications which had been filed by agencies of the State of California, the originator of the project in question. After lengthy hearings, the Board, on April 4, 1973, issued its decision, numbered 1422 (hereinafter denoted "D 1422") granting to the Plaintiff's appropriator's rights to the requested water, assigning to such appropriations the desired priority date. However, in D 1422, the Board imposed certain conditions upon the Plaintiff's impoundment, use and distribution of the total amount of water which the Board had granted to the Plaintiff in the foregoing grants of appropriator's rights. It is these conditions that the Board imposed, rather than the grants of appropriative rights, which engendered this litigation.

Simply stated, the United States now argues that some of the conditions imposed by the Board are in conflict with, and are contrary to the intent of Congress as expressed in the Reclamation Act of 1902, subsequent acts amendatory thereto, and the enactments authorizing the instant project.

The administrative function of the Board, its hearing and notice procedure, and the other elements of its permit granting powers are set forth in substantial detail in the California Water Code, §§ 1200 et seq. Unlike most other state administrative boards in California, its authority with regard to reconsideration of its decisions or orders, its basis for reconsideration of a decision or order, and the judicial review thereof, are spelled out in specific detail in §§ 1357, 1358 and 1360 of that Code. It should specifically be noted that § 1252.5 of the Water Code of California provides as follows:

"All rights and privileges conferred by this part upon any person in relation to the appropriation of water are likewise conferred upon the United States, the State, and any entity or organization capable of holding an interest in real property in this state."

Section 1358 of the Water Code provides:

"The decision or order may be reconsidered by the board on all the pertinent parts of the record and such argument as may be permitted, or a further hearing may be held, upon notice to all interested persons, for the purpose of receiving such additional evidence as the board may, for cause, allow. The decision or order on reconsideration shall have the same force and effect as an original order or decision."

Judicial review of the board's actions is found in § 1360 of the same Code:

Any person interested in any application may, within 30 days after final action by the board, file a petition for a writ of mandate in the superior court in and for the county in which the applicant seeks to divert water to inquire into the validity of the action of the board. If the applicant seeks to divert water in more than one county, the petition may be filed in any one of the counties. The right to petition shall not be affected by the failure to seek reconsideration before the board.¹

Rather than avail itself of the provisions of administrative reconsideration and state court review as prescribed by the California Legislature, the United States filed a Complaint for Declaratory Relief in this court on October 15, 1973, long after the time for filing state action has expired.² In its complaint, prayers for relief by the United States in this action requested this court to:

(1) Enter judgment declaring that the United States of America can appropriate unappropriated waters necessary for use in any federal reclamation project within the State of California without the necessity of applying to the California State Water Resources Control Board;

(2) Enter judgment declaring that when the United States of America chooses, as a matter of comity, to submit applications to the California State Water Resources Control Board, that the Board must grant such application if unappropriated waters are available;

(3) Enter judgment declaring that when the United States of America chooses, as a matter of comity, to submit applications to the California State Water Resources Control Board, that the Board cannot impose any terms or conditions in permits issued to such applications in contravention to Federal law; and

(4) Enter judgment declaring that Decision 1422 of the California State Water Resources Control Board is void in all respects where that decision conflicts with or contravenes Federal law; ...

Plaintiff was successful in both the District Court³ and the Court of Appeals.⁴

The Supreme Court of the United States, however, reversed in California v. United States, 438 U.S. 645, 98 S.Ct. 2985, 57 L.Ed.2d 1018 (1978). In remanding the case to this Court, Justice Rehnquist, speaking for a majority of six Justices directed that:

"Because the District Court and the Court of Appeals both held that California could not impose any conditions whatever on the United States' appropriation permit, those courts did not reach the United States' alternative contention that the conditions actually imposed are inconsistent with congressional directives as to the New Melones Dam. Nor did they reach California's contention that the United States is barred by principles of collateral estoppel from challenging the consistency of the permit conditions. Assuming, arguendo, that the United States is still free to challenge the consistency of the conditions, resolution of their consistency may well require additional factfinding...."

On September 27, 1978, Defendant (hereinafter "California"), filed a Motion for Summary Judgment and for Judgment on the pleadings in the matter. The matter was transferred to The Honorable Charles B. Renfrew for further proceedings, and he heard oral argument on the motion on March 1, 1979. Judge Renfrew, not having concluded the matter prior to his appointment as Assistant Attorney General, the matter was reassigned to the undersigned for decision.

II

CALIFORNIA'S CONTENTIONS

Briefly stated, California's argument is as follows:

Under state law, the United States had 30 days to petition the Board for reconsideration of its decision, including the conditions imposed on the United States therein. By not availing itself of this option, D 1422 became final 30 days after its issuance. At that point, the United States had 30 days in which to petition for a Writ of Mandamus pursuant to Section 1360 of the Water Code in the appropriate Superior Court of the State of California. Having allowed that time period to pass, D 1422 is now final and binding upon the United States in the instant suit. California reached this point by contending that since § 8 of the Reclamation Act of 1902 requires the United States to comply with state laws relating to the control, use, appropriation or distribution of water used for irrigation in all respects, that the only recourse for judicial review open to the United States was in the State court action as indicated by Water Code § 1360.

Having thus posited the foregoing major and minor premises of the syllogism, California urges the following conclusions on the court:

1. That the United States is barred by the doctrine of res judicata from challenging either the appropriations granted under D 1422, or any of the conditions contained therein.

2. That the doctrine of collateral estoppel bars the United States from challenging any of the actual findings of the Board to the effect that the United States has failed to show the proposed water uses are reasonable and beneficial under federal and state law.

3. If neither of the foregoing arguments is sufficient to entitle the State to the judgment in this court, that the court, on review of the administrative record, must uphold the factual findings of the Board because they are supported by substantial evidence.

At the threshold of this decision we must examine and decide:

1. Whether the United States could properly exercise the choice of judicial forum; and

2. The choice of law to be applied in whatever forum the United States chose to bring its action.

As stated in Wright, Miller and Cooper, Federal Practice and Procedure, § 3651:

"No subject matter jurisdiction difficulties are presented when the United States is the plaintiff in an action in the federal courts. Judicial power is provided by Article III, Section 2 of the Constitution which specifically defines the judicial power of the United States as extending "to Controversies to which the United States shall be a Party." Furthermore, Section 1345 of Title 28, provides that the district courts shall have jurisdiction, except as otherwise provided in `all civil actions, suits or proceedings commenced by the United States, or by any agency or officer thereof expressly authorized to sue by Act of Congress.' This statute also has been interpreted as applying to third-party claims by the United States under Rule 14. Finally, Section 1346(b) of Title 28 gives the district courts jurisdiction over any setoff, counterclaim, or other claim interposed by the United States against any plaintiff in cases in which the government is a defendant. There is no statutory

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