Ninth Circuit Rejects Claims to Area of Origin Priority by Tehama-Colusa Canal Authority

On July 1, 2013, the Ninth Circuit Court of Appeals issued an opinion rejecting assertions by Tehama-Colusa Canal Authority (“TCCA”) that California area of origin law entitled its member districts to priority deliveries of Central Valley Project (“CVP”) water and that the Bureau of Reclamation (“Bureau”) acted in violation of law by delivering less than 100% of contract amounts during contractual “Conditions of Shortage.” With the opinion, the Ninth Circuit affirmed the 2011 decision by the United States District Court for the Eastern District of California, discussed here.

In an opinion by Judge Johnnie B. Rawlinson, the court ruled that California area of origin laws, in particular Water Code section 11460, do not require the Bureau to prioritize the allocation of Federally-appropriated CVP water to Sacramento Valley CVP contractors.

In addition, the court concluded that the “clear contract language” of TCCA members’ water service contracts provides that TCCA members are not entitled to the full amount of water contracted for, and “may have to endure pro rata reduction in times of shortage, along with other CVP contractors.”

Finally, the court held that validation judgments foreclosed TCCA and its members from seeking to “circuitously undo the contract provisions to which they previously acceded.” The validation judgments, which became final in 2005, validated the water service contracts under California law.

The Ninth Circuit’s opinion in the case, Tehama-Colusa Canal Authority v. U.S. Dept. of the Interior, et al., Case No. 11-17199, may be found here.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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