O'Neill v. United States

50 F.3d 677 (1995)

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O'Neill v. United States

United States Court of Appeals for the Ninth Circuit
50 F.3d 677 (1995)

Facts

The Central Valley Project (CVP) in California was the country’s largest federal water-reclamation project. Under a 1963 contract with the Westlands Water District (the district), the United States government (defendant), via the United States Bureau of Reclamation (the bureau), agreed to construct the San Luis Unit as part of the CVP. The contract was authorized under the Reclamation Act of 1902. Under the contract, the district promised to pay for, and the bureau agreed to deliver to the district, 900,000 acre-feet of water annually. Farmers within the district relied on the specified water delivery for irrigation and expanded their operations. The bureau continued to deliver the water until 1978, when it claimed the contract was invalid. Litigation led to a 1986 stipulated judgment requiring the bureau to perform under the original contract. Meanwhile, Congress enacted the Endangered Species Act (ESA) in 1973 and the Central Valley Project Improvement Act (CVPIA) in 1992. The two acts, among other things, mandated that the bureau consider water quality control, environmental issues, and the effects on endangered species when assessing water-management approaches. With assistance from other federal agencies, the bureau determined that chinook salmon and delta smelt were threatened species affected by the CVP. As a result, the bureau reduced promised delivery to the district, resulting in a 50 percent reduction to various water users in the district. Edwin R. O’Neill and other landowners and water users in the district’s Area I (collectively, Area I) (plaintiffs) filed suit in the district court seeking to enforce the 1986 stipulated judgment and require the bureau to deliver the total contracted amount of water. The bureau opposed the action, asserting that a limitation clause in the contract allowed it to reduce water deliveries when a shortage occurred. The bureau argued that the ESA and the CVPIA required it to reduce the water supply to comply with the two acts’ environmental obligations. The result was a shortage allowing it to invoke the limitation clause. The district court agreed with the bureau, and Area I appealed.

Rule of Law

Issue

Holding and Reasoning (Choy, J.)

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