Court: Supreme Court of the United States; April 15, 1963; Federal Supreme Court; Federal Appellate Court
The case involves the City of Fresno's appeal following a dispute regarding water rights along the San Joaquin River, originally stemming from Dugan v. Rank. Fresno, as an intervenor in the lawsuit, sought a declaration of its water rights as an overlying owner, statutory priority for municipal use, prior rights under California law, and entitlement to project water from the United States at irrigation rates. While Fresno won in the District Court, the Court of Appeals reversed this on the terms of water delivery, citing that the officials acted within their statutory authority and that the dispute required a waiver of the United States' sovereign immunity. The Court of Appeals declined to address Fresno's claim of superior water rights, stating that such rights could only be asserted if established under state law.
The Supreme Court affirmed the Court of Appeals' decision, referencing its prior ruling in Dugan v. Rank, which highlighted the lack of jurisdiction against the United States without consent. It reiterated that any relief sought against federal officials effectively constituted a claim against the United States. Furthermore, it clarified that Section 8 of the Reclamation Act does not allow state law to impede the federal government's eminent domain powers to acquire water rights, aligning with the precedent set in Ivanhoe Irrigation District v. McCracken. Lastly, the Court noted that the County of Origin and Watershed Acts do not provide the preferential rights Fresno claimed, as the statutes define preference based on proximity to the watershed or area of origin.
Service areas from Friant Dam include Kern, Tulare, Fresno, and Madera Counties, with water supply preferences extending beyond the immediate watershed to adjacent areas that can be conveniently served. Claims of preferential rights for domestic water use are baseless, as Section 9(c) of the Reclamation Project Act of 1939 stipulates that contracts for municipal water supply shall not impair irrigation efficiency, with the Secretary of the Interior having discretion in these matters. The U.S. Supreme Court case United States v. Gerlach Live Stock Co. affirmed that Congress viewed the Friant Dam as a reclamation project, denying preferential rights to Fresno for project water unless irrigation is not adversely affected.
Rate-setting authority for both municipal and irrigation water is granted to the Secretary, who must ensure rates cover operation, maintenance, and fixed costs. A 1947 report estimated municipal water rates at $10 per acre-foot and irrigation rates at about $3 per acre-foot, with the latter projected to recover only a fraction of capital costs allocated to irrigation. In contrast, municipal rates were expected to yield substantial surplus for irrigation costs beyond irrigators' financial capabilities. Long-term contracts establish Class 1 water at $3.50 per acre-foot and Class 2 at $1.50, with municipal water at $10 per acre-foot, all within the authority of the Reclamation Bureau as upheld in prior case law.
The judgment related to the City of Fresno's petition is affirmed, with directions to the Court of Appeals to vacate the District Court's judgment and dismiss the case. The financial overview indicates that irrigation payments amounted to $58,545,475 against a capital cost of $221,551,600, while municipal water rates returned $29,667,932 against a capital cost of $9,091,800. The Chief Justice did not participate in the case's consideration or decision.
