United States District Court, D. Arizona
G. CAMPBELL SENIOR UNITED STATES DISTRICT JUDGE.
Ak Chin Indian Community (the “Community”) sued
Defendant Central Arizona Water Conservation District
(“CAWCD”) for declaratory judgment and a
permanent injunction regarding delivery of Central Arizona
Project (“CAP”) water to the Community. Doc. 1.
CAWCD counterclaimed, seeking the opposite result. Doc. 16.
The Court joined the United States as a party under Rule 19
(Doc. 26), and the United States filed a crossclaim against
CAWCD seeking declaratory relief regarding interpretation of
relevant statutes and contracts as they relate to the
Community's water rights (Doc. 102). CAWCD asserted
claims against the United States, but the Court dismissed
them on sovereign immunity grounds. Doc. 89. Thus, the
remaining claims in this case are the Community's claims
against CAWCD, CAWCD's claims against the Community, and
the United States' claims against CAWCD.
parties have filed motions for summary judgment (Docs. 108,
107, 112), and oral argument was held on March 14, 2019. On
the merits of this water dispute, the Court will grant the
United States' motion for summary judgment on its claims
against CAWCD and grant the Community's motion on
CAWCD's counterclaims against the Community. The Court
will grant CAWCD's motion to dismiss the Community's
claims against it for lack of standing, and for the same
reason deny the Community's motion on its claims against
Undisputed Background Facts.
Community is a federally recognized Indian tribe.
See Doc. 106 ¶ 1. CAWCD is a multi-county water
conservation district and municipal corporation authorized to
operate and maintain the CAP, a system of canals, aqueducts,
and related structures that deliver Colorado River water
throughout central and southern Arizona. Doc. 106 ¶ 2.
“The United States” in this case includes a
number of federal officials and agencies that oversee
reclamation matters. The Court will use the term
“Secretary” to describe the role of the Secretary
of the Interior in matters discussed in this order.
The 1984 Act and 1985 Contract.
case concerns the Ak Chin Water Rights Act of 1984, referred
to and cited in this order as the “1984 Act.”
See 1984 Act, Pub. L. No. 98-530, 98 Stat. 2698
(Oct. 19, 1984). The 1984 Act addressed water the Community
is entitled to receive from the Colorado River.
2(a) of the Act required the Secretary to deliver a permanent
water supply to the Community of “not less than
seventy-five thousand acre-feet of surface water suitable for
agricultural use except as otherwise provided under
subsections (b) and (c).” 1984 Act, §
2(b), which is the section in dispute in this case, concerns
an additional 10, 000 acre-feet (“AF”) of water
the Community may receive under certain conditions. It
provides that “[i]n any year in which sufficient
surface water is available, the Secretary shall deliver such
additional quantity of water as is requested by the Community
not to exceed ten thousand acre-feet.” 1984 Act, §
2(b). The section further states that “[t]he Secretary
shall be required to carry out this obligation referred to in
this subsection only if he determines that there is
sufficient capacity available in the main project works of
the Central Arizona Project to deliver such additional
2(c) of the 1984 Act addresses the same obligation as §
2(a), but reduces the amount of water deliverable in
“time of shortage” from 75, 000 AF to 72, 000 AF.
Id., § 2(c). Section 2(c) is not at issue in
2(f) identifies the source of water for the 75, 000 AF called
for in § 2(a) and, in times of shortage, the 72, 000 AF
called for in § 2(c). It states that “[t]he water
supply referred to in subsections (a) and (c) shall be
supplied from an aggregate of the following”: (1) a
permanent supply of 50, 000 AF to be diverted from the
Colorado River under the Act of July 30, 1947 (61 Stat. 638),
for beneficial use on lands of the Yuma Mesa Division of the
Gila Project; and (2) CAP water allocated to the Community in
the Notice of Final Water Allocations to Indians and
non-Indian Water Users and Related Decisions (48 Fed. Reg.
12446, March 24, 1983) as is necessary to fulfill the
Secretary's water delivery obligations. Id.
statutory water rights are also reflected in a contract
between the Secretary and the Community that will be referred
to in this order as “the 1985 Contract.” The 1985
Contract tracks exactly the provisions of §§ 2(a),
(b), (c), and (f) of the 1984 Act, but renumbers them as
§§ 3(a), (b), (c), and (f). See Doc.
102-1. Under the 1985 Contract, the Community submits a
schedule of requested water deliveries to the Secretary by
October 1 of each year, and the Secretary reviews the
Community's requests to ensure they are consistent with
the contract. Id. §§7(a)(1)-(2). When the
Secretary orders the water to be delivered, it is delivered
to the Community through the CAP operated by
CAWCD's Contracts with the United States.
1988, CAWCD and the United States contracted to construct the
CAP and for the CAWCD to repay the United States for the
construction. Docs. 102-3 § 2.1; 102-4. Earlier, in
August 1987, CAWCD and the United States had entered into a
contract for the transfer of operation and maintenance of CAP
facilities to the CAWCD. See Docs. 102-2; 102-3
§ 2.2. Pursuant to these contracts, CAWCD and the United
States executed an operating agreement in 2000 to cover the
details of CAP operations, maintenance, funding,
environmental compliance, and commitments (the “2000
Operating Agreement”). Doc. 102-3 §§ 2.3;
3.1. Under the 2000 Operating Agreement, CAWCD is required to
“[m]ake deliveries of Project Waters and collect
payments therefor.” Id. § 7.2.4. The
Secretary must provide CAWCD with annual water delivery
schedules for Indian contractors. Id. § 7.3.3.
If CAWCD cannot confirm that all of the Indian water can be
delivered, it must meet and confer with the United States to
determine water deliveries. Id.
2007, CAWCD and the United States entered into a stipulated
judgment in a dispute over the 1988 repayment contract
(“2007 Stipulation”). See Doc. 102-5;
see also Doc. 106 ¶ 21. Section 5 of the 2007
Stipulation states that “CAWCD shall have the exclusive
right in its discretion to sell or use all Excess Water for
any authorized purpose of the CAP.” Doc. 102-5 §
5(d)(2). “‘Excess Water' is all Project Water
that is in excess of the amounts used, resold, or exchanged
pursuant to long-term contracts and subcontracts for Project
Water service.” Id., § 5(d)(1).
Other Relevant Statutes and Agreements.
Arizona Water Settlement Act.
2004, Congress enacted the Arizona Water Settlement Act
(“AWSA”). See PL 108-451, 118 Stat. 3478
(Dec. 10, 2004). The AWSA limited the total amount of CAP
entitlements under long-term contracts to 1, 415, 000 AF, of
which 650, 724 AF is designated for Arizona Indian tribes
(“Indian Pool” water). Id. §
104(c)(1)(A)(i)(I)-(II). Of this amount, 67, 300 AF is to be
used for resolving Indian water claims in Arizona through
“future Arizona Indian water rights settlement
agreements approved by Congress after the date of enactment
of [the AWSA].” Id.
San Carlos Water Settlement.
1992, Congress approved a water rights settlement
establishing the rights of the San Carlos Apache Tribe.
See Reclamation Projects Authorization and
Adjustments Act of 1992, PL 102-575, §§ 3701-3709,
106 Stat. 4600 (Oct. 30, 1992) (the “San Carlos
Act”). Congress directed the Secretary to reallocate
the unused water from the Community's permanent
allocation set forth in § 2(f)(2) of the 1984 Act.
Id. § 3704. The Secretary was also required to
amend the CAP water delivery contract between the United
States and the Community “as  necessary to satisfy
the requirements of” the reallocation of the §
2(f)(2) water. Id. § 3706.
The Current Dispute and the Parties' Positions.
2003 and 2018, the Community requested the 10, 000 AF of
additional water under § 2(b) of the 1984 Act every
year, and the Secretary agreed to provide it. See
Doc. 106 ¶¶ 24-25. CAWCD consistently asserted that
the Community was not entitled to water in excess of the
sources specified in § 2(f). See id. ¶ 25.
CAWCD nonetheless usually provided the extra water to the
Community. See Docs. 1 ¶ 4; 1-1; 106 ¶ 25;
113-12 to 14. On October 1, 2016, the Community submitted its
2017 water order to the Secretary. Doc. 1 ¶ 36. The
Community requested its full 75, 000 AF under § 2(a) and
10, 000 AF under § 2(b), plus additional water to cover
transmission losses. Id. ¶ 37. The United
States determined there was sufficient surface water and
canal capacity available and issued the full order to CAWCD.
Id. ¶ 38. CAWCD agreed to provide the water for
2017, but asserted that it no longer would deliver the
Community's 10, 000 AF under § 2(b). Docs. 1 ¶
40; 1-1 at 63-64. The Community then filed this lawsuit. The
parties' positions can be summarized as follows.
United States and the Community read the 1984 Act and the
1985 Contract as entitling the Community to § 2(a)'s
permanent allotment of 75, 000 AF each year from the
dedicated sources in § 2(f), and to the additional 10,
000 AF called for in § 2(b) whenever the Secretary
determines that “sufficient surface water is
available” and CAP has the capacity to deliver the
water. 1984 Act, § 2(b). Because all of the water in the
CAP system is either under contract with system users or
reserved for resolving future Indian disputes, there is no
undesignated water in the CAP system to fill the § 2(b)
provision. The United States and the Community contend,
however, that the § 2(b) water can come from unused CAP
water - water for which another entity has an allocation or
contractual right but which is not used by that entity in a
United States provides this example: Under the AWSA, the
Indian Pool portion of CAP water includes 6, 411 AF allocated
for an expected future water rights settlement with the
Navajo Nation. AWSA § 104(a)(1)(B)(ii). Unlike the
Community, the Navajo Nation has not yet reached a water
rights settlement with the United States, has no water
delivery contract, and therefore does not receive the 6, 411
AF reserved for it each year. The United States and the
Community argue that this unused water can be used by the
Secretary for other Indian purposes and is
“available” within the meaning of § 2(b) to
help fill the 10, 000 AF requested by the Community. Doc. 115
sees things differently. CAWCD argues that potential users of
CAP water can obtain rights to receive such water only in one
way: (1) the Secretary must allocate water to the user, and
(2) the user must enter a contract with the Secretary for
delivery of the water. For ease of reference, the Court will
refer to CAWCD's argument as the “two-step
rule.” CAWCD argues that both steps must be satisfied
before CAP water can be distributed. CAWCD asserts that the
Community's right to 75, 000 AF in § 2(a) satisfies
the two-step rule because the Community (1) has received an
allocation of the water as reflected in § 2(f) of the
1984 Act, and (2) has contracted for the water in § 3(a)
of the 1985 Contract (corresponding to § 2(a) of the
1984 Act). Not so for § 2(b) water. CAWCD argues that
although the Community has a contract for the 10, 000 AF in
§ 3(b) of the 1985 Contract, the Secretary has not
allocated water to the Community for this purpose and the
Community therefore cannot receive it from CAP water.
Further, CAWCD asserts that because all water in the CAP
system is either contracted for or reserved for settlement of
future Indian water disputes, no CAP water is
“available” for delivery to the Community within
the meaning of § 2(b) of the 1984 Act.
includes unused CAP water. CAWCD argues that any unused water
in the system belongs to CAWCD under the “excess
water” provision of the 2007 Stipulation and cannot be
used to fill the requirements of § 2(b). For example,
CAWCD contends that because the 6, 411 AF discussed above has
been reserved by the Secretary for a future Navajo Nation
water settlement, it is not “available” to the
Community under § 2(b). The fact that it is not
presently used by the Navajo Nation means that it is
“excess water” under the 2007 Stipulation that
CAWCD can dispose of in its discretion.
no CAP water may be used for § 2(b), CAWCD argues that
the Secretary could fulfill its obligation to the Community
by providing 10, 000 AF of water from non-CAP sources through
leases or other means. Doc. 112 at 7, 11-14. CAWCD argues
that the United States is simply trying to avoid this
responsibility by appropriating unused water in the CAP
system - water that rightly belongs to CAWCD.
judgment is appropriate if the evidence, viewed in the light
most favorable to the nonmoving party, shows “that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). The parties agree that the facts of this
case are not in dispute and that interpretation of the
relevant statutes and contracts may occur on the
cross-motions for summary judgment.
interpreting a statute, we look first to the plain language
of the statute, construing the provisions of the entire law,
including its object and policy, to ascertain the intent of
Congress.” Maricopa-Stanfield Irr. & Drainage
Dist. v. United States, 158 F.3d 428, 435-36 (9th Cir.
1998). Interpretation of a contract entered into pursuant to
federal law, when the United States is a party, is governed
by federal law. O'Neill v. United States, 50
F.3d 677, 682 (9th Cir. 1995). The plain language of the
contract should be considered first. Klamath Water Users
Ass'n v. Patterson, 204 F.3d 1206, 1210 (9th Cir.
The Community's Standing.
argues that the Community lacks standing to sue under
CAWCD's operating agreement with the United States.
See Doc 112 at 17. Before a third party can obtain
relief under a contract, it must show that it is an intended
beneficiary of the contract. Klamath, 204 F.3d at
that benefit from a government contract are generally
incidental beneficiaries and may not enforce the contract
absent a clear intent to the contrary. Id.
“This clear intent hurdle is not satisfied by a
contract's recitation of interested constituencies, vague
hortatory pronouncements, statements of purpose, explicit
reference to a third party, or even a showing that that the
contract operates to the third parties' benefit and was
entered into with them in mind.” County of Santa
Clara v. Astra USA, Inc., 588 F.3d 1237, 1244 (9th Cir.
2009) (quotation marks and alterations omitted) (citing
Klamath, 204 F.3d at 1212; Orff v. United
States, 358 F.3d 1137, 1145 (9th Cir. 2004)).
Klamath, the Ninth Circuit found irrigators that
benefited from a government contract to impound irrigation
water were not third-party beneficiaries for purpose of
standing, even if the contract was undoubtedly entered into
with the irrigators in mind. See Klamath, 204 F.3d
at 1212. Similarly, in Orff, the Ninth Circuit found
farmers were not clearly intended beneficiaries of a water
district contract because the contract did not manifest
“an intent to create enforceable rights” in the
third-party farmers. 358 F.3d at 1145. The farmers asserted
that a provision requiring water users to pay assessments and
charges to the water district demonstrated that the contract
intended to grant them third-party rights. Id. at
1146. The court found that this provision merely detailed the
requirements to obtain water rather than an intent to create
enforceable rights for individual water users. Id.
Community argues that “[w]hile [it] is not mentioned by
name in the United States' various contracts with CAWCD,
at least one of those contracts singles out CAWCD's
obligations to make water deliveries to Indian contractors
such as [the Community].” Doc. 116 at 14 (citing Doc
102-3 § 7.3.3). Because the contracts focus special
attention on the obligations owed to Indian contractors, the
Community contends, they “evince special consideration
for and an intent to confer benefits on Indian contractors
that are not generally provided to all contractors.”
Id. The Community asserts that the unique trust
relationship between the United States and Indian contractors
distinguishes the Community and other Indian tribes from the
incidental beneficiaries in Klamath, Orff,
and other Ninth Circuit cases. The Court disagrees.
Community cites no case law to support its position. The
closest Ninth Circuit authority involves a consent decree
where, applying contract principles, the court held that a
tribe did not have third-party beneficiary status despite the
tribe's involvement in the decree negotiations, its
mention multiple times in the decree, and the decree's
granting of certain rights to the tribe. See United
States v. FMC Corp.,531 F.3d 813, 820 (9th Cir. 2008).
The Ninth Circuit found that two key facts undermined the
tribe's third-party beneficiary status: (1) the
government, as a party to the decree, had an ongoing
incentive to enforce its contract and therefore the party was
assumed to be an ...