17 May 2010

Rights vs Contracts

via JF, we hear that
Westlands' General Manager/General Counsel Tom Birmingham himself was there to explain why, technically, Westlands doesn't actually have junior water rights...

According to Birmingham, Westlands doesn't have junior water rights because they're just CVP contractors, and the Bureau of Reclamation is governed by different rules.
Ok, I'll bite. Westlands has junior water contracts. I know, Tom told me himself.

Why are these different, in function, from junior rights?

If there's less water, junior rights holders get cut.

If there's less water, do senior rights holders get cut? No, junior holders get cut.

Tomay-toe, toma-toe, you still get cut.

Or, am I missing something here?

3 comments:

Chris Brooks said...

I believe the typical set-up with federal projects is that the project (or water district created to take water from the project) holds the water rights, then contracts with the irrigation district or individual farmers to supply them with water. There is a legal difference between an appropriative water right and a contracted water right, but when you're talking about contracts with BOR there really is no functional difference - the contract rights are entitlements roughly equal to property rights. But if the contracts are for water that has a relatively low priority (as CVP does) there can be a call on the water represented in those contracts. Also, when you are contracting with a federal entity they are required to comply with all federal environmental laws - which just might decrease your priority even further.

DFB said...

There is a slight difference but the outcome is the same as far as Westlands is concerned.

Yes, a senior water rights holder takes water before a junior. One exception to that rule is that BoR/CVP (senior) gets cut the same in proportion to DWR/SWP (junior). This is due to the joint operating agreement in place between the two projects and restrictions put in place by SWRCB back in the day.

BoR contracts are not divided by senior/junior as water rights are. Rather, BoR has different priority contracts. The priorities are all based on 1) whether the contractor has actual water rights (exchange contractors); and 2) where other water service contractors without rights are located (north or south of delta, Friant, etc). Westlands has the second to lowest priority. The lowest priority contractors only gets water in surplus years (Stockton has yet to see a drop in 30 years). On the other hand, DWR contracts treat each contractor equally, and they get proportional delivery cuts.

BoR contracts all have a clause that essentially allows the agency to not deliver water for most any reason. Article 11(a), precludes government liability for “any damage, direct or indirect, arising from a shortage on account of errors in operation, drought, or any other causes.” Courts have found that clause to be unambiguous and clear on its face and the priorities established in contracts to be valid. In other words, Westlands is screwed. See: Westlands Water Dist. v. U.S., 337 F.3d 1092 (2003) http://scholar.google.com/scholar_case?case=9369949126471477963&hl=en&as_sdt=2&as_vis=1&oi=scholarr

David Zetland said...

Thanks folks. Helpful, and I'll stick with DFB's bottom line...