Court reimburses valley water districts, but they’re thirsty for more

05/09/2013 3:52 PM

05/09/2013 3:52 PM

A federal judge has awarded several million dollars to two San Joaquin Valley water districts that didn’t receive the irrigation water they were promised, apparently ending an excruciatingly long legal fight on a disappointing note for farmers who thought they were owed much more.

The Stockton East Water District and Central San Joaquin Water Conservation District had together asked for as much as $52 million. Instead, in a decision Thursday, U.S. Court of Federal Claims Judge Christine Odell Cook Miller awarded the districts a total of $2.4 million.

The federal government owed the money for the Bureau of Reclamation’s failure to deliver contracted irrigation water from New Melones Lake in the Sierra Nevada foothills.

“Reclamation’s non-performance in the years 1999 through 2004 was not excused, and therefore Reclamation was liable for breaching the contract in those years,” Miller wrote in one of two paired decisions.

But in a big blow to the two water districts, which filed their initial lawsuits in a different federal court in 1993, Miller significantly limited the amount the federal government must pay. In particular, she rejected entirely the districts’ claims for what lawyers call “expectancy damages,” which include lost profits and other benefits that might have reasonably been expected had the contracts not been breached.

“Clearly, they’re lower than what we had hoped for,” Stockton East Water District General Manager Kevin Kauffman said of the court’s award in a telephone interview Friday, “but at least it does show some damages.”

Miller, among other things, concluded that the lack of infrastructure, like a necessary delivery pipe, rendered it “implausible” that the Stockton district would have been in a position to use all of the contracted water had it been available. Miller further concluded that the Stockton district was able to avoid treatment costs and other expenses because it had less New Melones water to manage.

“Avoided costs…should be deducted from a potential damages award, regardless of whether Stockton East passed its cost savings along to customers,” Miller wrote.

The judge, however, partially accepted the water districts’ requests to be reimbursed for some of the money paid to the Oakdale Irrigation District and another local water agency that supplied substitute water. The judge said the districts acted “reasonably” in trying to mitigate the loss of New Melones water, particularly after federal officials told them that more New Melones water would be devoted to fish protection.

“She did a good job of understanding the issues,” Kauffman said.

The Stockton East district covers about 116,000 acres in eastern San Joaquin County, including the city of Stockton. The smaller Central San Joaquin district, also based in Stockton, serves area farmers. Both expected to draw water from New Melones, completed in the late 1970s amid legal and environment battles of its own.

The claims court initially dismissed the water districts’ lawsuit in 2007, after the original suits had been transferred from another court. But in 2009, an appeals court reversed the trial judge and concluded that the Bureau of Reclamation had breached the water contracts between 1999 and 2004. The contracts called for the federal agency to deliver 155,000 acre-feet of New Melones water each year to these water districts.

In its decision Thursday, the claims court awarded the Stockton East district $2.27 million. The amount is the difference between what Stockton East paid other irrigation districts for substitute water, and what it would have paid for cheaper New Melones water. The Central district was awarded $149,950.

Kauffman said the Stockton East board of directors will meet soon to figure out whether to appeal.

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