United States v. California

No. 75-3554 (9th Cir. April 1, 1977)

The Ninth Circuit affirms a lower court's judgment, 6 ELR 20120, that § 8 of the Reclamation Act of 1902 does not require the United States to obtain from the California State Water Resources Control Board a permit to appropriate unappropriated water from the Stanislaus River for the New Melones dam project. The court finds this ruling dictated by the Supreme Court's recent decisions in Hancock v. Train, 6 ELR 20555, and EPA v. California, 6 ELR 20563, which held that language even more specific than that appearing in § 8 did not subject the federal government to state permit procedures under the Clean Air Act and Federal Water Pollution Control Act Amendments of 1972. Moreover, the court emphasizes, the law establishing the state permit procedures in this case was not enacted until 20 years after the Reclamation Act was passed. Congress could not have intended to require federal compliance with state laws not yet in existence. The court notes, however, that § 8 does require the federal government, in acquiring water for federal reclamation projects, to make application to the state board to notify it of the scope of the planned federal project and to enable the state to determine, according to its laws, whether there is sufficient unappropriated water available.

Counsel for Plaintiff-Appellee
Dwayne Keyes, U.S. Attorney; Richard W. Nichols, Ass't U.S. Attorney
650 Capitol Mall, Room 2058, Sacramento CA 95814
(916) 449-2331

Carl Strass
Lands and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 737-8200

Counsel for Defendants-Appellants
Evelle J. Younger, Attorney General; Carl Boronkay, Ass't Attorney General; Roderick Walston, Dennis D. Smaage, Richard Jacobs, Deputy Attorneys General
6000 State Bldg., San Francisco CA 94102
(415) 557-2620

For himself, Carter & Wallace, JJ.

[7 ELR 20351]

Duniway, J.:

The State of California and its State Water Resources Control Board appeal from judgment for the United States entered by the District Court for the Eastern District of California. The opinion and judgment of that court are reported in United States v. State of California, E.D.Cal., 1975, 403 F. Supp. 874. The judgment of the district court appears at 403 F. Supp. 902-03. The principal questions are (1) whether Section 8 of the Reclamation Act of 1902, 32 Stat. 388, now 43 U.S.C. § 383, requires that the United States apply to the California State Water Resources Control Board for a permit to appropriate unappropriated water from the Stanislaus River for the New Melones project, and, (2) if so, what conditions, if any, the Board can attach to a permit that it grants. The questions are of great importance, and we have given them careful attention.

Our study of the record and the law convinces us that the judgment must be affirmed, substantially for the reasons stated by Judge MacBride in his opinion.

Two recent decisions of the Supreme Court strengthen our conviction. In Hancock v. Train, 1976, 426 U.S. 167, 96 S. Ct. 2006, 48 L. Ed. 2d 555, the question was whether § 118 of the Clean Air Act, 42 U.S.C. § 1857f, permits a state to require federally owned or operated installations to obtain a permit to operate, as required by the state's federally approved plan for assuring air quality. The pertinent language of § 118 reads:

Each department, agency, and instrumentality of the executive, legislative, and judicial branches of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in the discharge of air pollutants, shall comply with Federal, State, interstate, and local requirements respecting control and abatement of air pollution to the same extent that any person is subject to such requirements.

42 U.S.C. § 1857f.

The Court states its holding as follows:

Kentucky, like the Court of Appeals for the Fifth Circuit in Alabama v. Seeber, 502 F.2d 1238, 1247-1248 (1974), finds in § 118 a sufficient congressional authorization to the States, not only to establish the amount of pollutants a federal installation may discharge, but also to condition operation of federal installations on securing a state permit. We disagree because we are not convinced that Congress intended to subject federal agencies to state permits. We are unable to find in § 118, on its face or in relation to the Clean Air Act as a whole, or to derive from the legislative history of the Amendments any clear and unambiguous declaration by the Congress that federal installations may not perform their activities unless a state official issues a permit. Nor can congressional intention to submit federal activity to state control be implied from the claim that under Kentucky's EPA-approved implementation plan it is only through the permit system that compliance schedules and other requirements may be administratively enforced against federal installations. Id. at 180-81, 96 S. Ct. at 2013.

* * *

In view of the undoubted congressional awareness of the requirement of clear language to bind the United States, our conclusion is that with respect to subjecting federal installations to state permit requirements, the Clean Air Act does not satisfy the traditional requirement that such intention be evinced with satisfactory clarity. [7 ELR 20352] Should this nevertheless be the desire of Congress, it need only amend the Act to make its intention manifest. Id. at 198, 96 S. Ct. at 2021.22 (footnotes omitted).

In Environmental Protection Agency v. California ex rel. State Water Resources Control Board, 1976, 426 U.S. 200, 96 S. Ct. 2022, 48 L. Ed. 2d 578, the Court reached a similar conclusion as to the effect of § 313 of the Water Pollution Control Act Amendments of 1972, 86 Stat. 816, 33 U.S.C. § 1323. That section provides that federal installations must "comply with Federal, State, interstate, and local requirements respecting control and abatement of pollution to the same extent that any person is subject to such requirements." California and Washington sought to apply the permit requirements of their programs. We held that they could do so (511 F.2d 963), but the Supreme Court reversed. Applying the principles of Hancock, supra, the Court said:

Our decision in this case is governed by the same fundamental principles applied today in Hancock v. Train, supra, [426 U.S.] at 179 [, 96 S. Ct. 2006, 48 L. Ed. 2d 555]: federal installations are subject to state regulation only when and to the extent that congressional authorization is clear and unambiguous. Id. at 211, 96 S. Ct. at 2028. Except for the reference to service charges, § 313 is virtually identical to § 118 of the Clean Air Act, 42 U.S.C. § 1857f. Taken alone, § 313, like § 118 of the Clean Air Act, states only to what extent — the same as any person — federal installations must comply with applicable state requirements. Section 313 does not expressly provide that federal dischargers must obtain state NPDES permits. Nor does § 313 or any other section of the Amendments expressly state that obtaining a state NPDES permit is a "requirement respecting control or abatement of pollution." Id. at 212-13, 96 S. Ct. at 2028 (footnote omitted).

The language of § 8 of the Reclamation Act of 1902, set out in the opinion of the district court, 403 F. Supp. 885, is no more specific in subjecting federal projects to state permit requirements than are the statutes construed in the foregoing cases. Our view that the judgment in this case should be affirmed is, we think, supported by the principles applied in those cases. Indeed, we find that California's claim in this case that the United States must obtain a permit and comply with conditions embodied in it is less supportable than the claims of Kentucky in Hancock, supra, and of California and Washington in Environmental Protection Agency, supra. In each of those cases, it could more plausibly be argued that Congress did intend to subject federal installations to state permit requirements than in this case. When the Congress enacted § 118 of the Clean Air Act and § 313 of the Water Pollution Control Act Amendments of 1972, the use by the states of the permit device as a means of enforcing their laws in these areas was well known. The language of the two Acts, subjecting federal instrumentalities to state laws, is very broad. Yet the Court declined to read either section as requiring compliance with state permit requirements.

On the other hand, when § 8 of the Reclamation Act was adopted in 1902, California's permit requirement did not exist. At that time, under the Civil Code of 1872, §§ 1410-1422, surplus water was appropriated by the physical act of taking and diverting it to beneficial use. An appropriator could post a notice of taking at the point of diversion and record a copy with the county recorder.If the appropriator was diligent in completing the work for the diversion, his rights would date back to the posting of the notice. The statute did not create appropriative rights; it merely provided evidence of the date of appropriation. A fortiori, then, we cannot read § 8 as requiring compliance with California permit requirements that did not exist when § 8 was adopted.

In 1913, California enacted the Water Commission Act (Cal.Stats.1913, c. 586) which created the State Water Commission and provided a statutory procedure that could be followed in the appropriation of unappropriated water flowing in any natural channel "for useful and beneficial purposes." The Act became effective, following a referendum vote, in 1914. In 1923, an amendment made the statutory procedure the exclusive method of appropriating water. (Cal.Stats. 1923, c. 87.) The Act, as amended, is now part of the California Water Code, Divisions 1 and 2.

As the district judge concluded, a major purpose of § 8 of the 1902 Act was to recognize and protect state water law, particularly the state law doctrine of appropriative rights to water. 403 F. Supp. at 888. Similarly, the Clean Air Act and the Water Pollution Control Act amendments give effect to state law and require compliance with it by federal installations. Indeed, those acts are more specific than § 8 of the 1902 Act. Yet the Court has declined to read them as subjecting federal installations to state permit requirements, even though the use of permits by the states as a means of enforcing their clean air and water pollution laws was known. To read § 8 of the 1902 Act as requiring compliance with laws that did not then exist and procedures not made compulsory by California until 1923 — over 20 years later — would fly in the face of the Hancock and Environmental Protection Agency decisions. We could only do so if the language of § 8 were much more specific than it is.

In one respect, however, we disagree with Judge MacBride's decision. He says, 403 F. Supp. 889-90:

Indeed, while the Congressional history of the 1902 Act indicates broad federal purpose and authority in the operation and control of federal reclamation projects, the comity inherent in a federal system would not permit an overbroad usurpation of state sovereignty. Accordingly, the federal government is required, when acquiring water for federal reclamation projects, to comply with the forms of state law, including application to state water boards where necessary, for two purposes: (1) to enable the state to determine, according to its law, whether there is sufficient unappropriated water available for the project; and (2) to give notice to the state of the scope of the project.

His judgment provides:

(1) The United States can appropriate unappropriated water necessary for use in any federal reclamation project within the State of California, but must first, in accordance with comity, apply to the California State Water Resources Control Board for a determination by that Board of the availability of unappropriated water.

(2) When the United States submits applications to the California State Water Resources Control Board, that Board must grant such applications if unappropriated waters are available.

We agree with this result, but we do not agree that the requirement is one of comity. It is a legal requirement of § 8.

Under § 8, the national government, in constructing and administering reclamation projects, must recognize and cannot nullify either water rights created by state laws or the laws that create them. But enforcement of the government's duty via the permit device is not handed over to the state.

The phrase "in accordance with comity" is stricken from paragraph (1) of the judgment. In all other respects, the judgment is affirmed.

[7 ELR 20352]

JAMES M. CARTER, Circuit Judge, concurring specially:

I concur in the above opinion. Hancock v. Train, 426 U.S. 167, 96 S. Ct. 2006, 48 L. Ed. 2d 555 (1976), and Environmental Protection Agency v. California ex rel. State Water Resources Control Board, 426 U.S. 200, 96 S. Ct. 2022, 48 L. Ed. 2d 578 (1976), make improper, under existing statutes, any state requirements [7 ELR 20353] in the nature of permits. The cases hold that it is for the Congress to explicitly determine whether to subject federal agencies to state permits.

I would suggest, however, that it may be one thing for the Congress to provide that a state may require a permit to assure proper air or water quality standards of a federally-owned or operated installation; it is quite another thing to permit a state to require permits for the very operation of such a facility. I cannot envision the Congress providing that the states, by a permit process, may control the operation of federally constructed, funded, and operated water and power projects.

[7 ELR 20353]

WALLACE, Circuit Judge, concurring and dissenting:

Although recent Supreme Court decisions leave me with no clear concept of what Congress must say in order to require the federal government to comply with state law, I am persuaded that the language of the statute reviewed here is insufficient to validate California's permit procedure. While the "shall" in section 8 of the 1902 Reclamation Act appears to be mandatory, and while the Bureau of Reclamation's conduct over nearly three-quarters of a century indicates that it had no doubt of the necessity for compliance with state law, I cannot say that the language of the section is any clearer or less equivocal than that rejected as insufficient in Hancock v. Train, 426 U.S. 167, 96 S. Ct. 2006, 48 L. Ed. 2d 555 (1976), and EPA v. California ex rel. State Water Resources Control Board, 426 U.S. 200, 96 S. Ct. 2022, 48 L. Ed. 2d 578 (1976). Thus, with reluctance I concur that the statute does not require the Bureau of Reclamation to secure, pursuant to state law, the permit in question.

However, unlike the majority,¹ I would go no further. Nothing in Hancock or EPA necessarily forecloses federal compliance with state-imposed requirements not involving permits. Indeed, the more than 70 years of cooperative development of water resources in the West under the Reclamation Act attest to the wisdom in providing non-exclusive control over this limited asset.

Also, I believe that we must disapprove that portion of the district court's order that requires the federal government, "in accordance with comity, [to] apply to the California State Water Resources Control Board for a determination by that Board of the availability of unappropriated water" and that requires the Board to "grant such applications if unappropriated waters are available." United States v. State of California, supra, 403 F. Supp. at 902. By construing section 8 under compulsion of Hancock and EPA as not requiring Bureau of Reclamation compliance with state appropriation procedures, we bring an element of uncertainty to the administration of water resources. Absent some mechanism to convey the information, the states cannot know what amount of unappropriated water remains for private use in a watershed after a portion is appropriated by the Bureau. The "comity" theory and application/notice requirement of the district court are an effort to patch this tear caused by the new construction of section 8.

It is a wayward effort. Comity is a concept of deference and voluntary action. Zink v. Estelle, 403 F. Supp. 656, 659 (S.D.Tex.1975); Galloway v. Watts, 395 F. Supp. 729, 731 (D.Md.1975). To use such a concept as a basis for requiring affirmative federal action seems peculiarly incongruous. Accordingly, I agree with the majority's disapproval of the district court's comity theory.

But the majority does no etter in its effort for it provides no defensible basis for requiring federal agency action. Accordingly, I must reject that portion of the majority's opinion which directs the federal government "to comply with the forms of state law" (emphasis added) because "[i]t is a legal requirement of § 8." Slip op. at , majority op. at .²

Concededly where two sovereigns, acting independently, administer water rights in the same watershed, there is a great potential for uncertainty. But that is what our Hancock- and EPA-inspired construction of section 8 means. The majority has failed to find a defensible legal basis to give effect to its desire to avoid this problem. Unfortunately, I can see no such basis either. Accordingly, we have, I believe, no alternative but to leave it to the legislative branch to devise a solution. Therefore, I would go no further than to disapprove the permit procedure in question.

1. The majority's approach to the permit issue seems to be premised on the belief that the impermissible aspect of the state's scheme is not the permit requirement but rather the conditions the state has attached to the permit. California has conceded all along that, although the Bureau must seek and secure a permit, the state has no power to attach to the permit conditions inconsistent with or contradictory to congressional purposes underlying the particular reclamation project. California believes, however, that no such conflict exists in this case.

In a proceeding before a state agency, it was determined that the conditions imposed by California were valid. The federal government did not appeal this decision. Accordingly, the government conceded at oral argument that it is precluded by the doctrine of res judicata from raising the issue anew in this case.

2. While the majority fails to provide us with any legal reasoning for requiring compliance with "the forms of state law," I can only assume that the requirement is derived from federal common law. Before embarking on this new and uncharted course of constructing common law, I would ask: Do we have the legal competency to fashion any rules in this area? Even if we do, is it wise for us to undertake the task? While I entertain doubts that the first question can be answered affirmatively, I am convinced that we ought not undertake the task of judicial rulemaking in an area as complex and sensitive as state-federal relations over water.

If my assumption regarding the federal character of the application/notice requirement is incorrect, then that requirement must be viewed as one of state law. If derived from state law, there would be an inconsistency with the majority's initial conclusion that section 8 does not require federal agency compliance with state permit procedures.