Summary of a Recent
Judicial Development in
Water Law

Government's Duty to Deliver Equitable Share of
Irrigation Water to Leased Land

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Oswalt v. United States, 85 Fed. Cl. 153 (Fed. Cl. 2008), the United States Court of Federal Claims held that the government had breached its lease agreement with the plaintiffs by failing to deliver an equitable share of irrigation water to certain leased allotments.

Background

The plaintiffs brought an action for breach of contract against the government for allegedly failing to provide their leased government farmlands with irrigation. Id. at 155. The Indian reservation on which the lands were located had experienced a severe drought in 1994, and the government had adopted a water distribution plan to "ensure an equitable distribution of the available water to each major lateral and subdivision of the project." Id. at 156-57. The plaintiffs claimed that for six weeks during the summer of 2004, there was insufficient water in the canals servicing the land they farmed to permit irrigation, although other farmers located further up the canal did receive sufficient water. Id. at 157. The plaintiffs discussed the water shortage with their district administrator and agreed to sign a promissory note for the balance of the operation and maintenance charges due on their lease. Id. They brought this action in 1998, and after exhausting their administrative remedies, the parties came before the Court of Federal Claims and moved for summary judgment. Id.

Arguments

The plaintiffs argued that the government breached its contractual obligations by failing to provide them with their proportionate share of irrigation water, which resulted in substantial crop loss. Id. at 158.

The government argued that the plaintiffs had failed to make timely payment of operation and maintenance assessments for four of the seven land allotments at issue, thereby relieving it of its obligation to provide irrigation water to those allotments. Id. As to the remaining three allotments, it argued that the plaintiffs could not establish the amount of damages caused by the alleged breach with reasonable certainty. Id. at 158-59.

Analysis and Holdings

The court explained that the government had an obligation to deliver an equitable share of the irrigation water available to the plaintiffs' allotments pursuant to 25 C.F.R. § 171.1(c). Id. at 159. However, timely payment of (or arrangements to pay) the operation and maintenance assessments is a precondition to the delivery of irrigation water under 25 C.F.R. § 171.17(b), so the court stated that unless the plaintiffs could establish that timely payments were made for each allotment, they could not "establish the obligation by the government to deliver water, or consequently, a breach of that obligation." Id. at 159. The plaintiffs had not made timely operation and maintenance payments for three of the seven allotments, and thus the government was not required to deliver an equitable share of water to those lands. Id. The government disputed whether a promissory note had actually been executed by the plaintiffs to secure payment of the assessments, but that issue was irrelevant because the court held that § 171.17(b) unambiguously requires actual payment, and therefore a promissory note to pay the operation and maintenance assessments at a later date would not satisfy the plaintiffs' obligation to pay. Id. at 159-60. As to the remaining four allotments, the court found that the government had not satisfied its obligation to provide a proportionate share of water, and had thus breached its lease agreements with the plaintiffs; therefore, genuine issues of material fact precluded summary judgment on the issue of damages. Id. at 160-62.

The case was decided on December 17, 2008.