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Dubuque and Pacific Railroad v. Litchfield, 64 U.S. 66, 88–89 (1859). See also United States v. Grand River Dam Authority, 363 U.S. 229 (1960), Slidell v. Grand jean, 111 U.S. 412 (1883), The Delaware Railroad Tax (Minot v. The Philadelphia, W. & B. R.R.), 85 U.S. (18 Wall.) 206 (1874).

In Wisconsin Central Railroad Co. v. U.S., 164 U.S. 190 (1896) the Court dealt with a situation analogous to that presented here. By an 1864 Act a grant of land was made to the railroad company, "upon the same terms and conditions” as in an 1856 Act. The 1856 Act provided that the rates for transporting mail could be fixed by Congress. The act of March 3, 1873, prescribed the rates for transporting mail and provided that land grant railroads whose grant was on condition that Congress could fix the rates would receive 80% of the regular rate.

The company received 80 percent and sued in the Court of Claims for the balance of the regular rate. The Court held that the words "upon the same terms and conditions” incorporated in the 1864 Act, the provisions of the 1856 Act. 6* * * [T]he settled rule is that statutes granting privileges or relinquishing rights of the public are to be strictly construed against the grantee.” Ibid. at 202.

Applying the same rationale to the application of the acreage limitations to lands in Imperial Valley, section 14 of the Project Act incorporated the reclamation law, and the land limitation provisions of section 46 of the 1926 Act are part of the reclamation law. Nothing in the Project Act exempts the lands in Imperial Valley from section 46. Therefore, the land limitations of section 46 are a part of the Project Act; and since "statutes granting privileges or relinquishing rights of the public are to be strictly construed against the grantee," the excess land laws apply to the lands in Imperial Valley served by the federal project.

The Wilbur Letter and Prior Administrative Practice The repayment contract of the Imperial Irrigation District with the United States was executed by Ray Lyman Wilbur, Secretary of the Interior, on December 1, 1932. Article 1 states the contract is made "pursuant to the reclamation law and Article 30 states that "Except as provided by the Boulder Canyon Project Act, the reclamation law shall govern the construction, operation and maintenance of the works to be constructed hereunder.”

It has been the practice of the Bureau of Reclamation to include in irrigation district contracts detailed requirements for the implementation of land limitation provisions. Such detailed requirements vary from case to case, but are substantially similar to those described in Ivanhoe, supra, at 285–86. No such detailed requirements were in

IMPERIAL IRRIGATION DISTRICT LANDS

December 31, 1964

cluded in the Imperial Irrigation District contract, and to date the District has not complied with the excess land laws. Excess land provisions have been applied to lands within the Coachella Valley County Water District which are also serviced by the All-American Canal under contracts executed pursuant to the Boulder Canyon Project Act. Detailed provisions were included in the supplemental Coachella contract of December 22, 1947, in conformity with a ruling from the then Solicitor of the Department, Mr. Fowler Harper. 24

An anomalous situation now exists. The two districts, Imperial and Coachella, while serviced by the same federally constructed facility, are accorded different administrative treatment as to excess land. The reasons for the administrative treatment accorded Imperial were announced in a letter, dated February 24, 1933, from the Secretary of the Interior Ray Lyman Wilbur to the Imperial Irrigation District. 25 See Appendix E for text.

34 Solicitor's Opinion, M-33902 (May 31, 1945). See Appendix H.

25 The Wilbur letter was written within three months following execution of the contract. While not relevant to the conclusion reached in this opinion, the record is ambiguous as to whether the Department had actually determined the excess land laws not to be appllcable to Imperial Irrigation District prior to the execution of the contract. There is no direct evidence of such a conclusion. To the contrary, the only record we have been able to find of consideration of the question prior to the execution of the contract indicates that the excess land limitations did apply. On November 4, 1930, Executive Assistant to the Secretary Northcutt Ely stated that the excess land laws would have to be enforced in Imperial Valley. (Response No. 3 by Northcutt Ely. See Appendix D.)

The Wilbur letter itself states that the question was raised "early in the negotiations" and adds that "upon careful consideration the view was reached that this limitation does not apply to land now cultivated and having a present water right." When this conclusion was reached, the Secretary did not say.

The genesis of the Wilbur letter is found in a letter of February 4, 1933 (Appendix B), from Mr. Coffey to Porter W. Dent, Assistant Commissioner and Chief Counsel of the Bureau of Reclamation.

Mr. Coffey's letter takes no position but reports a conversation with Mr. Charles L. Childers, general counsel for Imperial. Mr. Childers apparently told Mr. Coffey that Mr. Dent and Judge Finney, the Solicitor, had agreed during the contract negotiations that acreage limitations did not apply to Imperial. He requested a formal Solicitor's ruling to that effect but significantly, said Mr. Coffey, "He doesn't want any formal ruling, of course, if the Solicitor were to hold that the limitation applies ..."

Assuming the Childers' conversation was correctly reported by Mr. Coffey-we have nothing directly from Mr. Childers—two facts are evident: first, that Mr. Childers is not certain that the application of the excess land laws is precluded by failure to incorporate detailed provisions in the contract; and, second, that he is not sufficiently certain that a conclusion has been reached that the excess land laws do not apply to preclude the possibility that a formal opinion might declare that they do.

Mr. Coffey's letter was transmitted to Mr. Ely by a memorandum of February 7, 1933 (Appendix B), from Mr. Dent. While the Dent memorandum, like the Wilbur letter, states that the question of applicability of the 160-acre limitation was raised "early in the negotiations connected with the All-American Canal contract,” Mr. Dent went on to say that "So far as I am advised, all who have given this matter consideration agree that this limitation does not apply to lands now cultivated and having a present water right. The view has been, and is, I believe, that those lands having already a water right, are entitled to have such right recognized without regard to the acreage limitation mentioned."

It is to be noted that while Mr. Dent stated that the question had arisen "early in the negotiations," he did not state that it had been then resolved. His remarks which follow

Secretary Wilbur based his conclusion that the excess land laws do not apply to the private lands in the Imperial District on two contentions. The first was that no "sale” of a water right had ocurred within the meaning of section 5 of the Reclamation Act of June 17, 1902,26 because the private lands in the Imperial District had a vested water right which was recognized by the Congress in section 1 of the Project Act through the water-charge exemption.

Secretary Wilbur's understanding of the word "sale" in section 5 of the 1902 Act has already been disposed of, and the fact, that Congress gave Imperial an exemption from charges "for water and the use, storage, or delivery of water” does not constitute the granting of a water right.

This point is not material to the question being considered in this memorandum since, as has been shown, the ownership of a water right does not preclude the application of the excess land laws. However, if it were material, it must be pointed out that the language of section 1 of the Project Act does not in terms create or recognize a water right, it merely exempts from a charge. And as already noted "the established rule of construction in such cases is, that rights, privileges, and immunities not expressly granted are reserved. There is no safety to the public interests in any other rule.” The Delaware Railroad Tax (Minot v. The Philadelphia, W. & B. R.R.), 85 U.S. (18 Wall.) 206, 225 (1874).

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that statement are as susceptible to a present resolution of the matter as to a resolution in the course of the negotiations.

By memorandum of February 16, 1933, Mr. Ely advised Mr. Dent that he concurred in the Dent view and requested Mr. Dent to prepare what became the Wilbur letter (Appendix C).

The only other contemporary departmental record heightens the ambiguity as to when the conclusion announced in the Wilbur letter was actually reached. This is the March 1, 1933, letter from Mr. Dent to Mr. Coffey (Appendix F). In this letter Mr. Dent referred to the opinion that he had shared with Mr. Coffey early in the negotiations that some specific provision should be inserted regarding acreage limitation, He then stated that representatives of the District feared that a specific provision "would only be confusing and make ratification by the landowners more difficult.” He went on to say that the ground relied on by the Wilbur letter, i.e., non-applicability of the acreage limitation to lands having a vested water right, “is the ground upon which you and I with reluctance agreed to elimination of the specific provision regarding acreage limitation." It is not clear from this statement whether Mr. Dent reluctantly agreed with that ground prior to execution of the contract, or only reluctantly agreed to delete a reference to excess lands on that ground.

In any event, in the extensive departmental files covering the negotiation of the Imperial contract, save for Mr. Ely's memorandum of November 4, 1930, there has been found no contemporary record either of legal analysis or discussion of the excess land question. On the other hand, these files do reveal that counsel for the Imperial District was not satisfied that a decision had been reached in the Department prior to execution of the contract, and sought formal assurance on the question. The request for formal decision was rejected in favor of the informal Wilbur letter. Neither in that letter nor in the memoranda leading up to its preparation is the ambiguity of when the decision was first reached resolved.

20 32 Stat. 389. "No right to the use of water for land in private ownership shall be sold for a tract exceeding 160 acres to any one landowner *

IMPERIAL IRRIGATION DISTRICT LANDS

December 31, 1964

For the same reason the requirement in section 6 for "satisfaction of present perfected rights” cannot be read as insulating the District lands from acreage limitation. It is not in plain terms an exemption from the limitations of reclamation law in connection with the obligation to repay the cost of Imperial Dam and the All-American Canal.

We turn now to Secretary Wilbur's second contention, namely, that the Department had interpreted section 5 of the 1902 Act to permit the recognition of a water right for more than 160 acres in single ownership by allowing the continued flow of water covered by the right through federal project facilities.

This had been the position of the Department in the special situation where existing physical facilities were being acquired by the Government for incorporation in a project. In such cases, lands to

a which the water right was appurtenant were considered to be outside the project.

The first authority cited by Secretary Wilbur, Opinion of Assistant Attorney General, 34 L.D. 351 (January 6, 1906), serves to illustrate the limited nature of this practice. There, an entire irrigation system already partially completed and in service, owned by a private land and irrigation company, was proposed to be acquired by the United States at a purchase price of $15,000. It was to be incorporated into a larger federal reclamation project (East Umatilla). The agreement contemplated that some 8,000 to 9,000 acres of project land owned by the company would be placed in trust for sale to individuals in units conforming to the acreage limitations prescribed in accordance with sections 4 and 5 of the 1902 Act.

The company's water rights, held or claimed, were to be included in the conveyance to the United States except for the reservation by the company of a water right sufficient to irrigate 300 acres of land it proposed to retain. It was explained by the Director of the Geological Survey (of which the Reclamation Service was then-1905—a part) that to purchase the water right for the 300 acres would require a larger expenditure than could be justified.27 The government agreed to satisfy this right through project works. The company was not to pay any construction charges although it was to pay for operation and maintenance.

The Director pointed out that:

The furnishing of this water supply as part consideration is therefore a condition favorable to the United States. Besides, it is the usual practice in cases

27 Memorandum from Director, Geological Survey, to Secretary of Interior, November 16, 1905. See Appendix A.

where an existing irrigation system is purchased for enlargement, to agree to furnish a water supply to the prior owners, frequently without even reserving the right to make a charge for maintenance. This practice is founded on sound business principles for it is always cheaper to furnish the water when available than to buy the right to water which has already vested.

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If for instance the government were merely to recognize a vested right for water for 300 acres, the company could utilize the right only by building a canal system paralleling the government system or else the government would be required to forego the advantage of using the company's works now constructed.

He viewed section 10 of the 1902 Act 28 as authorizing the arrangement.

Assistant Attorney General Campbell, to whom the matter was referred for consideration, thereupon issued the decision cited in the Wilbur letter. The Assistant Attorney General concluded that under the transaction, the 300 acres covered by the reserved right, "is not brought within the limits of [the] project," Supra at 354. He held that the agreement did not conflict with section 5.29

The cases of the Newlands (Truckee-Carson) and North Platte projects alluded to by Secretary Wilbur involved comparable purchases of existing private irrigation works.30

This practice referred to by Secretary Wilbur is not a precedent for the Imperial Valley situation. The United States acquired no preexisting facilities; the Imperial lands were not only a part of the project, they were the primary reason for the project; and finally, the lands in Imperial were not exempted from, but were expressly required to repay, construction charges for the All-American Canal, Imperial Dam, and appurtenant structures “in the manner provided by the reclamation law.” Section 4(b) of the Project Act.

” On the other hand, the practice of the Department in respect or the carriage of water through reclamation project facilities for the irrigation of desert land entries, shows an intention to apply excess

29 32 Stat. 390, 43 U.S.C. sec. 373. The section authorizes the Secretary "to perform any and all acts and to make such rules and regulations as may be necessary and proper" for the purpose of carrying the provisions of the Act into full force and effect.

> While the Wilbur letter does not cite it, the 1906 ruling was followed on May 31, 1910, by a departmental regulation (38 L.D. 637, para. 45), which 1s currently found at 43 CFR 230.70 :

The provision of section 5 of the act of June 17, 1902 (32 Stat. 389; 43 U.S.C. 381, 392, 431, 439), limiting the area for which the use of water may be sold, does not prevent the recognition of a vested right for a larger area and protection of the same by allowing the continued flowing of the water covered by the right through works constructed by the Government under appropriate regulations and charges.

As is apparent from comparison of its text with a headnote to the 1906 decision, this regulation was evidently intended as no more than a codification thereof.

80 See Department of the Interior Second Annual Report of the Reclamation Service, 1902-3, at 368-69 (1904), and Fourth Annual Report of the Reclamation Service, 1904-5, at 236 (1906).

Anna M. Wright, 40 L.D. 116 (1911), also referred to in the Wilbur letter, merely cited the 1910 regulation. It has no relevance to the question here involved.

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