Ak-Chin Indian Community v. Central Arizona Water Conservation District

Filing 89

ORDER granting 76 Motion to Dismiss for Lack of Jurisdiction; granting 76 Motion to Dismiss for Failure to State a Claim. Signed by Judge David G Campbell on 1/12/2018.(DGC, nvo)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Ak-Chin Indian Community, Plaintiff, 10 11 ORDER v. 12 No. CV-17-00918-PHX-DGC Central Arizona Water Conservation District, et. al, 13 Defendants/Counterclaimant/ Crossclaimant, 14 15 United States of America, et al., 16 Defendant/Crossclaim Defendants. 17 18 19 Crossclaim Defendants the United States, Department of the Interior (“DOI”), 20 Bureau of Reclamation (“BOR”), and four officials of the DOI and BOR (collectively, 21 the “United States”) move to dismiss Defendant Central Arizona Water Conservation 22 District’s (“CAWCD”) crossclaim against them under Rules 12(b)(1) and 12(b)(6). The 23 motion is fully briefed and no party has requested oral argument. Because the Court 24 lacks jurisdiction over the crossclaim, it will grant the motion under Rule 12(b)(1). 25 I. Background. 26 Plaintiff Ak-Chin Indian Community sued CAWCD to establish its right to certain 27 water. See Doc. 1. CAWCD moved to join the United States as a necessary party 28 defendant under Rule 19, and the Court granted the motion. See Doc. 61. CAWCD then 1 brought a crossclaim against the United States regarding CAWCD’s obligation to provide 2 the water to Ak-Chin on behalf of the United States. See Doc. 65. The crossclaim seeks 3 injunctive and declaratory relief. Id. 4 5 The history of the underlying dispute is summarized in the Court’s prior order of July 27, 2017. See Doc. 61 at 1-5. Relevant facts are repeated here. 6 CAWCD operates and maintains the Central Arizona Project (“CAP”) pursuant to 7 an operating agreement with the United States. Doc. 65 ¶¶ 4-5. As part of a 1984 8 settlement with Ak-Chin, the United States committed to deliver not less than 75,000 9 acre-feet (“AF”) per year “from the main project works of the [CAP] to the southeast 10 corner of the Ak-Chin Indian Reservation.” Ak-Chin Water Rights Settlement Act of 11 1984, Pub. L. No. 98-530, § 2(a), 98 Stat. 2698 (the “1984 Act”). Additionally, “[i]n any 12 year in which sufficient surface water is available,” the DOI “shall deliver such additional 13 quantity of water as is requested by the Community not to exceed ten thousand acre- 14 feet.” Id. § 2(b). The 1984 Act identifies the CAP as the source of the mandatory 75,000 15 AF, but does not identify a source for the additional 10,000 AF. See Doc. 65 ¶¶ 21-22. 16 The parties refer to this additional 10,000 AF as “§ 2(b) water,” and they dispute whether 17 and under what circumstances CAWCD is obligated to supply it. 18 Pursuant to a contract between the United States and Ak-Chin, Ak-Chin submits 19 an annual schedule of its desired water deliveries to the DOI, which reviews the schedule 20 for compliance with governing statutes and contracts and transmits it to CAWCD to 21 arrange the water deliveries. Doc. 1 ¶¶ 24-28. CAWCD alleges that the United States 22 transmitted a 2017 schedule that included § 2(b) water and would have forced CAWCD 23 to supply water in excess of its obligations. Doc. 65 ¶ 30. The United States instructed 24 CAWCD that the § 2(b) water was to come from “any unused Indian contract water.” Id. 25 ¶ 31. 26 CAWCD argues that various statutes allocate a total of 136,645 AF of CAP water 27 for use by the Ak-Chin and San Carlos Apache tribes each year. 28 ¶¶ 24-29, 51. See Doc. 65 Further, CAWCD asserts that forcing it to supply § 2(b) water from -2- 1 “unused Indian contract water” violates the 2007 CAP Repayment Stipulation from prior 2 litigation between CAWCD and the United States. Doc. 65 ¶¶ 32-33; Doc. 65-1 at 49. 3 Because § 2(b) water is “Excess Water” under the Stipulation, CAWCD argues that it has 4 the “exclusive right in its discretion to sell or use [it] for any authorized purpose of the 5 CAP.” Id. 6 II. Rule 12(b)(1) Standard. 7 Federal courts are courts of limited jurisdiction, “possess[ing] only that power 8 authorized by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 9 511 U.S. 375, 377 (1994). Once jurisdiction is challenged in a Rule 12(b)(1) motion, it 10 “is to be presumed that a cause lies outside this limited jurisdiction, and the burden of 11 establishing the contrary rests upon the party asserting jurisdiction[.]” 12 citations omitted). To establish jurisdiction over its crossclaim against the United States, 13 CAWCD must demonstrate both “statutory authority granting subject matter jurisdiction” 14 over the claims and “a waiver of sovereign immunity.” E.J. Friedman Co. v. United 15 States, 6 F.3d 1355, 1357 (9th Cir. 1993) (internal quotations and citation omitted). 16 Unless CAWCD “satisfies the burden of establishing that its action falls within an 17 unequivocally expressed waiver of sovereign immunity by Congress, it must be 18 dismissed.” Dunn & Black, P.S. v. United States, 492 F.3d 1084, 1088 (9th Cir. 2007). 19 III. Id. (internal Discussion. 20 CAWCD asserts two bases for a waiver of sovereign immunity: the Reclamation 21 Reform Act of 1982 (the “RRA”), 43 U.S.C. § 390uu, and the Administrative Procedure 22 Act (the “APA”), 5 U.S.C. §§ 702, 704, 706. Doc. 65 ¶¶ 39, 43. 23 A. 24 Section 390uu of the RRA reads as follow: 25 Consent is given to join the United States as a necessary party defendant in any suit to adjudicate, confirm, validate, or decree the contractual rights of a contracting entity and the United States regarding any contract executed pursuant to Federal reclamation law. The United States, when a party to any suit, shall be deemed to have waived any right to plead that it is not amenable thereto by reason of its sovereignty, and shall be subject to 26 27 28 The RRA. -3- 1 2 judgments, orders, and decrees of the court having jurisdiction, and may obtain review thereof, in the same manner and to the same extent as a private individual under like circumstances. 3 4 43 U.S.C. § 390uu. 5 The first sentence of the statute is clear: “Consent is given to join the United 6 States as a necessary party defendant . . . .” Id. (emphasis added). The United States 7 concedes that this language authorizes its joinder as a defendant under Federal Rule of 8 Civil Procedure 19, as occurred earlier in this case. But the United States argues that the 9 statute does not authorize CAWCD’s crossclaim against it. Doc. 76 at 4-8. The Court 10 agrees. 11 In Orff v. United States, 545 U.S. 596 (2005), the Supreme Court confirmed that 12 “a waiver of sovereign immunity must be strictly construed in favor of the sovereign.” 13 Id. at 601-02. Applying this principle, the Court held that § 399uu did not permit a direct 14 suit against the United States: 15 16 17 18 Section 390uu grants consent “to join the United States as a necessary party defendant in any suit to adjudicate” certain rights under a federal reclamation contract. (Emphasis added.) This language is best interpreted to grant consent to join the United States in an action between other parties – for example, two water districts, or a water district and its members – when the action requires construction of a reclamation contract and joinder of the United States is necessary. It does not permit a plaintiff to sue the United States alone. 19 20 21 22 23 . . . The statute does not waive immunity from suits directly against the United States, as opposed to joinder of the United States as a necessary party defendant to permit a complete adjudication of rights under a reclamation contract. Id. at 602, 604. 24 CAWCD argues that its crossclaim is not a direct suit against the United States 25 and therefore is not covered by the holding in Orf. Doc. 80 at 5. Noting that it has 26 brought the crossclaim against the United States under Rule 13(g) of the Federal Rules of 27 Civil Procedure, CAWCD argues that “crossclaims do not require an independent basis 28 of jurisdiction if the crossclaim satisfies the test for ancillary jurisdiction.” Id. But the -4- 1 authorities cited by CAWCD in support of this argument do not address sovereign 2 immunity. See Cam-Ful Indus., Inc. v. Fid. & Deposit Co. of Md., 922 F.2d 156, 160 (2d 3 Cir. 1991); Transamerica Life Ins. Co. v. Rabadi, No. CV 15-07623-RSWL-EX, 2017 4 WL 3184168, at *8 (C.D. Cal. July 24, 2017). They instead apply the well-recognized 5 doctrine of ancillary jurisdiction, which holds that federal courts may exercise 6 jurisdiction over nonfederal claims if they arise out of the same facts as federal claims in 7 the same lawsuit. This doctrine, which is a matter of “judicial economy, convenience and 8 fairness to litigants,” Cam-Ful, 922 F.2d at 160, says nothing about a waiver of sovereign 9 immunity. And the Ninth Circuit clearly has held that the modern version of ancillary 10 jurisdiction, found in 28 U.S.C. § 1367, does not waive sovereign immunity. Dunn & 11 Black v. United States, 492 F.3d 1084, 1088 n.3 (9th Cir. 2007) (“§ 1367 merely grants 12 federal courts supplemental jurisdiction over state claims related to certain federal 13 claims” and “cannot operate as a waiver of the United States’ sovereign immunity[.]”) 14 (citation omitted). 15 CAWCD also cites the second sentence of § 399uu, which provides that “[t]he 16 United States, when a party to any suit, shall be deemed to have waived any right to plead 17 that it is not amenable thereto by reason of its sovereignty, and shall be subject to 18 judgments, orders, and decrees of the court having jurisdiction[.]” CAWCD seems to 19 suggest that once the United States has been joined as a defendant under Rule 19, this 20 sentence waives sovereign immunity with respect to crossclaims. Doc. 80 at 4. But 21 CAWCD cites no authority for this argument and the Court finds it inconsistent with the 22 demand that a waiver of sovereign immunity “be unequivocally expressed in statutory 23 text.” Lane v. Pena, 518 U.S. 187, 192 (1996); Jachetta v. United States, 653 F.3d 898, 24 903 (9th Cir. 2011). The sentence cited by CAWCD more naturally means that the 25 United States cannot assert sovereign immunity against the plaintiff once it has been 26 joined as a defendant in a lawsuit. It does not clearly state that the United States has 27 waived its sovereign immunity with respect to any and all crossclaims. 28 -5- 1 Finally, CAWCD asserts that because the United States was successfully joined as 2 a defendant in this suit, it “cannot be a party for some purposes . . . but not for others 3 (being subject to CAWCD’s claims).” Doc. 80 at 5. In support, CAWCD cites Terry v. 4 Newell, No. CV-12-02659-PHX-DGC, 2014 U.S. Dist. LEXIS 92408 (D. Ariz. July 8, 5 2014), but Terry held that certain claims were barred by sovereign immunity despite the 6 fact that the United States had entered the case. Id. at *6-8. And although the Court 7 addressed the meaning of “coparty” under Rule 13(g) with respect to other crossclaims, it 8 did so only to decide whether the crossclaims fell within an exception to the exhaustion 9 requirement in the Federal Tort Claims Act. Id. at *8-13. The Court did not consider 10 § 399uu and its limited waiver of sovereign immunity. 11 CAWCD’s crossclaim is brought directly against the United States. It is the same 12 claim CAWCD would assert in a stand-alone lawsuit against the government, and, under 13 Rule 13(g), is expressly brought “against” the United States. See Fed. R. Civ. P. 13(g). 14 The crossclaim does not fall within § 399uu’s limited waiver of sovereign immunity. 15 Orf, 545 U.S. at 601-02. 16 B. 17 Count 2 of CAWCD’s crossclaim seeks relief under the APA. Doc. 65 at 10. The 18 APA waives sovereign immunity for certain challenges to agency action if three 19 conditions are met: (1) the claims are not for money damages, (2) an adequate remedy for 20 the claims is not available elsewhere, and (3) the claims do not seek relief expressly or 21 impliedly forbidden by another statute. 5 U.S.C. §§ 702, 704; see also Tucson Airport 22 Auth. v. Gen. Dynamics Corp., 136 F.3d 641, 645 (9th Cir. 1998). The United States 23 argues that CAWCD cannot meet the third element because the APA claim is contract- 24 based and thus is impliedly forbidden by the Tucker Act, 28 U.S.C. § 1491. Doc. 76 25 at 9-14. CAWCD argues that its APA claim is not based on contract, but rather is based 26 on various statutes. Doc. 80 at 8-12. The Court agrees with the United States.1 The APA. 27 1 28 The United States also argues that CAWCD’s claim is barred by the second prong, but the Court need not address this argument because the claim fails under the third. -6- 1 The Tucker Act gives the Court of Federal Claims jurisdiction over “any claim 2 against the United States founded . . . upon any express or implied contract with the 3 United States[.]” 28 U.S.C. § 1491. The Tucker Act provides for an award of money 4 damages, but “‘impliedly forbids’ declaratory and injunctive relief and precludes [an 5 APA] § 702 waiver of sovereign immunity in suits on government contracts.” N. Side 6 Lumber Co. v. Block, 753 F.2d 1482, 1485 (9th Cir. 1985); see Tucson Airport Auth., 136 7 F.3d at 646; Spectrum Leasing Corp. v. United States, 764 F.2d 891, 893 (D.C. Cir. 1985) 8 (“It is clear from the APA’s legislative history that section 702’s waiver of sovereign 9 immunity may not be used to circumvent the jurisdictional and remedial limitations of the 10 Tucker Act.”). 11 immunity has not been waived by the APA and the Court lacks jurisdiction. See Tucson 12 Airport Auth., 136 F.3d at 646 (citing N. Star Alaska v. United States, 14 F.3d 36, 37 (9th 13 Cir. 1994) (“N. Star Alaska III”)). Thus, if CAWCD’s crossclaim is contractually based, sovereign 14 Whether claims are contractually based for purposes of the Tucker Act “‘depends 15 both on the source of the rights upon which the plaintiff bases its claims, and upon the 16 type of relief sought (or appropriate).’” Doe v. Tenet, 329 F.3d 1135, 1141 (9th Cir. 17 2003) (quoting Megapulse v. Lewis, 672 F.2d 959, 968 (D.C. Cir. 1982)), rev’d on other 18 grounds, Tenet v. Doe, 544 U.S. 1 (2005); see N. Star Alaska III, 14 F.3d at 37 (adopting 19 the Megapulse test). “The label that is attached to a claim is not conclusive.” Doe, 329 20 F.3d at 1141. The key question is whether the claim asserted “is at its essence a contract 21 claim.” Megapulse, 672 F.2d at 968. 22 23 Allegations in the crossclaim make clear that this dispute is at its essence a contract dispute. The Court will quote relevant allegations. 24 “CAWCD delivers water on behalf of the United States, in accordance with the 25 Operating Agreement between CAWCD and the United States.” Doc. 65 ¶ 5. The 26 United States has entered into water agreements with various Arizona Indian tribes, and 27 “the Operating Agreement obligates CAWCD, upon direction of the United States, to 28 distribute the CAP water allocated in these agreements.” Id. ¶ 6. -7- 1 Various statutes allocate “a total of 136,645 acre-feet of CAP water . . . for use by 2 the Ak-Chin and the San Carlos Apache Tribe.” Id. ¶ 29. “On October 6, 2016, the 3 United States submitted to CAWCD a 2017 CAP water order that exceeded the total of 4 the 136,645 acre-feet identified for use by both tribes.” Id. ¶ 30. “The United States 5 stated that § 2(b) Water ordered for Ak-Chin was to come ‘from any unused Indian 6 contract water.’” Id. ¶ 31. “However, water that is not used under a CAP Indian contract 7 or a CAP non-Indian subcontract is ‘Excess Water,’ as that term is defined in § 5(d)(1) of 8 the 2007 CAP Repayment Stipulation[,]” id. ¶ 32, and “CAWCD has the ‘exclusive right 9 in its discretion to sell or use all Excess Water for any authorized purpose of the CAP,’” 10 id. ¶ 33. Pursuant to its discretionary authority under the Stipulation, CAWCD has 11 established procedures for distributing Excess Water, and those procedures left no Excess 12 Water to be distributed to Ak-Chin as requested by the United States. Id. ¶ 35-36. As a 13 result, CAWCD had no obligation to deliver Excess Water to Ak-Chin, id. ¶ 37, and the 14 “United States directive to CAWCD requiring CAWCD to provide such water constitutes 15 a violation the CAP Repayment Stipulation, which CAWCD seeks to enforce through 16 this action.” Id. ¶ 53. 17 To summarize, (1) the water the United States asked CAWCD to deliver to Ak- 18 Chin in 2017 was Excess Water under various statutes and agreements; (2) CAWCD has 19 exclusive authority to control Excess Water under the 2007 CAP Repayment Stipulation, 20 which is a contract, see Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir. 1989) (“An 21 agreement to settle a legal dispute is a contract and its enforceability is governed by 22 familiar principles of contract law.”); (3) CAWCD, in the exercise of its discretionary 23 authority under the Stipulation, allocated Excess Water to other users and had no 24 obligation to deliver it to Ak-Chin; and (4) the United States order that it do so was a 25 violation of the Stipulation. This claim is based on contract. The source of CAWCD’s 26 alleged right to control Excess Water is a contract (the Stipulation), and the government’s 27 request that it deliver Excess Water to Ak-Chin violated that contract. 28 -8- 1 Language used by CAWCD in the crossclaim removes all doubt. The crossclaim 2 alleges that “this is a suit to adjudicate the contractual rights of contracting entities and 3 the United States regarding contracts executed pursuant to Federal reclamation law, as 4 pled more fully below.” Doc. 65 ¶ 15. It also alleges that “[t]his matter is a contractual 5 dispute arising under contracts entered into pursuant to federal Reclamation laws[.]” Id. 6 ¶ 41. For relief, the crossclaim seeks a declaration that “CAWCD is not obligated to 7 fulfill a delivery request for § 2(b) Water out of Excess Water as defined in the CAP 8 Repayment Stipulation.” Id. at 11. It also seeks an injunction barring the United States 9 from requesting that CAWCD provide Excess Water to Ak-Chin. Id. 10 11 12 13 14 15 16 17 The crossclaim’s APA count is based on the same alleged wrongs. The APA claim makes this assertion: The United States’ 2017 CAP water order exceeded the total of the 136,645 acre feet identified for use by both the Ak-Chin and San Carlos Apache tribes, and included water deliveries to Ak-Chin without the Secretary providing a water supply to CAWCD to fulfill the request for § 2(b) Water from sources other than those denominated as Excess Water. In these and other respects, the United States’ 2017 CAP water order, and other associated actions, are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law” within the meaning of the APA. 5 U.S.C. § 706(2)(A). 18 19 Id. ¶¶ 59-60 (citations omitted). As this language makes clear, the APA claim is based on 20 the assertion that CAWCD has no obligation to provide Excess Water to Ak-Chin – an 21 argument based on the 2007 CAP Repayment Stipulation, which is a contract. Jeff D., 22 899 F.2d at 759. 23 In short, the rights asserted and the remedies sought in the crossclaim are rooted in 24 contract. The crossclaim therefore seeks relief impliedly forbidden by another statute – 25 the Tucker Act – and the APA waiver of sovereign immunity does not apply. Tucson 26 Airport Auth., 136 F.3d at 645. The crossclaim is barred by sovereign immunity.2 27 2 28 The fact that the crossclaim seeks relief under the Declaratory Judgment Act, 28 U.S.C. § 2201, does not change this result. CAWCD does not argue that the Declaratory Judgment Act waives sovereign immunity, and the Act “does not confer federal -9- 1 2 3 IT IS ORDERED that the United States’ motion to dismiss CAWCD’s crossclaim (Doc. 76) is granted. Dated this 12th day of January, 2018. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 jurisdiction, but rather requires an ‘independent jurisdictional basis.’” See Countrywide Home Loans, Inc., v. Mortg. Guar. Ins. Corp., 642 F.3d 849, 854 (9th Cir. 2011). - 10 -

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