Glenn-Colusa Irrigation District v. United States Army Corps of Engineers et al

Filing 49

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb on 7/18/2019 GRANTING 44 Defendants' Motion for Partial Summary Judgment. (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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GLENN-COLUSA IRRIGATION
DISTRICT,

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No. 2:17-cv-120 WBS CKD

Plaintiff,
MEMORANDUM & ORDER RE:
DEFENDANTS’ MOTION FOR
PARTIAL SUMMARY JUDGMENT

v.
UNITED STATES ARMY CORPS OF
ENGINEERS; ASSISTANT SECRETARY
OF THE ARMY FOR CIVIL WORKS JOELLEN DARCY, in her official
capacity; LIEUTENANT GENERAL
TODD SEMONITE, in his official
capacity; and COLONEL DAVID RAY,
in his official capacity,
Defendants.

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----oo0oo---Plaintiff Glenn–Colusa Irrigation District brought this

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action against defendants the United States Army Corps of

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Engineers (“USACE”), Assistant Secretary of the Army for Civil

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Works Jo–Ellen Darcy, Lieutenant General Todd Semonite, and

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Colonel David Ray, alleging that the USACE breached a

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construction contract by failing to construct an irrigation

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facility according to the contract’s specifications. (Compl.

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(Docket No. 1).)

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Partial Summary Judgment. (Docket No. 44.)

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I.

Before the court is defendants’ Motion for

Background

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Plaintiff is a state government entity and an

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irrigation district that provides water to farms in Glenn and

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Colusa counties.

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4 (Docket No. 45-2).)

(Decl. of Thaddeus Bettner (“Bettner Decl.”) ¶
Plaintiff diverts water from the

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Sacramento River at a pump station near Hamilton City and then

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conveys that water through a canal to approximately 1,500

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landowners.

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States Army that builds and maintains infrastructure in the

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United States.

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http://www.usace.army.mil/About (last visited July 10, 2019).)

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The individual defendants are Army personnel who oversee USACE

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operations.

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(Id. ¶ 5.)

The USACE is a subdivision of the United

(See US Army Corps of Engineers,

(See Compl. ¶¶ 18-20 (Docket No. 1).)

In 1991, the United States brought an Endangered

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Species Act action against plaintiff in this court.

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Ex. 2 (Docket No. 46-2).)

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unlawfully took endangered Chinook salmon with defective fish

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screens at its Hamilton City pump station.

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After Judge Levi permanently enjoined plaintiff from pumping

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water during the salmon’s migration season, the parties developed

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a long-term solution and created the Hamilton Fish Screen

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Project.

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into a Project Cooperation Agreement (“PCA”) and agreed to co-

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fund the construction of an irrigation gradient facility designed

(Id.)

(Pl.’s App.

The government alleged that plaintiff

(See id. at 1.)

As part of that project, the parties entered

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to improve the performance of a fish screen plaintiff implemented

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at the pump station.

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(Pl.’s App. Ex. 4 (Docket No. 46-4).)

The gradient facility is an in-channel permanent rock

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structure located near plaintiff’s intake channel off the

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Sacramento River.

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the water surface levels at the pumping station and was

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engineered to improve performance of the newly-implemented fish

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screen.

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plaintiff meet demand and also ensure compliance with the pumping

(Bettner Decl. ¶ 9.)

(Bettner Decl. ¶ 11.)

The facility regulates

The facility was designed to help

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restrictions imposed due to the prior litigation.

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Ex. 3 at 15 (Docket No. 46-3).)

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construction of the gradient facility in Section 102 of the

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Energy and Water Development Appropriations Act of 1990, Pub. L.

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No. 101-101, 103 Stat. 641, 649.

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Secretary of the Army, acting through the Chief of Engineers, to

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complete engineering and design and proceed with construction of

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the gradient facility.

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(Pl.’s App.

Congress authorized the

This authorization directed the

The PCA sets forth the obligations of the parties with

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respect to the construction of the gradient facility.

(Pl.’s

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App. Ex. 4.)

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plaintiff to contribute a minimum of 25% of total project costs

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for the facility.

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funds for the project from Congress on the condition that it

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expeditiously construct the project, applying the procedures

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traditionally applied to federal projects pursuant to federal

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law.

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work on the Project . . . shall be exclusively within the control

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of the Government.”

As a non-federal sponsor, the PCA required

(Id. at 5.)

(Id. at 4.)

Additionally, USACE received

The PCA specified that “performance of all

(Id.)
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Part of the PCA, and the focus of defendants’ motion,

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references bank stabilization work near River Mile 208 (“RM

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208”).

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from the gradient facility.

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(Docket No. 46-5).)

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congressional authorization for the construction of the gradient

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facility was modified by Section 305 of the Water Resources

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Development Act of 1999, Pub. L. No. 106–53, 113 Stat. 269, 299.

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(Pl.’s App. Ex. 4 at 1.)

(Id. at 1.)

RM 208 is located about two miles upstream
(Pl.’s App. Ex. 5 at 50:22-25

The PCA refers to RM 208 and notes that

Citing Section 305, the PCA states that

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the government may “carry out bank stabilization work in the

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riverbed gradient facility, particularly, in the vicinity of

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River Mile 208, if the Assistant Secretary of the Army (Civil

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Works) determines that such work is necessary to protect the

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overall integrity of the project, on the condition that

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additional environmental review of the project is conducted,

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which work, if approved may be reflected in an amendment to this

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Agreement.”

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(Id.)

In 2001, the parties executed a Schedule and Cost

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Change Request to complete engineering reports and environmental

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assessments “to evaluate alternatives for the RM 208 bank

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stabilization feature of the gradient facility project.”

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App. Ex. 8 (Docket No. 46-8).)

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contracted with outside parties to complete the referenced

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engineering and environmental work.

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(Docket Nos. 46-9 to 46-17).)

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the Assistant Secretary of the Army made no determination that

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bank stabilization work was necessary to protect the overall

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integrity of the gradient facility project and the parties did

(Pl.’s

In the years after, the USACE

(See Pl.’s App. Exs. 9-15

Ultimately, plaintiff admits that

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not execute an amendment to the PCA to include such work at RM

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208.

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No. 44-3).)

(Decl. of Benjamin Hall (“Hall Decl.”) Ex. A at 6 (Docket

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After the parties were unable to resolve the issues

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they had with the project, plaintiff brought an action against

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the government in the Court of Federal Claims, alleging that the

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United States breached the PCA by failing to construct the

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gradient facility according to the PCA’s specifications.

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Glenn-Colusa Irrigation Dist. v. United States, 129 Fed. Cl. 593

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(2016).

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lack of jurisdiction.

See

The Court of Federal Claims dismissed that action for
Id. at 599.

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In January 2017, plaintiff filed this action, alleging

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causes of action against defendants for: (1) breach of contract,

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(2) breach of the implied covenant of good faith and fair

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dealing, (3) breach of implied warranty, (4) declaratory

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judgment, and (5) violation of the Administrative Procedure Act.

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(Compl. ¶¶ 20–26.)1

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of project defects, that USACE failed to construct improvements

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at RM 208.

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as to all claims arising out of the alleged failure to conduct

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bank stabilization efforts near RM 208.2

Plaintiff alleges, as one of its categories

(Id. ¶¶ 84-89.)

Defendants now seek summary judgment

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This court previously denied defendant’s motion to
dismiss certain claims on the grounds that they were barred by
the applicable statute of limitations. See Glenn-Colusa
Irrigation Dist. v. U.S. Army Corps of Eng’rs, No. 2:17-cv-0120
WBS GGH, 2017 WL 2779012 (E.D. Cal. June 27, 2017).
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The complaint does not clearly outline what claims
pertain to the alleged defects at RM 208. Accordingly, the court
assumes that plaintiff alleges all of its claims as to this
alleged defect.
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II.

Legal Standard

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Summary judgment is proper “if the movant shows that

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there is no genuine dispute as to any material fact and the

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movant is entitled to judgment as a matter of law.”

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P. 56(a).

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of the suit, and a genuine issue is one that could permit a

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reasonable jury to enter a verdict in the non-moving party’s

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favor.

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(1986).

Fed. R. Civ.

A material fact is one that could affect the outcome

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

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The party moving for summary judgment bears the initial

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burden of establishing the absence of a genuine issue of material

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fact and can satisfy this burden by presenting evidence that

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negates an essential element of the non-moving party’s case.

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Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).

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Alternatively, the movant can demonstrate that the non-moving

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party cannot provide evidence to support an essential element

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upon which it will bear the burden of proof at trial.

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inferences drawn from the underlying facts must, however, be

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viewed in the light most favorable to the party opposing the

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motion.

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U.S. 574, 587 (1986).

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III.

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Id.

Any

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

Discussion
Federal law governs contract interpretation where the

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United States is a party.

Mohave Valley Irrigation & Drainage

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Dist. v. Norton, 244 F.3d 1164, 1165 (9th Cir. 2001).

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content of federal law is derived from general federal common

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law.

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(9th Cir. 2016).

The

United States Postal Serv. v. Ester, 836 F.3d 1189, 1195
In interpreting and applying federal common
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law, courts should be “guided by general principles of contract

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law and by the Restatement.”

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Small Bus. Admin., 868 F.2d 340, 343 (9th Cir. 1989) (alteration

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in original).

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principles is “the content of the forum state’s law.”

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Colusa, 2017 WL 2779012, at *3 (citations and quotations

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omitted).

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First Interstate Bank of Idaho v.

Another source of traditional common law
Glenn-

The interpretation of a contract is a mixed question of
law and fact.

Tehama-Colusa Canal Auth. v. U.S. Dep’t of the

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Interior, 721 F.3d 1086, 1093 (9th Cir. 2013).

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determination of whether contract language is ambiguous is a

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question of law.”

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Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999).

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interpretation starts with the language of the written agreement.

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Id.

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interpreted with reference to the whole, with preference given to

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reasonable interpretations.”

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contract are clear and unambiguous, they must be given their

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ordinary meaning.

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However, “the

Klamath Water Users Protective Ass’n v.
Contract

The contract “must be read as a whole and every part

A.

Id.

If the provisions of a

Tehama-Colusa, 721 F.3d at 1093.

Breach of Contract Claim
A breach of contract claim requires (1) the existence

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of a valid contract, (2) an obligation under the contract, (3) a

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breach of that duty, and (4) damages caused by the breach.

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CDF Firefighters v. Maldonado, 158 Cal. App. 4th 1226, 1239 (5th

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Dist. 2008); San Carlos Irrigation & Drainage Dist. v. United

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States, 877 F.2d 957, 959 (Fed. Cir. 1989).

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that defendants did not perform their contractual obligation to

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carryout bank stabilization work at RM 208.
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See

Plaintiff argues

Plaintiff insists

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that such an obligation exists because evidence demonstrates that

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RM 208 is integral to the gradient facility project.

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Here, the express terms of the PCA, the contract at

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issue in this case, define the obligations of the parties and the

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scope of the gradient facility project.

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requires that the government “expeditiously construct the

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project,” applying the procedures traditionally applied to

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federal projects.

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of the agreement states that:

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Article II-A of the PCA

(See Pl.’s App. Ex. 4 at 4.)

And Article I-A

The term “Project” shall mean the Riverbed Gradient
Facility Project for the Sacramento River at the GCID
Intake, California, which shall be operated in an
integrated fashion with the Hamilton City Pumping
Plant Fish Screen Improvement Project. The Riverbed
Gradient Facility is designed with the general
characteristics of a natural riffle and consists of
three sheet pile cutoff walls and rock riprap
revetment along the channel bed and banks as generally
described in the Limited Reevaluation Report titled,
“Gradient Facility Limited Reevaluation Report,
Riverbed Gradient Facility for the Sacramento River at
the GCID Intake, California,” dated, March 1998 and
approved by Director of Civil Works, on 21 April 1998.

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(See id. at 2.)

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208.

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the PCA, does not include bank stabilization at RM 208.

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Hall Decl. Ex. A at 5.)

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contract does not obligate defendants to take any action related

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to RM 208.

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Nothing within the quoted language mentions RM

Likewise, plaintiff agrees that the project, as defined in
(See

Moreover, the operative part of the

In fact, the PCA contains only a single reference to RM

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208, which is in the contract’s recitals.

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at 1; see also Hall Decl. Ex. A at 6 (plaintiff admitting that a

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recital to the PCA contains the relevant reference to RM 208).)

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Recitals in a contract “are merely explanations of the
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(See Pl.’s App. Ex. 4

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circumstances surrounding the execution of the contract.”

See

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Mozdzierz v. Accenture, LLP, No. 06-cv-3877, 2010 WL 4273323, at

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*6 (E.D. Pa. Oct. 29, 2010) (citation omitted).

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generally given limited effect and do not form any part of the

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real agreement.

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Pigments, Inc., 101 Cal. App. 4th 1083, 1101 (1st Dist. 2002);

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see also Grynberg v. F.E.R.C., 71 F.3d 413, 416 (D.C. Cir. 1995)

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(“[I]t is standard contract law that a Whereas clause, while

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sometimes useful as an aid to interpretation, cannot create any

Recitals are

See Emeryville Redevelopment v. Harcros

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right beyond those arising from the operative terms of the

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document.”).

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certain parts of a contract that may otherwise be ambiguous.

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Hunt v. United Bank & Tr. Co., 210 Cal. 108, 115 (1930).

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Ultimately, if the operative part of a contract is clear, that

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meaning controls.

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No. 10-cv-945 CW, 2013 WL 12324116, at *10 (N.D. Cal. Apr. 15,

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2013) (citing 17A Am. Jur. 2d Contracts § 383).

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Their relevance is confined to giving meaning to
See

See Powertech Tech., Inc. v. Tessera, Inc.,

The operative part of the agreement is clear in this

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case.

Plaintiff cannot point to any portion of the PCA that is

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otherwise ambiguous and that would be clarified by the reference

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to RM 208 in the recitals.

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the obligations of each party and provides a definition of the

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scope of the project.

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relevant promise made on the part government in this recital.

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The recital merely notes that “the Government may carry out bank

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stabilization work . . . if the Assistant Secretary of the Army

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(Civil Works) determines that such work is necessary to protect

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the overall integrity of the project.”

The agreement explicitly sets forth

Regardless, the court cannot ascertain any

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(Pl.’s App. Ex. 4 at 1

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(emphasis added).)

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authority under the Water Resources Development Act of 1999 and

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emphasizes that performing such work remains within the Assistant

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Secretary’s discretion, outside of the promises made in the

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operative portion of the agreement.

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The recital merely restates defendants’

In hopes of creating a factual dispute, plaintiff makes

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two arguments in support of its contention that defendants had

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contractual obligations related to RM 208.

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argues that defendants would not have performed all the

First, plaintiff

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previously-mentioned engineering and environmental work if it had

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no obligation to do so.

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USACE used funds earmarked for this project and provided by

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plaintiff pursuant to its cost-sharing obligation under the PCA

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for work on RM 208.

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46-18 & 46-19).)

Second, plaintiff provides evidence that

(See Pl.’s App. Exs. 16 & 17 (Docket Nos.

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Plaintiff’s argument that the government would not have

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performed the work if it did not have an obligation to do so is a

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non-sequitur.

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inquired into the appropriateness of bank stabilization work at

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RM 208.

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under Section 305 of the Water Resources Development Act of 1999,

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the Assistant Secretary had to first determine that such work is

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necessary to the overall project and conduct environmental

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review.

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the existence of an obligation, the court cannot conclude that

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the authorization for the engineering and environmental work was

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anything but an exercise of the Assistant Secretary’s

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discretionary authority under this statute.

The evidence merely shows that the government

Indeed, before defendants could undertake such work,

In the absence of language from the PCA that supports

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Plaintiff’s second argument, that the USACE used funds

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meant for the project, relies on letters sent to plaintiff from

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government officials.

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government asked for required cash contributions under the PCA to

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fund contracts for RM 208 engineering design reports and

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environmental documentation.

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plaintiff’s cash contribution share of 25% (see id.), which is

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the exact share specified in the PCA (see Pl.’s App. Ex. 4 at 5).

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However, this evidence is not enough to establish that RM 208 was

The cited evidence shows that the

(See id.)

The letters mention

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the subject of any contractual obligations.

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evidence like these letters “is inadmissible to contradict a

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clear contract term.”

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Health Tr. v. Elks Lodge, B.P.O.E. No. 1450, 827 F.2d 1324, 1327

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(9th Cir. 1987).

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evidence may be used to prove a meaning of a term that is

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otherwise unambiguous on its face, the offered evidence should

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“prove a meaning to which the language of the instrument is

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reasonably susceptible.”

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Drayage & Rigging Co., 69 Cal. 2d 33, 37 (1968).

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Generally, extrinsic

Pierce Cty. Hotel Emps. & Rest. Emps.

While California law states that extrinsic

Pac. Gas & Elec. Co. v. G. W. Thomas

Here, the meaning of the term “project” in the PCA

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cannot reasonably be construed to include work at RM 208.

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scope of the project is defined in terms of the gradient facility

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structure. (See Pl.’s App. Ex. 4 at 2.)

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enumerates in detail “total project costs,” yet it makes no

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mention of costs for bank stabilization work.

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Instead, the type of costs listed relate to the construction of

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the actual facility, not work upstream.

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plaintiff cannot argue that the parties could not have
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The

Similarly, the PCA

(See id. at 3.)

(See id.)

Further,

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anticipated including references to bank stabilization work in

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these definitions.

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208 in its recitals without identifying any legal rights and

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obligations related to that work.

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As explained previously, the PCA refers to RM

Although plaintiff made cost contributions related to

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RM 208, its remedy at the time would have been to contest its

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obligation to contribute funds.

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acquiescence to expand the scope of the contract beyond what the

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plain language of the agreement supports.

Plaintiff cannot use its then-

See Pace v. Honolulu

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Disposal Serv., Inc., 227 F.3d 1150, 1158 n.10 (9th Cir. 2000)

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(courts cannot “admit[] parol evidence that is wholly

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inconsistent with the terms of [the agreement]”).

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Even if these letters establish that RM 208 is included

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in the scope of the project, nothing in the PCA required

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defendants to perform bank stabilization work at RM 208.

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only mention of RM 208 in the agreement is language emphasizing

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the Assistant Secretary’s discretion under the relevant statute

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to authorize such work.

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Consistent with this statutory authority, defendants simply

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explored the necessity of any work at RM 208.

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agreement did not place any limits on the Assistant Secretary’s

The

(See Pl.’s App. Ex. 4 at 1.)3

Because the

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The PCA also states that such work “if approved may be
reflected in an amendment to this Agreement.” (Id.) If the PCA
already required defendants to conduct bank stabilization work at
RM 208, any further amendment would be unnecessary, and this
language would be superfluous. Such a reading is inconsistent
with basic principles of contract interpretation. See
Brinderson-Newberg Joint Venture v. Pac. Erectors, Inc., 971 F.2d
272, 278–79 (9th Cir. 1992) (“It is well settled that a contract
should be interpreted so as to give meaning to each of its
provisions.”).
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discretion, the court cannot independently determine whether the

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exercise of that discretion was reasonable.

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Basin Elec. Power Co-op., 248 F.3d 781, 797 (8th Cir. 2001)

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(“[W]here a contract gives broad discretion . . . to one of the

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parties,” it is inappropriate to “rewrite the bargained-for-terms

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of the contract by limiting the [] party’s discretion.”).

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Therefore, as a matter of law, the Assistant Secretary’s

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discretionary decision not to authorize bank stabilization work

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at RM 208 is not a breach of the PCA.

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See United States v.

Accordingly, the court must dismiss plaintiff’s breach
of contract claim with respect to RM 208.
B.

Plaintiff’s Remaining Claims Related to RM 208
Plaintiff cannot use any implied covenants, such as the

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implied covenant of good faith and fair dealing, to create an

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obligation related to RM 208.

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project as defined by the agreement did not include RM 208 and,

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even if it did, the PCA did not otherwise require defendants to

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complete bank stabilization work there.

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faith and fair dealing, the only implied covenant mentioned in

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plaintiff’s opposition, “cannot expand a party’s contractual

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duties beyond those in the express contract or create duties

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inconsistent with the contract’s provisions.”

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Timber, Inc. v. United States, 596 F.3d 817, 831 (Fed. Cir.

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2010); see also Racine & Laramie, Ltd. v. Dep’t of Parks &

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Recreation, 11 Cal. App. 4th 1026, 1032 (4th Dist. 1992) (“[T]he

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implied covenant is limited to assuring compliance with the

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express terms of the contract, and cannot be extended to create

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obligations not contemplated in the contract.”).

As explained previously, the

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The implied duty of good

Precision Pine &

For the reasons

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given previously, construing an implied covenant to require

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certain actions on the part of defendants related to RM 208 runs

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counter to the very terms of the PCA.

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Lastly, plaintiff fails to defend in its opposition any

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claims it may have related to RM 208 for breach of implied

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warranty and violations of the Administrative Procedure Act.

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court cannot identify any independent legal support for these

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claims.

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to RM 208, the court must also dismiss the related request for

The

Accordingly, because plaintiff has no claim with respect

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declaratory relief under the Declaratory Judgment Act, 28 U.S.C.

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§ 2201.

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Judgment Act, the party must have a viable underlying claim.

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City of W. Sacramento v. R & L Bus. Mgmt., No. 2:18-cv-900 WBS

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EFB, 2019 WL 2249630, at *4 (E.D. Cal. May 23, 2019) (citations

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omitted).

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In order to be entitled to relief under the Declaratory
See

IT IS THEREFORE ORDERED that defendants’ Motion for

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Partial Summary Judgment (Docket No. 44) be, and the same hereby

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is, GRANTED.

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Dated:

July 18, 2019

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