The Mohave Valley Irrigation & Drainage District (Irrigation District), located in western Arizona, sued the Secretary of the Department of Interior alleging that the United States breached a 1968 contract that entitled the Irrigation District to an annual allotment of 41,000 acre-feet of water from the Colorado River. The District of Arizona granted summary judgment in favor of the United States. The Irrigation District appealed and the Ninth Circuit affirmed, holding that the Secretary properly considered the present perfected rights (PPRs)[1] of private landowners when it determined that the irrigation district was not entitled to receive its annual allotment.
The Irrigation District alleged that the United States erred by not including the PPRs in it's annual allotment. Conversely, the Secretary maintained that the United States had fulfilled its contractual responsibilities by subtracting the PPRs located within the irrigation district from the allotment. The Ninth Circuit agreed with the United States because the language of the 1968 contract was clear on its face, made no exceptions for holders of PPRs, and thus supported the Secretary's interpretation.[2] The court noted that PPRs had long been recognized at the time the parties entered the contract; therefore, if the parties intended to exclude privately held PPRs, the contract would have so specified.[3]
[1] Present perfected rights (PPRs) are those rights to water from the Colorado River that existed as of June 25, 1929, were acquired under state law, and have been put to beneficial use. Arizona v. California, 376 U.S. 340, 341 (1964). PPRs also include all water rights created under federal law. Id.
[3] The Irrigation District contended that the contract was ambiguous, and that the Uniform Commercial Code (UCC) permits the admission of extrinsic evidence to support its position. 244 F.3d at 1166 (citing U.C.C. ยง 2-202). The Ninth Circuit permitted the Irrigation District to submit evidence, but ultimately rejected its position: "In the absence of such evidence, the contract is not ambiguous." Id.
