Stockton East Water Dist. v. United States
2009 WL 3110720
| Fed. Cir. | 2011Background
- This case began in 1993 when water districts sued the United States in federal court for failing to provide contracted water.
- It was transferred to the Court of Federal Claims, which in 2007 entered a judgment for the Government after an eight‑day trial.
- On appeal, we held that binding contracts existed and the Government breached them in certain respects, but rejected total liability absolution and vacated a non-litigated takings claim.
- We remanded for damages determination on upheld contract breaches.
- The Government petitioned for rehearing; in the interest of justice, we granted rehearing and reconsidered our decision, ultimately reaffirming the remand for damages and denying further liability remand.
- The Court’s order, dated March 18, 2011, denied further liability remand and allowed expedited damages proceedings on remand, with a dissent by Judge Gajarsa
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Government breached the contracts by failing to deliver water as promised. | Stockton East maintains breach on failure to deliver promised quantities. | U.S. asserts defenses under Article 9(a) and others may excuse breach. | Yes, breach occurred; Article 9(a) defense limitedly upheld for some years, but not a full shield. |
| Whether the Article 9(a) drought defense should shield the Government from liability for all disputed years. | Plaintiffs rely on the breach and denial of water allocations. | Defense applies only to availability/allocation of water, not operation; some years fell outside. | Limited defense upheld for certain years (1994–1995); others not proved. |
| Whether remand for additional taking of evidence on liability is warranted after rehearing. | Remand necessary for full evidentiary development. | No remand required; record fully developed on key questions. | No remand for liability; remand for damages remains, with expedited proceedings. |
Key Cases Cited
- Stockton East Water District v. United States, 583 F.3d 1344 (Fed. Cir. 2009) (reversed in part on liability, remanded for damages)
- Castle v. United States, 301 F.3d 1328 (Fed. Cir. 2002) (takings action after contract damages; burden issues)
- Brunswick Bank & Trust Co. v. United States, 707 F.2d 1355 (Fed. Cir. 1983) (proper burden of proof on negligence versus reasonable operation in contract case)
- Klamath Irrigation District v. United States, 75 Fed. Cl. 677 (D. Or. 2007) (distinguishing impossibility and sovereign acts defenses; cited by Court of Appeals)