Stockton East Water District and Central San Joaquin Water Conservation District v. United States
109 Fed. Cl. 460
| Fed. Cl. | 2013Background
- Stockton East and Central sued the United States for breach of the 1983 New Melones water contracts and related damages.
- Damages sought include cost of cover from Third-Party SSJID and expectancy damages for breach years 1999-2004.
- Contracts required minimum water deliveries; breach occurred when Reclamation failed to deliver minimums in 1999-2004 (and earlier years affected by shortages).
- Central argued it incurred $194,560 cost of cover and sought $10.65–$15.33 million in expectancy damages; the court on remand evaluates these damages.
- Court held: Central liable for $149,950 cost of cover; no entitlement to expectancy damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Cost of cover damages allowed? | Central paid SSJID $675,000 for cover water at $15/acre-ft. | Audited statements show only $300,000 paid; per-acre-foot costs differ; costs of cover not recoverable. | Central awarded $149,950 for cost of cover. |
| Existence of expectancy damages? | Central should recover $10.65–$15.33 million for lost benefits from breach. | Damages not proven with reasonable certainty; cannot establish a plausible but-for world. | Central denied expectancy damages. |
| Causation and foreseeability standard? | Damages were within foreseeable scope of breach and caused by non-performance. | Damages not shown under the but-for or substantial factor standards; must prove plausible but-for world. | Court applied but-for causation; Central failed to prove the but-for world. |
Key Cases Cited
- Fifth Third Bank v. United States, 518 F.3d 1368 (Fed. Cir. 2008) (requirement to prove foreseeability, causation, and certainty for expectancy damages)
- Cal. Fed. Bank v. United States, 395 F.3d 1263 (Fed. Cir. 2005) ( Foreseeability, causation, certainty burdens for damages)
- Glendale Fed. Bank, FSB v. United States, 239 F.3d 1374 (Fed. Cir. 2001) (but-for/cost-avoidance principles in damages)
- Yankee Atomic Electric Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008) (preferred but-for causation approach in Winstar/SNF-like claims)
- Bluebonnet Sav. Bank, F.S.B. v. United States, 339 F.3d 1341 (Fed. Cir. 2003) (damages proof and avoided costs considerations)