City of Fresno v. United States, No. 22-1994 (Fed. Cir. Dec. 17, 2024)

Case: 22-1994 Document: 124 Page: 1 Filed: 12/17/2024
United States Court of Appeals

for the Federal Circuit
______________________
CITY OF FRESNO, ARVIN-EDISON WATER

STORAGE DISTRICT, CHOWCHILLA WATER
DISTRICT, DELANO-EARLIMART IRRIGATION
DISTRICT, EXETER IRRIGATION DISTRICT,
IVANHOE IRRIGATION DISTRICT, LINDMORE
IRRIGATION DISTRICT, LINDSAY-STRATHMORE
IRRIGATION DISTRICT, LOWER TULE RIVER
IRRIGATION DISTRICT, ORANGE COVE
IRRIGATION DISTRICT, PORTERVILLE
IRRIGATION DISTRICT, SAUCELITO IRRIGATION
DISTRICT, SHAFTER-WASCO IRRIGATION
DISTRICT, SOUTHERN SAN JOAQUIN
MUNICIPAL UTILITY DISTRICT, STONE CORRAL
IRRIGATION DISTRICT, TEA POT DOME WATER
DISTRICT, TERRA BELLA IRRIGATION
DISTRICT, TULARE IRRIGATION DISTRICT,
LOREN BOOTH LLC, MATTHEW J. FISHER, JULIA
K. FISHER, HRONIS INC., CLIFFORD R.
LOEFFLER, MAUREEN LOEFFLER, DOUGLAS
PHILLIPS, CARALEE PHILLIPS,
Plaintiffs-Appellants
v.
UNITED STATES, SAN LUIS & DELTA-MENDOTA

WATER AUTHORITY, SANTA CLARA VALLEY
WATER DISTRICT, SAN LUIS WATER DISTRICT,
WESTLANDS WATER DISTRICT, GRASSLAND
WATER DISTRICT, JAMES IRRIGATION
DISTRICT, BYRON BETHANY IRRIGATION
DISTRICT, DEL PUERTO WATER DISTRICT, SAN
JOAQUIN RIVER EXCHANGE CONTRACTORS
WATER AUTHORITY, CENTRAL CALIFORNIA
IRRIGATION DISTRICT, FIREBAUGH CANAL
2 CITY OF FRESNO v. US
WATER DISTRICT, SAN LUIS CANAL COMPANY,

COLUMBIA CANAL COMPANY,
Defendants-Appellees
______________________
2022-1994
______________________
Appeal from the United States Court of Federal Claims

in No. 1:16-cv-01276-AOB, Judge Armando O. Bonilla.
______________________
Decided: December 17, 2024

______________________
ROGER J. MARZULLA, Marzulla Law, LLC, Washington,

DC, argued for plaintiffs-appellants. Also represented by
NANCIE GAIL MARZULLA; TIMOTHY E. METZINGER, CRAIG A.
PARTON, Price, Postel & Parma LLP, Santa Barbara, CA.
MATTHEW JUDE CARHART, Commercial Litigation

Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for defendant-appellee
United States. Also represented by MICHAEL D. GRANTSON,
ELIZABETH MARIE HOSFORD, PATRICIA M. MCCARTHY,
VINCENT DE PAUL PHILLIPS, JR.
DANIEL O’HANLON, Kronick Moskovitz Tiedemann &

Girard, Sacramento, CA, argued for defendants-appellees
Byron Bethany Irrigation District, Central California
Irrigation District, Columbia Canal Company, Del Puerto
Water District, Firebaugh Canal Water District, Grassland
Water District, James Irrigation District, San Joaquin
River Exchange Contractors Water Authority, San Luis
Canal Company, San Luis & Delta-Mendota Water
Authority, San Luis Water District, Santa Clara Valley
Water District, Westlands Water District. San Luis &
Delta-Mendota Water Authority also represented by
REBECCA AKROYD, San Luis & Delta-Mendota Water
Authority, Sacramento, CA.
CITY OF FRESNO v. US 3
DAVID THOMAS RALSTON, JR., Foley & Lardner LLP,

Washington, DC, for defendants-appellees Byron Bethany
Irrigation District, Del Puerto Water District, James
Irrigation District. Also represented by JULIA DI VITO,
FRANK S. MURRAY.
PAUL MINASIAN, Minasian, Meith, Soares, Sexton &

Cooper, LLP, Oroville, CA, for defendants-appellees
Central California Irrigation District, Columbia Canal
Company, Firebaugh Canal Water District, San Joaquin
River Exchange Contractors Water Authority, San Luis
Canal Company. Also represented by ANDREW J.
MCCLURE, JACKSON A. MINASIAN.
ELLEN WEHR, Wehr Water Law & Policy, Sacramento,

CA, for defendant-appellee Grassland Water District.
THOMAS M. BERLINER, Duane Morris LLP, San

Francisco, CA, for defendant-appellee San Luis Water
District. Also represented by ROBERT M. PALUMBOS,
Philadelphia, PA.
ANDREW GSCHWIND, Santa Clara Valley Water District,

San Jose, CA, for defendant-appellee Santa Clara Valley
Water District. Also represented by ANTHONY TOMMY
FULCHER.
ANDREW SHIPLEY, Wilmer Cutler Pickering Hale and

Dorr LLP, Washington, DC, for defendant-appellee
Westlands Water District. Also represented by DANIEL
VOLCHOK.
ALEX M. PELTZER, Peltzer & Richardson, Visalia, CA,

for amici curiae Eastern Tule Groundwater Sustainability
Agency, Greater Kaweah Groundwater Sustainability
Agency, Mid-Kaweah Groundwater Sustainability Agency,
Pixley Irrigation District Groundwater Sustainability
Agency. Also represented by JOSH TODD FOX, Ruddell,
Stanton, Bixler, Mauritson & Evans, LLP, Visalia, CA.
MATTHEW GORDON ADAMS, Kaplan Kirsch & Rockwell

LLP, San Francisco, CA, for amicus curiae Friant Water
Authority. Also represented by WILLIAM CADE MUMBY;
SAMANTHA RACHEL CARAVELLO, Denver, CO.
______________________
Before MOORE, Chief Judge, CLEVENGER and STARK,

Circuit Judges.
STARK, Circuit Judge.
In this case, we are called upon to review how the
federal government resolved a particular dispute over
water distribution during the drought-ridden year of 2014.
As we explain in more detail below, individual growers,
irrigation districts (which provide water to farms), water
districts (which provide water to municipalities), and the
City of Fresno, all located within the area served by the
Central Valley Project (“CVP” or “Project”), sued the
United States (“government”) over its failure to deliver
water they contend they were entitled to under a series of
contracts. The government defended its water allocation
decisions by pointing to obligations it had under other
contracts, to deliver water to another set of entities.
Through adjudication of a series of motions, the Court of
Federal Claims dismissed several of the plaintiffs’ claims
and granted summary judgment to the government on all
remaining claims.
Because we agree with the disposition of the Court of
Federal Claims, we affirm.
I
A
The Central Valley of California lies in the center of the
state, to the west of the Sierra Nevada mountains and to
the east of the Coastal Ranges. The Central Valley,
through which the Sacramento River and the San Joaquin
River flow, is home to the largest federal water
management project in the United States: the CVP. The
CVP consists of dams, reservoirs, hydropower stations,

canals, and other infrastructure operated by the United
States Bureau of Reclamation (“Reclamation”). Through
its operation of the CVP, Reclamation controls water from
the Sacramento and San Joaquin Rivers and allocates
those waters throughout California.
The Sacramento River has substantial water
resources, but the land abutting it is not generally suitable
for agriculture. By contrast, the San Joaquin River lacks
sufficient water to meet all the agricultural and other
needs of the San Joaquin Valley. The CVP aims to “re-
engineer its natural water distribution,” United States v.
Gerlach Live Stock Co., 339 U.S. 725, 728 (1950),
addressing the mismatch between where water is
abundant, but arguably less needed, and where it is scarce,
yet could – if diverted – be put to more efficient agricultural
benefit. See generally Gustine Land & Cattle Co. v. United
States, 174 Ct. Cl. 556, 560-61 (1966).
The CVP consists of multiple “divisions.” Most
pertinent to this case is the Friant Division, which includes
the Friant Dam, where Reclamation collects water
originating in the San Joaquin River and stores that water
in Millerton Lake. From Millerton Lake, the water is
distributed to water and irrigation districts through the
Madera and Friant-Kern Canals.1
Key features of the CVP that are pertinent to the
background and analysis of the issues presented in this
appeal are shown in Figure 1, an annotated map, below.2
1 For simplicity, and because it does not impact the

analysis, we use “water district” throughout the remainder
of this opinion to refer to both water districts and irrigation
districts.
2 See Friant Water Authority Amicus Curiae Br.,

ECF No. 52 at 2 (further annotations added by court).
Figure 1. Map of Central Valley

B
Reclamation’s role in the CVP includes obtaining rights
to water resources in the Central Valley and undertaking
commitments to deliver those waters. Prior to the
inception of the CVP, various private entities owned rights
to San Joaquin River water. These entities, which we (like
the parties) refer to as the “Exchange Contractors,” 3 are
successors to parties that entered into various agreements
with the government. In one such agreement, which we
will call the “Purchase Contract,” the predecessors of the
Exchange Contractors sold the bulk of their rights to San
Joaquin River water to the government while at the same
time reserving their rights to San Joaquin River water “in
excess of specified rates of flow” identified in Schedule 1 of
the Purchase Contract (“reserved waters”). J.A. 232-83,
314. The same parties then executed a “Contract for the
Exchange of Waters” (the “Exchange Contract”), which
granted Reclamation authority to “store, divert, dispose of
and otherwise use” even these “reserved waters” – that is,
the Exchange Contractors’ predecessors’ Schedule 1
“reserved waters” from the San Joaquin River.4 J.A. 315-
16.
3 We use “Exchange Contractors” to refer to,

collectively, the parties that intervened in this litigation to
join the government’s defense: San Luis & Delta-Mendota
Water Authority, Westlands Water District, Santa Clara
Valley Water District, San Luis Water District, Grassland
Water District, James Irrigation District, Byron Bethany
Irrigation District, Del Puerto Water District, San Joaquin
River Exchange Contractors Water Authority, Central
California Irrigation District, Firebaugh Canal Water
District, San Luis Canal Company, and Columbia Canal
Company.
4 The Exchange Contract has been amended several

times. The version in effect at the pertinent time, 2014, is
Because all the rights of the Exchange Contractors’

predecessors now indisputably are held by the Exchange
Contractors, we will at this point dispense with referring
to the predecessors, except where relevant.
As consideration to the Exchange Contractors, the
government agreed in the Exchange Contract to provide
them with “substitute water.” J.A. 315-16. Specifically,
Reclamation’s rights to the Exchange Contractors’
“reserved waters” of the San Joaquin River exist “so long
as, and only so long as, the United States does deliver to
the [Exchange Contractors] by means of the Project or
otherwise substitute waters in conformity with this
contract.” J.A. 316. Article 8 of the Exchange Contract
requires that a specified “Quantity of Substitute Water” be
delivered to the Exchange Contractors:
During all calendar years, other than those defined
as critical, the United States shall deliver to the
[Exchange Contractors] for use hereunder an
annual substitute water supply of not to exceed
840,000 acre-feet in accordance with the [specified]
maximum monthly entitlements.
J.A. 326. During critical years, which are those in which
water is less abundant (according to specific measures set
out in the Exchange Contract), the government is required
to provide a lesser amount to the Exchange Contractors, a
maximum of 650,000 acre-feet. Other provisions, most
pertinently Article 4, describe Reclamation’s obligations
when there are certain interruptions to its ability to supply
substitute waters to the Exchange Contractors. J.A. 315-
17.
C
Having obtained from the Exchange Contractors rights
to San Joaquin River water, Reclamation then contracted
the 1968 version. J.A. 25, 309-44. All references to the

“Exchange Contract” are to this 1968 version.
to deliver water to municipal and private entities within

the Friant Division. Specifically, the government entered
into the “Friant Contract” with certain water districts and
the City of Fresno (“Friant Contractors”);5 the Friant
Contractors, in turn, deliver water to, among others,
individual growers (“Friant Growers”). 6 The Friant
Contract requires Reclamation to deliver water, including
water from the San Joaquin River, to the Friant
Contractors. As consideration, the Friant Contractors
agreed to pay the government for delivered water and paid
part of the costs of constructing the infrastructure of the
CVP.
The Friant Contract obligates the government to
deliver specified amounts of water to the Friant
Contractors each year, although this duty is “subject to the
terms of” the pre-existing Exchange Contract. J.A. 368. In
5 We use “Friant Contractors” to refer to, collectively:

City of Fresno, Arvin-Edison Water Storage District,
Chowchilla Water District, Delano-Earlimart Irrigation
District, Exeter Irrigation District, Ivanhoe Irrigation
District, Lindmore Irrigation District, Lindsay-Strathmore
Irrigation District, Lower Tule River Irrigation District,
Orange Cove Irrigation District, Porterville Irrigation
District, Saucelito Irrigation District, Shafter-Wasco
Irrigation District, Southern San Joaquin Municipal
Utility District, Stone Corral Irrigation District, Tea Pot
Dome Water District, Terra Bella Irrigation District, and
Tulare Irrigation District. We use “Friant Growers” to
refer to, collectively: Loren Booth LLC, Matthew J. Fisher,
Julia K. Fisher, Hronis Inc., Clifford R. Loeffler, Maureen
Loeffler, Douglas Phillips, and Caralee Phillips.
6 All citations to the “Friant Contract” are to the

2010 version, which was in effect in 2014. The parties are
in agreement that this version is representative of the
governing agreements between the Friant Contractors and
the United States.
particular, Article 3(n) of the Friant Contract states that

“[t]he rights of the [Friant] Contractor[s] under this
Contract are subject to the terms of the contract for
exchange waters,” that is, the Exchange Contract. Id.
(emphasis added). But crucially to Appellants’ case here,
the government also agreed in Article 3(n) that it “will not
deliver to the Exchange Contractors [under the Exchange
Contract] waters of the San Joaquin River unless and until
required by the terms of [the Exchange Contract].” Id.
Other provisions of the Friant Contract relate to other
aspects of potential conflicts between the government’s
water delivery obligations to the Friant Contractors and
those it owes to other parties, such as the Exchange
Contractors. Most pertinent to this appeal are Articles
13(b) and 19(a), which provide the government some
measure of immunity from liability for some of its
allocation decisions. J.A. 394, 402. The extent of this
immunity is disputed among the parties.
In sum, then, under the Friant Contract, the Friant
Contractors are entitled to delivery of amounts of water
from Reclamation, including water from the San Joaquin
River. However, because the government only obtained
rights to control San Joaquin River water by virtue of
entering into the Exchange Contract – thereupon
undertaking duties owed to the Exchange Contractors –
the Friant Contract also addresses how Reclamation must
navigate conflicts between its obligations to the Exchange
Contractors and those it owes to the Friant Contractors.
D
As the Court of Federal Claims explained, and the
parties do not dispute:
Since 1951, Reclamation has stored and
diverted the Exchange Contractors’
reserved San Joaquin River water at the
Friant Dam and supplied [the Exchange
Contractors] with substitute water [from
the Sacramento-San Joaquin River Delta]
through the Delta-Mendota Canal. . . .

Since 1962, . . . Reclamation has supplied
the Friant Contractors with San Joaquin
River water impounded at the Friant Dam
and stored in Millerton Lake.
J.A. 25, 27. In all years until 2014, Reclamation was able
to meet its contractual obligation to supply the Exchange
Contractors with substitute water by delivering water
sourced solely from the Sacramento-San Joaquin River
Delta, without drawing on water from the San Joaquin
River.
In early 2014, due to drought conditions, the Governor
of California declared a state of emergency, which
eventually lasted until 2017. Reclamation recognized it
was not going to be able to meet its combined water-
delivery obligations for 2014 to the Exchange Contractors
and the Friant Contractors. Thus, on February 15, 2014,
Reclamation informed the Exchange Contractors that 2014
would be a “critical year,” as that term is defined in the
Exchange Contract. Reclamation predicted it would only
be able to allocate to the Exchange Contractors “336,000
acre-feet rather than the maximum 650,000 acre-feet
critical year entitlement.” J.A. 1859-60. Several months
later, on May 13, 2014, Reclamation updated its forecasts
and advised the Exchange Contractors that “[d]ue to the
continued drought and unique hydrology, Reclamation
[would] for the first time provide water [to the Exchange
Contractors] from both Delta [i.e., Sacramento River water
through the Delta-Mendota Canal] and San Joaquin River
sources.” J.A. 1660 (emphasis added). By drawing from
these multiple sources, including San Joaquin River water,
Reclamation “anticipate[d] being able to meet [the] critical
year demands for the months of April through October[,]
which totals 529,000” acre-feet. Id.
Reclamation did, in fact, supply significant amounts of
water to the Exchange Contractors between May 15 and
September 27, 2014, although it thereafter released no San
Joaquin River water to these entities in October,
November, or December of that year. During 2014,

Reclamation delivered approximately 540,000 acre-feet of
water to the Exchange Contractors, of which roughly
209,000 acre-feet had originated in the San Joaquin River
(before being sent to the Friant Dam and stored in
Millerton Lake), and the other approximately 331,000 acre-
feet having originated in the Sacramento River, released
from the Delta-Mendota Canal.
In the meantime, in March 2014, Reclamation notified
the Friant Contractors that it would not be supplying them
with any water that year, other than the minimum needed
for public health and safety considerations. Ultimately,
while Reclamation delivered these “health and safety”
waters to the Friant Contractors (as well as carryover
water from the previous year’s allocation), what the Friant
Contractors received in 2014 was essentially a “zero
allocation.” J.A. 1888-89.
E
In October 2016, the Friant Contractors and Friant
Growers (collectively, “Friant Parties” or “Appellants”) filed
suit against the United States in the Court of Federal
Claims.7 The Friant Parties alleged that Reclamation’s
actions in 2014, and particularly Reclamation’s diversion
of San Joaquin River water to the Exchange Contractors
instead of to them, constituted a breach of the Friant
Contract. The alleged breach caused Appellants to “suffer[]
huge losses of annual and permanent crops, loss of
groundwater reserves, water shortages and rationing, and
[to] incur[] millions of dollars [of losses] to purchase
emergency water supplies.” J.A. 198. The Friant Parties
further claimed that “[t]he water and water rights of the
7 On January 8, 2021, the Friant Parties filed a

substantially identical case challenging the Bureau’s 2015
water allocations. See City of Fresno v. United States, No.
21-375 (Fed. Cl. Jan. 8, 2021). That matter is currently
stayed. See id., ECF No. 9. (Feb. 11, 2021).
Friant Division appropriated by the United States in 2014

were the property of Plaintiffs, and their landowners and
water users, each of which are the beneficial owners of the
water rights.” J.A. 222. Thus, the Friant Parties alleged
that the government’s actions constituted takings without
just compensation in violation of the Fifth Amendment.
The United States, joined by the Exchange
Contractors, who intervened in the litigation, responded by
arguing that Reclamation had been required under the
Exchange Contract to deliver water from the San Joaquin
River to the Exchange Contractors due to the drought
conditions experienced in 2014, which left no other water
available for Reclamation to use to meet its contractual
obligations. Therefore, they contended, there had been no
breach of the Friant Contract. Further, the government
and Exchange Contractors (collectively, hereinafter,
“Appellees”) asserted that even if there had been a breach,
the Friant Contract immunized the government from
liability, because Reclamation’s water allocation decisions
had not been arbitrary, capricious, or unreasonable.
Finally, Appellees insisted that the Friant Contractors and
Friant Growers could not maintain a takings claim because
none of these entities had a property interest in the water
they expected Reclamation to deliver to them under the
Friant Contract and lacked standing.
The Court of Federal Claims dismissed the Friant
Growers’ breach of contract claim because these entities
were neither parties to nor third-party beneficiaries of the
Friant Contract and, therefore, lacked standing.8 The
court also dismissed the Friant Growers’ and the Friant
Contractors’ takings claims for lack of standing, as none of
these parties possesses a property interest in water
supplied to them directly (or through third parties) by
Reclamation. The Friant Contractors’ breach of contract
claims proceeded and, after discovery, the trial court
8 This aspect of the trial court’s ruling is not on

appeal.
granted Appellees’ motion for summary judgment and

denied the Friant Contractors’ cross-motions for summary
judgment. These rulings were based on the court’s
conclusions that (a) the Friant Contractors’ rights under
the Friant Contract were subordinate to the rights of the
Exchange Parties under the Exchange Contract; (b) the
conditions in 2014 required Reclamation, under the
Exchange Contract, to deliver San Joaquin River water to
the Exchange Contractors, because San Joaquin River
water may be treated as “substitute water;” and (c) the
government was, regardless, immunized under the Friant
Contract for its water allocation decisions because no
reasonable factfinder could find its decisions to have been
arbitrary, capricious, or unreasonable.
The Friant Parties timely appealed. We have
jurisdiction under 28 U.S.C. § 1295(a)(3).
II
The Friant Parties’ appeal presents solely issues of law.
We review de novo a determination by the Court of Federal
Claims to dismiss a claim for lack of subject matter
jurisdiction or failure to state a claim, as well as that
court’s interpretation of a contract. See Ute Indian Tribe of
the Uintah & Ouray Indian Rsrv. v. United States, 99 F.4th
1353, 1364 (Fed. Cir. 2024); Gould, Inc. v. United States,
935 F.2d 1271, 1273 (Fed. Cir. 1991). Likewise, “[w]e
review the Court of Federal Claims’[] grant of summary
judgment under a de novo standard of review, with
justifiable factual inferences being drawn in favor of the
party opposing summary judgment.” Russian Recovery
Fund Ltd. v. United States, 851 F.3d 1253, 1259 (Fed. Cir.
2017). “For Fifth Amendment takings claims, we review de
novo the existence of a compensable property interest.”
Fishermen’s Finest, Inc. v. United States, 59 F.4th 1269,
1274 (Fed. Cir. 2023) (internal quotation marks omitted).
III
On appeal, the Friant Contractors contend that the
Court of Federal Claims misinterpreted both the Exchange
Contract and the Friant Contract. In particular, they

argue that the Exchange Contract did not require the
United States to provide San Joaquin River water to the
Exchange Contractors and, thus, Reclamation breached its
obligations under Articles 3(a) and 3(n) of the Friant
Contract by doing so. In the Friant Contractors’ view, San
Joaquin River water cannot constitute “substitute water”
under the Exchange Contract because Articles 4(b) and 4(c)
of that contract set out the only circumstances under which
San Joaquin River water can be provided to the Exchange
Contractors, and the conditions of those provisions were
not met in 2014. The Friant Contractors alternatively
contend that, even if Reclamation was required by the
Exchange Contract to deliver San Joaquin River water to
the Exchange Contractors, it nonetheless breached the
Friant Contract by delivering an amount of such water that
exceeded what was required. They also dispute the Court
of Federal Claims’ conclusion that the government is
immune from liability for its breach of the Friant Contract.
Finally, the Friant Parties challenge the trial court’s
dismissal of their takings claim.
The government and Exchange Contractors ask us,
instead, to endorse the analysis of the Court of Federal
Claims. They argue that the critical year circumstances
Reclamation confronted in 2014, and the government’s
competing obligations to the Exchange Contractors and
Friant Contractors, required Reclamation to source
“substitute water” from the San Joaquin River for delivery
to the Exchange Contractors, and required it to do so in the
amounts that Reclamation actually delivered. They
further contend that, in any event, the government is
immunized from any breach of the Friant Contract as long
as the government’s determinations were not arbitrary,
capricious, or unreasonable, and here they were not.
Finally, the government and Exchange Contractors urge us
to affirm the trial court’s conclusion that none of the Friant
Parties has a property interest in Reclamation water under
state or federal law and, accordingly, there was no Fifth
Amendment taking.
Our analysis of these various contentions proceeds as

follows. First, we explain that the Exchange Contract
broadly defines “substitute water” and expressly
contemplates that Reclamation may be required, under
certain circumstances, to deliver water originating in the
San Joaquin River to the Exchange Contractors as
“substitute water.” Second, nothing about this
interpretation of the Exchange Contractors’ rights and
Reclamation’s obligations contradicts or renders
meaningless Article 4 of the Exchange Contract. Third,
Reclamation did not breach the Friant Contract by
delivering the amounts of San Joaquin River water it
supplied to the Exchange Contractors. Fourth, even if any
of the actions undertaken by Reclamation were a breach of
the Friant Contract, Reclamation enjoyed immunity from
liability because its actions could not be found to be
arbitrary, capricious, or unreasonable. Fifth, and finally,
we affirm the Court of Federal Claims’ dismissal of the
takings claims.
A
The Friant Contractors allege that the government
breached Articles 3(a) and 3(n) of the Friant Contract.
Article 3(a) provides that, subject to certain conditions and
limitations (which are not at issue in this appeal), the
government “shall make available for delivery to the
[Friant] Contractor[s] from the Project” specified amounts
of water. J.A. 362. Article 3(n) then states:
The rights of the [Friant] Contractor[s] under this
Contract are subject to the terms of the contract for
exchange waters [i.e., the Exchange Contract] . . . .
The United States agrees that it will not deliver to
the Exchange Contractors thereunder waters of the
San Joaquin River unless and until required by the
terms of [the Exchange Contract], and the United
States further agrees that it will not voluntarily
and knowingly determine itself unable to deliver to
the Exchange Contractors entitled thereto from
water that is available or that may become
available to it from the Sacramento River and its

tributaries or the Sacramento-San Joaquin Delta
those quantities required to satisfy the obligations
of the United States under said Exchange Contract
and under [the Purchase Contract].
J.A. 368 (emphasis added). The Friant Contractors allege
that the government breached these provisions by
delivering San Joaquin River water to the Exchange
Contractors in 2014 despite not being required to do so by
the Exchange Contract.9 We disagree.
To determine whether the government breached its
contractual obligations, we start with the text of the
relevant contracts, “the ‘plain and unambiguous’ meaning
of which control[].” Aspen Consulting, LLC v. Sec’y of
Army, 25 F.4th 1012, 1016 (Fed. Cir. 2022). An
“[a]greement must be considered as a whole and
interpreted so as to harmonize and give reasonable
meaning to all of its parts.” Coast Fed. Bank, FSB
v. United States, 323 F.3d 1035, 1038 (Fed. Cir. 2003).
Because the issue of whether the government breached
the Friant Contract turns on whether the government
acted in a way that it was not required to act by the
Exchange Contract, our analysis begins with the text of the
Exchange Contract. We start with “substitute water,”
which Article 3 of the Exchange Contract defines:
The term “substitute water” as used herein
means all water delivered hereunder at the
points of delivery hereinafter specified to the
Contracting Entities [i.e., the Exchange
Parties], regardless of source.
J.A. 315 (emphasis added). By stating that “all water” may
be “substitute water” “regardless of source,” this definition
9 It is undisputed that in 2014 “Reclamation

delivered San Joaquin River-sourced water to the
Exchange Contractors at Mendota Pool.” Gov’t Br. at 26.
does not exclude any source from potentially providing

substitute water. Thus, the Exchange Contract’s definition
of “substitute water” plainly does not exclude San Joaquin
River water.
Other provisions of the Exchange Contract confirm
that the contracting parties contemplated that San
Joaquin River water might be required to be used as
substitute water and delivered to the Exchange
Contractors. See, e.g., J.A. 321 (Article 5(d)(5)(e):
“Whenever sufficient water is available from the San
Joaquin River and/or Fresno Slough[ 10] to meet the needs
of the [Exchange Contractors] at Mendota Pool,
[Reclamation] reserves the right to make all deliveries to
the [Exchange Contractors] at that point.”) (emphasis
added); J.A. 333 (Article 9(f): describing certain conditions
applying “[w]hen less than 90 percent of the total water
being delivered to the [Exchange Contractors] is coming
from the San Joaquin River and/or the Fresno Slough”)
(emphasis added). Additionally, as the Court of Federal
Claims correctly observed, these and other provisions of the
Exchange Contract anticipate that water will be provided
to the Exchange Contractors from the Mendota Pool, even
though the parties understood the Mendota Pool could
contain San Joaquin River-sourced water. J.A. 42 (citing
Articles 5(d), 9(f), and 11).
None of this is to say that the United States is always
entitled to supply San Joaquin River water as substitute
water to the Exchange Contractors. The Friant Contract
restricts the government’s authority to do so to only those
circumstances in which the government is required to use
San Joaquin River water to meet its obligations under the
Exchange Contract. J.A. 445. In other words, only when
Reclamation does not have sufficient water from other
sources – including the Sacramento River, Sacramento-San
Joaquin Delta, and Delta-Mendota Canal – to fulfill its
10The Fresno Slough is “at times a tributary of” the

San Joaquin River. J.A. 234.
contractual duty to supply the specified quantities of

substitute water to the Exchange Contractors is
Reclamation permitted to deliver San Joaquin River water
to the Exchange Contractors, because it is only in those
circumstances that Reclamation is required, under the
Exchange Contract, to do so.
Our conclusion is based on the contractual language we
have discussed above, and it is also supported by two
realities, which are reflected in the contracts. First, the
rights to San Joaquin River water initially belonged to the
predecessors of the Exchange Contractors, and they only
relinquished those rights subject to the government’s
commitment to provide them (and their successors) with
substitute water, with no limitation on the location from
which that water may be sourced. As the government
accurately explains:
The context for the 1939 Exchange Contract was
that the Exchange Contractors’ predecessors-in-
interest held senior water rights that Reclamation
needed to obtain to make possible the Central
Valley Project. . . . Possessing that leverage, the
Exchange Contractors’ predecessors-in-interest
were able to protect themselves by obtaining broad
“substitute water” rights in the Exchange Contract
that were not limited to Delta-sourced [or
Sacramento River] water.
Gov’t Br. at 32.
Second, as we noted earlier and now emphasize, Article
3(n) of the Friant Contract expressly makes “[t]he rights of
the [Friant] Contractor[s],” including the Friant
Contractors’ rights to government delivery of water,
“subject to the terms” of the Exchange Contract. J.A. 368
(emphasis added). Thus, we agree with the Court of
Federal Claims:
[T]he Exchange Contractors are entitled to San
Joaquin River water over . . . the Friant
Contractors, even though it is relegated to a last
resort source [for the Exchange Contractors] under

the Friant Contract. A contrary interpretation
would prioritize the clearly subordinated
contractual rights of the Friant Contractors over
the superior rights of the Exchange Contractors.
J.A. 42.
Therefore, we conclude that San Joaquin River water
may be used by Reclamation as “substitute water” when
such water is required by the Exchange Contract to be used
as “substitute water,” such as when the government cannot
otherwise meet its obligations to the Exchange
Contractors. Here, it is undisputed that during 2014,
Reclamation was only able to deliver approximately
331,000 acre-feet of non-San Joaquin River water to the
Exchange Contractors, thereby requiring the remaining
substitute water to be sourced from the San Joaquin River
to fulfill its obligations under Article 8 of the Exchange
Contract. J.A. 33-34.
B
The Friant Contractors object that our conclusion as
just described cannot be squared with Article 4 of the
Exchange Contract. More particularly, they contend that
the Court of Federal Claims’ interpretation of Article 4(a)
improperly renders Articles 4(b) and 4(c) of the Exchange
Contract nullities – because those are the only sections
that require Reclamation to provide the Exchange
Contractors with San Joaquin River water. We are not
persuaded.
Article 4(a), entitled “Conditional Permanent
Substitution of Water Supply,” provides that the
government may
store, divert, dispose of and otherwise use, within
and without the watershed of the aforementioned
San Joaquin River, the aforesaid reserved waters
of said river for beneficial use by others than [the
Exchange Contractors] so long as, and only so long
as, the United States does deliver to [the Exchange
Contractors] by means of the Project or otherwise

substitute water in conformity with this contract.
J.A. 315-16 (emphasis added). In this way, Article 4(a)
makes the government’s ability to provide San Joaquin
River water to “others,” including the Friant Contractors,
dependent on the government’s simultaneous ability (“so
long as, and only so long as”) to provide substitute water to
the Exchange Contractors.
Article 4(b), “Temporary Interruption of Delivery,” then
provides:
Whenever the United States is temporarily unable
for any reason or for any cause to deliver to the
[Exchange Contractors] substitute water from [the
Sacramento River through] the Delta-Mendota
Canal or other sources, water will be delivered from
the San Joaquin River.
J.A. 316 (emphasis added). The San Joaquin River water
to be provided during such a temporary interruption in the
government’s ability to deliver non-San Joaquin River
substitute water to the Exchange Contractors must be (1)
in the same quantities as required under Article 8 for the
first seven days, and (2) for the rest of the temporary
interruption, “in quantities and rates as reserved in the
Purchase Contract,” which (as we discuss further below)
are quantities significantly less than the quantities owed
to the Exchange Contractors under Article 8. J.A. 316.
Article 4(c) goes on to address “Permanent Failure of
Delivery,” providing that “[w]henever the United States is
permanently unable for any reason or for any cause to
deliver” the Exchange Contractors the required substitute
water, the Exchange Contractors “shall receive the said
reserved waters of the San Joaquin River as specified in
said Purchase Contract.” J.A. 316-17 (emphasis added).
Nothing about our interpretation of the Exchange
Contract, including Article 4(a), renders Articles 4(b) or
4(c) meaningless. The Friant Contractors’ contrary view
rests on their incorrect assumption that Articles 4(b) and
4(c) set out the sole circumstances under which San

Joaquin River water is required to be delivered to the
Exchange Contractors. To adopt the Friant Parties’
reading – that Articles 4(b) and 4(c) are triggered on each
occasion Reclamation is unable (temporarily or
permanently) to meet even a small portion of its substitute
water obligations to the Exchange Contractors from non-
San Joaquin River sources – would materially reduce the
rights the Exchange Contractors bargained for in their
contract.
Reclamation may, for instance, be unable to deliver
substitute water to the Exchange Contractors from the
Sacramento River through the Delta-Mendota Canal
because certain facilities necessary to do so may, at some
point, be inoperative or under repair. Consistent with
these foreseeable possibilities, the Friant Contract
references “errors in physical operations of the Project,
drought, [and] other physical causes beyond the control of
the Contracting Officer,” J.A. 394, which likewise could
result in the government – temporarily or permanently –
being unable to supply the Exchange Contractors with any
non-San Joaquin River-sourced substitute water. Articles
4(b) and 4(c) address these specific circumstances. They do
not more generally govern in all circumstances under
which the government is able to provide some non-San
Joaquin River water to the Exchange Contractors, but is
not able to provide all of the required water from non-San
Joaquin River sources.
Our conclusion is consistent with a common-sense
understanding of the parties’ intent in entering into the
Exchange Contract. The amount of water to which the
Exchange Contractors are entitled under Article 8 of the
Exchange Contract is 840,000 acre-feet in non-critical
years and 650,000 in critical years. This significantly
exceeds the amounts to which they are entitled when
Articles 4(b) and 4(c) are triggered. For instance, during a
temporary interruption in the government’s ability to
supply any substitute water from non-San Joaquin River
sources, the Exchange Contractors are entitled to the
amounts “as specified in Article 8” only “for the first 7

consecutive days.” J.A. 316. Thereafter, the quantities
they are entitled to are reduced to “quantities and rates as
reserved in the Purchase Contract.” Id.
Appellants’ position, then, that Article 4(b) applies
whenever Reclamation is unable to deliver the full amount
of substitute water (from non-San Joaquin River sources)
to which the Exchange Contractors are entitled under
Article 8, would, as the Exchange Contractors write in
their brief, “convert a shortfall of even a single acre-foot
into the Exchange Contractors’ loss of entitlement to the
remaining 649,999 acre-feet of water” in a critical year,
“senselessly punish[ing] [them] for the government’s
inability to meet its obligations.” Intervenors’ Br. at 17.
Nothing in the contractual language warrants such a
result, which would contradict the history and intent of the
Exchange Contract: to provide the Exchange Contractors’
reserved water rights in the San Joaquin River to the
government to use in the CVP but conditioned upon the
government’s obligation to deliver the Exchange
Contractors the specified amounts of substitute water,
preferably from non-San Joaquin River sources but, if
necessary, from the San Joaquin River.
Importantly, when the government acts pursuant to
Article 4(b), instead of Article 8, it is relieved of other
obligations as well. In addition to being permitted to
deliver lesser amounts of substitute water (after the first
seven days) to the Exchange Contractors, invoking Article
4(b) also eliminates the government’s responsibility to
ensure the quality of substitute water (Article 9(f)), waives
limits on the methods by which substitute water is to be
delivered (Article 10), and changes the location where the
substitute water is delivered (Article 5). There is no
indication in the Exchange Contract that the Exchange
Contractors would have absolved the government of all of
these duties in circumstances in which the government was
still able to deliver a substantial proportion of substitute
water from non-San Joaquin River water – as opposed to
the narrow circumstances in which, temporarily or
permanently, the government is unable to deliver any

water from non-San Joaquin River sources.
In short, Article 4(b) addresses specific circumstances
in which the government is wholly unable to provide the
Exchange Contractors with substitute water from
anywhere other than the San Joaquin River. It is
undisputed that in 2014 this never occurred. While the
drought limited how much non-San Joaquin River water
the government delivered to the Exchange Contractors, the
government was able to – and did – deliver non-San
Joaquin River water to the Exchange Contractors
throughout that year; eventually, more than 300,000 acre-
feet of such water. J.A. 2114 (Appellants’ expert
acknowledging “there was never a day [in 2014] in which
Reclamation was unable to deliver water from the Delta-
Mendota Canal to the Exchange Contractors”).
Accordingly, the situation here was not governed by Article
4(b) of the Exchange Contract. Instead, as the government
has repeatedly maintained, it acted in 2014 pursuant to
its authority – and obligation – under Article 8 of that
contract. Hence, again, we agree with the Court of Federal
Claims that the government was entitled to summary
judgment on the Friant Contractors’ breach of contract
claims.
C
The Friant Contractors argue that even if we
determine, as we have, that San Joaquin River water may
be “substitute water,” and that Article 4(a) – and, therefore,
the quantities of Article 8, rather than the lower quantities
of Article 4(b) – applied in 2014, as we have also concluded,
the government nonetheless breached the Friant Contract
due to specific features of the deliveries it made that year.
We again disagree.
First, the Friant Contractors contend that during
certain months in 2014 the government “over-delivered”
San Joaquin River water to the Exchange Contractors,
thereby breaching the government’s duty under the Friant
Contract not to supply any more water to the Exchange
Contractors than was prescribed by the Exchange

Contract. The Friant Contractors did not make this
argument in their opening brief and, as such, it is forfeited.
See United States v. Ford Motor Co., 463 F.3d 1267, 1276
(Fed. Cir. 2006). (“Arguments raised for the first time in a
reply brief are not properly before this court.”). Even if the
argument had been preserved, it lacks merit. As the Court
of Federal Claims explained, the “maximum monthly
entitlements” of the Exchange Contract are non-binding
guidelines, so long as Reclamation does not exceed the
“annual substitute water supply” limit of that same
contract. J.A. 38-39 (emphasis added). It is undisputed
that the government delivered only approximately 540,000
acre-feet of water to the Exchange Contractors over the
whole of 2014. Thus, regardless of how much water the
government delivered the Exchange Contractors during
any particular month that year, it did not exceed the
binding annual cap – so it did not deliver more water than
was required under the Exchange Contract and, hence, did
not breach duties owed to the Friant Contractors under the
Friant Contract.
Second, the government also did not breach the Friant
Contract by including among the substitute water it
provided to the Exchange Contractors water it had stored
in Millerton Lake. The Friant Contractors argue that “over
100,000 acre-feet of water delivered to the Exchange
Contractors (largely from storage in Millerton Lake [and
originating in the San Joaquin River]) . . . should have
been delivered to the Friant Contractors.” Reply Br. at 1.
As we explained above, see supra III.A, including this
water among what it delivered to the Exchange
Contractors was entirely consistent with the Exchange
Contract. To the extent the Friant Contractors are also
contending that Reclamation committed a breach by
storing San Joaquin River water at Millerton Lake in
anticipation of needing it to supply to the Exchange
Contractors, they fail to point to any specific duty in the
Friant or Exchange Contract that the government violated.
At most, the Friant Contractors contend that because
Article 4(b) doesn’t require the use of water from Millerton

Lake, the Friant Contract does not permit it. But they fail
to identify any section of the Friant Contract prohibiting
the use of water from Millerton Lake. Even if no provision
of the Exchange Contract explicitly authorizes this action,
neither does any provision in it (or in the Friant Contract)
prohibit it.
Again, then, there was no breach of contract.
D
Even if the Friant Contractors could, contrary to our
analysis above, demonstrate that delivery of San Joaquin
River-sourced water to the Exchange Contractors in 2014
was not required by the Exchange Contract and, therefore,
such delivery constituted a breach of the government’s
obligations to the Friant Contractors, we would still affirm
the Court of Federal Claims on the alternative grounds of
the government’s contractual immunity from liability. As
the Ninth Circuit has recognized, operation of the CVP
assigns to Reclamation “an extremely difficult task: to
operate the country’s largest federal water management
project in a manner so as to meet the Bureau’s many
obligations.” Cent. Delta Water Agency v. Bureau of
Reclamation, 452 F.3d 1021, 1027 (9th Cir. 2006).
Unsurprisingly, then, when the government undertook
these obligations it did so while also obtaining a measure
of immunity from liability.
Specifically, Article 13(b) of the Friant Contract
provides:
If there is a Condition of Shortage because
of . . . drought . . . or actions taken by the
Contracting Officer to meet legal
obligations . . . then, except as provided in
subdivision (a) of Article 19 of this Contract, no
liability shall accrue against the United
States . . . for any damage, direct or indirect,
arising therefrom.
J.A. 394. Article 19(a), in turn, states:
Where the terms of this Contract provide for

actions to be based upon the opinion or
determination of either party to this Contract, said
terms shall not be construed as permitting such
action to be predicated upon arbitrary, capricious,
or unreasonable opinions or determinations.
J.A. 402. We agree with the government that “[r]ead
together, Articles 13 and 19 prevent liability from accruing
against the United States during periods of drought so long
as the contracting officer does not take actions that are
predicated upon arbitrary, capricious, or unreasonable
opinions or determinations.” Gov’t Br. at 13 (internal
quotation marks omitted).
Taking the evidence in the light most favorable to the
Friant Contractors, no reasonable factfinder could find
that the Contracting Officer’s actions here were of this
nature. During the “critical year” of 2014, Reclamation,
confronted with insufficient water from non-San Joaquin
River sources to meet its full contractual obligation to
supply “substitute water” to the Exchange Contractors,
determined that it was required under the Exchange
Contract to supply San Joaquin River water to the
Exchange Contractors. The record is devoid of evidence
that the government’s actions were anything other than a
good faith, reasonable effort to address a challenging
circumstance in a manner that officials believed was
compliant with the government’s contractual obligations.
Accordingly, the Court of Federal Claims was right to
grant summary judgment to the government on the Friant
Contractors’ breach of contract claim, as the government
could not be found liable based on its actions, which cannot
reasonably be found to be arbitrary, capricious, or
unreasonable.
E
Finally, we address Appellants’ takings claims.11
Appellants allege that the 2014 actions of Reclamation
constituted a taking of their property without justification,
in violation of the Fifth Amendment. Here, again, we reach
the same conclusion as the Court of Federal Claims, which
dismissed these claims based on the lack of a protected
property interest.
While the Court of Federal Claims based its dismissal
decision on the Friant Parties’ lack of standing, pursuant
to Rule 12(b)(1) of the Rules of the Court of Federal Claims
(“RCFC”), J.A. 19, we have determined that the issue
before us is instead whether Appellants stated a takings
claim upon which relief may be granted, an inquiry
governed by RCFC 12(b)(6).12 The Friant Parties
adequately alleged they were injured by Reclamation’s
water allocation decisions and that the Court of Federal
11 The takings claim was brought by the Friant

Contractors (on behalf of non-party individuals to whom
they deliver water), the Friant Growers, and Fresno. J.A.
222-23 (Complaint); see also J.A. 15. The Court of Federal
Claims dismissed as to each of these Appellants, as none
had shown it had a property right to water, and the Friant
Growers additionally lacked any contractual rights
whatsoever. On appeal, the Friant Parties challenge only
the dismissals as to the Friant Contractors (in their
representative capacity) and as to the Friant Growers.
Because, as a matter of law, none of the Appellants has a
protected property interest in the water supplied to them
by Reclamation, we need not make distinctions among
them in our analysis.
12 Appellees moved to dismiss the takings claims

based on both RCFC 12(b)(1) and 12(b)(6). See City of
Fresno v. United States, No. 16-1276C (Fed. Cl. May 15,
2019), ECF No. 136 at 3, 22-23; ECF No. 137 at 15-19, 26,
34-36; ECF No. 138 at 6-7, 9.
Claims could redress their injuries. Hence, they

established standing and that the Court of Federal Claims
had subject matter jurisdiction. See Lujan v. National
Wildlife Federation, 504 U.S. 555, 560-61 (1992) (“[T]he
irreducible constitutional minimum of standing contains
three elements. First, the plaintiff must have suffered an
injury in fact – an invasion of a legally protected interest
which is (a) concrete and particularized, and (b) actual or
imminent, not conjectural or hypothetical. Second, there
must be a causal connection between the injury and the
conduct complained of – the injury has to be
fairly . . . trace[able] to the challenged action of the
defendant, and not . . . th[e] result [of] the independent
action of some third party not before the court. Third, it
must be likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.”)
(alterations in original; internal citations, quotation
marks, and footnotes omitted). Because Appellants’
allegation of a protected property interest is not “wholly
insubstantial and frivolous,” nor “patently without merit,”
they have standing and the trial court had jurisdiction to
determine whether they stated a claim. Bell v. Hood, 327
U.S. 678, 682-83 (1946).
We turn, then, to whether Appellants stated a takings
claim upon which relief may be granted. See Columbus
Reg’l Hosp. v. United States, 990 F.3d 1330, 1342 (Fed. Cir.
2021) (“If we conclude that [the plaintiff ’s] allegations fail
to state a cognizable claim, we can convert the [Court of
Federal Claims’] Rule 12(b)(1) dismissal into a Rule
12(b)(6) dismissal.”). They did not.
In the context of water rights, state law, not federal law,
“define[s] the dimensions of the requisite property rights
for purposes of establishing a cognizable taking.” Klamath
Irr. Dist. v. United States, 635 F.3d 505, 511 (Fed. Cir. 2011)
(internal quotation marks omitted); see also id. at 512-17
(applying Oregon law). As the Supreme Court has stated
on several occasions, “the [Reclamation] Act clearly
provided that state water law would control in the
appropriation and later distribution of the water.” Nevada
v. United States, 463 U.S. 110, 122 (1983) (internal

emphasis omitted); see also California v. United States, 438
U.S. 645, 664 (1978) (same).
Thus, we must assess whether the Friant Contractors
or the Friant Growers possess property rights under
California law. J.A. 199-215 (complaint alleging 18 times
that Appellants have property rights “under California
law”). They do not.
Appellants argue they have “appurtenant” rights to
CVP water because it is delivered to their customers or to
their lands. Open. Br. at 48 (“[T]he Government’s
allocation of water acquired for the Reclamation Act project
is constrained by the appurtenant right of the landowners
within that project who beneficially use the [P]roject’s
water to irrigate their crops.”). Like the trial court, we
understand their argument to be that California law gives
them “appropriative” rights, i.e., a right that “‘confers upon
one who actually diverts and uses water the right to do so
provided that water is used for reasonable and beneficial
uses and is surplus to that used by riparians or earlier
appropriators.’” J.A. 16 (quoting United States v. State
Water Res. Control Bd., 227 Cal. Rptr. 161, 168 (Cal. Ct.
App. 1986)). Appellants are wrong.
First, Appellants do not have any water rights under
California law because, instead, as the California State
Water Resource Control Board (“SWRCB”) has held, it is
Reclamation that “has appropriative water rights in the
Central Valley Project.” Cnty. of San Joaquin v. State
Water Res. Control Bd., 63 Cal. Rptr. 2d 277, 285 n.12 (Ct.
App. 1997); see also J.A. 2399-2403 (SWRCB Decision D-
1641 (Mar. 15, 2000) (“Title to the water rights under the
permits is held by [Reclamation].”), aff’d sub nom. State
Water Res. Control Bd. Cases, 39 Cal. Rptr. 3d 189 (Cal. Ct.
App. 2006)); J.A. 221 (complaint acknowledging “[t]he
United States holds legal title to such water and water
rights”).
Second, as the government points out, “[t]he purpose of
the appropriation doctrine is to reward initiative that
allows water that would have otherwise sat worthless to be

put to beneficial use, thus contributing to the state’s
development.” Gov’t Br. at 56 (citing Irwin v. Phillips, 5
Cal. 140, 146 (Cal. 1855)). This is exactly the type of action
that Reclamation undertook pursuant to the Reclamation
Act, 43 U.S.C. § 372. While Appellants put the water
provided to them by Reclamation to beneficial use, that
supply of water would not exist without the creation and
operation of the Project, i.e., the efforts of Reclamation. In
this context, California law does not assign property rights
in water based on the uses put to it by end users. See
Ivanhoe Irr. Dist. v. All Parties and Persons, 350 P.2d 69,
75 (Cal. 1960) (holding that Project water “belongs to or by
appropriate action may be secured by the United States”
and “[i]n a very real sense it is or will become the property
of the United States”), abrogated on other grounds by
California v. United States, 438 U.S. 645, 672 (1978).
Appellants point to no California precedent
persuasively supporting the proposition that the water
delivered by Reclamation creates in the Friant Growers, or
in the end users whose interests the Friant Contractors
seek to represent, appropriative property rights.
Appellants cite to a decision of the SWRCB, Cal. SWRCB
Decision No. D-935. This SWRCB decision, in the course
of granting permits to the United States to control certain
water rights, discussed the rights of recipients of such
water. J.A. 975-1086. It observed: “[u]nder our permit and
license system the right to the use of water by
appropriation does not vest by virtue of application, permit
or license, [but] by application of the water to beneficial use
upon the land.” J.A. 1074. This statement does not
constitute a holding that putting received Project water to
“beneficial use upon the land” is sufficient to create a
property right in receipt of that water. Other California
authorities, including those we have already cited above,
further clarify this point. See J.A. 2402 (SWRCB Decision
D-1641) (rejecting argument that water users have
property rights in Project water and stating “[the]
argument that the end users of water are the water right
holders would mean that instead of having a relatively few

water purveyors subject to statewide regulatory authority
of the SWRCB, there would be millions of water right
holders”); Israel v. Morton, 549 F.2d 128, 132 (9th Cir. 1977)
(holding that appurtenance doctrine does not apply to
water delivered by Reclamation).
Because Appellants have failed to establish that they
possess any property rights in water delivery from the
government, they cannot maintain a takings claim. See
Fishermen’s Finest, 59 F.4th at 1275 (explaining that only
“if the court concludes that a cognizable property interest
exists” do we determine whether that property interest was
“taken”). Therefore, we affirm the Court of Federal Claims’
dismissal of these claims.
IV
We have considered Appellants’ remaining arguments
and find them unpersuasive. For the reasons stated, we
affirm the judgment of the Court of Federal Claims.
AFFIRMED
COSTS
No costs.

City of Fresno v. United States, No. 22-1994 (Fed. Cir. Dec. 17, 2024)

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City of Fresno v. United States, No. 22-1994 (Fed. Cir. Dec. 17, 2024)

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Case: 22-1994 Document: 124 Page: 1 Filed: 12/17/2024

United States Court of Appeals

CITY OF FRESNO, ARVIN-EDISON WATER

UNITED STATES, SAN LUIS & DELTA-MENDOTA

WATER DISTRICT, SAN LUIS CANAL COMPANY,

Appeal from the United States Court of Federal Claims

Decided: December 17, 2024

ROGER J. MARZULLA, Marzulla Law, LLC, Washington,

MATTHEW JUDE CARHART, Commercial Litigation

DANIEL O’HANLON, Kronick Moskovitz Tiedemann &

DAVID THOMAS RALSTON, JR., Foley & Lardner LLP,

PAUL MINASIAN, Minasian, Meith, Soares, Sexton &

ELLEN WEHR, Wehr Water Law & Policy, Sacramento,

THOMAS M. BERLINER, Duane Morris LLP, San

ANDREW GSCHWIND, Santa Clara Valley Water District,

ANDREW SHIPLEY, Wilmer Cutler Pickering Hale and

ALEX M. PELTZER, Peltzer & Richardson, Visalia, CA,

MATTHEW GORDON ADAMS, Kaplan Kirsch & Rockwell

Before MOORE, Chief Judge, CLEVENGER and STARK,

CVP consists of dams, reservoirs, hydropower stations,

1 For simplicity, and because it does not impact the

2 See Friant Water Authority Amicus Curiae Br.,

Figure 1. Map of Central Valley

3 We use “Exchange Contractors” to refer to,

4 The Exchange Contract has been amended several

Because all the rights of the Exchange Contractors’

the 1968 version. J.A. 25, 309-44. All references to the

to deliver water to municipal and private entities within

5 We use “Friant Contractors” to refer to, collectively:

6 All citations to the “Friant Contract” are to the

particular, Article 3(n) of the Friant Contract states that

through the Delta-Mendota Canal. . . .

November, or December of that year. During 2014,

7 On January 8, 2021, the Friant Parties filed a

Friant Division appropriated by the United States in 2014

8 This aspect of the trial court’s ruling is not on

granted Appellees’ motion for summary judgment and

Contract and the Friant Contract. In particular, they

Our analysis of these various contentions proceeds as

available to it from the Sacramento River and its

9 It is undisputed that in 2014 “Reclamation

does not exclude any source from potentially providing

10The Fresno Slough is “at times a tributary of” the

contractual duty to supply the specified quantities of

resort source [for the Exchange Contractors] under

Contractors] by means of the Project or otherwise

4(c) set out the sole circumstances under which San

amounts “as specified in Article 8” only “for the first 7

permanently, the government is unable to deliver any

Contractors than was prescribed by the Exchange

Article 4(b) doesn’t require the use of water from Millerton

Where the terms of this Contract provide for

11 The takings claim was brought by the Friant

12 Appellees moved to dismiss the takings claims

Claims could redress their injuries. Hence, they

v. United States, 463 U.S. 110, 122 (1983) (internal

allows water that would have otherwise sat worthless to be

holders would mean that instead of having a relatively few

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