The Stockton-based Central San Joaquin Water Conservation District — which flies under the radar, even compared with other water districts — may have a massive cash windfall coming its way.
In a legal fight dating back two decades, Central and the neighboring Stockton East Water District had claimed they were owed between $37 million and $42 million for water promised but not always delivered by the federal government from New Melones Lake. Stockton residents helped pay for a tunnel and other infrastructure to take the water, only to have the feds inconsistently deliver it for a variety of reasons.
The districts prevailed on the merits of the case, but the damages awarded last year by a trial court amounted to a disappointing $2.5 million combined.
Stockton East settled the case and moved on, but Central pressed the matter, filing an appeal.
And the district won. The U.S. Court of Appeals for the Federal Circuit found on Friday that the lower court should have awarded “expectancy damages.”
Central’s failure to request a full amount of water every year wasn’t necessarily because of reduced demand from its growers, the court found. Rather, it is “eminently plausible” that the government’s failure to provide the water in 1993 is what prompted Central to ask for less in subsequent years.
“At some point most people stop asking for what they have been told they are not going to get, and they make other plans to meet their needs,” the court found.
“… Why would Central request water it was told would not be available? It seems clear that having sufficient water available is paramount to the success of the agricultural enterprise, and failure to obtain the water needed from Central quite plausibly would have caused the farmers to look elsewhere, on their own, for water, or to resort to using groundwater.”
Could the decision have implications for other water districts that have been denied full allocations under their federal contracts?
Read the ruling here.