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City of Tacoma v. Richardson

December 08, 1998

CITY OF TACOMA, WASHINGTON,, PLAINTIFF-APPELLEE,
v.
BILL RICHARDSON, SECRETARY, U.S. DEPARTMENT OF ENERGY, DEFENDANT-APPELLANT.



Before Mayer, Chief Judge, Newman, and Clevenger, Circuit Judges.

The opinion of the court was delivered by: Mayer, Chief Judge.

Appealed from: United States District Court for the Western District of Washington Judge Robert J. Bryan

Opinion for the court filed by Chief Judge MAYER. Dissenting opinion filed by Circuit Judge CLEVENGER.

The United States Department of Energy, acting through the Western Area Power Administration ("WAPA"), appeals the judgment of the United States District Court for the Western District of Washington, which denied its motion to transfer the city of Tacoma's action against WAPA to the United States Court of Federal Claims. See City of Tacoma v. O'Leary, No. 96-CV-5699 (W.D. Wash. Aug. 12, 1997). Because the district court correctly held that it had jurisdiction over the case pursuant to 43 U.S.C. § 390uu (1994), we affirm.

Background

On December 31, 1984, Tacoma entered into a twenty-year contract, superseding a similar 1983 contract, to provide WAPA electric energy to cover shortfalls in power supplied by the Department of Energy's Central Valley Project. The Central Valley Project is a federal reclamation project that was designed primarily to supply irrigation water to the West, and consists of dams, hydroelectric power plants, and irrigation canals. See City of Santa Clara v. Watkins, 984 F.2d 1008, 1010 (9th Cir. 1993). The project can sell or lease power generated in excess of its needs; it can also protect itself against insufficient supplies of power by agreeing to purchase electric energy, as it did with Tacoma.

The contract stated that WAPA could give Tacoma a one-year notice of termination if the average yearly incremental cost of energy purchased pursuant to the agreement exceeded a certain threshold. On August 24, 1995, an audit determined that the purchase cost had exceeded this threshold. Subsequently, on January 17, 1996, WAPA gave Tacoma a letter purporting to be a one-year notice of termination.

Tacoma brought suit in the United States District Court for the Western District of Washington, seeking a declaratory judgment that WAPA lacked authority to terminate the contract. In addition to claiming that the complaint was brought pursuant to the Administrative Procedure Act, 5 U.S.C. §§ 702-706 (1994) ("APA"), Tacoma argued that WAPA's decision to terminate the contract exceeded its statutory authority, was in violation of the contract, and was arbitrary, capricious, and an abuse of discretion. Tacoma moved for summary judgment, asserting that WAPA lacked grounds for terminating the contract and its method of termination violated the agreement. WAPA cross-moved for summary judgment, alleging that its decision was justified. Finally, Tacoma moved, unchallenged, to amend its complaint to add remedial claims for a declaratory judgment that the termination notice violated the contract, and damages resulting from this alleged breach; and a declaratory judgment that WAPA had waived its right to termination. The district court denied summary judgment to both parties because genuine issues of material fact were present.

The district court also raised two issues sua sponte: whether Tacoma's claims satisfied certain requirements under the APA, and whether the court had subject matter jurisdiction. The latter question is at issue here.

Subsequently, WAPA argued that the waiver of sovereign immunity under the Reclamation Reform Act of 1982, 43 U.S.C. § 390uu (1994), applies only to those agreements implicating a repayment or water service contract, as the term "contract" is defined in 43 U.S.C. § 390bb(1) (1994). The district court rejected this assertion, holding that section 390uu's waiver of immunity is not limited by section 390bb(1)'s definition of "contract," thereby providing the court subject matter jurisdiction over the claims against WAPA. Repeating its immunity contention, WAPA then moved for transfer to the Court of Federal Claims, contending that the Tucker Act, 28 U.S.C. § 1491(a) (1994), gives exclusive jurisdiction to that court; the district court denied the motion. WAPA appeals.

Discussion

WAPA asks us to hold that the district court's refusal to transfer this case to the Court of Federal Claims is in error. "We review decisions of the district courts on questions of jurisdiction under a de novo standard of review." Kanemoto v. Reno, 41 F.3d 641, 643 (Fed. Cir. 1994). Moreover, "[t]his is an issue of statutory interpretation, over which we exercise plenary review." Ed A. Wilson, Inc. v. General Servs. Admin., 126 F.3d 1406, 1408 (Fed. Cir. 1997). Accordingly, our review of the district court's decision not to transfer this case is de novo.

The power agreement at issue was entered into pursuant to the Reclamation Reform Act of 1982, which covers all federal reclamation law. See 43 U.S.C. § 390aa (1994). Here, we must interpret the scope of the act's sovereign immunity waiver, under section 390uu, which provides:

"Consent is given to join the United States as a necessary party defendant in any suit to adjudicate, confirm, validate, or decree the contractual rights of a contracting entity and the United States regarding any contract executed pursuant to Federal reclamation law. The United States, when a party to any suit, shall be deemed to have waived any right to plead that it is not amenable thereto by reason of its sovereignty, and shall be subject to judgments, orders, and decrees of the court having jurisdiction, and may obtain review thereof, in the same manner and to the same extent as a private individual under like ...


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