Barcellos & Wolfsen, Inc. v. Westlands Water District

FLETCHER, Circuit Judge:

Boston Ranch Company, Edwin R. O’Neill, and West Haven Farming Company appeal the district court’s denial of their motion to order the Department of Interior to sell water to them at a certain price pursuant to a contract incorporated into a consent judgment. They argue that § 224(h) of the Reclamation Reform Act of 1982, 43 U.S.C. § 390ww(h), if applied to them, impairs their contract rights and interferes with the consent judgment in violation of due process and the separation of powers required by the Constitution. We affirm the district court.

FACTUAL AND STATUTORY BACKGROUND

This appeal turns on the interpretation of contracts made and a judgment rendered under the aegis of the Reclamation Act of 1902, 32 Stat. 388, and subsequent statutes amending it. The purpose of the original 1902 Act was to encourage people to go West, not to engage in big-time speculation, see Ivanhoe Irrig. Dist. v. McCracken, 357 U.S. 275, 297, 78 S.Ct. 1174, 1186, 2 L.Ed.2d 1313 (1958), but to grow crops on modest family farms in the country’s drier regions so that the nation’s agricultural bounty would increase. The Act promoted the farming of lands in the arid West by creating a system under which the federal government would provide funds to build water projects from which water would be sold at a subsidized price. The Interior Department was directed to charge water users prices that would recapture the cost of building the project exclusive of interest. 43 U.S.C. § 461. The original 1902 Act allowed this subsidized water to be sold only to resident farmers and only for parcels of land no larger than 160 acres. 43 U.S.C. § 431. But the strict restriction against larger farms inhibited Congress’ goal of increasing agricultural production. In 1926 Congress amended the Act to allow Interior to sell water for larger tracts, but only if the owner promised to divest himself of the lands in excess of 160 acres on terms to be worked out by Interior. 43 U.S.C. § 423e.

The appellants are landowners. Each owns more than one thousand acres of farm land in California’s Central Valley. *816They buy water from the Westlands'Water District (the District). The District and the Department of Interior (Interior) entered into a contract in 1963 (the 1963 Contract), under which the District bought water at a subsidized rate of $8.00 per acre foot (including a $0.50 drainage service component) from a federal reclamation project (the Project) for resale under certain conditions to subscribers within the District. As subscribers, the appellants are beneficiaries of the 1963 Contract, even though they are not parties to it.

The 1963 Contract prohibits the District from furnishing Project water to an owner who wishes to use the water to irrigate his “excess lands,” or lands in excess of 160 acres,1 unless the owner agrees in a separate, recordable contract with Interior to certain significant restraints on his rights to the excess lands. Each appellant entered into at least one such recordable contract with Interior between 1969 and 1974.2 The appellants' recordable contracts are identical except for the description of the owner’s particular excess lands.

Article 5 of the recordable contracts provides:

All rights of the Landowner to receive Project Water for its excess lands shall be subject to the provisions of the District Contract and this contract.

Article 25(b)(i) of the District Contract states that as a condition precedent to the right to receive Project water, the landowner shall

[agree] to dispose of his land ... to persons who can take title thereto as nonex-cess land ... within a period ten (10) years after the date of the execution of said recordable contract and agree[ ] further that if said land is not so disposed of within ... ten years, the Secretary [of Interior] shall have the power to dispose of said land ... on behalf of such large landowner.

The District contract and the recordable contracts provide not only that the landowner must sell his excess land within ten years, but also that he must sell at an artificially low appraised price — artificially low because the appraiser may not take into account the fact that the owner of the land has access to water from the Project. Furthermore, the landowner may not sell his excess lands without Interior's approval.

Although the contracts give the landowner a ten-year period during which he may transfer his excess lands without being subject to the Secretary of Interior’s power of attorney over the lands, Article 13 of the recordable contracts provides:

the computation of the ten-year period ... shall not include any year or years in which water or service from the Project may not be available to the land involved through no fault of the District or the Landowner.

Article 13 is potentially important to this dispute, because during the ten-year term of the several recordable contracts at issue, events intervened to prevent the contracts from being performed according to the original design.

In 1976, a federal district court issued an injunction against the Department of Interior, prohibiting it from approving excess land sales pursuant to recordable contracts until Interior promulgated, in accordance with the Administrative Procedure Act, rules governing the criteria and procedures for approving such sales. National Land for People v. Bureau of Reclamation, 417 F.Supp. 449 (D.D.C.1976). While the injunction was in effect, from 1976 to 1982, the appellants were not permitted to sell their excess lands in the manner envisioned by the recordable contracts. However, only one appellant, O’Neill, attempted to sell.3

With regard to those excess lands governed by recordable contracts executed pri- or to 1972, the ten-year period in which to *817sell expired at some time during the period the injunction was in effect. Nonetheless, during this period, Interior provided Project water at the same rate for lands whose ten years had run as for those whose time had not run. It is disputed whether the contracts required this treatment or whether Interior was simply attempting to act equitably in light of a circumstance (the injunction) unforeseeable at the time it entered into the various contracts with the District and the landowners.

The landowners argue that Article 13 must be construed to toll the ten-year period for disposing of land, because Interior’s approving excess land sales is a “service.” They also argue that if the injunction tolled the ten-year period for disposing of their excess lands, it also provided them with extra time to receive water from the Project at a subsidized price. They point to Article 8 of the recordable contracts, which provides:

None of the excess land ... shall be entitled to receive water nor shall service be made available to such land pursuant to the District Contract, except while owned by the Landowner, unless the same shall have been sold to a person who [would be] qualified as a nonexcess landowner to receive Project water ...

Appellants argue that Article 8 must be construed to mean that as long as a landowner owns excess lands under recordable contract, he is entitled to receive subsidized Project water for those lands. The merits of these arguments are discussed elsewhere.

In 1978, the Solicitor of the Interior Department, Leo Krulitz, issued a legal opinion stating that the $8.00 rate specified in the 1963 Contract was inadequate to recover the escalating costs of the Project and was therefore contrary to the federal reclamation laws, see 43 U.S.C. § 461, and not binding. Op. Solic. 85 Interior Dec. 297 (1978). The Krulitz opinion did not address the question of whether excess lands under recordable contracts for more than ten years should receive Project water at the same price as other land or whether they should receive Project water at all. As a result of the Krulitz opinion, the Interior Department began to charge the District between $13.30 and $16.40 per acre foot for all Project water.

In 1979 the appellants sued the District in state court, seeking among other things to have the $8.00 rate enforced. The District joined the United States as a party and removed the action to United States District Court for the Eastern District of California. While the parties were litigating this action, a number of changes in the law occurred.

In 1982, partly as a result of the injunction against Interior concerning excess land sales, Congress passed the Reclamation Reform Act of 1982 (RRA), 43 U.S.C. §§ 390aa et seq., which comprehensively revised reclamation law. The RRA explicitly required Interior to establish rules for disposing of excess lands over which it had a power of attorney, RRA § 209(d), 43 U.S.C. § 390ii(d), and it thus superseded the injunction.

The RRA created a new regime of benefits and burdens for excess landowners that would apply to all contracts between Interior and water districts entered into or amended after the date of enactment.4 It also provided for a transition regime, allowing districts and landowners already parties to contracts with Interior to operate in substantially the same manner as they had under the prior law but with some changes. Section 203(b), 43 U.S.C. § 390cc(b), provided that districts with such existing contracts would be “subject to federal reclamation law in effect immediately prior to the date of enactment of this Act, as that law is amended or supplemented by sections 209 through 230 of this title.” Under this transition regime, the landowner would be entitled to receive water at the price provided in the pre-existing contract. Section 203(c), 43 U.S.C. § 390cc(c), allowed a landowner with a pre-existing contract to elect to be treated under the new regime *818rather than the transition regime. The new regime increased from 160 to 960 acres the amount of land not subject to the burdens imposed on “excess lands,” but at the same time it increased the price of water, requiring that water for excess lands (those in excess of 960 acres) be sold at “full cost.” 5 These higher excess land limits and provisions for full cost pricing were set forth in §§ 203-208 of the Act, 43 U.S.C. §§ 390cc-390hh, and are sometimes referred to as the “discretionary provisions” of the Act because any recipient may choose to come under them.

Section 209(e) of the Act, 43 U.S.C. § 390ii(e), governed the effect of the 1976 injunction on pre-existing recordable contracts. It provided that the period of time provided in the contracts for the landowner to dispose of excess lands would “be extended from the date on which the Secretary again commences the processing ... of the disposition of such lands for a period equal to the remaining period of time under the recordable contract for the disposal thereof by the owner at the time [of the injunction].” Section 209(e) did not specify whether the price of water during the extended period would be the old contract rate or the full cost rate.

Section 205(c) of the Act, 43 U.S.C. § 390ee(c) provided:

Notwithstanding any extension of time of any recordable contract as provided in section 209(e) of this title, lands under recordable contract shall be eligible to receive irrigation water at less than full cost for a period not to exceed ten years from the date such recordable contract was executed by the Secretary in the case of contracts existing prior to the date of enactment of this Act ... Provided, That in no case shall the right to receive water at less than full cost under this subsection terminate sooner than eighteen months after the date on which the Secretary again commences the processing or the approval of the disposition of such lands.

Because § 203(b) provided that water recipients with pre-existing contracts were subject to prior law as supplemented by §§ 209-230, but did not provide explicitly that they were subject exclusively to those provisions, it was unclear whether § 205 applied to those recipients.

In May of 1983, shortly after the Act was passed, Interior issued a proposed regulation providing that § 205 did apply to prior law recipients and was thus part of the transition regime.6 48 Fed.Reg. 19911, 19913 (May 3, 1983). But in December of 1983, Interior changed its position and issued Final Rule ll(i)(4) providing:

Land under recordable contract which is held by a water user not subject to the discretionary provisions may continue to receive irrigation water at the contract water rate for the extended term of the contract....

48 Fed.Reg. 54,781 (former 43 C.F.R. § 426.11(0(4)).

In 1984, the appellants’ recordable contracts were amended in accordance with § 209(e) to extend the period of time for disposing of their excess lands.7 The contracts were not amended to reflect the provision in Interior’s Final Rule ll(i)(4) *819that the price of water would remain at the same contract rate during the extended period.

Meanwhile, negotiations for a settlement of the underlying 1979 lawsuit were proceeding apace. Congress was interested in the outcome of the lawsuit, and on December 19,1985 passed section 122 of an appropriations bill, Public Law 99-190, which provided:

None of the funds made available by this or any other Act for fiscal year 1986 to the Office of the Secretary, Department of Interior, shall be expended to submit to the United States District Court for Eastern California any settlement with respect to Westlands Water District v. United States, et al.... until (1) April 15, 1986, and (2) until the Congress has received from the Secretary and reviewed for a period of 30 days a copy of the proposed settlement agreement which has been approved and signed by the Secretary.

In June of 1986, Interior Solicitor Ralph W. Tarr rescinded the 1978 Krulitz opinion.

On July 24, 1986, the parties agreed to a stipulated judgment in the underlying action. Pursuant to P.L. 99-190, § 122, the Secretary submitted the settlement to Congress. The Subcommittee on Water and Power Resources of the House Committee on Interior and Insular Affairs, chaired by Congressman George Miller, held public hearings. Congressman Miller proposed an amendment to an appropriations bill which would have prohibited the settlement, and the amendment passed the House on July 31, 1986. However, the appropriations bill passed by the Senate and enacted into law did not contain the Miller amendment. The thirty days provided in § 122 elapsed.

On August 29, 1986 the court entered a stipulated judgment. For our purposes, two aspects of the judgment are relevant. First, the judgment provided for refunds to landowners of all water payments in excess of the $8.00 contract rate made since the time of the Krulitz opinion, including, as per Final Rule ll(i)(4), payments m excess of the $8.00 rate for water used on excess lands controlled by the landowners for the extended period provided in § 209(e) of the Act. Second, the judgment provided that “[t]he 1963 Contract is a valid, enforceable and implementable contract entitling the District through the end of 2007 to water and other service as specified therein,” and further provided that “the United States shall perform the 1963 Contract[.]” The judgment was not appealed.

In December of 1987, Congress amended the RRA by enacting a new section 224(h), 43 U.S.C. § 390ww(h) which provided:

The provisions of section 205(c) are and have been applicable to all recordable contracts executed prior to October 12, 1982 [the date of enactment of the RRA], and any decision, rule, or regulation promulgated by the Department of Interior to the contrary is hereby revoked: Provided, That ... the Secretary shall not seek reimbursement for any amount due under this subsection or section 205(c) which was due prior to the date of enactment of this subsection.

On June 10, 1988 Interior published Proposed Rule ll(i)(4)(ii) to implement § 224(h) and overrule the old ll(i)(4). 53 Fed.Reg. 21,857 (1988). On January 17, 1989, the proposed rule became Final Rule ll(i)(4)(ii), which provides:

For land under extended recordable contract owned by prior law recipients, water deliveries shall be made at the full-cost rate ... commencing December 23, 1987, through the effective termination date of the extended recordable contract.

43 C.F.R. § 426.11(i)(4)(ii).

Shortly after § 224(h) was enacted, the appellants brought a motion in the district court to enforce the judgment. They argued that the judgment, in requiring the United States to perform the contract, required Interior to sell water for excess lands under extended-time contracts at the rate of $8.00 per acre foot rather than at the full cost rate of approximately $42.00 that would be required by § 224(h). The motion was essentially one for specific performance of the contract in accordance with the appellants’ understanding of the contract. The appellants did not seek com*820pensation for breach of contract. They argued that § 224(h) did not apply to them. In the alternative, they argued that if § 224(h) did apply, it impaired the contract and interfered with the judgment and thus violated due process and the separation of powers required by the Constitution.

The court denied the motion in a conclu-sory manner, without explanation as to how it interpreted the judgment, the underlying contracts, or the applicable statutes. Since all of these interpretative questions are ones of law reviewable de novo, L.K. Comstock & Co. v. United Engineers and Constructors, Inc., 880 F.2d 219, 221 (9th Cir.1989) (contract interpretation); Keith v. Volpe, 784 F.2d 1457, 1461 (9th Cir.1986) (interpretation of consent decree); Vance v. Hegstrom, 793 F.2d 1018, 1022 (9th Cir. 1986) (statutory interpretation), we decide the issues without remanding.

DISCUSSION

A. The Applicability of § 224(h)

The appellants’ initial argument is that § 224(h) does not apply to them. They offer two theories for why this is so.

First, they argue that because their recordable contracts were amended after October 12, 1982 to conform to the requirements of § 209(e) of the Act,8 they were not “executed” prior to that date. And, the argument continues, § 224(h) provides that § 205(c) is applicable only to recordable contracts “executed prior to October 12, 1982.” This argument has a fundamental flaw. To read the phrase “executed prior to October 12, 1982” to mean “executed prior to October 12, 1982 but not amended after October 12, 1982” would be to render the clause in § 224(h) following that phrase meaningless.9 That clause states, “and any decision, rule, or regulation to the contrary promulgated by the Department of Interior to the contrary is hereby revoked.” The only decision, rule or regulation to the contrary, former 43 C.F.R. § 426.11(i)(4), provided that “land under a recordable contract not subject to the discretionary provisions may continue to receive water at the contract water rate for the extended term of the contract.” (Emphasis added.) That extended term derives from § 209(e), and it was pursuant to a regulation that implemented § 209(e) that the recordable contracts were amended to incorporate the extended term. See 43 C.F.R. § 426.11(i)(3). These amendments could only have been made, of course, after the October 12, 1982 date of the RRA’s enactment. Thus, to read § 224(h) the way the appellants do would impute to Congress an intent to exempt from a statute that revokes a given regulation those persons who had been virtually the only ones to whom the revoked regulation applied. We do not impute to Congress an intent to engage in an exercise in futility.10

The appellants’ second argument why § 224(h) does not apply to them is specious. They argue that since Congress was aware of the Westlands controversy (having been presented in a previous session with the opportunity to scuttle the 1986 Westlands settlement), the fact that the Westlands Water District was not mentioned by name in § 224(h) implies that Congress intended to exempt landowners in the Westlands District. Section 224(h) provides explicitly that § 205(c) is applicable to “all” recordable contracts, not all except those that Congress had reason to be aware of, and not, as the dissent argues, all except those incorporated into judgments. Section 224(h) clearly applies to the appellants.

*821At oral argument, counsel for the appellants conceded that interpreting § 224(h) to exempt his clients was “stretching it.” Appellants nonetheless rely on the canon that if a certain reading of a statute raises “serious” constitutional questions, a court should stretch to find a “fairly possible” alternative construction that will avoid the questions. See Johnson v. Robison, 415 U.S. 361, 366-67, 94 S.Ct. 1160, 1165-66, 39 L.Ed.2d 389 (1974). This canon has its limits; the court need not play the role of contortionist. There is no fairly debatable construction of § 224(h) that would exempt the appellants from its provisions. Moreover, for reasons discussed below, we do not believe that the constitutional questions the appellants raise are sufficiently serious to warrant invoking the canon in any event.

B. The Due Process/Impairment of Contract Issue

Appellants argue that § 224(h) as applied to them deprives them of property without due process in violation of the fifth amendment by impairing the recordable contracts and the District’s contract with Interior.

The fifth amendment prohibits the federal government from depriving a person of “property without due process of law.” In Lynch v. United States, 292 U.S. 571, 579, 54 S.Ct. 840, 843, 78 L.Ed. 1434 (1934), the Supreme Court held that “[r]ights against the United States arising out of a contract with it” are property rights protected from deprivation or impairment by the fifth amendment.11

In impairment of contract and due process cases involving contracts, two somewhat different kinds of contracts have been held to create contract rights protected by the constitution. In addition to traditional contracts, assented to in some formal way by both parties, see Lynch, statutes themselves have been treated as contracts, “when the language and circumstances evince a legislative intent to create private rights of a contractual nature enforceable against the state.” United States Trust Co. v. New Jersey, 431 U.S. 1, 17 n. 13, 97 S.Ct. 1505, 1515 n. 13, 52 L.Ed.2d 92 (1977). See also Indiana ex rel. Anderson v. Brand, 303 U.S. 95, 104-05, 58 S.Ct. 443, 447-48, 82 L.Ed. 685 (1938). The appellants do not claim that the 1982 Act and regulations promulgated thereunder constitute a “contract” impaired in 1987 by the passage of § 224(h). They claim only that the District Contract and the recordable contracts, of their own force, gave them rights that Congress allegedly took away in enacting § 224(h).

To prevail in their claim that § 224(h) deprived them of their contract right to water at $8.00 per acre foot for excess lands receiving water for more than ten years, the appellants must first, of course, demonstrate that they had such a contract right before the enactment of § 224(h). See National R. Passenger Corp. v. A.T. & S.F.R. Co., 470 U.S. 451, 105 S.Ct. 1441, 84 L.Ed.2d 432 (1985). If they can demonstrate they had such a right, they must then show a substantial impairment of that right. See id. If no substantial impairment is shown, the inquiry ends. See id. In this case, the inquiry ends after the first step. The appellants cannot demonstrate that the right they claim is a right they are entitled to by contract.

The appellants make the remarkable argument that, regardless of the reason for the landowner’s failure to sell, he is entitled to subsidized water for as long as he owns his lands. They argue that Article 8 of the recordable contracts compels this conclusion. Article 8 provides:

None of the excess land ... shall be entitled to receive water nor shall service be made available to such land pursuant to the District Contract, except while owned by the Landowner, unless the same shall have been sold to a person who [would be] qualified as a nonexcess landowner to receive Project water ...

*822Appellants argue that the statement, “None of the excess land ... shall be entitled to receive water ... except while owned by the Landowner” is logically equivalent to the statement, “While excess land is owned by the Landowner, he shall be entitled to receive water.” We find this argument unpersuasive. The former statement plainly means that it is a necessary condition for land to receive water that it be owned by the Landowner who executed the recordable contract. The landowners assert that it is a sufficient condition. Appellants have offered no evidence to support their interpretation; the plain language of the contract is otherwise and accordingly controls. We therefore reject the appellants’ argument that under Article 8, the landowner’s mere ownership of excess lands entitles him to Project water.

Thus far, we have determined only that Article 8 does not answer the question of what rights, if any, are given by the contracts to a landowner whose ten years has expired. Unfortunately, no other provision of the contracts unequivocally answers the question. Article 25 of the District Contract comes closest. It provides:

(b) Each large landowner as a ... condition precedent to the right to receive water made available pursuant to this contract for any of his excess lands shall:
(i) Before any water is furnished by the District to his excess land, execute a valid recordable contract, agreeing ... to dispose of his excess land ... to persons who can take title thereto as nonexcess land ... at a price not to exceed the approved, appraised value of such excess land and within a period of ten (10) years, after the date of the execution of said recordable contract^] and agreeing further that if said land is not so disposed of within ten (10) years, the Secretary shall have the power to dispose of said land at the appraised value ... on behalf of such large landowner.

The Article makes a landowner’s entering into a recordable contract, wherein he agrees to dispose of his excess lands within ten years, a condition precedent to his right to receive water pursuant to the contract. Appellants would have us read the Article as providing that in order to receive water, a landowner need only execute the contract and need not thereafter take the action required by the contract in order to continue receiving water. We reject such a wooden reading for two reasons. First, it is unlikely that the parties intended or expected that the landowners would make promises and not attempt to perform them. Thus, although the condition precedent to receiving Project water is phrased in terms of the landowner’s “agreeing” to dispose of his excess lands within ten years, his failure to abide the agreement should be considered a breach of the condition in order to give the agreement life. Second, it is doubtful that Interior’s right to a power of attorney was intended to be its exclusive remedy. The landowner’s failure to sell as required by the contract should relieve Interior of the obligation to provide water. If it were otherwise, there would be little or no incentive for the landowner to sell within the prescribed period. The contract provides that the excess lands must be sold at a price determined by appraisers according to a formula that discounts the true market value of the lands by excluding the value of the water rights. The landowner would thus have much to gain by delay (continued cheap water) and little to lose (at most the right to choose the identity of the person who would receive his lands). Contract obligations ordinarily are mutual. There is no reason to read this contract as an exception.

Although the District Contract and recordable contracts do not entitle a landowner to receive water for more than ten years if he chooses not to sell his excess lands within that time, it does not necessarily follow that a landowner who is legally ;precluded, from selling his land in the manner provided by the contracts should be deprived of Project water for an extended time. As a result of the injunction against Interior owing to its failure to comply with the APA, the appellants here were legally precluded from selling their lands when their respective ten-year periods expired. We need not decide whether Interior’s noncompliance with the APA in its capacity as an administrative agency should be charge*823able to Interior in its capacity as a commercial contractor and thus be considered a breach of the water contracts.12 For even if Interior “breached” the District Contract and recordable contracts by failing to comply with the APA, it does not follow that Interior is constitutionally compelled to provide the landowners with the particular remedy they desire — eight dollar water for as long as they own their lands.

The landowners in this suit seek specific performance of a contract that they argue entitles them to subsidized water for as long as they own their lands. They do not seek compensatory damages resulting from Interior’s failure to process excess land sales. If they were seeking such damages, relief would be limited to losses they suffered as a result of not having the opportunity to sell their land less the gains they reaped from receiving $8.00 water for a period far longer than they originally could have expected.13 The question we face is thus quite narrow: whether the appellants have a constitutionally-protected contract right to the particular remedy they seek.

ee appellants argue that Article 13 of the recordable contracts entitles them to-water at the contract rate for more than ten years. Article 13 provides for a tolling of the ten year period to sell excess lands if “water or service from the Project” becomes unavailable during that time. The appellants argue that “service” refers to the service of approving excess land sales and that they are thus entitled by the contract to additional time in which to dispose of their lands. Their interpretation of the word “service” is unsupportable,14 but even if we accept their interpretation, Article 13 does not entitle them to subsidized water.15 The appellants need to show more than just their entitlement to own the excess lands for more than ten years free of the Secretary’s power of attorney; they need to show their entitlement to Project water under the terms of the contract during that time.

Article 13, when,properly construed, perhaps at most implicitly provides for the converse relationship between extended ownership and extended water rights. If a landowner were actually to suffer from a *824cut off of water through no fault of his own, it is arguable that he would be entitled to hold onto his lands for a long enough time to receive the benefit that Article 13 seems intended to confer.

The primary benefit that the landowners receive from the federal reclamation program is the privilege of receiving subsidized water. Having to sell their excess lands within a limited period of time at an artificially low appraised price is an intended burden.

When Congress passed the Reclamation Act of 1902, it had two goals — to encourage family farming on modest-sized parcels and to increase agricultural output by subsidizing the irrigation of formerly arid and unproductive lands. See Ivanhoe Irrig. Dist. v. McCracken, 357 U.S. 275, 78 S.Ct. 1174, 2 L.Ed.2d 1313 (1958); United States v. Tulare Lake Canal Co., 535 F.2d 1093 (9th Cir.1976). Because the 1902 Act’s attempt to advance the first goal by strictly limiting access to subsidized water to those who owned fewer than 160 acres proved to interfere too much with the second goal, Congress adjusted the balance by amending the Act to authorize Interior to allow larger operators to receive water in exchange for their promise to divest themselves of excess lands. See 43 U.S.C. § 423e.

Against this backdrop, Article 13’s guarantee to the landowner of subsidized water for the period of time during which he lost that right makes good sense, since the essential benefit to the landowner provided by the contract (and the Act) is cheap water for the specified period of time. It does not follow that in exchange for the temporary loss of the right to sell their excess lands at an artificially low price, the landowners should receive the right to additional years of cheap water. The statutory and contractual scheme suggest that the right to subsidized water is likely to be more valuable than the right to sell lands; otherwise there would be no need to coerce the landowner to sell at the end of ten years— he would do it right away.

Other than Article 13, the only contractual provision that the appellants rely on to link ownership with entitlement to subsidized water is Article 8, which we concluded did not so entitle landowners.16

We have found no provision in either the District Contract or the recordable contracts that provides that the right to receive water on excess lands for more than ten years follows from the right to own them for more than ten years. As we have explained, the very structure of the statutory and contractual scheme suggests otherwise.

The landowners’ argument that the contracts give them the right to subsidized water for more than ten years thus finds no support either in the language or in the underlying purpose of the contracts. We agree with Interior that the 1963 Contract simply does not provide for the unforeseen situation presented by the injunction against the approval of excess land sales. When the ten-year periods expired, the parties had to deal with the situation without explicit guidance from the contract.17

In a case where the government is charged by private individuals with breaching its own obligations in violation of the Constitution, “[a]ny ambiguity in the contract must operate against the adventurer and in favor of the public.” Charles River *825Bridge v. Warren Bridge, 36 U.S. (11 Pet.) 420, 544, 9 L.Ed. 773 (1837).18 Because it was an unforeseen event—the injunction—that prevented the contracts in this case from being performed as planned by either party to them, it is not surprising that the contracts contained no explicit provisions governing the situation in which the parties found themselves.19

Although we hold that the District contract and the appellants’ recordable contracts did not give them any contractual right to receive more than ten years of subsidized water, we do not, however, imply that they lacked any reasonable expectation to receive the water for the extended period of their recordable contracts. Interior’s December, 1983 regulations created reasonable expectations that the landowners would be able to receive subsidized water for the extended period, but the regulations did not create constitutionally pro-tectable expectations. A legislature may repeal a statute that created non-contractual expectations as long as there is a rational basis for repeal. See U.S. Railroad Retirement Board v. Fritz, 449 U.S. 166, 174, 101 S.Ct. 453, 459, 66 L.Ed.2d 368 (1980). See also United States v. Sperry Corp., — U.S. —, 110 S.Ct. 387, 107 L.Ed.2d 290 (1989). It follows a fortiori that a repeal of regulations under that statute is subject to no greater judicial scrutiny. The appellants do not claim that § 224(h) fails the rational basis test.20

In sum, since we find that the appellants never had a contractual right to receive more than ten years of water for their excess lands, Congress, in enacting § 224(h), did not deprive them of a property right within the meaning of the fifth amendment.

C. The Separation of Powers

The appellant’s next claim is that, in addition to the contracts, the stipulated judgment gave them vested rights which Congress stripped them of in enacting § 224(h). They argue that in so doing, Congress invaded the province of the judiciary and violated the principle of separation of powers.

The fifty-six page judgment settled a great number of disputes among the parties involved, concerning, among other things, priorities among various users within the District, drainage facilities, and the issues raised by the 1978 Krulitz opinion. Nowhere does the judgment discuss the *826issue of the price of water for excess lands under extended term contracts. The judgment requires the United States to perform the 1963 District Contract, but as we have decided, that contract does not govern the particular issue addressed by § 224(h).

The appellants argue that because at the time the parties negotiated and entered into the judgment they assumed that Interior Rule ll(i)(4) was a definitive interpretation of the RRA, the judgment therefore incorporated that interpretation of the RRA and bound the parties to it. They argue that reading the judgment to incorporate Interior's rule would be just, because, in reliance on that rule, they provided valuable consideration in the form of forfeited claims.

We doubt that even if the parties had expressly incorporated Interior’s rule into the judgment, they would be entitled permanently to benefit from it were the law to change. “The parties cannot, by giving each other consideration, purchase from a court of equity a continuing injunction.... The parties could not become the conscience of the equity court and decide once and for all what was equitable and what was not, because the court was not acting to enforce a promise but to enforce a statute.” System Federation v. Wright, 364 U.S. 642, 651-53, 81 S.Ct. 368, 373-74, 5 L.Ed.2d 349 (1961). But the judgment does not provide for terms such as those spelled out in Interior’s former rule. All the judgment requires is for the 1963 Contract to be performed. We have already held that § 224(h) is not inconsistent with the 1963 Contract.

The appellants did not ask the district court to modify or reopen its judgment in light of a purported change in the law.21 They took the riskier but potentially more lucrative step of claiming the change in law was an unconstitutional act that interfered with the judgment. For the reasons stated above, this claim cannot be sustained.

AFFIRMED.

. 320 acres for a husband and wife owning land jointly.

. Appellant Boston Ranch executed two recordable contracts in 1972, covering 23,711 acres of excess lands. Appellant O’Neill executed three recordable contracts in 1969 and 1970, covering 974 excess acres. Appellant West Haven Farming Co. executed five recordable contracts in 1973 and 1974, covering 5,556 excess acres.

.O'Neill filed a separate lawsuit concerning his right to sell.

. It is undisputed that the stipulated judgment is not an amended contract for the purposes of the Act.

. The full cost price is calculated to recapture interest on the government's construction costs.

. In its entirety, the proposed rule provided:

A landowner who has land under an extended recordable contract may continue to receive irrigation water for that land at the contract water rate for the full term of the original contract. However, the landowner must pay the full cost rate during the entire extended contract period unless the contract lapsed during the moratorium [i.e. the injunction] or matured within eighteen months of the date the moratorium was lifted. If the maturity date under the original contract lapsed during a moratorium or if the original contract matures within eighteen months of the date a moratorium was lifted, the landowner may receive irrigation water at the contract rate for no more than eighteen months after the processing of excess land resumes. Thereafter the landowner must pay the full cost of the irrigation water delivered during the extension period.

48 Fed.Reg. at 19913.

.The contracts were extended by approximately eight years, the length of time of the moratorium on excess land sales.

Mr. O'Neill’s contract had not been so amended because he was in the process of disposing of his excess lands.

. This argument would not help appellant O'Neill, who did not enter into an amended recordable contract.

. This reading would also do violence to the plain language of § 224(h), which does not distinguish between those contracts amended after their initial execution and those not so amended.

. The legislative history of § 224(h) supports our conclusion. The conference report stated that the reason for enacting § 224(h) was that lands subject to recordable contracts executed prior to October 12, 1982 "have already received irrigation water for ten years regardless of any extension or suspension of the contract for purposes of disposal of excess lands.” H.R.Conf. Rep. No. 495, 100th Cong., 2d Sess. 786. Those extensions or suspensions were embodied in the very amendments that the appellants claim exempt them from § 224(h).

. The Contract Clause of article I, § 10 prohibits states from impairing contracts; the fifth amendment’s prohibition against federal impairments is not necessarily coextensive. See Pension Guaranty Corporation v. R.A. Gray & Co., 467 U.S. 717, 732-33, 104 S.Ct. 2709, 2719-20, 81 L.Ed.2d 601 (1984).

. See Horowitz v. United States, 267 U.S. 458, 461, 45 S.Ct. 344, 345, 69 L.Ed. 736 (1925) (noting that "United States when sued as a contractor cannot be held liable for an obstruction to the performance of the particular contract resulting from its public and general acts as a sovereign.”)

. The landowners received water at the $8.00 rate for far more than ten years, because Congress (and Interior) provided that there would he no interruption of subsidized water while the moratorium on excess land sales was in effect and for an additional eighteen months following the moratorium. See RRA §§ 205(c), 224(h). The appellants have thus received subsidized water for from 13 to 18 years, depending on when they executed their recordable contracts. We note further that two of the appellants, Boston Ranch and West Haven Farming, never even attempted to sell their excess lands. The third appellant, O’Neill did try to sell and subsequently brought a successful suit in the Court of Claims for compensatory damages.

. The interpretation is unsupportable for at least two reasons. First, even if approving of land sales is a "service," it certainly does not come "from the Project," and it is thus not the kind of service envisioned by Article 13. Second, throughout the documents defining the relationship among the landowners, the District, and Interior, “service” appears in contexts where it clearly refers to the service of distributing water and providing drainage facilities to recipients.

.Section 209(e) of the RRA has the same effect on the contracts as the appellants’ reading of the word “service,” and pursuant to § 209(e), the recordable contracts were amended to provide the appellants with extra time to dispose of their lands prior to the maturity of the Secretary’s right to invoke a power of attorney. The contracts were not, however, amended to reflect former Interior Rule ll(i)(4) providing for low cost water pricing.

Section 209(e) raises an interpretative problem similar to the problem posed by Article 13: does it by implication provide additional time to receive subsidized water?

It is ironic that the dissent, while purporting to find a plausible reading of § 224(h) that would avoid constitutional questions, neglects to apply this principle to § 209(e), which is far more ambiguous than § 224(h). Section 209(e) was interpreted two different ways by Interior while the agency was making rules under the RRA, and Congress has seen fit to pass an amendment clarifying its meaning. Although the dissent is correct that it would be “parlous” to give controlling weight to declarations of one Congress’ intent by a subsequent Congress, it is not parlous to find Congress' subsequent interpretation relevant to the question whether the previous Congress’ provision was ambiguous.

. The dissent argues that Paragraph 17.6 of the Judgment provides the missing link between ownership of and entitlement to subsidized water. But the dissent places too much emphasis on Paragraph 17.6. It provides: "[T]he District shall not charge any water user more for water service or Drainage Service than the charges required to be paid to the United States for such service, plus any [overhead expenses].” The dissent apparently assumes that “the charges required to be paid to the United States” means the contract rate of $8.00. But Paragraph 17.6 states only that the District must charge the users the legally applicable rate and not attempt to profit from its position as the “middleman.” The question we face in this appeal is what the legally applicable rate is for users who have received subsidized water for more than ten years. The dissent, in assuming that rate must be the $8.00 contract rate, begs this question.

. The dissent seems to assume that Interior bears the burden of proving that the contract does not entitle the landowners to more than ten years of subsidized water. But as challengers to a congressional act, it is the landowners who must prove the existence of the contract right they claim the act has impaired. National *825R. Passenger Corp., 470 U.S. at 472, 105 S.Ct. at 1455.

. In Lynch, 292 U.S. at 579, 54 S.Ct. at 843, the Court held that “when the United States enters into contract relations, its rights and duties are governed generally by the law applicable to private individuals." The law applied is federal law, Priebe & Sons v. United States, 332 U.S. 407, 411, 68 S.Ct. 123, 125, 92 L.Ed. 32 (1947), which includes the Charles River Bridge canon quoted in the text.

The Charles River Bridge rule is simply another way of stating that "governmental contracts 'should be construed, if possible, to avoid foreclosing exercise of sovereign authority.’ ” Peterson v. Dept. of Interior, 899 F.2d 799, 807 (9th Cir.1990) (quoting Bowen v. Agencies Opposed to Social Security Entrapment, 477 U.S. 41, 52, 106 S.Ct. 2390, 2397, 91 L.Ed.2d 35 (1986)).

. The dissent suggests that a remand might be in order for further factual development of the contract interpretation question. We would not ordinarily quarrel with such a suggestion, but neither party offers any parol evidence to help us interpret the documents at issue. Absent parol evidence, appellate courts are in as good a position as trial courts to interpret documentary evidence.

.Section 224(h) by its terms is self-executing and becomes effective immediately upon enactment. The appellants claim that at a minimum they were constitutionally entitled to a “grace period” after the enactment of § 224(h) during which they could continue to receive subsidized water. They rely on cases suggesting that when a legislature imposes a new condition on a person’s right to maintain ownership of certain property, the legislature must provide a sufficient period for the person to comply with the condition. See United States v. Locke, 471 U.S. 84, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985); Texaco, Inc. v. Short, 454 U.S. 516, 102 S.Ct. 781, 70 L.Ed.2d 738 (1982). These cases do not govern the present case. In this case, no property right is being conditioned on any particular behavior; there is thus no need for a "grace period.”

. We do not imply that § 224(h), in overturning Interior's regulation, necessarily changed the law as Congress had intended it to be applied.