Nampa & Meridian Irr. Dist. v. Bond

RUDKIN, Circuit Judge (after stating the facts as above). While conceding that the Secretary of the Interior has authority to provide for drainage under the Reclamation Act, the appellant insists that such provision must be made as a part of the original construction cost, or by agreement with a majority of the landowners affected under the act of 1914, and that the cost of drainage cannot be included in the maintenance and operation charge. The appellee, on the other hand, contends that it is a proper maintenance and operation charge, and that, in any event, under the terms of its contract with the United States, the appellant is bound by the act of the Secretary in fixing the maintenance and operation charge for the Boise project. There is force in this latter contention, but we prefer to rest our decision on broader grounds. While indefinite, the term “operating expense” is a broad and comprehensive one, and its meaning in a given case depends on the nature and amount of the expenditure, and all the surrounding circumstances. As said by the court in Schmidt v. Louisville C. & L. Ry. Co., 119 Ky. 287, 302, 84 S. W. 314, 318: “There is no rule of law declaring what constitutes operating expenses. That is to be determined by the testimony as to each item of expenditure. It is a matter of evidence, and determinable like any other fact.” The situation confronting the Reclamation Service was this: The necessity for drainage follows irrigation on an extensive scale almost as a matter of course. It cannot be determined in advance with any degree of certainty when drainage will 'be required, or its cost or extent when required. If not provided for in advance, as was the case here, it can only be provided for by agreement with a majority of the landowners affected, or by a maintenance and operation charge. The prosecution of the present suit gives little promise that the necessary consent could be obtained, but the power of the Secretary to conserve and protect the property under his charge is not dependent upon any such consent. It has been almost universally held that damages to person or property resulting from operation is a proper operating expense, and, had injury resulted to crops or other property from the operation of this system, compensation for such injury would fall within the most restricted meaning of that term. Furthermore, the power of the Secretary does not stop at reparation for past injuries. It extends to the prevention of future injuries as well, and if, in the exercise of the broad discretion vested in him, the Secretary deems it advisable to incur expense to prevent future losses rather than make reparation after the losses have been incurred, a court of equity will not review his discretion.. In other words, the expense of preventing injury by seepage resulting from operation is a proper operation charge, or, at least, the determination of the Secretary of the Interior to that effect is controlling upon the courts. The decree of the court below is therefore affirmed.