Full opinion text
AMENDED MEMORANDUM DECISION AND ORDER RE: JULY 3, 2000, CROSS-MOTIONS FOR SUMMARY JUDGMENT AND FOR RECONSIDERATION WANGER, District Judge. This decision and order amends the decision and order filed March 2, 2001 (Doc. 346). INTRODUCTION This matter, is before the Court on the cross-motions for summary judgment submitted by Plaintiff and the Boston Ranch Parties (who are Defendants, Counter-claimants, and Third-Party Plaintiffs) as to the disposition of $9,679,000 held by the Court in escrow', see Doc. 328 ¶ 1 (government’s statement of undisputed facts in support of motion for summary judgment). Oral argument was held on Monday, August 28, 2000. I. THE CLAIMS The dispute underlying this action concerns: (1) the price per acre-foot the United States Department of the Interior (“Interior”), Bureau of Reclamation (“Bureau”), is permitted to charge water-users who take water from the San Luis Unit of the United States Central Valley Project (“CVP”); and (2) a drainage-charge component. Interior argues 43 U.S.C. § 390ww(h), enacted in 1987, which requires the Secretary of the Interior to collect the “full cost” for providing all federal (including CVP) water, establishes the price. See Doc. 1. The water-users are members of Westlands Water District (“Westlands”), interpled into this action by defendant Westlands, and contend that the price was fixed at $8.00 per acre-foot by a 1963 water-service contract between Westlands and the Bureau (“1963 Contract”), authorized by the Reclamation Act of 1902, 32 Stat. 388, former 43 U.S.C. §§ 371-616 (1902), which authorizes Interior and the Bureau to contract with water districts (not individual water-users) for water service from a federal reclamation project. See, e.g., 43 U.S.C. § 485h(e) (2000). The United States brought this action against Westlands on February 27, 1989, after Westlands refused to pay “full cost” for CVP water furnished under the 1963 Contract. It sought: (1) a declaratory judgment that Westlands violated 43 U.S.C. § 890ww(h) “as a result of its failure to pay full cost to the United States for federal reclamation project irrigation water delivered to certain lands located within Westlands Water District which are encumbered by extended recordable contracts,” Doc. 1 ¶ 1; and (2) “a money judgment for the difference between the applicable full cost rate and the rate paid by the Westlands Water District for federal reclamation project irrigation water delivered to such lands encumbered by extended recordable contracts,” id. Westlands collects water charges by assessments on its member water-users, and remits payment to the United States according to ¶¶ 6(a) & (b) of the 1963 Contract. The water-users object to paying more than the “Contract” price for water services by counterclaims and a third-party complaint against the federal parties, alleging nine causes of action for declaratory relief, see Doc. 48, and seeking a refund of any payments made for drainage service after 1986. These claims advance legal theories that 43 U.S.C. § 390ww(h)’s full-cost provision does not apply to the water-users. In their November 4,1991, opposition to the government’s Motion for Order to Enter Final Judgment, the water-users raised many issues, including whether the term “service” in the 1963 Contract and recordable contracts includes “providing drainage service to recipients.” Doc. 141 17:28-18:3 (quoting Barcellos & Wolfsen, Inc. v. Westlands Water Dist., 899 F.2d 814, 823 n. 14 (9th Cir.1990) (hereinafter “Barcellos”))', see also id. at 38:17-39:10 (“The Original Westlands Landowners Are Not Precluded By The Prior Decision From Litigating The No-Drainage Issue.”). An April 16, 1993, decision on the government’s motion for final judgment notes: “the drainage provided by the United States to Westlands has been greatly attacked. To the Court’s knowledge, no case had considered the effect upon the respective rights and duties of the parties under the various agreements.” Doc. 178 at 15:17-22. By April, 1993, only two triable issues of fact remained: (1) “appropriate issues relating to drainage,” id. at 15:23-24; and (2) “any issues pertaining to the calculation of the sum owed to the United States, and the calculation of the interest to be paid [to whomever the fund belongs],” id. at 16:3-4. The current cross-summary judgment motions were filed July 3, 2000. See Docs. 324-26. The water-users seek summary judgment: (1) for restitution against the United States, of such amounts equal to the payments by the water-users for drainage service and facilities not provided by the United States; (2) that the United States breached its contract by failing to perform contractual water-pricing obligations, and that the water-users are entitled to such amounts equal to the water surcharges they paid into the interpled fund; and (3) they are entitled to interest earned on interpled funds. See Doc. 324 at vii:9-14 (water-users’ memorandum in support of partial or summary adjudication of issues). On April 3, 1997, summary judgment was granted against the water-users and for the United States on the second issue (contractual price of water). See Doc. 278 at 25:18-27:13. The water-users now move for reconsideration of that decision “in light of the Ninth Circuit’s recent Sumner Peck decision [and] for other changes of circumstances.” Doc. 324 at vii:16-17. The government seeks summary judgment, alleging the water-users “are not entitled to any of the funds” because: 1. The monies in escrow represent the difference between the contract rate for water deliveries and “full cost,” as that term is defined under federal law, and federal law does not vest the Bureau with discretion not to collect full cost for federal water. 2. Regardless whether the counterclaims have a basis in law, there is no independent jurisdiction for the water-users’ assertion against the United States, given the Orff decision. 3. Firebaugh Canal Co. v. United States, 203 F.3d 568 (9th Cir.2000), underscores that compliance by the United States with the San Luis Act did not require construction of the interceptor drain, the action that the water-users asserted was the quid pro quo for their having to pay for drainage. See Doc. 327 at 2:3-14 (government’s opening brief). II. FACTUAL AND PROCEDURAL BACKGROUND This suit arises from the Bureau’s administration of the San Luis Unit, a division of the CVP. The CVP is the nation’s largest federal reclamation project, spanning “the length of California’s Central Valley, from Shasta Dam, in the north, to the Frianb-Kern Canal, in the south.” Firebaugh Canal Co., 203 F.3d at 570. It “is a multipurpose federal reclamation project consisting of dams, hydroelectric power plants, transmission lines, and irrigation canals.” City of Santa Clara v. Watkins, 984 F.2d 1008, 1010 (9th Cir.1993). “The grand design of the Project was to conserve and put to maximum beneficial use the waters of the Central Valley of California,” Dugan v. Rank, 372 U.S. 609, 612, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963), which comprises approximately one-third of California’s territory, see id. Construction of the San Luis Unit was authorized by the San Luis Act. The “principal purpose” of the San Luis Unit is to furnish irrigation to land in Merced, Fresno, and Kings counties, California. See Firebaugh Canal, 203 F.3d at 570. Westlands is the largest contractor for water from the San Luis Unit. See id. at 572. In 1963, Westlands entered into the 1963 Contract with the Bureau to purchase CVP water from the San Luis Unit at a subsidized maximum rate of $8.00 per acre-foot. See Barcellos, 899 F.2d at 816; Doc. 141 exhibit B 12:13-16. This rate included a $0.50 drainage service component. See Doc. 141 exhibit B 12:14-15. The 1963 Contract is impacted by additional considerations: First, Section (a) of the San Luis Act requires the Government to provide drainage service to Westlands. “Any water project that brings fresh water to an agricultural area must take the salty water remaining after the crops have beén irrigated away from the service area.” Firebaugh Canal, 203 F.3d at 571. Second, “[t]he 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, unless the owner agrees in a separate, recordable contract with Interior to certain significant restraints on his rights to the excess lands.” Barcellos, 899 F.2d at 816 (footnote omitted). Between 1969 and 1974, each of the Third-Party Defendants (Boston Ranch Company, S. Stamoules & Co., South Boston Co., and Westhaven Farming Co.) executed a recordable contract with the United States to divest themselves of then-excess lands. See id. These recordable contracts are identical in every aspect, except for the party’s name and description of the property. The primary benefit that the landowners receive from the federal reclamation program is the privilege of receiving subsidized water. Having to sell then-excess lands within a limited period of time at an artificially low appraised price is an intended burden. Id. at 824. These recordable contracts also have a provision, Article 13, that extends the ten-years period of ownership whenever “water or service from the Project may not be available to the land involved through no fault of the District or the Landowner.” This suit concerns three issues: (1) the payment rate for San Luis Unit water applicable to excess lands during extension periods, i.e., full-cost or subsidized (the 1963 Contract rate); and if the fund before the court contains any water service payments that should be refunded; (2) who is entitled to any drainage component payments; and (3) whether any declaratory relief is appropriate. A. 1902: Reclamation Act of1902. Any discussion of federal water in California begins in 1902: “The Reclamation Act of 1902 provided the framework for modern day reclamation law.” Martin J. Jackley, Reclamation Law and the Bell Fourche Irrigation District: A Desperate Fight for a Way of Life in Times of Change, 40 S.D. L. REV. 478, 479 (1995) (footnote omitted). “The final westward migration of the late 1800s resulted in an enormous demand by the settlers for irrigation systems.” Peterson v. United States Dep’t of Interior, 899 F.2d 799, 802 (9th Cir.1990) (citing Paul S. Taylor, The Excess Land Law: Execution of a Public Policy, 64 YALE L.J. 477, 481-85 (1955)). “Responding to the pressing demand for federal assistance in funding water reclamation projects, Congress passed the Reclamation Act of 1902.” Id. (citing 1902 Act). The 1902 Act had two purposes: “encourage family farming on modest-sized parcels [160 acres];” and “to increase agricultural output by subsidizing the irrigation of formerly arid and unproductive lands.” Barcellos, 899 F.2d at 824 (citing Ivanhoe Irrig. Dist., 357 U.S. at 275, 78 S.Ct. 1174; United States v. Tulare Lake Canal Co., 535 F.2d 1093 (9th Cir.1976)). “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.” • Id. (citing 43 U.S.C. § 423e). Under the 1902 Act, there was very limited regulation of excess lands, because prior to the 1982 RRA, Interior did not regulate leasing of excess lands receiving subsidized water. See 32 Stat. 389 (1902) (making landowner eligible for federal project water if he owned less than 160 acres, but not limiting such water delivery to non-leased lands). The Omnibus Adjustment Act of 1926, the first major amendment to the 1902 Act, partially rectified this problem by introducing the “recordable contract” idea, which required water recipients who owned lands in excess of 160 acres to enter into a contract with Interior in which they agreed to sell their excess lands within ten years at a price not reflecting the availability of project water. See id. at 483. B.1963: 1963 Contract “Westlands entered into a water service contract with the United States in 1963 under which the United States, through the Bureau of Reclamation, agreed to make available for Westlands’ purchase 900,000 acre-feet of water from the San Luis Unit of the Central Valley Project CCVP’).” Barcellos & Wolfsen, Inc. v. Westlands Water Dist., 849 F.Supp. 717, 720 (E.D.Cal.1993), aff'd, O’Neill v. United States, 50 F.3d 677 (9th Cir.1995). By this Contract, Interior agreed to provide CVP water to the District for 40 years. Two main provisions of the 1963 Contract are germane to this suit: (1) a specified volume of water provided at $8.00/acre-foot ($7.50/acre-foot for water service and $0.50/aere-foot for drainage service) in Article 6(a); and (2) before water could be delivered to “excess lands” (lands in excess of 160 acres), the owner must execute a “recordable contract” to sell those excess lands within ten (10) years at a price that does not consider the water rights (Article 23(a)), or Interior would do so through a power of attorney granted by the owner (Articles 24-25). C. 1976: D.C. District Court Injunction On August 9, 1976, the District of Columbia district court issued an injunction preventing approval of any new contracts for excess land sales until the initiation of public rule-making proceedings. See Nat. Land for People v. Bureau of Reclamation, 417 F.Supp. 449 (D.D.C.1976). That injunction remained in effect until 1982. As a result, Interior halted all land sales under recordable contracts nationwide, and did not approve land sales from 1976 through 1984. As ten years of ownership of water users’ excess lands began to expire, a problem surfaced: although under the injunction, the water-users were unable to complete sale of them excess lands, they nevertheless continued to receive subsidized water for these excess lands for more than ten years. D. 1978: The Interior Department Increases the Water Price In 1978, the Solicitor of the Interior Department “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.” Barcellos, 899 F.2d at 817 (citing 1978 “Krulitz opinion”). As a result of this opinion, “the Interior Department began to charge the District between $13.30 and $16.40 per acre[-]foot for all Project water.” Id. E. 1979: The Water-Users and West-lands sue to enforce the 1963 Contract’s luater-pricing provision In 1979, the water-users sued Westlands in state court, “seeking among other things to have the $8.00 rate enforced.” Id. Westlands joined the United States as a party, and the action was later removed to the United States District Court for the Eastern District of California. See id. F. 1982: Congress passes the Reclamation Reform Act of 1982 (“RRA”): “Full-Cost” water In 1982, Congress attempted to address the problems caused by the district court injunction against selling excess lands and the Krulitz opinion recommending full-cost rates for all water, by passing the RRA, 43 U.S.C. §§ 390aa to zz-1, which: (1) required that water delivered to excess lands be paid for at full-cost; (RRA § 205(a)); (2) extended the time for landowners to dispose of their excess lands for which there were recordable contracts, by not counting the six-year effective period of the district court injunction (1976-1982) against the ten-year period for disposal of excess lands under Article 13 of the recordable contracts (RRA § 209(e)); and (3) confined eligibility to receive subsidized water for excess lands under the recordable contracts to a total of ten years, regardless whether Article 13 extended the ownership term; but suspended termination of the right to such subsidized water (and a corresponding duty to pay “full cost”) until eighteen (18) months after the date when the Secretary began again to approve land sales (RRA § 205(c)). Section 209(d) superseded the 1976 district court injunction, explicitly requiring Interior to establish rules for disposing of the excess lands under recordable contracts, and extended recordable contracts for a time period equal to the unexpired portion of the ten-year term when the district court injunction took effect. See 43 U.S.C. § 390ii (2000). Section 204 of the RRA also increased the allowable amount of “non-excess” lands from 160 to 960 acres, see 43 U.S.C. § 390dd (1986), and applied this acreage limitation to all irrigated lands, whether owned or leased, see id. at § bb(6) (1986), closing the loophole that previously existed under the 1902 Act. In the 1982 RRA, Congress also added the so-called “hammer clause,” section 203(b), codified at 43 U.S.C. § 390cc (2000), in conference committee, which gave districts with water contracts predating the effective date of the RRA a choice to either voluntarily and irrevocably elect to amend their contracts to comply with the RRA’s “full-cost” provisions for excess lands (and enjoy § 204’s increased 960-acre limitation for non-excess lands), or remain under the 1902 Act, with its 160-acre limitation. See 43 U.S.C. §§ 390ee(a) & (b) (2000). Interior resumed approval of excess land sales in July, 1984. See Doc. 1 ¶ 20; Doc. 48 ¶ 25. G. 1986: The 1986 Barcellos Consent Judgment Re-Establishes the 1968 Contract Water Price Interior rescinded the 1978 Krulitz opinion on June 17, 1986 (“Tarr reeission”). See Barcellos, 899 F.2d at 819. On July 24, 1986, the parties reached a global (water rate, drainage, and excess lands) settlement memorialized by a stipulated judgment in the 1979 action (the “1986 Barcellos Judgment”), which was entered December 30, 1986. See id. First, the parties stipulated: The 1968 Contract is a valid, enforceable and implementable contract entitling the District through the end of 2007 to water and other service by the United States as specified therein. Doc. 141 exhibit E at 12 ¶ 4.1. The 1986 Barcellos Judgment prescribes three distinct water prices, depending on the type of land to which the water was delivered (original Westlands area, lands electing to come under the 1982 RRA’s “discretionary” provisions, and former Westplains lands): (1) Article 4.1 provides that “the District and the United States shall perform the 1963 Contract;” (2) Article 4.2 provides that any water delivered to the former Westplains area (referred to as Areas 2A and 2B) is governed by Articles 4.4 and 4.5 below; (3) Article 4.4 specifies: “The agricultural water service component of the rates to be paid to the United States for water delivered under Article 3 of the 1963 Contract to lands which become subject to the Discretionary Provisions of the 1982 Act shall be the higher of (a) $7.50 per acre foot or (b) the appropriate rate as of the date of delivery established pursuant to the 1982 Act [full-cost];” (4) Article 4.5 provides that water for Municipal and Industrial Uses “shall be paid for ... at the applicable Central Valley Project water rate as of the date of delivery.” Doc. 141 exhibit E at 13-14 (1986 Judgment). The water-users in this case initially chose not to be “hammered” into a 1982 RRA election; ie., did not irrevocably elect to amend their contracts to subject recordable contract lands in excess of 160 acres to the full cost provisions. See Doc. 48 ¶ 26. The water-users all owned original Westlands lands (Areas 1A or IB). See id. at ¶ 15. Under the 1986 Judgment, the water-users are governed by the 1963 Contract’s $8.00/acre-foot rate. The Judgment also 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 ... payments in 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. Barcellos, 899 F.2d at 819; see also Doc. 141 exhibit E ¶¶ 8-9, at 32-36. Neither the 1986 Judgment nor the 1963 Contract has a provision that explicitly addresses the United States’ sovereign power to legislate. But see infra Part IV.F.3.C. H. 1987: Congress Re-sets the water price at “Full Cost” for excess lands under recordable contract On December 22, 1987, less than one year after entry of the Barcellos Judgment, Congress amended federal reclamation law through the Omnibus Budget Reconciliation Act of 1987 by adding section 224(h), codified at 43 U.S.C. § 390ww(h) (2000). Section 224(h) requires the Secretary of the Interior to collect “Ml cost” for federal reclamation water delivered to excess lands under pre-RRA recordable contracts. See 43 U.S.C. § 390ww(h) (2000). It does this by applying section 205 of the 1982 RRA to “all recordable contracts executed prior to October 12, 1982.” Section 205(a) mandates collecting the “full cost” rate for water as defined by the statute, a substantially higher amount than the cost provided by the 1986 Barcel-los Judgment and the 1963 Contract. See Doc. 15 at 1-2. As of 1987, the full-cost rate was approximately $42.00 per acre-foot, see Barcellos, 899 F.2d at 819, a rate over five times the contractual rate, which includes operation, maintenance, and replacement charges, see 43 U.S.C. § 390bb(3)(A) (2000). Aside from the “full cost” requirement, section 205(c) also limited the water-users to a total of ten years of subsidized water for their excess lands, regardless of any ownership extension period provided by Article 13 of the recordable contracts. See id. at § 390ee(c). Shortly after ERA § 224(h) (43 U.S.C. § 390ww(h)) was enacted, Westlands brought a motion in Barcellos to specifically enforce the 1986 Barcellos Judgment, arguing that the Judgment constrained the United States to charge only the water-service rates specified in the 1986 Judgment and the 1963 Contract, $8.00 per acre-foot. See Barcellos, 899 F.2d at 819. Westlands argued that section 224(h) could not be applied to abrogate the 1986 Barcel-los Judgment; see id. at 820, because before the time section 224(h) was enacted, a judgment that ordered Interior to perform the terms of the 1963 Contract had already been entered. In the alternative, West-lands alleged if section 224(h) applied to the 1963 Contract and the 1986 Barcellos Judgment, then it impaired the obligation of the Judgment, a contract, violating due process and separation of powers. See id. The District Court denied Westlands relief. An appeal followed. See id. I. 1989: The Instant Suit After the Barcellos appeal was filed, in 1989, the United States brought this action against Westlands Water District: First, for a declaratory judgment that Westlands violated RRA section 224(h) “as a result of its failure to pay full cost to the United States for federal reclamation project irrigation water delivered to certain lands located within Westlands Water District which are encumbered by extended recordable contracts,” Doc. 1 ¶ 1; and second, for a “money judgment for the difference between the applicable full cost rate and the rate paid by the Westlands Water District for federal reclamation project irrigation water delivered to such lands encumbered by extended recordable contracts,” id. Westlands moved to stay the action pending the Barcellos appeal. See Doc. 5. The motion for stay was denied. See Doc. 15 at 4. J. 1989: The Counter-claims, Request for Interpleader, and the Joinder of, inter alia, the Water-Users On July 10, 1989, Westlands answered the complaint and filed a “counterclaim for interpleader.” See Doc. 19. It requested that: (1) “the court order that Water Users be made party defendants to respond to the complaint and to [the instant] counterclaim;” (2) “the United States and Water Users be required to interplead and settle among themselves their respective rights to the money collected by West-lands;” (3) “the court adjudge who is entitled to the sum collected by Westlands;” (4) “the court discharge Westlands from all liability except to the person(s) the court shall adjudge entitled to the sum of money;” and (5) ‘Westlands recover its costs and attorneys’ fees.” Id. Because Westlands maintained that Section 390ww(h) did not apply to it, beginning July 28, 1989, Westlands began depositing with the Court assessment monies it collected from the water-users that they requested Westlands withhold from the United States. See Doc. 25. On September 15, 1989, the court held that West-lands had “the right to [interjplead the interested party.” Doc. 30 at 5. On November 3, 1989, Westlands filed a second amended counterclaim. See Doc. 38. It named, inter alia, water-users Boston Ranch Company, S. Stamoules & Company, South Boston Company, and Wes-thaven Farming Company. On January 26, 1990, the water-users, including the Boston Ranch parties, replied to the second amended counterclaim, see Doc. 47, and filed a counterclaim and third-party-complaint against the federal parties, see Doc. 48. The water-users alleged nine causes of action for declaratory relief, seeking to avoid application of Section 390ww(h)’s full-cost provision. See id. K. 1990: Issuance of the Stay and the Barcellos Opinion On May 11, 1990, the parties stipulated to a stay pending the outcome of the Bar-cellos appeal. See Doc. 110. The Barcellos appellate decision issued March 16, 1990, and was amended June 7, 1990, on denial of rehearing and rehearing en banc. See Barcellos, 899 F.2d at 814. In a divided opinion, the Ninth Circuit rejected the water users’ contentions that RRA section 224(h) did not apply to the 1963 Contract: “There is no fairly debatable construction of § 224(h) that would exempt the [water-users] from its provisions.” Id. at 821. The Ninth Circuit also rejected the claim that section 224(h), as applied to the water users, was unconstitutional. See id. “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 [water-users] must first, of course, demonstrate that they had such a contract right before the enactment of § 224(h).” Id. (citing Nat’l R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451, 105 S.Ct. 1441, 84 L.Ed.2d 432 (1985)) (emphasis in original). Then, “[i]f they can demonstrate they had ‘such a right, they must then show a substantial impairment of that right.” Id. (citing Nat’l R.R. Passenger Corp., 470 U.S. at 451, 105 S.Ct. 1441). The Court of Appeals found the water-users: “never had a contractual right to receive more than ten years of water for their excess lands, [and] Congress, in enacting § 224(h), did not deprive them of a property right within the meaning of the fifth amendment.” Id. at 825. On December- 3, 1990, the Supreme Court denied certiorari. See Boston Ranch Co. v. Dep’t of the Interior, 498 U.S. 998, 998, 111 S.Ct. 555, 112 L.Ed.2d 562 (1990). The res judicata effect of the 1990 Barcellos appellate decision on the issues presented by this suit must be decided. L. 1991: The Government Moves for Entry of Judgment On July 30, 1991, the Government moved for entry of final judgment. See Doc. 127. It argued that the 1990 Barcel-los appellate decision disposed of all issues in this lawsuit. See id. at 6-7. The water-users argued that the failure to provide drainage, an issue not decided by Barcel-los, affects that calculus. See Doc. 141. On April 16, 1993, the motion for final judgment was denied, see Doc. 178, because two triable issues of fact were identified. First, were “appropriate issues relating to drainage.” Id. at 15:16-24: [T]he drainage provided by the United States to the Westlands Water District has been greatly attacked. To the' Court’s knowledge, no ease had considered the effect upon the respective rights and duties of the parties under the various agreements. Clearly, the cross-defendants and the third-party plaintiff cannot be precluded from raising appropriate issues relating to drainage in this litigation. Second, were “any issues pertaining to the calculation of the sum owed to the United States, and the calculation of the interest to be paid them.” Id. at 16:3-4. “Drainage issues” were brought to the forefront in approximately June, 1986, when the United States ceased providing drainage to Westlands and the San Luis Unit. The San Luis Feasibility Report, prepared by the Secretary of the Interior in 1956, contemplated “a system of tile drains that would empty into an interceptor drain that would convey the water 197 miles to the Contra Costa Delta for disposal.” Firebaugh Canal Co., 203 F.3d at 571. Construction of part of this interceptor drain was initiated, and by 1975, the middle forty (40) percent of the drain, approximately 82 miles, was built. See Doc. 328 ¶ 14; Doc. 336 ¶ 14 (undisputed facts). In 1975, however, “the Secretary suspended construction of the interceptor drain, citing ‘questions’ and ‘concerns’ raised in the public arena.” Firebaugh Canal Co., 203 F.3d at 571. Rather, a subsurface drainage collector system was constructed. See id. Drainage service utilizing this system commenced in 1978. See id. It operated until June, 1986, as follows: The subsurface collector drainage system discharged approximately 7,300 acre-feet annually of collected subsurface agricultural drainage into the portion of the drain constructed prior to 1975. The drain carried the drainage water to Kesterson Reservoir, which had become the temporary terminus of the drain. Id. In mid-1983, however, “waterfowl nesting studies at Kesterson Reservoir revealed instances of embryo deformity and mortality.” Id. It was suspected that selenium in some of the soils in Westlands was being carried with drainage water into Kesterson Reservoir and was concentrating in biota. Like other metals, selenium can impair the growth of crops and is hazardous to human and animal life when present in high concentrations. Id. at 571-72. As a result, “[ojn March 15, 1985, the Secretary of the Interior announced that it would close the Reservoir.” Id. at 572. By June, 1986, “the drains at Westlands were plugged and the middle portion of the interceptor drain was closed.” Id. The United States continued to deliver water to Westlands after June, 1986, but without providing drainage service. Ultimately, the Government took the position that “subsequent changes in the law and environmental knowledge made compliance with the San Luis Act impossible, and thereby excused the United States from performing th[e] duty [to provide drainage].” Id. Affected landowners filed suit “seeking completion of the master drain to the Contra Costa Delta.” Id. at 571. Two suits were filed, Sumner Peck Ranch, Inc. v. Bureau of Reclamation, No. CV-F-91-048, and Firebaugh Canal Co. v. United States, No. CV-F-88-634, which “were partially consolidated to resolve the plaintiffs’ common allegation that the Secretary of Interior is required by law to construct facilities to drain agricultural drainage water from certain lands in Westlands Water District.” Id. Such a statutory duty was found, as was breach of the duty to provide drainage. Judgment was entered for the landowners on these issues on March 12, 1995. See Firebaugh Canal Co. v. United States, No. CV-F-88-634 (E.D.Cal. Mar. 12, 1995) (Doc. 442). The Government appealed, reiterating its arguments that it had no drainage obligation under the San Luis Act, or alternatively, if it did have such an obligation, the obligation had been excused by factual or legal impossibility. M. 1991: Released Funds On March 28, 1994, the Government moved to release all funds in the escrow account, except the funds claimed by claimants. See Doc. 216. All counsel agreed $1,733,201.00 could be released to the United States, see Doc. 236 at 6:9-11, and on December 7, 1994, the Government’s motion was granted to the extent of the agreed sum, see id. at 6:13-14; 7:1-5. N. 1996: Cross-motions for Summary Judgment Re: Remaining Funds On August 23, 1996, the Government sought a final order to distribute the remainder of the escrow account funds to it. See Doc. 247. On August 26, 1996, the water-users filed a cross-motion for partial judgment on the pleadings, or, in the alternative, summary judgment against the United States. See Doc. 250. They advanced two theories: first, that the United States breached contracts with the water-users and Westlands. Specifically: Article 13 of their recordable contracts provides that the Secretary of Interior holds power of attorney over their excess lands for ten years after the recordable contracts were signed. This ten-year period is tolled when “water or ‘service’ ” from the CVP was not available. The water-users contend that the term “service” includes adequate “drainage service,” and that because little or no drainage service has ever been provided, the ten-year period has been tolled and never expired. They argue, if the ten-year period never expired, the original contract terms, including the $8.00 per acre-foot price, are still in effect, and section 224(h) is inapplicable to water delivered to their excess lands under the extended recordable contracts. Assuming, arguendo, that Barcellos makes section 224(h) applicable to their contracts, the water-users contend the government’s failure to provide drainage service breached the 1963 Contract and their recordable contracts, entitling them to damages. See Doc. 250 at 17:3-8. They anticipate the Government’s assertion of the unmistakability and the sovereign acts defenses, preemptively arguing these defenses fail under United States v. Winstar Corp., 518 U.S. 839, 116 S.Ct. 2432, 135 L.Ed.2d 964 (1996) (hereinafter “Winstar ”). Third, assuming, arguendo, that there was no breach of contract by the Government’s failure to provide drainage service, the water-users assert a non-contractual theory of recoveiy: restitution of all drainage-related payments, because they paid for drainage, but never received it. See id. at 23. 0. 1997: Decisicm on cross-summary judgment motions A memorandum decision and order on these cross-motions issued April 3, 1997. See Doc. 278. As to the first argument, the term “ ‘service’ must include ‘drainage service.’ ” Id. at 25:18-19. ' However, as Barcellos teaches: “It does not follow ... that Claimants had a right to subsidized water as long as they owned their excess land.” Id. at 25:23-24. The water-users’ interpretation that the self-extended recordable contracts made RRA § 224(h) inapplicable was “strained at best.” Id. at 26:26. This April, 1997, memorandum decision held that RRA section 224(h) “does not abridge any contract right because Claimants have no absolute contract right to the unqualified delivery of water at the $8.00 rate.” Id. at 27:10-12. Any Wins-tar analysis was found unnecessary, because “no enforceable contract right existed that § 224(h) could breach.” Id. at 27:12-13. On the first two issues, summary judgment was granted against the water-users and for the Government, holding that section 224(h) did not wrongfully impair the water-users’ contractual rights. See id. at 27:14^15. This holding was based on Barcellos. See id. at 24-27. For reasons stated below, reconsideration of these rulings is appropriate. The Government did not address the water-users’ non-contractual theory of recovery. See id. at 26:21. Finding that the Firebaugh Canal Co. appeal would impact the water-users’ unjust enrichment theory, their cross-motion for summary judgment was denied without prejudice, pending the Ninth Circuit’s decision in Firebaugh Canal Co. See id. at 27:22-28:20. The Ninth Circuit decided Firebaugh Canal Co. on February 04, 2000. P. 2000: Firebaugh Canal Co. v. United States In Firebaugh Canal Co., the Ninth Circuit rejected the Government’s position that it need not provide drainage to the San Luis Unit contractors, see Firebaugh, 203 F.Sd at 568: Affected landowners, both inside and outside the San Luis Unit service area, sued the Department of the Interior, seeking completion of the master drain to the Contra Costa Delta. See Sumner Peck Ranch, Inc. v. Bureau of Reclamation, 823 F.Supp. 715 [(E.D.Cal.1993)]; Firebaugh Canal Co. v. United States, No. CV-F-88-634.... In May of 1992, these lawsuits were partially consolidated to resolve the plaintiffs’ mutual allegation that the Secretary of Interior is required by law to construct facilities to drain agricultural drainage water from certain lands in Westlands Water District. Id. at 572. The United States appealed the entire district court judgment that, inter alia: require[d] the Department to “take such reasonable and necessary actions to promptly prepare, file and pursue an application for a discharge permit” with the California Water Resources Control Board, pursuant to the Government’s duty to provide drainage under the San Luis Act. Id. at 570 (quoting without citing the district court judgment). The Ninth Circuit affirmed the district court holding that: (1) the Government has a duty to provide drainage to the San Luis Unit; (2) performance of that duty has been unreasonably and unlawfully delayed; and (3) the time has now come to provide such drainage service. See id. at 575. Q. 2000: Cross Motions Re: Remaining Funds The current cross-summary judgment motions were filed July 3, 2000. See Docs. 324-28. “In light of the Ninth Circuit’s recent Firebaugh decision” and “for other changes of circumstances,” Doc. 324 at vii: 14-18, the water-users seek reconsideration of the April 3, 1997, memorandum and order (Doc. 278), which held that they were required to pay the “full cost” rate as defined by RRA § 224(h). The water-users have two basic arguments: (1) they re-assert the contractual interpretation argument that the 1963 Contract’s subsidized water rate applies to excess lands during Article 13 extension periods caused by the government’s failure to provide drainage service; and (2) they are owed restitution for any drainage payments, because the government has not provided drainage. The water-users support these arguments by claiming Barcellos is inapposite after Winstar and Firebaugh. Their previously advanced Winstar argument was rejected in the 1997 memorandum decision, because “no enforceable contract right existed that § 224(h) could breach.” Doc. 278 at 27:9-15. The water-users argue Firebaugh provides a factual basis to conclude that the recordable contracts may have been extended by failure to provide drainage service. See Doc. 324 at 13:14-19. The contract-extension argument is not new; its viability has been acknowledged. See Doc. 278 at 25:18-19 (“Claimants persuasively argue ‘service’ must include ‘drainage service.’ ”). Nonetheless, even if recordable contracts are extended, the United States is not necessarily required to provide, in perpetuity, $8.00 per acre-foot water to landowner parties to the recordable contracts. See id. at 26:3-8 (citing Barcellos, 899 F.2d at 823). The water-users provide no new arguments, law, or facts as to the breach of contract issue raised regarding water-service prices. However, no case has yet interpreted, outside of dictum, whether the 1963 Contract, the recordable contracts, and the 1986 Barcellos Judgment afford the water-users contract-priced (rather than full-cost) water for their excess lands during any time extended recordable contracts are effective if drainage service was not provided (which will be decided in the Firebaugh Canal Co. remand). This issue directly affects whether summary judgment should be granted. Two other issues remain. First, the water-users argue they are entitled to restitution of the fees paid for drainage facilities and service under a theory of unjust enrichment, because the United States has not yet provided for such facilities and service. In addition, they argue they are entitled to interest on the interpled funds. The United States rejoins that the water-users “are not entitled to any of the funds” because: (1) the Bureau has no discretion “other than to collect full cost;” (2) based on Orff, no independent jurisdiction exists to hear the water-users’ counterclaims; and (3) Firebaugh Canal Co. held the United States was not required to construct the interceptor drain under the San Luis Act, which “was the quid pro quo” for the water-users’ drainage payments. See Doc. 327 at 2:3-14. The government’s last argument addresses only part of the landowners’ drainage claim. The landowners contend that even if “drainage” does not include the interceptor drain with East Bay terminus, they have not received “any drainage,” i.e., drainage service to which the Court of Appeals held they were entitled under the San Luis Act, which breaches their recordable contracts and the contract embodied within the 1986 Barcellos Judgment. R. Types of Funds There are three different types of funds on deposit in this case: (1) the fifty-cent drainage component from each $8.00 or “full cost” acre-foot payment since the 1986 Barcellos Judgment; (2) the difference between the $8.00 contract rate and the “full cost” rate paid for excess lands between 1986 and present; and (3) any separate “drainage fund” payments. III. LEGAL STANDARD A. Summary Judgment “Summary judgment ‘shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ” 7-Up Bottling Co. of Jasper Inc. v. Varni Bros. Corp. (In re Citric Acid Litig.), 191 F.3d 1090, 1093 (9th Cir.1999) (quoting Fed. R. Civ. P. 56(c)). A genuine issue of fact exists when the non-moving party produces evidence on which a reasonable trier of fact could find in its favor viewing the record as a whole in light of the evidentiary burden the law places on that party. See Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir.1995); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The non-moving party -cannot simply rest on its allegation without any significant probative evidence tending to support the complaint. See U.A. Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir.1994). [T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial. In such a situation, there can be “no genuine issue as to any material fact,” since a complete failure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The more implausible the claim or defense asserted by the opposing party, the more persuasive its evidence must be to avoid summary judgment. See United States ex rel. Anderson v. N. Telecom, Inc., 52 F.3d 810, 815 (9th Cir.1995); see also Van Westrienen v. Americontinental Collection Corp., 94 F.Supp.2d 1087, 1094 (D.Or.2000) (“when the non-moving party’s claims are factually implausible, that party must come forward with more persuasive evidence than would otherwise be required.”) (citing Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics Inc., 818 F.2d 1466, 1470 (9th Cir.1987)). Nevertheless, “the evidence of the non-movant is to be believed and all justifiable inferences are to be drawn in its favor.” Murphy Exploration & Prod. Co. v. Oryx Energy Co., 101 F.3d 670, 673 (Fed.Cir.1996) (quoting Liberty Lobby, 477 U.S. at 255, 106 S.Ct. 2505; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). A court’s role on summary judgment, however, is not to weigh the evidence, i.e., issue resolution, but rather to find genuine factual issues. See Abdul-Jabbar v. Gen. Motors Corp., 85 F.3d 407, 410 (9th Cir.1996). B. Reconsideration “[A] motion for reconsideration of summary judgment is appropriately brought under either Rule 59(e) or Rule 60(b).” Fuller v. M.G. Jewelry, 950 F.2d 1437, 1442 (9th Cir.1991) (citing Taylor v. Knapp, 871 F.2d 803, 805 (9th Cir.1989) (citing Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir.1985) (citing Stephenson v. Calpine Conifers II, Ltd., 652 F.2d 808, 811 (9th Cir.1981)))). A 59(e) motion must be brought no later than ten (10) days following entry of the final judgment, see Fed.R.Civ.P. 59(e) (1992), whereas a 60(b) motion must be brought within a “reasonable” time, which cannot be more than one year if the motion is based on mistake ((b)(1)), newly-discovered evidence ((b)(2)), or fraud ((b)(3)), see Fed.R.Civ.P. 60(b)(l)-(b)(3) (1992). A Rule 59(e) motion for reconsideration that is filed outside the ten-day period may be interpreted as a Rule 60(b) motion. Accord Taybr, 871 F.2d at 805 (construing reconsideration motion labeled as Rule 60 motion as a Rule 59 motion, because it was filed eight days after entry of summary judgment, within the time period for Rule 59(e)). 1. Rule 59(e) “A motion for reconsideration of summary judgment is appropriately brought under Rule 59(e).” Backlund, 778 F.2d at 1388 (citing Stephenson, 652 F.2d at 811). Rule 59(e) reconsideration is appropriate where: the district court is presented with newly-discovered, evidence or committed clear error; the initial decision was manifestly unjust; or if there is an intervening change in controlling law. See 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir.1999) (citing Sch. Dist. No. 1J, Multnomah County, Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir.1993) (hereinafter “Sch. Dist. No. 1J ”) (citing All Haw. Tours, Inc. v. Polynesian Cultural Ctr., 116 F.R.D. 645, 648 (D.Haw. 1987), rev’d on other grounds, 855 F.2d 860, 1988 WL 86203 (9th Cir.1988))). A reconsideration motion should not merely present arguments previously raised, or which could have been raised in the initial summary judgment motion. See Backlund, 778 F.2d at 1388 (“The motion was properly denied here because ... it presented no arguments that had not already been raised in opposition to summary judgment.”); United States v. Navarro, 972 F.Supp. 1296, 1299 (E.D.Cal.1997) (“[Mjotions to reconsider are not vehicles permitting the unsuccessful party to ‘rehash’ arguments previously presented.... Nor is a motion to reconsider justified on the basis of new evidence which could have been discovered prior to the court’s ruling.... Finally, ‘after thoughts’ or ‘shifting of ground’ do not constitute an appropriate basis for reconsideration.”) (citations omitted). “These relatively restrictive standards ‘reflect district courts’ concern for preserving dwindling resources and promoting judicial efficiency.’ ” Navarro, 972 F.Supp. at 1299 (quoting Costello v. United States Gov’t, 765 F.Supp. 1003, 1009 (C.D.Cal.1991)) (alteration omitted). 2. Rub 60 Rule 60(b) permits reconsideration of a district court order based on: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly-discovered evidence that supports grounds for a new trial under Rule 59; (3) fraud by an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released or discharged; or (6) any other reason justifying relief from the operation of the judgment. See Fed.R.Civ.P. 60(b)(1)-(b)(6) (1992). Rule 60 reconsideration is generally appropriate in three instances: 1) when there has been an intervening change of controlling law, 2) new evidence has come to light, or 8) when necessary to correct a clear error or prevent manifest injustice. Sch. Dist. No. 1J, 5 F.3d at 1262; see also E.D. Cal. L.R. 78—280(k). “A motion for reconsideration is not a vehicle to 'reargue the motion or to present evidence which should have been raised before.” Bermingham v. Sony Corp. of Am., Inc., 820 F.Supp. 834, 856 (D.N.J. 1992), aff'd, 37 F.3d 1485 (3d Cir.1994) (citing Weyerhaeuser Corp. v. Koppers Co., 771 F.Supp. 1406, 1419 (D.Md.1991)). “ ‘A party seeking reconsideration must show more than a disagreement with the Court’s decision, and “recapitulation of the cases and arguments considered by the court before rendering its original decision fails to carry the moving party’s burden.” ’ ” Id. at 856-57 (quoting G-69 v. Degnan, 748 F.Supp. 274, 275 (D.N.J.1990)) (quoting Carteret Sav. Bank, F.A. v. Shushan, 721 F.Supp. 705, 709 (D.N.J.1989)). To succeed, a party must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision. See, e.g., Kern-Tulare Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal.1986), aff'd in part and rev’d in part on other grounds, 828 F.2d 514 (9th Cir.1987). IV. DISCUSSION A. Reconsideration The water-users meet the requirements for reconsideration under Rule 60, because a clear error may have been made in, or a manifest injustice may occur as a result of, the 1997 memorandum decision’s finding that Barcellos is dispositive of the contractual interpretation issues presented. B. Impact of the 1990 Barcellos decision Before a re-interpretation of the 1963 Contract, the Recordable Contracts, and the 1986 Barcellos Judgment can be performed, the extent to which the 1990 Bar-cellos appellate decision interprets then-disputed provisions as an explicit holding (rather than dicta), which is law of the case, must be decided. Barcellos definitively answers the “quite narrow,” Barcellos, 899 F.2d at 823, question whether the 1963 Contract and/or recordable contracts gave the water-users the unqualified right to water at the $8.00 contract rate for their excess lands during any extended period of the recordable contracts (ie., beyond initial the 10-year term) caused by their inability to sell those excess lands due to a federal district court injunction against such sales in effect from 1976 to 1982. It holds that the contracts do not afford the water-users an unlimited right to low-cost water service for excess lands during Article 13 ownership extension periods caused by the Bureau’s failure to approve land sales, making it impossible to sell those excess lands, and accordingly, § 224(h) did not deprive them of anything. See id. at 823-26. This conclusion is based on a rejection of the water-users’ argument that Article 13 of the recordable contracts', which tolls the ten-year period during times when “water or service” was not provided, included the “service” of approving excess land sales. See id. at 823. The basis for this holding was that approving land sales was neither “water” nor “service” within the intended meaning of Article 13. See id. The 1997 memorandum decision interpreted the Barcellos appellate decision to find that regardless of the intended meaning of the term “service” in Article 13, the water-users had no contract right to subsidized water during any period of “extended” (more than 10 years’) ownership of their excess lands, in view of the Barcel- los’ finding that section 224(h) applied to the 1963 Contract and the 1986 Judgment. See, e.g., id. at 823-25. Upon closer scrutiny, this finding was not on an issue necessary to the Circuit Court’s decision, because once the Court found that “service” did not include approving land sales, the case was over: there was no contract provision to authorize an Article 13 extension. Barcellos is factually distinguishable, because the only extending event at issue was Interior’s non-approval of excess land sales during 1976 until 1984. The event of an express Article 13 extending cause, absence of drainage “service,” was not at issue. Because “land sale approval” was not encompassed by the Article 13 terms, “water or service,” the gratuitous discussion in Barcellos regarding the right to subsidized water during extension periods was not necessary to the decision; it is dicta. See Trent v. Valley Elec. Ass’n, Inc., 195 F.3d 534, 537 (9th Cir.1999) (interpreting prior panel’s statement as dicta and therefore not binding under the law of the case doctrine) (citing Milgard Tempering, Inc. v. Selas Corp. of Am., 902 F.2d 703, 715 (9th Cir.1990)); Export Group v. Reef Indus., Inc., 54 F.3d 1466, 1472 (9th Cir.1995) (rejecting statements not necessary to another decision as dicta and declining to follow as binding precedent); Sarnoff v. Am. Home Prods. Corp., 798 F.2d 1075, 1084 (7th Cir.1986) (“A dictum is a statement in a judicial opinion that could have been deleted without seriously impairing the analytical foundations of the holding — that, being peripheral, may not have received the full and careful consideration of the court that uttered it.”) (Posner, J.); see also OXY USA, Inc. v. Babbitt, 230 F.3d 1178, 1184 (10th Cir.2000) (“dicta are ‘statements and comments in an opinion concerning some rule of law or legal proposition not necessarily involved nor essential to determination of the case in hand.’ ”) (quoting Rohrbaugh v. Celotex Corp., 53 F.3d 1181, 1184 (10th Cir.1995) (quoting Black’s Law DictionaRY 454 (6th ed.1990))); United States v. Wade, 152 F.3d 969, 973 (D.C.Cir.1998) (“Because that issue was not before the court, its overly broad language would be obiter dicta and not entitled to deference.”) (citing cases); Nephew v. City of Aurora, 766 F.2d 1464, 1466 (10th Cir.1985) (rejecting dicta from prior panel, although facially on point); Blaok’s Law Dictionary 465 (7th ed.1999) (defining judicial dictum as “[a]n opinion by a court on a question that is directly involved, briefed, and argued by counsel, and even passed on by the court, but that is not essential to the decision.”) (emphasis added). Dicta are not binding as law of the case. See, e.g., Trent, 195 F.3d at 537. Barcellos did not address the different issue raised here: the effect of an absence of drainage service on the full-cost provision and the Article 13 extension period. In Barcellos, the water-users argued that the combination of the 1963 Contract and recordable contracts entitled them to subsidized water for their excess lands during any time they own these lands (“extended period”) after the initial ten-year period of subsidized water lapsed. Unlike Barcel-los, the term “service” under Article 13 encompasses drainage service, which the water-users claim was not provided in any of the years in question, with the alleged effect that the ten-year period of subsidized water and ownership is indefinitely extended until such time drainage service is provided. The Barcellos pronouncement that there was no possibility that a right to subsidized water existed during any Article 13 extension periods, for ihore than 10 years, is dicta. It is not binding as law of the case. Careful re-analysis of Barcellos leads to the conclusion that it does not decide the issues presented here. The entire 1963 Contract was not interpreted by the Barcellos majority. Further interpretation of the 1963 Contract by another panel in O’Neill shows that extrinsic evidence may be relevant. See O’Neill, 50 F.3d at 682. C. Contractual Interpretation 1. Contractual Interpretation: Basic Principles When interpreting a contract, the plain language within the four corners of the contract must first be examined to determine the mutual intent of the contracting parties. See, e.g., United States v. Clark, 218 F.3d 1092, 1096 (9th Cir.2000) (“Following traditional rules of contract interpretation, we must examine the plain language of the term in the context of the document as a whole.”) (quoting sources). In “cases of contracts, language is to be given, if possible, its usual and ordinary meaning. The object is to find out from the words used what the parties intended to do.” Fla. Cent. R.R. Co. v. Schutte, 103 U.S. (Mem.) 118, 140, 13 Otto 118, 26 L.Ed. 327 (1880). “Further, business contracts must be construed with business sense, as they naturally would be understood by intelligent men of affairs.” Giove v. Dep’t of Transp., 230 F.3d 1333, 1340-41 (Fed.Cir.2000) (quoting N. German Lloyd v. Guar. Trust Co., 244 U.S. 12, 24, 37 S.Ct. 490, 61 L.Ed. 960 (1917); Deloro Smelting & Ref. Co. v. United States, 161 Ct.Cl. 489, 317 F.2d 382, 387 (1963) (quoting N. German Lloyd, 244 U.S. at 24, 37 S.Ct. 490)) (alteration marks and internal quotation marks omitted). “A written contract must be read as a whole and every part interpreted with reference to the whole, with preference given to reasonable interpretations.” Klamath Water Users Protective Ass’n v. Patterson, 204 F.3d 1206, 1210 (9th Cir.), cert. denied, — U.S. -, 121 S.Ct. 44, 148 L.Ed.2d 14 (2000) (citing Kennewick Irrigation Dist. v. United States, 880 F.2d 1018, 1032 (9th Cir.1989)). “The normal rule of construction, of course, is that courts must interpret contracts, if possible, so as to avoid internal conflict.” Trident Ctr. v. Conn. Gen. Life Ins. Co., 847 F.2d 564, 566 (9th Cir.1988) (citing sources). “The interpretation of a contract is a mixed question of law and fact.” Tyler v. Cuomo, 236 F.3d 1124, 1134 (9th Cir.2000) (quoting Klamath Water Users Protective Ass’n, 204 F.3d at 1210 (citing O’Neill, 50 F.3d at 682 (citing Carpenters Pension Trust Fund v. Underground Constr. Co., 31 F.3d 776, 778 (9th Cir.1994)))). “A contract is ambiguous if reasonable people could find its terms susceptible to more than one interpretation. The fact that the parties dispute a contract’s meaning does not establish that the contract is ambiguous.” Barcellos & Wolfsen, Inc., 849 F.Supp. at 721 (quoting Kennewick Irrigation Dist., 880 F.2d at 1032 (quoting Int’l Union of Bricklayers & Allied Craftsman Local No. 20 v. Martin Jaska, Inc., 752 F.2d 1401, 1406 (9th Cir.1985))) (internal citation and citation marks omitted). “[T]he determination whether contract language is ambiguous is a question of law.” Tyler, 236 F.3d at 1134 (quoting Klamath Water Users Protective Ass’n, 204 F.3d at 1210 (citing O’Neill, 50 F.3d at 682 (citing Carpenters Pension Trust Fund, 31 F.3d at 778))). Federal common law controls contractual interpretation if the United States is a party to the contract and entered into it pursuant to federal law. See Klamath Water Users Protective Ass’n, 204 F.3d at 1210 (citing O’Neill, 50 F.3d at 682). “In fashioning federal rules, guidance is gained from general principles for interpreting contracts.” Saavedra v. Donovan, 700 F.2d 496, 498 (9th Cir.1983) (citing United States v. Seckinger, 397 U.S. 203, 209-11, 90 S.Ct. 880, 25 L.Ed.2d 224 (1970)). Although “[u]nder the parol evidence rule, a court looks to, and enforces, the plain language of a contract and does not look to ‘extrinsic evidence to interpret the terms of an unambiguous written instrument,’ ” United States v. Nunez, 223 F.3d 956, 958 (9th Cir.2000) (quoting Wilson Arlington Co. v. Prudential Ins. Co. of Am., 912 F.2d 366, 370 (9th Cir.1990) (citing Trident Ctr., 847 F.2d at 568-69)) (ellipses omitted), because the Uniform Commercial Code (“U.C.C.”) is another source of federal common law upon which a district court may rely when interpreting a contract where the federal government is a party, “[t]he Code permits the [Court to] use ... extrinsic evidence in a manner that substantially narrows the traditional application of the parole evidence rule.” O’Neill, 50 F.3d at 684. For example, under U.C.C. § 2-202(a), evidence of prior dealings, usage, and performance is also relevant in determining whether the contract is ambiguous. See U.C.C. § 2-202(a); see also Trident Ctr., 847 F.2d at 569 (noting that under California law, “it matters not how clearly a contract is written, nor how completely it is integrated, nor how carefully it is negotiated, nor how squarely it addresses the issue before the court: the contract cannot be rendered impervious to attack by parol evidence. If one side is willing to claim that the parties intended one thing but the agreement provides for another, the court must consider extrinsi