But the 9th Circuit disagreed, saying the Bureau had discretion over price and delivery times of the water, which affect water flow. Therefore, it has to consult with one of the other two agencies. The court also said that the bureau wasn't required to renew the contracts.
Stuart Somach, a lawyer representing water-rights holders who intervened to fight the lawsuit, said the ruling "destabilizes" the state's water-allocation system because it raises uncertainty over the contracts and water delivery.
"The big loser in all of this is the state of California," Somach said.