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Environmental Law

California Attorney General pushes DOJ's Solicitor General to seek en banc review of Federal Circuit's Casitas decision

By Keith Rizzardi (index)

A few weeks ago, this blawg posted the results of Casitas Municipal Water District v. United States, Case No. 2007-5153 (Fed. Cir. Sept. 25, 2008).  See ESA blawg (Sept. 29, 2008).  In commentary, I warned that the ruling had significant potential consequences for ESA implementation.  Stretched to its limits, the opinion can be read to mean that simply requiring people to leave water in a watershed -- a perfectly reasonable request when excessive water use destroys that very watershed (and its species) -- constitutes a taking.   In a  letter to the U.S. Solicitor General, the California Attorney General Brown voiced his concern with this opinion, noting, among other points, that:

"the majority opinion ignores other important requirements of California water law that bear upon the appropriate analytical framework to be applied in this case. Specifically, as the State Water Board discussed in its amicus brief, under California law, water rights are non-exclusive, non-possessory, usufructuary rights. Cal. Water Code ?? 102, 1001; Palmer v. Railroad Comn, 167 Cal. 163, 168 (1914); Parks Canal & Mining Co. v. Hoyt, 57 Cal. 44, 46 (1880). As such, water rights cannot be physically appropriated, occupied, or invaded by a mere restriction on the exercise of such rights, as occurred in this case."  

In other words, the stakes are getting higher in this battle between Western water law and the Endangered Species Act...


FROM THE OCTOBER 20, 2008 LETTER TO GREGORY G. GARRE, U.S. SOLICITOR GENERAL...

VIA OVERNIGHT MAIL
Honorable Gregory G. Garre
United States Solicitor General
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

RE: Casitas Municipal Water Dist. v. United States, United States Court of Appeals for the Federal Circuit, Case No. 2007-5163, Opinion Filed September 25, 2008

Dear Honorable Solicitor General Garre:

We are writing on behalf of the California State Water Resources Control Board (State Water Board) to urge you to approve the U.S. Department of Justice’s request to file a petition for rehearing en banc in the U.S. Court of Appeals for the Federal Circuit in Casitas Municipal Water Dist. v. United States, Case No. 2007-5163. This case involves a challenge brought by the Casitas Municipal Water District (Casitas) against the United States for an alleged Fifth Amendment taking of Casitas’s appropriative water right, which is held under California law. Specifically, Casitas alleges that a biological opinion issued by the National Marine Fisheries, which specified certain operational criteria for Casitas’s water diversion project to prevent jeopardy to endangered southern California steelhead, effected a physical and regulatory taking of Casitas’s water right. The U.S. Court of Federal  claims granted the United States’ motion for partial summary judgment, holding that Casitas’s takings claim must be analyzed under a regulatory taking, not a physical taking, framework. Casitas stipulated to entry of judgment against it on its regulatory takings claim, and [Casitas] appealed.

On September 25, 2008, in a 2-1 decision, the Federal Circuit Court of Appeals reversed, holding that Casitas’s claim must be analyzed as a physical takings claim. The majority reasoned that “the government did not merely require some water to remain in stream, but instead actively caused the physical diversion of water away from the Robles-Casitas Canal - after the water had left the Ventura River and was in the Robles-Casitas Canal - and towards the fish ladder, thus reducing Casitas’s water supply.” Slip Op. at 22; see also id. at 26, 28. The majority further opined that “[w]hen the government forces Casitas to divert water away from the Robles-Casitas Canal to the fish ladder for the public purpose of protecting the West Coast Steelhead trout, this is a governmental use of the water. The fact that the government did not itself divert the water is of no import.” Id. at 23-24. The decision implies that, had the biological opinion simply specified that a certain amount of water be left instream, a regulatory taking analysis would have applied. Id. at 22, 26, 28. The State Water Board is extremely concerned about the majority opinion’s holding and reasoning, as it is predicated on several serious errors of state and federal law, and also likely will lead to practical difficulties and confusion in implementing instream flow requirements in the future.

First, as the dissenting opinion pointedly notes, the majority opinion inappropriately elevates form over substance by creating an artificial distinction between bypassing flows around a dam to a water delivery canal and then returning the water to the river by way of a fishway, versus bypassing flows over, around or through the dam without making use of a water delivery canal. Dissenting Slip Op. at 7-8. Under the majority’s approach, while both approaches are designed to achieve the same purpose of maintaining fisheries and other instream beneficial uses, the former approach would be analyzed under a per se physical taking framework and the latter under a regulatory taking framework. As dissenting Justice Mayer states: “[t]o differentiate between these two illustrative approaches on a deceptively simple theory of ‘diversion’ creates a perverse system of incentives, . . . because self-selected methods of regulatory compliance can be manipulated and negotiated to arrive at preferred Fifth Amendment results.” Id. at 8.1

The majority’s artificial distinction between “diversions” around a dam making use of a water delivery canal before water is returned to the river, versus flows over, around or through a dam using bypass flow facilities also ignores the fact that longstanding state law requires all dam owners to “allow sufficient water at all times to pass through a fishway . . . to keep in good condition any fish that may be planted or exist below the dam.” Cal. Fish & Game Code ? 5937. Thus, under the majority’s reasoning, where fish passage is provided by a fishway that connects to a water delivery canal, whether an alleged taking of California water rights is analyzed under a physical or regulatory taking framework will depend upon whether the water user is or is not in compliance with state law requiring instream flows to be bypassed through that fishway. Such a distinction makes no sense and is unworkable in practice.

Second, the majority opinion misreads a trilogy of U.S Supreme Court cases in which the Court found a taking of water rights in factual contexts that were very distinguishable from the Casitas case. See International Paper Co. v. United States, 282 U.S. 399 (1931); United States v. Gerlach Livestock Co., 339 U.S. 725 (1950); and Dugan v. Rank, 372 U.S. 609 (1963); Slip Op. at 22-23. Unlike the situation in the Casitas case, these other cases involved situations where the federal government actually physically appropriated the claimant’s water for the government’s own proprietary or consumptive use and/or to transfer that water to another consumptive water user. See Dissenting Slip Op. at 6 (“[i]n each of those cases, the government appropriated a private party’s water rights by requisitioning the water for its own or a third party’s proprietary or consumptive use”).

Here, by contrast, the biological opinion merely provided that some amount of water be bypassed around the dam to a fish ladder operated by Casitas, to maintain endangered fish and other instream beneficial uses both above and below the dam. Id. (“[h]ere, the government did not invade, seize, convey or convert Casitas’s property to consumptive or proprietary use. Rather, it imposed regulatory operating criteria on Casitas’s request to comply with the ESA through use of a fish passage facility that returns a specified amount of water diverted from the Ventura River by the Robles Diversion Dam back to its natural flow for the purpose of endangered species preservation”).

Third, although critical issues concerning the scope of Casitas’s water right remain to be decided on remand, the majority opinion contains imprecise statements that could be read otherwise and that are contrary to California water law. For example, the majority opinion improperly implies that Casitas has an absolute right to divert the entire amount of water specified in its water right license, irrespective of the effect such diversions may have on instream fishery resources. See Slip Op. at 16, 25-26 & n. 15, 30-31 & n. 17. As the State Water Board pointed out in its amicus brief on appeal in this case, under longstanding background principles of California law, no water right holder has a vested right to divert a specified quantity of water. United States v. State Water Resources Control Bd., 182 Cal. App. 3d 82, 147 (1986). Nor does a water right holder have a vested right, through its diversions, to harm instream fishery resources and other beneficial uses. See, e.g., National Audubon Society v. Superior Court, 33 Cal. 3d 419, 437, 440, 445, 447, 452 (1983); United States v. State Board, 182 Cal. App. 3d at 105-106, 129; State Water Resources Control Bd. Cases, 136 Cal. App. 4th 674, 806 n. 54 (2006); see also Dissenting Slip Op. at 1-2.

Fourth, the majority opinion ignores other important requirements of California water law that bear upon the appropriate analytical framework to be applied in this case. Specifically, as the State Water Board discussed in its amicus brief, under California law, water rights are non-exclusive, non-possessory, usufructuary rights. Cal. Water Code ?? 102, 1001; Palmer v. Railroad Comn, 167 Cal. 163, 168 (1914); Parks Canal & Mining Co. v. Hoyt, 57 Cal. 44, 46 (1880). As such, water rights cannot be physically appropriated, occupied, or invaded by a mere restriction on the exercise of such rights, as occurred in this case. See Dissenting Slip Op. at 3-4, 6, 9. Dissenting Justice Mayer correctly observed that “[t]he government is not appropriating or taking possession of Casitas’s property, but rather is prohibiting Casitas from making private use of a certain amount of the river’s natural flow under a public program to promote the common good.” Id. at 9. Moreover, under California law, it is the holder of the appropriative water rights -- in this case, Casitas -- that actually physically controls water right diversions, not the United States.

For the foregoing reasons, the State Water Board respectfully requests that the U.S. Department of Justice’s request to file a petition for rehearing en banc in this case be approved. We appreciate your consideration of this request.

Sincerely,
[original signed by]
TARA L. MUELLER
Deputy Attorney General
For EDMUND G. BROWN JR.
Attorney General of the State of California
Attorneys for the California State Water
Resources Control Board

Full post as published by ESA Blawg on October 23, 2008 (boomark / email).