Court Rules That WaterRight Restrictions To Protect Fish Habitat Did Not Constitute A Taking

By Alfred E. Smith, II
Nossaman Water Law

In a decision entered on March 29, 2007, the United States Court of Federal Claims ruled that the government need not pay compensation to a water district for restrictions on water diversions to protect endangered species. Casitas Municipal Water District v. United States, Case No. 05-168L (“Casitas”). The case involved a municipal water district that built a fish ladder and other improvements to assist the passage of endangered steelhead trout at the Robles Diversion Dam located on the Ventura River.

The water district argued that restrictions imposed by the U.S. amounted to a taking of property thereby triggering the Constitution’s just compensation requirement because the restrictions required the district to forego the exercise of a right to divert approximately 3,200 acre-feet of water per year for irrigation purposes. The water district pointed out that water is a unique asset, the value of which is tied exclusively to its use, and when its use is restricted or denied, all value is lost.

The government disagreed, claiming that the water restrictions did not amount to a physical or per se taking, such as when the government takes property for a school or road. Instead, the government argued that the restrictions should be treated as a “regulatory” taking, requiring compensation only when the restriction deprives an owner of all economically beneficial use of the property under the criteria adopted in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).