Transcript International Paper Co. v. United States

CWAG 2010
WATER LAW CONFERENCE
The Broadmoor
Colorado Springs, Colorado
April 29 – 30, 2010
Is a Requirement to Leave Water in a Stream
for Endangered Species a “Physical Taking” of
a Water Right?
(Some thoughts on Casitas, Tulare Lakes, etc.)
Joe Feller
Arizona State University
National Wildlife Federation
University of Colorado
Three Tests for Takings of Land
A government action is a compensable taking of land if:
1.it “denies all economically beneficial or productive use”
of the land (Lucas v. South Carolina Coastal Council), or
2.it constitutes a “permanent physical occupation” of the
land (Loretto v. Teleprompter Manhattan), or
3.it is deemed a taking through application of the Penn
Central test, which takes into account, among other
things,
– the “character” of the government action,
– the economic impact of the action, and
– the land owner’s “reasonable investment backed
expectations.”
Why does he focus only on “physical takings”?
Because:
1. Hardly anybody ever wins on a Lucas “total
deprivation” argument.
• It requires virtually 100% loss of property
value.
• Even 90% loss has been held insufficient.
2. Hardly anybody ever wins under the Penn Central
test.
3. A couple of plaintiffs have achieved at least
preliminary success in claiming that an ESA-inspired
restriction on water use or supply was a “physical
taking.” (Tulare Lake, Casitas)
Why is a “physical occupation” of land a taking?
Because it violates the right to exclude.
Loretto:
1.“The power to exclude has traditionally been
considered one of the most treasured strands in an
owner's bundle of property rights.” 458 U.S. at 435.
– Because it abrogates the right to exclude, a
“permanent physical occupation” of land, no matter
how small, is a taking. Id. at 435 - 436.
Does a water right include the right to exclude?
No!
A water right is “usufructary”; that is, it is a right
to use, not to exclude.
No Right to Exclude
Examples of how water rights are non-exclusive:
– Others may use the water upstream, so long as it is
returned to the stream.
– Others may use the water downstream, when you
are done with it.
– Others may use the water whenever you are not
using it. (Imagine applying this rule to a house!)
– Another may take the water away entirely if he
provides a substitute supply. (Imagine again.)
– You may lose the right if you don’t use it, or if you
waste it. (Imagine again.)
Conclusion:
Because a water right does not include a right to
exclude, the “physical taking” rule, which is based on
the right to exclude, should not be applied to water
rights. (I.e., Casitas and Tulare Lakes were wrongly
decided.)
Does this mean that a court should never hold that a
water right has been taken?
No. But it means that a takings determination should
be based on a complete analysis of the circumstances
(i.e., the Penn Central test) rather than a per se rule
(the “physical taking” test).
Observations:
Although the Court of Federal Claims (Tulare Lakes) and
the Federal Circuit (Casitas) have applied the “physical
taking” rule to regulatory restrictions on water rights,
the U.S. Supreme Court has never done so.
The Casitas court cited three Supreme Court cases as
purportedly applying “physical taking” analysis to
restrictions on water rights.
These cases were decided decades before Loretto
(1982) and subsequent cases drew a sharp line
between “physical” and “regulatory” takings.
Moreover . . .
International Paper Co. v. United States (1931)
Did the Supreme Court apply “physical takings”
analysis?
– The court never referred to a “physical taking.”
– The court found a taking because the United States
itself invoked the power of eminent domain by
“requisitioning” water.
• “The Government purported to be using its
power of eminent domain to acquire rights that
did not belong to it.” 282 U.S. at 407
• The government “relied upon and exercised its
power of eminent domain to that end; . . .
purporting to act under that power and no
other.” 282 U.S. at 408
United States v. Gerlach Live Stock Co. (1950)
Did the Supreme Court apply “physical takings”
analysis?
– The court never referred to a “physical taking.”
– The court found a taking because the United States
itself explicitly invoked the power of eminent
domain.
“[W]hether required to do so or not, Congress
elected to recognize any state-created rights and
to take them under its power of eminent
domain.” 339 U.S. at 739
Dugan v. Rank (1963)
This case did not involve any regulatory restriction on
water use or diversion.
Rather, the government itself built a dam that dried up a
stream in which the plaintiff had water rights.
“Physical taking” indeed!
Not applicable to ESA cases.
Finally , a Caution about Casitas . . .
“[T]he government admissions make clear that the United
States did not just require that water be left in the river,
but instead physically caused Casitas to divert water
away from the Robles-Casitas Canal and towards the fish
ladder. Where the government plays an active role and
physically appropriates property, the per se taking
analysis applies.” 543 F.3d at 1295.
The Casitas court placed great emphasis on this
distinction, repeating it 5 times throughout the opinion.
This reasoning would not apply in a case where the
government just requires that water be left in a stream.
CWAG 2010
WATER LAW CONFERENCE
The Broadmoor
Colorado Springs, Colorado
April 29 – 30, 2010