32nd Annual Water Law Conference Water and Takings John D. Echeverria Vermont Law School 32nd Annual Water Law Conference American Bar Association June 4-6, 2014 Las Vegas, NV

Water . . .

and Takings “Nor shall private property be taken for public use, without just compensation” -U.S. Constitution, 5th Amendment No person's property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made . . . -TX Constitution, Art. I, Sec. 17

Outline of presentation: Primer on Takings Typology of Takings Cases Involving Water The Nature of the Property Right at Issue in Water Takings Cases The Applicable Takings Tests in Water Takings Cases

Two Basic Types of Takings Claims

Four Issues in Every Takings Case Does the plaintiff have a valid claim to possess “property”? Has the property been “taken”? If there was a taking of property, was it for a “public use?” Finally, if there was a taking of private property for a public use, how much financial “compensation” is due?

Key Issues in an “Inverse” Case Does the plaintiff have a valid claim to possess “property”? Has the property been “taken”? If there was a taking of property, was it for a “public use?” Finally, if there was a taking of private property for a public use, how much financial “compensation” is due?

Key Issues in an “Inverse” Case Does the plaintiff have a valid claim to possess “property”? Has the property been “taken”? If there was a taking of property, was it for a “public use?” Finally, if there was a taking of private property for a public use, how much financial “compensation” is due?

Takeaway: Inverse Condemnation Claims Involving Water are Different They are different: - because property interests in water are more limited than other types of property interests, making it harder for claimants to prevail in water takings cases than in other types of takings cases. -- but the traditional takings tests apply (or should apply) in water takings cases in the same fashion that they apply in any other takings case.

NB: Roger Marzulla Advocates the Opposite Position According to Roger: - property interests in water are at least as robust as any other type of private property interest, including interests in land, and -- the applicable takings tests should be applied more generously in favor of water takings claimants than for other types of takings claimants.

“Inverse” Takings Tests Direct appropriations and Permanent Physical Occupations = per se takings.

“Inverse” Takings Tests Regulatory takings claims: -- Total denials of all value = Lucas per se takings.

“Inverse” Takings Tests Regulatory takings claims: -- Total denials of all value = Lucas per se takings. -- Lesser but still substantial restrictions on property use = potential Penn Central takings claims, which turn on (a) the level of economic impact, (b) the degree of interference with investment-backed expectations, (c) and the character of the government action.

“Inverse” Takings Tests The Nollan/Dolan “essential nexus” and “rough proportionality” tests for regulatory “exactions.” And now Koontz has expanded Nollan and Dolan to apply to: -- monetary exactions, and -- permit denials based on a landowner’s refusal to accede to a “demand” for an exaction.

“Inverse” Takings Test The alleged failure of a government action to “substantially advance” a legitimate govern- mental interest cannot support a claim under the Takings Clause. Instead, such allegations can only state a potential claim under the Due Process Clause Lingle v. Chevron, USA (2005) But query whether Koontz has undermined Lingle?

A Typology of Takings Cases Seven categories of water takings cases – though there are undoubtedly some overlooked outliers.

A Typology of Takings Cases Flooding Cases (too much water) Pumpelly v. Green Bay Co.,80 U.S. 166 (1871) Arkansas Game & Fish Commission v. United States, 133 S.Ct. 511 (2012)

A Typology of Takings Cases Restrictions on water use (too little water) Tulare Lake Basin Water Storage Dist. v. United States, 49 Fed.Cl. 313 (2001) Bragg v. Edwards Aquifer Authority, 2013 WL 4535935 (Tex.App. 2013).

A Typology of Takings Cases Restrictions to prevent water pollution City of Houston v. Trail Enterprises, 377 S.W. 3d 873 (Tex. 2012) Machipongo Land and Coal Co., Inc. v. Com., 799 A.2d 751 (Pa. 2002)

A Typology of Takings Cases Releases of polluted waters Mildenberger v. United States, 643 F.3d 938 (Fed Cir 2011),

A Typology of Takings Cases Government-caused erosion United States v. Dickinson, 331 U.S. 745, 749 (1947)

A Typology of Takings Cases Government restrictions on filling Palazzolo v. Rhode Island, 533 U.S. 606 (2001) Walcek v. United States, 303 F.3d 1349 (Fed Cir. 2002)

A Typology of Takings Cases Transformations of state water allocation systems Franco-American-American Charolaise, Ltd. v. Oklahoma Water Resources Board, 855 P. 2d 568 (1990),

The Special Nature of the Property Right in Water The Special Physical Nature of Water Resources -- Variable in quantity on daily, seasonal and yearly basis -- Value of resource dependent on shared use - e.g., navigation -- Uses highly interdependent -e.g. return flows groundwater pumping -- Water is often both very scarce and very valuable – especially out West!

The Special Nature of the Property Right in Water The Special, Limited Character of Legal Rights in Water -- Use or lose it principle -- Doctrine of waste -- Doctrine of reasonable use in riparian jurisdictions -- Navigational servitude -- Public trust doctrine

The Special Nature of the Property Right in Water Special Water-Specific Defenses Available in Takings Litigation: -- Riparian reasonable use doctrine : an overlooked takings defense in Arkansas Game & Fish Commission v. United States -- Navigational servitude -- Scranton v. Wheeler -- Public trust doctrine -- National Audubon

But What Takings Tests Apply in Water Takings Cases? The Usual Ones -- sometimes government management of water will give rise to physical occupation claims – such as in the case of permanent flooding -- takings claims based on regulatory restrictions on the use of water – restrictions on surface water diversion or on groundwater pumping – should be analyzed just like any other regulatory takings claim, based on Penn Central or possibly Lucas. -- No principled argument to the contrary.

But What Takings Tests Apply in Water Takings Cases? But see: Tulare Lake Basin Water Storage Dist. v. United States, 49 Fed.Cl. 313 (2001), and Casitas Mun Water Dist. v. United States, 543 F.3d 1276, 1296 (Fed. Cir. 2008)

Thank you!