Is Regulation of Water a Constitutional Taking?

Abstract

This article addresses the issue of how the Takings Clause of the Fifth Amendment should be applied to regulatory restrictions affecting water use. The article contends, contrary to some recent commentary and court decisions, that there is no justification for the view that regulation of water should be viewed as more likely to produce takings liability than regulations involving other natural resources. Indeed, the article contends that, if anything, the extensive and varied “background principles” limiting private property interests in water should make takings liability less likely in the arena of water regulation than in other arenas. The article describes the tortured history of this issue in the U.S. Court of Federal Claims and the U.S. Court of Appeals for the Federal Circuit: starting with Judge John Wiese’s 2001 decision in Tulare Lake Basin Water Storage District v. United States, holding that a restriction on water use should be analyzed as a per se physical-occupation taking; proceeding to Judge Wiese’s 2008 decision in Casitas Municipal Water District v. United States, repudiating his Tulare Lake takings theory; and ending with the 2009 Federal Circuit decision in Casitas embracing the novel, relatively narrower theory that a regulatory mandate that water be passed through a fishway should be treated as per se physical taking. The article explains why, in light of precedent and basic principles of takings jurisprudence, Judge Wiese erred in Tulare Lake but corrected his mistake in Casitas. The article then explains why the Federal Circuit erred in adopting the narrower theory that a regulatory mandate to pass water through a fishway should be viewed as a per se physical taking. This part of the article focuses on two aspects of the issue essentially ignored by the Federal Circuit: the longstanding understanding in takings jurisprudence that negative restrictions on action and affirmative mandates to take action are subject to the same basic takings analysis, and the large volume of precedent, mostly dating from the 19th century, rejecting property rights challenges to government orders that dam owners construct fishways to facilitate fish passage.