Federal Court Supports Takings Claims for Water Rights in ESA Case

Published February 2, 2017

Farmers in the Klamath Basin, located along the southern Oregon and northern California coasts, are challenging the federal government’s decision to cut off irrigation water to their farms as part of the government’s attempt to protect endangered species.

Judge Marian Blank Horn of the U.S. Court of Federal Claims in Washington, DC ruled the government’s action could amount to a compensable takings claim under the Fifth Amendment to the U.S. Constitution.

In 2001, the Department of the Interior (DOI), citing authority under the Endangered Species Act (ESA), shut off irrigation water in the Klamath Basin to protect three fish species on the Endangered Species List. DOI maintained the farmers did not have legally enforceable property rights to the water, so no takings took place.

Horn’s December 2016 opinion in Klamath Irrigation, et al., and John Anderson Farms, Inc., et al., v. United States ruled DOI’s prevention of water delivery to farmers counts as an actual physical taking under which, if proven, the federal government must provide payment to property owners, as opposed to a regulatory taking, which requires the court to balance the benefits of a government’s action against a property owner’s loss.

Horn sent the case back to the trial court to determine the factual question of whether the alleged taking occurred and warrants compensation.

Closing a Loophole

William Perry Pendley, president of the Mountain States Legal Foundation, applauded Horn’s decision.

“If [the] plaintiffs prove they possess a property interest, the federal government must provide ‘just compensation’ and may not quibble the federal government has not seized anything and owes nothing,” Pendley said. “The court put it this way: ‘The distinction is important because physical takings constitute per se takings and impose a ‘categorical duty’ on the government to compensate the owner, whereas regulatory takings generally require balancing and ‘complex factual assessments.’

“All too often that ‘balancing’ lets the federal agencies do their mischief and get off scot-free,” said Pendley.

Brian Seasholes, a former research fellow at the Reason Foundation, also welcomed Horn’s opinion.

“The recent court case finding the implementation of the ESA resulted in taking water rights is a welcome development in the decades-long effort by landowners and resource users to have ESA conform to the admonition of the Fifth Amendment of the U.S. Constitution, [which reads, ‘nor shall private property be taken for public use without just compensation,'” Seasholes said. “If this ruling is sustained … it will also have a beneficial impact on endangered species conservation, by forcing the U.S. government to prioritize and make more cost-effective decisions about what endangered species habitat is most important.”

Michael McGrady ([email protected]writes from Colorado Springs, Colorado.