Feds Seek Review Of Casitas Ruling

Issue at stake is ‘taking’ for fish ladder

By Daryl Kelley
Claiming that a three-judge appeals panel erred, federal lawyers have asked the full U.S. appeals court in Washington to review a September ruling in which the panel found that the federal government had seized Casitas Municipal Water District property by forcing it to provide water for a fish ladder built for the endangered steelhead trout.
That panel decision, if it stands, could potentially be worth tens of millions of dollars for Casitas, the largest water district in the Ojai Valley. Either way, some experts say, the Casitas case could end up before the U.S. Supreme Court as a test of private property rights.
Last week, U.S. environmental lawyers asked the entire 11-justice Washington appeals court to reconsider the case, on which the appeals panel itself split 2-1 in overturning a lower court decision.
The lower court had found that the Bureau of Reclamation had not seized Casitas’ private property when forcing it to provide water without compensation. But the appeals panel decided the water was private property and sent the case back to the trial court to be heard on that basis.
Now, lawyers for the Environmental and Natural Resources Division of the U.S. Justice Department have argued consider the case.
The panel “clearly departed from binding precedent of the Supreme Court and this Court” in requiring that the Casitas case be considered under federal law for the taking of private property instead of under law relating to regulatory restrictions on property, the new petition said.
Indeed, federal lawyers even argued that Casitas had not lost a drop of water to the fish ladder that it has been forced to replace, since the Casitas reservoir and dam project is naturally replenished by rainfall.
“The record shows no evidence of loss of use, and the United States’ expert report shows that, under historic weather patterns, the Project has sufficient access to water and storage so that no loss of use is anticipated to occur …,” the petition argues.
But Roger Marzulla, a Washington lawyer representing Casitas, said Tuesday that he thinks reconsideration of the case will be rejected by most of the 11 justices, and the case will be returned to the trial court to be tried as a property taking, with compensation going to Casitas for its loss of water. The full appeals court decides to rehear cases decided by a panel only about once a year out of dozens of petitions, he said.
He said he expects a decision in January.
“The panel was correct,” Marzulla said. “There are three water rights cases (decided by the Supreme Court), and in all the finding was that the plaintiffs should recover.”
Nor does Marzulla think the case should ever reach the Supreme Court, although property rights attorneys said it could set a precedent nationwide.
“I’d just like this case to go back to the trial court, and get it over with,” he said. “I think the Supreme Court law is clear enough. There is not a new issue here that the Supreme Court ought to be addressing.”
But that’s not the way state and federal lawyers have seen the case since it was filed by Casitas in 2005 after the district was required to build a fish ladder on the Ventura River, and to provide water for it.
Casitas sought compensation for both the ladder and the water, but lost the case to reclaim the $9 million for ladder construction. But compensation for the on-going cost of water remains in play.
J. David Breemer, a principal attorney for the Pacific Legal Foundation, a property rights group in Sacramento, said the appeals panel’s Casitas decision “is very important because it says your water can’t be taken without you being paid for it.”
Before that ruling, Breemer said, the presumption was that the government had a right to take water being used by a private party without compensation to satisfy federal environmental law, such as the Endangered Species Act.
“Now the presumption is that they’ve got to pay for that water,” he said.
If the Bureau of Reclamation is forced to pay for water to operate the fish ladder, the bill could total $1 million to $2 million a year, officials said. That compares with Casitas’ annual budget of $15 million.
Casitas estimates that it takes at least 3,200 acre-feet of water a year to guarantee that the steelhead migration can occur.
The district charges farmers $371 an acre-foot for water and residential customers $444. It also estimates that it would cost at least $600 an acre-foot to import water for the fish ladder during a prolonged drought.
That means that the value of the 3,200 acre-feet is at least $1.12 million and as much as $1.92 million, said Casitas representatives. (An acre-foot of water meets the needs of two typical households for a year.)
Lawyer Marzulla said that a water appraiser and broker hired by the district has placed the total value of the water the district could lose for the fish ladder over decades as at least “tens of millions of dollars, and it could go as high as $80 million.”
But Casitas is not counting its money yet.
Indeed, the five elected directors of the water district are split 3 to 2 on whether its a good idea to continue with the suit.
Last year, the board majority voted to press the litigation for a third year despite a steep $500,000 cost and repeated setbacks, while the board minority said the suit was a waste of money and would undercut the Endangered Species Act if Casitas won.
That split has persisted, with Directors Jim Word, Bill Hicks and Pete Kaiser wanting to continue the case, and Directors Russ Baggerly and Richard Handley wanting to end it.
Also fighting against the Casitas case are state and federal lawyers who maintain that the river water Casitas gathers in its reservoir is owned by all of the people of California and not by the water district, and that it can be used by government agencies for the common good without compensation. It fact, that procedure is common when enforcing the Endangered Species Act.
Last year, a federal claims court judge agreed, ruling that a constitutional property right was not involved when the federal government required Casitas to provide water without compensation.
The claims court judge ruled that the Casitas case had to be considered under federal law that deals with the government’s simple regulatory constraint of water use, and not as a “physical taking” of private property. Water agencies have rarely, if ever, won compensation in a case argued under such rules, officials have said.
But after the appeals panel decision, and the new petition opposing it, the case appears wide open again.
The Casitas district provides water for about 65,000 people and nearly 5,700 acres of farmland in the Ojai Valley and Ventura area.
a lower court decision.
The lower court had found that the Bureau of Reclamation had not seized Casitas’ private property when forcing it to provide water without compensation. But the appeals panel decided the water was private property and sent the case back to the trial court to be heard on that basis.
Now, lawyers for the Environmental and Natural Resources Division of the U.S. Justice Department have argued to consider the case.
The panel “clearly departed from binding precedent of the Supreme Court and this Court” in requiring that the Casitas case be considered under federal law for the taking of private property instead of under law relating to regulatory restrictions on property, the new petition said.
Indeed, federal lawyers even argued that Casitas had not lost a drop of water to the fish ladder that it has been forced to replace, since the Casitas reservoir and dam project is naturally replenished by rainfall.
But Roger Marzulla, a Washington lawyer rep-resenting Casitas, said Tuesday that he thinks reconsideration of the case will be rejected by most of the 11 justices, and the case will be returned to the trial court to be tried as a property taking, with compensation going to Casitas for its loss of water. The full appeals court decides to rehear cases decided by a panel only about once a year out of dozens of petitions, he said.
He said he expects a decision in January.
“The panel was correct,” Marzulla said. “There are three water rights cases (decided by the Supreme Court), and in all the finding was that the plaintiffs should recover.”
Nor does Marzulla think the case should ever reach the Supreme Court, although property rights attorneys said it could set a precedent nationwide.
“I’d just like this case to go back to the trial court, and get it over with,” he said. “I think the Supreme Court law is clear enough.”
But that’s not the way state and federal lawyers have seen the case since it was filed by Casitas in 2005 after the district was required to build a fish ladder on the Ventura River, and to provide water for it.
Casitas sought com-pensation for both the ladder and the water, but lost the case to reclaim the $9 million for ladder construction.
J. David Breemer, a principal attorney for the Pacific Legal Foundation, a property rights group in Sacramento, said the appeals panel’s Casitas decision “is very important because it says your water can’t be taken without you being paid for it.”
Before that ruling, Breemer said, the presumption was that the government had a right to take water being used by a private party without compensation to satisfy federal environmental law, such as the Endangered Species Act.
“Now the presumption is that they’ve got to pay for that water,” he said.
If the Bureau of Reclamation is forced to pay for water to operate the fish ladder, the bill could total $1 million to $2 million a year, officials said. That compares with Casitas’ annual budget of $15 million.
Casitas estimates that it takes at least 3,200 acre-feet of water a year to guarantee that the steelhead migration can occur. The district charges farmers $371 an acre-foot for water and residential customers $444. It also estimates that it would cost at least $600 an acre-foot to import water for the fish ladder during a prolonged drought.
But Casitas is not counting its money yet.
Indeed, the five elected directors of the water district are split 3-to-2 on whether its a good idea to continue with the suit.
Last year, the board majority voted to press the litigation for a third year despite a steep $500,000 cost and repeated setbacks, while the board minority said the suit was a waste of money and would undercut the Endangered Species Act if Casitas won.
That split has persisted, with Directors Jim Word, Bill Hicks and Pete Kaiser wanting to continue the case, and Directors Russ Baggerly and Richard Handley wanting to end it.
Also fighting against the Casitas case are state and federal lawyers who maintain that the river water Casitas gathers in its reservoir is owned by all of the people of California and not by the water district, and that it can be used by government agencies for the common good without compensation. It fact, that procedure is common when enforcing the Endangered Species Act.
Last year, a federal claims court judge agreed, ruling that a constitutional property right was not involved when the federal government required Casitas to provide water without compensation.
The claims court judge ruled that the Casitas case had to be considered under federal law that deals with the government’s simple regulat-ory constraint of water use, and not as a “physical taking” of private property.
But after the appeals panel decision, and the new petition opposing it, the case appears wide open again.