The public pays to keep water in a river

A new wave of ‘takings’ lawsuits could bust the environmental protection budget

  • In the early 1990s, the California Department of Water Resources closed down the gates of the Delta Cross Channel - at the center of this photo - to keep water in the Sacramento River for endangered fish

    Bureau of Reclamation

A perennial battle between the 1973 Endangered Species Act and the Fifth Amendment of the U.S. Constitution is being joined once again, thanks to a trio of lawsuits. The suits seek money from the federal government to compensate for water that it withheld from farmers, beginning in the early 1990s, to protect endangered fish in several Western rivers.

Tucked at the end of the Fifth Amendment is what’s known as the "takings clause," which prohibits the government from taking "private property … for public use, without just compensation." Roger Marzulla — a Washington, D.C.-based property-rights attorney who worked for the Reagan administration and served on George W. Bush’s "transition" team in 2001 — is using the clause in an attempt to force the federal government to pay water users when it curtails their water deliveries to protect endangered species.

"If the rain doesn’t come, if the snow doesn’t fall, that is one of the risks of irrigation. That’s the risk the farmers did accept," says Marzulla. "The risk they did not accept was that the federal government would come in and say, ‘We simply are going to take your water.’ "

Critics say that if the lawsuits succeed, as one already has, it could mean payouts of hundreds of millions of dollars of taxpayer money — and could make it prohibitively expensive for the federal government to keep rivers flowing for endangered species.

The first of the three cases was filed by the Tulare Lake Basin Water Storage District and several other water users near Bakersfield, Calif. Between 1992 and 1994, in an effort to keep enough water in the San Francisco Bay Delta for chinook salmon and the delta smelt, the California Department of Water Resources reduced deliveries to farmers. Both fish are protected under the federal Endangered Species Act. Because the state was attempting to comply with federal law, the Bakersfield water users sued the federal government for taking their water.

In a controversial 2003 decision, federal claims court Judge John Wiese ruled that the federal government owed water customers $14 million plus interest. Many observers and parties in the case expected the federal government to appeal Wiese’s decision.

"These (kinds of) claims have been advanced many times before, but they’ve been regularly rejected by the state and federal courts," says Rick Frank, the chief deputy attorney general for the state of California. "We think (the Tulare decision) is aberrational, and that’s why we expected the federal government to appeal it."

In December, however, the federal government announced that it was simply going to settle the case and pay the water districts $16.7 million.

"I think we were looking at the possibility that this was going to be upwards of $26 million (including interest), and we were able to ‘buy’ the case at $16 million," says Sue Ellen Wooldridge, the top attorney for the U.S. Department of Interior. "It was a good settlement from the perspective of the American taxpayer."

But Barry Nelson, a San Francisco-based policy analyst with Natural Resources Defense Council, says the Tulare case can’t be seen in isolation: "This is part of a very clear strategy among property-rights advocates to bust state and federal budgets with the price tag of environmental protection. Instead of going to Congress to repeal (environmental laws), they’re simply trying to bankrupt federal agencies if they try to enforce them."

The Tulare settlement itself doesn’t establish any legal precedent, but it is sure to be widely quoted in subsequent cases. On March 30, the Washington, D.C.-based claims court will hear arguments in the next significant takings case — the Klamath Irrigation District’s $100 million claim against the federal government for water-delivery reductions four years ago (see story at left). Marzulla, who is spearheading the Klamath case, is also preparing to argue a similar lawsuit filed by the Stockton East Water District and Central San Joaquin Water Conservation District.

In the Klamath and Stockton East cases, the federal government may have limited its liability by including language in the water contracts which stipulates that deliveries may be reduced for a variety of reasons — including, theoretically, endangered species protection. Nonetheless, the cases are a significant test of whether the government will require water users to adapt to evolving environmental protection regulations, or simply try to pay its way out of the problem.

"We’ve been passing new laws every year for the past 230 years, and people have had to accommodate to them," says California water-law scholar Joseph Sax. "Once you behave the way this administration has behaved, you don’t have any leverage over anybody — and then the question is, ‘How much money do you have?’ "

The author is HCN associate editor.

Note: in the print edition of this issue, this article is accompanied by a sidebar, "Who owns Klamath water — farmers or the public?"

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