U.S. Billed for Lost Water

Judge rules that irrigators whose supplies were decreased to save endangered fish are owed $14 million.

Los Angeles Times - 1/26/04

By Bettina Boxall, staff writer

During the California drought of the early 1990s, the federal government cut back water deliveries to Central Valley irrigation districts to protect two rare fish species, the threatened delta smelt and the endangered chinook salmon. Now, the bill is due.

In a case that legal experts say could hobble aquatic protections under the Endangered Species Act, a federal claims court judge ruled recently that the U.S. government must give the irrigators $14 million for the water they never received.

The payment — which could grow to more than $25 million with the addition of interest and legal fees — stems from an earlier decision by the same judge that the water cutback amounted, under the U.S. Constitution, to a property taking. The case has become a major beachhead for the property rights movement, which is pressing similar claims elsewhere.

"There's no free water, just as there's no free lunch. The costs are going to be borne somewhere along the line," said Roger Marzulla, a Washington, D.C., property rights attorney who represents the water districts. "The plaintiffs have a recognized property right under state law. The federal government took it, and the federal government has to pay for it."

Government and environmental lawyers say that, if the decision by federal Claims Court Judge John Paul Wiese stands and other courts embrace it, the Endangered Species Act could become too expensive to enforce.

"It's an enormously important case," said Richard Frank, a chief deputy in the California attorney general's office.

It has the potential, Frank said, "for seriously limiting government scientists and regulators from enforcing the Endangered Species Act and other environmental and health requirements."

In California and the rest of the West, most rivers have more claimants than they have water. So when federal or state water deliveries are slashed to maintain flows for fish in dry periods, somebody usually must do without.

In previous federal cases, when farmers or irrigation districts have challenged such cutbacks, courts generally have found that protections in the Endangered Species Act trumped their contract rights with the federal government, which was therefore not liable for any water loss.

In this case, however, the judge found the federal government liable because its environmental restrictions had forced the state to reduce its water shipments to contractors.

"The federal government is certainly free to preserve the fish; it must simply pay for the water it takes to do so," Wiese wrote in his first ruling in the case, issued in 2001. Three weeks ago he issued the second opinion, saying the water agencies were entitled to $14 million for the lost water deliveries.

Wiese's decision appears to be the first in which a court has found that the government, in essence, has to pay water users when it restricts their deliveries for environmental reasons.

"If it's not the very first case of this kind, it's the first prominent case in which the restriction of water use in order to implement the Endangered Species Act was found to be a constitutional taking," said UC Berkeley law professor Joseph Sax, who helped prepare legal briefs opposing the claims. "It does potentially set a very expensive precedent for the federal government."

A spokesman for the U.S. Justice Department said it had not been decided whether the agency would appeal the case, which was filed by the Tulare Lake Basin Water Storage District, the Kern County Water Agency and several other Central Valley districts that supply irrigation water to farms.

If the ruling is appealed, attorneys who filed briefs opposing the claims on behalf of a number of environmental groups predicted that it would be reversed. They argue that Wiese, though a respected member of the bench, engaged in some dubious legal reasoning.

"I think it was incorrectly decided," said John Echeverria, executive director of the Georgetown Environmental Law and Policy Institute. "It would have devastating consequences for the California budget and the state of its environment. The court, in finding a taking, elevated water rights above any other kind of property right known to the law."

But property rights advocates say the ruling is a good one that will make the government think twice before making water cutbacks to maintain stream flows.

"I think the federal government is going to be a lot more careful in how they proceed in the future if they wind up paying here — and I think they're definitely going to," said Robin Rivett, principal lawyer with the Pacific Legal Foundation, a Sacramento-based property rights group that filed a brief supporting the claims. "I think it's a very strong case."

Rather than just ordering water cutbacks, he predicted, the government will seek less confrontational ways of maintaining flows for fish. It will store water for later release or buy it. And if it does withhold it, Rivett said, contractors will go to court for reimbursement.

Marzulla, a former Justice Department official in the Reagan administration, dismissed suggestions that the case would hamstring Endangered Species Act protections. "Do we think all of a sudden the Fish and Wildlife Service is going to throw up its hands and say we're not protecting these fish anymore? I don't think so…. I've heard this is the end of the Endangered Species Act. Give me a break."

He is pressing similar claims on behalf of irrigation districts in the Klamath Basin in Oregon and Northern California, where the federal Bureau of Reclamation shut down water deliveries three years ago to maintain lake levels for two endangered species of sucker fish.

In that lawsuit, Marzulla is seeking $1 billion from the U.S. government.#