Petition for Writ of Certiorari — United Water Conservation District, Petitioner v. United States

APPENDIX

TABLE OF CONTENTS

Page

APPENDIX A

Opinion of the United States Court of

Appeals for the Federal Circuit

(Apr. 2, 2025) ........................................................ 1a

APPENDIX B

Order of the United States Court of

Federal Claims Dismissing the Complaint

(Jan. 26, 2023) .................................................... 15a

APPENDIX C

Order of the United States Court of

Appeals for the Federal Circuit Denying

Rehearing

(July 29, 2025) .................................................... 41a

1a

APPENDIX A

United States Court of Appeals

for the Federal Circuit

______________________

UNITED WATER CONSERVATION DISTRICT,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________

2023-1602

______________________

Appeal from the United States Court of Federal

Claims in No. 1:22-cv-00542-CFL, Senior Judge

Charles F. Lettow.

______________________

Decided: April 2, 2025

______________________

FRANK S. MURRAY, Foley & Lardner LLP,

Washington, DC, argued for plaintiff-appellant. Also

represented by DAVID THOMAS RALSTON, JR.; MICHAEL

P. CALABRESE, Los Angeles, CA.

TAMARA N. ROUNTREE, Appellate Section, Environment and Natural Resources Division, United

States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by

TODD KIM.

______________________

2a

Before LOURIE and HUGHES, Circuit Judges, and

GILSTRAP, District Judge.1

Lourie, Circuit Judge.

United Water Conservation District (“United”) appeals from a decision of the U.S. Court of Federal

Claims (“the Claims Court”) dismissing its complaint

for lack of subject matter jurisdiction. United Water

Conservation Dist. v. United States, 164 Fed. Cl. 79

(2023) (“United Decision”).

United’s suit against the United States (“the government”) seeks just compensation for an alleged taking under the Fifth Amendment of the U.S. Constitution. The Claims Court dismissed United’s complaint

because it determined that United’s claim should be

evaluated as a regulatory taking and, because United

had yet to exhaust its administrative remedies, its

claim was “not yet viable for adjudication.” United Decision, at 91. For the following reasons, we affirm.

BACKGROUND

United is a water conservation district, created

pursuant to California law to serve as the water management agency for the Santa Clara River and the

Oxnard coastal plain. Id. at 82. The California State

Water Resources Control Board (“the State Board”) issued United a license in 1958 and a permit in 1983,

providing United the right to appropriate and divert

water from the Santa Clara River for United’s beneficial use, i.e., to recharge groundwater aquifers, deliver

surface water to groundwater users, and stabilize the

1

Honorable Rodney Gilstrap, District Judge, United States

District Court for the Eastern District of Texas, sitting by designation.

3a

riverbed.2 Id. at 82–83. In 1987, United’s permit was

amended to allow for the construction of the Vern

Freeman Diversion dam (“Diversion dam”), which diverts water from the Santa Clara River into the Freeman Canal. Id. Water that the Diversion dam does

not divert into the Freeman Canal remains in the

Santa Clara River and flows into the Pacific Ocean.

Id. at 83.

In 1997, the National Marine Fisheries Service

(“NMFS”), an office of the National Oceanic and Atmospheric Administration within the Department of

Commerce, designated the Southern California steelhead trout in the Santa Clara River as an “endangered

species” under the Endangered Species Act (“ESA”).

Id.; see 16 U.S.C. §§ 1531–44. Section 9 of the ESA

prohibits taking species that are designated as endangered or threatened under the Act. United Decision,

at 83; see 16 U.S.C. § 1538(a)(1)(B). The government,

however, may allow a taking of steelhead trout otherwise prohibited by the ESA by issuing an incidentaltake permit under Section 10 of the ESA, 16 U.S.C.

§ 1539(a). United Decision, at 83. United, as of the

time of the Claims Court’s decision, had not yet applied for such a permit. Id. at 86.

In 2016, NMFS’s Office of Legal Enforcement

(“OLE”) issued a letter (“OLE Letter”) notifying

United that “a significant issue regarding ongoing

take of endangered southern California steelhead

[trout] exists at the [Diversion] Dam . . . , which

United owns and operates.” Id. at 85 (quoting J.A. 53)

2

The license, permit, and amendment to the permit were not

provided to the Claims Court and therefore any reference to the

recitals reflect matters drawn from the complaint, the parties’

briefing, and other materials included in the Joint Appendix.

4a

(alteration in original). The letter further states that

“United must commit to implementing interim operating measures that are consistent with the operational criteria set forth in the [Reasonable and Prudent Alternatives (“RPAs”)] . . . of the 2008 Biological

Opinion [(“2008 BiOp”)].” Id. (quoting J.A. 55). According to United’s complaint, RPA 2 of the 2008 BiOp

requires an increase in bypass flow, i.e., requiring

more Santa Clara River water to either remain in the

river or to flow through a fish ladder that is also located in the river (collectively, “bypass flow”).3 Id. at

88.

United’s State Board-issued license and permit

provide it with the right to appropriate and divert

144,630 acre-feet of Santa Clara River water per year

at the Diversion dam and to put that amount of water

to beneficial use. Id. at 83. United’s complaint therefore alleges that NMFS, by way of OLE’s Letter requiring United’s implementation of RPA 2, “caused

and required United to increase the amount of Santa

Clara River water used as bypass flow to the [Diversion dam] fish ladder and/or remaining in the Santa

Clara River for the benefit of the endangered fish species.” J.A. 35, ¶ 52. It specifically alleges that “compliance with RPA 2 of the BiOp, as interpreted by

NMFS, caused United to lose at least 49,800 [acrefeet] of water that it would have been permitted to divert from the Santa Clara River for its beneficial use,”

resulting in a physical taking. Id., ¶ 53; see J.A. 39,

3

The 2008 BiOp was not provided to the Claims Court and

therefore any reference to the recitals reflect matters drawn from

the complaint, the parties’ briefing, and other materials included

in the Joint Appendix.

5a

¶ 67 (alleging that “the taking by [the government]

constituted a physical taking”).

In the Claims Court, the parties disagreed about

whether United’s claim should be analyzed as a physical or regulatory taking, United Decision, at 88, and

thus “whether United’s claim is ripe for adjudication,”

because “[f ]or a regulatory taking claim to ripen,

there must be final agency action,” id. at 91. United

argued that its claim was ripe because it alleged a

physical, not regulatory, taking. Id. For its part, the

government argued that the claim was not ripe because United alleged a regulatory taking and had not

yet applied for and been denied an incidental-take

permit under Section 10 of the ESA. Id. In addition,

as relevant here, United conceded that the Diversion

dam is located in the Santa Clara River and any water

it diverts to the fish ladder “does not enter the Freeman [ ] Canal.” Id. at 83 (citing J.A. 24, ¶ 18).

The Claims Court first explained that “a physical

taking occurs when the government directly appropriates property or engages in the functional equivalent

of a practical ouster of the owner’s possession.”

United Decision, at 89 (quoting Katzin v. United

States, 908 F.3d 1350, 1361 (Fed. Cir. 2018)) (cleaned

up). A regulatory taking on the other hand, it explained, “occurs when a regulation restricts the

owner’s use of their property.” Id. (citing Penn Cent.

Transp. Co. v. City of New York, 438 U.S. 104, 124

(1978)). Finally, it explained that “[w]hen determining if a taking was physical or regulatory, a court

should focus on the character of the government action.” Id. (citing Casitas Mun. Water Dist. v. United

States, 543 F.3d 1276, 1290 (Fed. Cir. 2008) (“Casitas I”)).

6a

The Claims Court determined that United’s claim

should be analyzed as a regulatory taking. United Decision, at 91. It reasoned that the circumstances of

this case distinguished it from those where the Supreme Court and this court had applied the physical

takings doctrine to water rights because in those cases

the water rights holder “had to return water it had

already diverted.” Id. at 91 (citing Int’l Paper Co. v.

United States, 282 U.S. 399 (1931), and Casitas I, 543

F.3d at 1291–92)). And “[b]ecause United does not allege that it had to return water it had already diverted, it has not stated a physical takings claim.” Id.

at 90–91. In light of that determination, the Claims

Court concluded that United’s complaint was not ripe

because United had yet to apply for a Section 10 incidental-take permit under the ESA. Id. at 91 (citing

Boise Cascade Corp. v. United States, 296 F.3d 1339,

1349 (Fed. Cir. 2002) (“[A]bsent denial of the permit,

only an extraordinary delay in the permitting process

can give rise to a compensable taking.”)). The Claims

Court therefore dismissed United’s complaint for lack

of subject matter jurisdiction under Rule 12(b)(1) of

the United States Court of Federal Claims. Id.

United timely appealed, and we have jurisdiction

under 28 U.S.C. § 1491(b)(1).

DISCUSSION

United argues that the Claims Court improperly

dismissed its complaint for lack of subject matter jurisdiction. In United’s view, because the alleged taking should be evaluated as a physical, not regulatory,

taking, its claim is ripe for adjudication as pleaded.

We disagree.

“This court reviews legal conclusions by the Court

of Federal Claims de novo and factual findings for

7a

clear error.” Casitas Mun. Water Dist. v. United

States, 708 F.3d 1340, 1351 (Fed. Cir. 2013) (“Casitas II”) (citation omitted). “The nature or scope of a

compensable property interest in a takings analysis is

a question of law.” Id. (citation omitted). “In addition,

whether the Court of Federal Claims properly dismissed a complaint for lack of subject matter jurisdiction also is a question of law,” id., with any underlying

jurisdictional fact determinations reviewed for clear

error, Stephens v. United States, 884 F.3d 1151, 1155

(Fed. Cir. 2018). “Finally, the Court of Federal Claims

must address ripeness as a threshold consideration

before addressing the merits.” Casitas II, 708 F.3d at

1351 (cleaned up).

The Fifth Amendment provides that private property shall not “be taken for public use, without just

compensation.” U.S. Const. amend. V, cl. 4. To establish a taking under the Fifth Amendment, a party

must prove that it had a cognizable property interest

at the time of the alleged taking and that “the government’s action amounted to a compensable taking of

that interest.” Casitas II, 708 F.3d at 1348. A taking

can either be physical or regulatory in nature. See Casitas I, 543 F.3d at 1288–89. A taking that is physical

in nature is the “paradigmatic taking” and occurs by

“a direct government appropriation or [a] physical invasion of private property.” Id. at 1288 (quoting Lingle

v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005)). A

“[g]overnment action that physically appropriates

property is no less a physical taking because it arises

from a regulation.” Cedar Point Nursery v. Hassid,

594 U.S. 139, 149 (2021).

Regulatory takings differ from physical takings in

that, instead of asking “whether the government has

physically taken property for itself or someone else—

8a

by whatever means,” the question is whether the government “has instead restricted a property owner’s

ability to use his own property.” Id. (citing Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency,

535 U.S. 302, 321–23 (2002)). “While there is no ‘set

formula’ for evaluating regulatory takings claims,

courts typically consider whether the restriction has

risen to the level of a compensable taking under the

multi-factor balancing test articulated in Penn Central, 438 U.S. at 124.” Casitas I, 543 F.3d at 1289; see

Tahoe-Sierra, 535 U.S. at 322 n.17 (“When, however,

the owner contends a taking has occurred because a

law or regulation imposes restrictions so severe that

they are tantamount to a condemnation or appropriation, the predicate of a taking is not self-evident, and

the analysis is more complex.”). The Penn Central factors include “[t]he economic impact of the regulation

on the claimant and, particularly, the extent to which

the regulation has interfered with distinct investment-backed expectations” and also, “the ‘character of

the governmental action’—for instance whether it

merely affects property interests through ‘some public

program adjusting the benefits and burdens of economic life to promote the common good.’” Lingle, 544

U.S. at 538–39 (quoting Penn Central, 438 U.S. at

124).

Moreover, a regulatory takings claim “is not ripe

until the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue.” Williamson Cnty. Reg’l Plan. Comm’n

v. Hamilton Bank, 473 U.S. 172, 186 (1985), overruled

on other grounds by Knick v. Township of Scott, 588

U.S. 180 (2019)); see, e.g., Boise Cascade, 296 F.3d at

1357 (“Boise cannot make out a ripe takings claim

9a

based on the mere imposition of a permitting requirement” under the ESA.).

Here, it is undisputed that United acquired a

valid, appropriative property right in the beneficial

use of water it diverts to the Freeman Canal. See

United Decision, at 83. United contends, however,

that the Claims Court erred by characterizing its complaint as alleging a taking that is regulatory in nature. It argues that “restrictions imposed by NMFS’s

[OLE Letter] on United’s operation of the [Diversion

dam] resulted in a decrease in the volume of water

United was able to appropriate and put to beneficial

use.” United Br. 32. More particularly, it argues that

“the government appropriated the beneficial use of [ ]

49,800 acre-feet of Santa Clara River water for the

federal public purpose of fish preservation,” id. at 18,

and that that volume of water is now “gone forever,”

id. at 20. Because, as it argues, “United does not have

the same amount of water it can put to beneficial use

after the government action as it would have had absent the government action[,] . . . the government action is not a use restriction that otherwise leaves

United’s property right undisturbed, as is the case in

a regulatory taking[s] claim.” Id. at 19 (emphasis in

original). We disagree.

California property rights are governed by state

law. Cedar Point, 594 U.S. at 155 (“As a general matter, it is true that the property rights protected by the

Takings Clause are creatures of state law.”). “Under

well-established California law, the right of property

in water is usufructuary, and consists not so much of

the fluid itself as the advantage of its use.” Casitas II,

708 F.3d at 1353 (internal quotation marks and citation omitted). “[A]lthough a private entity cannot own

water itself, the right to use that water is considered

10a

private property.” Id. at 1354; see Thayer v. Cal. Dev.

Co., 128 P. 21, 24 (Cal. 1912) (“Under the law of this

state as established at the beginning, the water right

which a person gains by diversion from a stream for a

beneficial use is a private right—a right subject to

ownership and disposition by him, as in the case of

other private property.”). Further, “[u]nder the prior

appropriation doctrine, recognized in most of the

western states, water rights are acquired by diverting

water and applying it for a beneficial purpose.” Colorado v. New Mexico, 459 U.S. 176, 179 n.4 (1982).

Supreme Court precedent, as well as our own, “involving water rights provides guidance on the demarcation between regulatory and physical takings analysis with respect to these rights.” Casitas I, 543 F.3d

at 1289. International Paper and Casitas I are illustrative because they involve appropriative water

rights. See Int’l Paper, 282 U.S. at 404–408; Casitas

I, 543 F.3d at 1291–95. In both cases, the water rights

holder diverted a volume of water from the watercourse (e.g., a river) to a canal for its beneficial use

under its relevant contract or license. Int’l Paper, 282

U.S. at 404; Casitas I, 543 F.3d at 1280.

In International Paper, the government ceased

the diversion of water to International Paper’s mill for

a public purpose—supplying power for the war effort.

International Paper, 282 U.S. at 405–6 (“On December

29, the representative of the Secretary of War wrote

to the secretary of the Power Company ‘Please note

that the requisition order covers also all of the water

capable of being diverted through your intake canal.

[ ] This is intended to cut off the water being taken by

the International Paper Company . . . .’”). The Supreme Court concluded that this was a direct physical

appropriation because International Paper’s right to

11a

the water was completely cut off. See Int’l Paper, 282

U.S. at 407 (“The petitioner’s right was to the use of

the water; and when all the water that it used was . . .

turned elsewhere by government requisition for the

production of power it is hard to see what more the

Government could do to take the use.”).

In Casitas I, after the water had been diverted to

the canal and into the rights holder’s possession, the

government subsequently mandated a return of that

water for a public purpose—fish preservation. Casitas I, 543 F.3d at 1291–92. Because the government

caused water that was diverted to be returned—i.e., a

direct physical appropriation—we determined that

the taking was physical in nature. See id. (“[T]he government did not merely require some water to remain

in stream, but instead actively caused the physical diversion of water away from the Robles–Casitas Canal—after the water had left the Ventura River and

was in the Robles–Casitas Canal—and towards the

fish ladder, thus reducing Casitas’ water supply.” (emphasis added)).

United’s allegations here are materially different.

Unlike the water rights holders in International Paper and Casitas I, United has not alleged that the government completely cut off its access to the water or

caused it to return any volume of water it had previously diverted to its possession in the Freeman Canal.

In fact, United alleges that NMFS, at most, required

more water to stay in the Santa Clara River. See J.A.

20, ¶ 4 (“[T]he BiOp RPAs . . . compelled United to increase the amount of Santa Clara River water (a) flowing to a fish ladder located at United’s [Diversion

dam], and/or (b) remaining in the Santa Clara River

(collectively and commonly referred to as ‘bypass

flow’) to facilitate fish migration.”); J.A. 24, ¶ 18

12a

(“Bypass flow water used for the fish ladder or flowing

into the roller gate does not enter the Freeman [ ] Canal.”). Put simply, the BiOp RPAs represent a nonpossessory government activity merely requiring that

more Santa Clara River water, whether flown through

the fish ladder or not, remains in the river.

The RPAs therefore operate as “regulatory restrictions on the use of ” a natural resource and “do not

constitute physical takings.” Seiber v. United States,

364 F.3d 1356, 1366 (Fed. Cir. 2004); see, e.g., Boise

Cascade, 296 F.3d at 1355 (“The government simply

imposed a temporary restriction on Boise’s exploitation of certain natural resources located on its land

unless Boise obtained a permit.”). Stated differently,

“this case does not present the classic taking in which

the government directly appropriates private property for its own use; instead the interference with

property rights arises from some public program adjusting the benefits and burdens of economic life to

promote the common good.” Tahoe-Sierra, 535 U.S. at

324 (cleaned up). United’s complaint therefore alleges

a taking that is regulatory in nature.

United argues that “[t]here is no legal support” for

requiring “that the water at issue must have already

entered the property owner’s facilities before the governmental appropriation at issue.” United Br. 38. It

argues that “such a requirement . . . cannot be squared

with the Supreme Court’s consistent finding of a physical taking of the right to use water whenever the government action at issue prevents the rights holder

from accessing water it has the right to use.” Id. at

38, 42. Specifically, it contends that “the taking of the

right to use water constitutes a physical taking, even

where the governmental action prevented the water

from entering the property owner’s facilities in the

13a

first instance.” Id. at 42 (relying on Int’l Paper, 282

U.S. 399 (1931), United States v. Gerlach Live Stock

Co., 339 U.S. 725 (1950), and Dugan v. Rank, 372 U.S.

609 (1963)).

The Supreme Court precedent that United relies

upon, however, does not acknowledge any distinction

between physical and regulatory takings. That is presumably because it was not until 1978, decades after

the decisions in International Paper, Gerlach, and

Dugan, that the Court, in Penn Central, “clarified [ ]

the test for how far was ‘too far’” for a regulation to be

recognized as a taking. Horne v. Dep’t of Agric., 576

U.S. 350, 360 (2015). It may also be because the alleged

takings in those cases did not arise from a regulation,

as it clearly does here under the ESA. Moreover, Gerlach and Dugan involve riparian water rights, not appropriative water rights as here. The difference between the two is meaningful in the context of this case

because riparian rights exist by virtue of land ownership and, therefore, their acquisition by the landowner does not depend on any physical acts of diversion and beneficial use of water as is required for appropriative water rights. See Colorado, 459 U.S. at

179, n.4 (“Appropriative rights do not depend on land

ownership and are acquired and maintained by actual

use. Riparian rights, in contrast, originate from land

ownership and remain vested even if unexercised.”).

Unlike the riparian-rights holders in Gerlach and

Dugan, therefore, the appropriative-rights holder

here needed to have physically diverted water for its

property right to vest and thus become subject to a

physical taking, as in Casitas. For at least those reasons, the Supreme Court precedent and related cases

United cites are consistent with our decision here.

14a

A regulatory takings claim, as alleged here, is not

ripe until the rights holder obtains a final agency action. See Schooner Harbor Ventures, 569 F.3d at 1365;

see, e.g., Boise Cascade, 296 F.3d at 1355 (“[T]hat the

[government] never denied Boise’s permit . . . is fatal

to Boise’s regulatory takings claims, and it remains

fatal notwithstanding Boise’s attempt to recharacterize those claims as a forced physical [taking].”). Having yet to have been denied an incidental-take permit

under Section 10 of the ESA, United has therefore not

pleaded a ripe takings claim, and the district court

properly dismissed its complaint for lack of subject

matter jurisdiction.

CONCLUSION

We have considered United’s remaining arguments and find them unpersuasive. For the foregoing

reasons, we affirm.

AFFIRMED

15a

APPENDIX B

In the United States Court of Federal Claims

No. 22-542

(Filed:_January 26, 2023)

UNITED WATER

CONSERVATION

DISTRICT,

Plaintiff,

v.

UNITED STATES,

Defendant.

)

)

)

)

)

)

)

)

)

)

)

)

Complaint alleging

a physical taking of

water rights; government’s counter

contention of inchoate regulatory action; ripeness; no final agency action

Frank S. Murray, Foley & Lardner LLP, Washington, D.C. for plaintiff United Water Conservation District. With him on the pleadings and at the hearing

were David T. Ralston, Jr. and Julia Di Vito, Of Counsel, Foley & Lardner LLP, Washington, DC.

Peter Brocker, Trial Counsel, Natural Resources

Section, Environment & Natural Resources Division,

United States Department of Justice, Washington,

D.C. for the United States. With him at the hearing

were Brian Herman, Trial Counsel, United States Department of Justice, Washington, D.C. and Christopher Keifer, Attorney Advisor, Southwest Section, Office of the General Counsel, National Oceanic and Atmospheric Administration, Long Beach, California.

16a

OPINION AND ORDER

LETTOW, Senior Judge.

Plaintiff, United Water Conservation District

(“United”), has filed suit against defendant, United

States (“the government”), for just compensation for a

physical taking under the Fifth Amendment of the

U.S. Constitution. Compl. ¶¶ 65-68, ECF No. 1.

United alleges that the National Marine Fishery Service (“NMFS”) took its water rights for a public purpose. Compl. ¶ 67. More specifically, it argues that

NMFS’s Office of Legal Enforcement (“OLE”) in a letter dated June 9, 2016 caused United to implement

measures to protect Southern California steelhead

trout that resulted in its loss of beneficial use of water

from the Santa Clara River. See Compl. ¶ 68. The

government counters that plaintiff ’s claim is not ripe

for adjudication because there has been no final

agency action. Def.’s Mot. to Dismiss (“Def.’s Mot.”) at

4, ECF No. 9. Accordingly, the government seeks to

dismiss the complaint for lack of subject-matter jurisdiction under Rule 12(b)(1) of the Court of Federal

Claims (“RCFC”). See id. at 3-4. It characterizes the

alleged taking as regulatory in nature. Id. at 4-5.

Plaintiff responds that the court has jurisdiction over

its claim because it alleges a ripe physical taking,

which does not require final agency action. Pl.’s Resp.

in Opp’n to Def.’s Mot. to Dismiss (“Pl.’s Opp’n”) at 14,

18, ECF No. 12. After completion of briefing, see Def.’s

Reply Mem. in Support of Mot. to Dismiss (“Def.’s Reply”), ECF No. 13, the court held a hearing on December 2, 2022. See Hr’g Tr. 1:12 (Dec. 2, 2022). The motion is ready for disposition.

17a

BACKGROUND1

A. Legal Framework

The water rights at issue in this action are governed by the Fifth Amendment of the U.S. Constitution and the Endangered Species Act (“ESA”), 16

U.S.C. §§ 1531-44.

B. United and the Vern Freeman Diversion

Dam

United is a California water conservation district,

created under California law to serve as the water

management agency for the Santa Clara River and

the Oxnard coastal plain. Compl. ¶¶ 1, 13. The California State Water Resources Control Board (“State

Board”) issued United a license in 1958 (License

10173) and a permit in 1983 (Permit 18908), granting

it the right to appropriate and divert water from the

Santa Clara River for its beneficial use. Compl. ¶ 1.

In 1987, United’s permit was amended to allow for the

construction of the Vern Freeman Diversion dam (“Diversion dam”). Compl. ¶ 22.2 The Bureau of Reclamation provided United with federal funds to build the

Diversion dam. See Compl. ¶ 30.

The Diversion dam is a concrete dam that diverts

water from the Santa Clara River into United’s Freeman Diversion Canal. Compl. ¶ 15. The diverted water is passed through a fish screen and into the Freeman Diversion Canal. Compl. ¶ 17. The water that

1

The recitations that follow do not constitute findings of fact

but rather are recitals attendant to the pending motion and reflect matters drawn from the complaint, the parties’ motion and

briefs, documents attached to the briefs, and the hearing.

2

The license, permit, and amendment to the permit were not

provided to the court.

18a

passes through the Freeman Diversion Canal is used

to recharge groundwater aquifers, deliver surface water to groundwater users, and stabilize the riverbed.

Compl. ¶ 15.

Water that the Diversion dam does not divert into

United’s Freeman Diversion Canal remains in the

Santa Clara River and flows into the Pacific Ocean.

See Compl. ¶ 18. Some of this water is first passed

through a fish ladder or roller gate. Id.3 “Bypass flow

water used for the fish ladder or flowing into the roller

gate does not enter the Freeman Diversion Canal.”

Compl. ¶ 18. Based on a California state study of the

steelhead trout in the lower Santa Clara River, the

1987 state permit amendment that authorized the

construction of the Diversion dam required the dam to

include a fish ladder and water bypass flows that protect steelhead trout’s migration upriver to spawn.

Compl. ¶¶ 22-24.

Under its State Board-issued license and permit,

United was allowed to appropriate and divert water

for its beneficial use. Compl. ¶ 14. Specifically, it was

permitted “to appropriate and divert up to an instantaneous rate total of 375 cubic feet per second (‘cfs’) of

water at the [Diversion dam].” Id. “On an annual basis, United is permitted to appropriate and divert

144,630 acre-feet per year at the [Diversion dam]

(119,000 [acre-feet] for groundwater and 25,630 [acrefeet] for surface water).” Compl. ¶ 14. On average,

3

Water flowing into the fish ladder and remaining in the

Santa Clara River is bypass flow. See Compl. ¶ 4.

19a

between 1991 and 2014 United diverted 71,000 acrefeet of water yearly. Compl. ¶ 21.4

C. Endangered Species Act and the Steelhead Trout

In 1997 NMFS designated the Southern California steelhead trout in the Santa Clara River as an endangered species under the ESA. See Compl. ¶ 26.

This was six years after the dam was completed in

1991. See Compl. ¶¶ 16, 26. Section 9 of the ESA prohibits taking species that are designated as endangered or threatened under the Act. See 16 U.S.C.

§ 1538(a)(1)(B). Taking is defined in the ESA as “harass[ing], harm[ing], pursu[ing], hunt[ing], shoot[ing],

wound[ing], kill[ing], trapp[ing], captur[ing], collect[ing]” or attempting to do so. See 16 U.S.C.

§ 1532(19). Harm means “an act which actually kills

or injures fish or wildlife. Such an act may include

significant habitat modification or degradation which

actually kills or injures fish or wildlife by significantly

impairing essential behavioral patterns, including,

breeding, spawning, rearing, migrating, feeding[,] or

sheltering.” 50 C.F.R. § 222.102.

The government may authorize a taking otherwise prohibited by the ESA by granting an exemption

under Section 7 of the ESA, 16 U.S.C. § 1536. The

government may also allow a taking otherwise prohibited by the ESA by issuing a permit under Section 10

of the ESA, 16 U.S.C. § 1539(a). A Section 10

4

At the hearing on the government’s motion to dismiss, counsel for the government averred that “the status quo for 1997 to

2008 . . . was that the Vern Freedom Diversion Dam was being

operated by United Water and may or may not have been operating in such a way as to amount to a taking of steelhead.” Hr’g

Tr. 44:5-9.

20a

incidental-take permit can be issued “if such taking is

incidental to, and not the purpose of, the carrying out

of an otherwise lawful activity.” See 16 U.S.C.

§ 1539(a)(1)(B). “[T]he Secretary shall issue the permit . . . contain[ing] such terms and conditions as the

Secretary deems necessary or appropriate to carry out

the purposes of this paragraph” if the Secretary finds

five criteria are met and “has received such other assurances as he may require that the plan will be implemented.” 16 U.S.C. § 1539(a)(2)(B).5

D. Bureau of Reclamation, ESA Section 7

Proceeding, and NMFS’s 2008 Biological

Opinion

Because NMFS designated the Southern California steelhead trout as endangered and because the

Bureau of Reclamation provided funding to United for

the construction of the Diversion dam and fish ladder,

the Bureau brought a proceeding under Section 7 of

the ESA in 2005 to enable United’s ongoing operation

of the Diversion dam. See Compl. ¶ 30. Under Section

7 of the ESA, a federal agency must ensure that actions it “authorized, funded, or carried out . . . [are]

not likely to jeopardize the continued existence of any

endangered species . . . unless such agency has been

granted an exemption” under the Act. See 16 U.S.C.

§ 1536(a)(2). United represents that it supported the

5

The Section 10 incidental-take permit provisions of the ESA

require that the Secretary find that “(i) the taking will be incidental; (ii) the applicant will, to the maximum extent practicable,

minimize and mitigate the impacts of such taking; (iii) the applicant will ensure that adequate funding for the plan will be provided; (iv) the taking will not appreciably reduce the likelihood

of the survival and recovery of the species in the wild; and (v) the

measures, if any, required under subparagraph (A)(iv) will be

met.” 16 U.S.C. § 1539(a)(2)(B).

21a

Bureau throughout the Section 7 proceeding.

Compl. ¶ 30.6

See

On July 23, 2008, after considering the Bureau’s

request, NMFS issued a proposed Biological Opinion

(“BiOp”) that would expire in December 2011. Compl.

¶ 31; Def.’s Reply at 3. The 2008 BiOp “resulted in a

jeopardy finding by NMFS,” Def.’s Mot. Ex. A, at 2,

and included two reasonable and prudent alternatives

(“RPA”s) to be implemented, see Compl. ¶ 31. RPA 1

related to fish passage and RPA 2 related to bypass

flow; RPA 2 discussed both adult steelhead trout migration downstream of the dam (“RPA 2A”) and juvenile steelhead trout migration downstream of the dam

(“RPA 2B”). Compl. ¶ 31. In December 2008, the Bureau ended its involvement with the Diversion dam

and terminated its Section 7 proceeding. See Compl.

¶ 33; Def.’s Mot. at 2. United represents that the Bureau reasoned that it was unable to take Section 7 action because it did not own or operate the Diversion

dam. Compl. ¶ 33. United also represents that it implemented RPA 2A by 2016, but not RPA 2B because

United determined that RPA 2B could be harmful to

steelhead trout migration. See Compl. ¶ 32.7 The

6

Referring to this proceeding, a letter from the NMFS OLE in

2016 states that “United initially sought incidental take authorization under Section 7 of the ESA with the Bureau of Reclamation.” Def.’s Mot. Ex. A, at 2.

7

In 2009, California Trout (“Cal-Trout”) filed suit against

United, arguing that it was in violation of Section 9 of the ESA

because it did not have a Section 10 incidental-take permit and

because the Bureau of Reclamation had terminated its Section 7

proceeding. See Compl. ¶ 35. That action was settled in August

2009, with United agreeing to implement aspects of RPA 2A from

the BiOp, as well as other measures. See Compl. ¶ 36. United

22a

government counters that United failed to implement

the 2008 BiOp’s RPAs. See Def.’s Mot. at 2-3.

E. The Wishtoyo Foundation Action

On June 2, 2016, Wishtoyo Foundation

(“Wishtoyo”), Ventura Coastkeeper, and Center for Biological Diversity filed suit against United, arguing

that it was in violation of Section 9 of the ESA because

it did not have a Section 10 incidental-take permit.

Compl. ¶¶ 12-14, 89, 91; Wishtoyo Found. v. United

Water Conservation Dist., No. 2:16-CV-03869 (C.D.

Cal., June 2, 2016); see also Compl. ¶ 47; Def.’s Mot.

at 3. Following a trial, on September 23, 2018, the

district court held that because United did not have a

Section 10 incidental-take permit, “United’s operation

and maintenance of the [Diversion dam], including

the existing . . . fish ladder and . . . water diversion to

the Freeman Canal and United facilities,” Compl.

¶ 49, was an unauthorized take and therefore violated

Section 9 of the ESA, Wishtoyo Found., 2018 WL

6265099 at *77 (C.D. Cal. Sept. 23, 2018), aff ’d, 745

Fed. Appx. 541 (9th Cir. 2020). The district court issued a permanent injunction on December 1, 2018,

which was affirmed by the Ninth Circuit in 2020.

Wishtoyo Found., 2018 WL 7571315 (C.D. Cal. Dec. 1,

2018), aff ’d, 745 Fed. Appx. 541 (9th Cir. 2020); see

also Compl. ¶¶ 50-51.8

represents that it implemented measures to comply with the settlement between 2009 and 2016. See Comp. ¶ 37.

8

The district court initially issued a judgment and permanent

injunction on September 27, 2018, Wishtoyo Found., No. 2:16CV-03869 (C.D. Cal. Sept. 27, 2018), but this was amended by

the order of December 2018.

23a

The Wishtoyo permanent injunction requires that

United implement RPA 2 from the 2008 BiOp, including both RPA 2A and RPA 2B, until either United receives a Section 10 incidental-take permit or the district court reaches a different holding. See Compl.

¶ 50. The district court held that United must

complete forthwith the necessary studies to

evaluate all reasonable alternatives to the existing fish ladder, select a preferred alternative, and submit complete regulatory authorization requests to NMFS, the U.S. Fish and

Wildlife Service (“USFWS”), the U.S. Army

Corps of Engineers . . . [and] [b]y no later than

June 30, 2020, United shall submit completed

regulatory applications for the following:

i. ESA section 10 incidental take permit and

multi-species habitat conservation plan

(“MSHCP”) to NMFS and the USFWS for operation and maintenance of [the Diversion

dam] and United’s Diversion at the [dam] . . . .

Nothing in this judgment precludes United

from seeking incidental take authorization.

. . . through a section 7 federal consultation

between a federal agency . . . and NMFS or the

USFWS.

Wishtoyo Found., 2018 WL 7571315, at *2-3.

F. NMFS’ Office of Legal Enforcement’s 2016

Letter to United

On June 9, 2016 NMFS’s OLE issued a letter to

United “to notify . . . United . . . that a significant issue regarding ongoing take of endangered southern

California . . . , steelhead [trout] exists at the [Diversion] Dam . . . , which United owns and operates.”

Def.’s Mot. Ex. A, at 1. That letter stated, in part:

24a

NMFS staff is of the opinion that United’s

operation of the Freeman Diversion has annually resulted in take of SC steelhead through

death, capture[,] and significant impairment

of essential behavioral patterns. Furthermore, without specific modifications, operation of the Freeman Diversion will certainly

continue to result in take of SC steelhead

[trout] on an annual basis. Because United

does not have any authorization for the take

of SC steelhead, all such takes are in violation

of Section 9 of the ESA.

...

United’s cooperation to date in pursuing

long term incidental take authorization

through Section 10, while encouraging, has

not included sufficient interim protection for

SC steelhead. Given United’s current, multiyear schedule for obtaining an incidental take

permit, and the dwindling number of adult SC

steelhead returning to the Santa Clara River,

NMFS believes that United must commit to

implementing interim operating measures

that are consistent with the operational criteria set forth in the RPA (i.e., elements 2(a) and

2(b)) and appurtenant terms and conditions

(i.e., 1(a), 2(a-c), and 4(a-c)) of the 2008 Biological Opinion. In order to be effective in protecting SC steelhead during the 2017 migration season and subsequent migration seasons

pending issuance of an incidental take permit,

these measures must be in place before December 1, 2016.

Absent a firm commitment by United to

timely implement the RPA criteria and

25a

measures, combined with timely and accurate

monitoring of implementation, NMFS intends

to pursue legal options available under the

ESA to ensure that adequate interim operating measures are in place to minimize the impending take of SC steelhead at the Freeman

Diversion pending NMFS’s evaluation of

United’s incidental take permit application. I

encourage United in the strongest terms possible to immediately institute the operational

criteria and measures of the RPA.

. . . We request the courtesy of your response by August 8, 2016, regarding your

plans to implement these interim operating

measures consistent with the operational criteria set forth in the RPA.

Def.’s Mot. Ex. A, at 2-3. United responded by August

8, 2016 to OLE stating it would implement NMFS’s

interpretation of RPA 2A but not RPA 2B. It requested a discussion with NMFS about RPA 2B. See

Compl. ¶ 44. OLE replied in September 2016 indicating that it took United’s letter to indicate that it would

implement both RPA 2A and RPA 2B by December 1,

2016. See Compl. ¶ 45. United represents that it complied, implementing NMFS’s interpretations of RPA

2A and RPA 2B. See Compl. ¶ 46.

G. United’s Implementation of RPA 2A and

RPA 2B

In implementing NMFS’s interpretations of RPA

2A and 2B, United represents that it “increase[d] . . .

bypass flow through the [Diversion dam] fish ladder

and then to the Pacific Ocean.” Compl. ¶ 46; see also

Compl. ¶ 64. It argues that because its implementation of the 2016 OLE letter increased water flowing to

26a

the fish ladder remaining in the Santa Clara River,

less water was available to be diverted to the Freeman

Diversion Canal. See Compl. ¶¶ 4, 46, 52. Based on

its modeling, United estimates that between 2017 and

2021 it “los[t]” 49,800 acre-feet of water that would

have been diverted to the Freeman Diversion Canal.

See Compl. ¶ 53. It states that its compliance has

caused a loss of beneficial use of water including “a

reduction in water deliveries” and changes in water

allocation to “its lands, inhabitants[,] and constituent

groundwater users.” Compl. ¶ 55.

H. United has not Applied for an ESA Section 10 Permit

United has not applied for a Section 10 incidentaltake permit under the ESA,9 but avers that it has

started the internal process of applying for a Section

10 incidental-take permit, Compl. ¶ 34, including coordinating with NMFS on the development of a conservation plan, Def.’s Mot. Ex. A, at 2. In the 2016

OLE letter, NMFS states that “[d]espite eight years of

effort, take authorization, and the accompanying criteria and measures for the operation of the Freeman

Diversion to reduce take of SC steelhead [trout],” any

incidental-take authorization by United “appear[s] to

be several years off.” Def.’s Mot. Ex. A, at 2.

I.

Parties’ Positions

United filed its complaint initiating this action on

May 17, 2022, seeking 40 million dollars in just

9

At the hearing, United’s counsel advised that “United has

been working actively to pursue an incidental take permit.” Hr’g

Tr. 48:6-7. Notice of applications for Section 10 incidental-take

permits are required to be published in the Federal Register. 50

C.F.R. § 17.32(b)(1)(ii). To date, notice has not been published.

27a

compensation for a physical taking. Compl. ¶ 58. The

government responded by filing this motion to dismiss

on September 16, 2022, claiming the court does not

have subject-matter jurisdiction because there is not

final agency action. Def.’s Mot. at 2-3.

STANDARDS FOR DECISION

A. Rule 12(b)(1) — Lack of Subject-Matter

Jurisdiction

The Tucker Act provides this court jurisdiction

over “any claim against the United States founded either upon the Constitution, or any Act of Congress or

any regulation of an executive department, or upon

any express or implied contract with the United

States, or for liquidated or unliquidated damages in

cases not sounding in tort.” 28 U.S.C. § 1491(a)(1).

The Tucker Act does not, however, provide substantive rights. See United States v. Testan, 424 U.S. 392,

398 (1976). To establish this court’s jurisdiction under

the Tucker Act, United must “identify a substantive

right for money damages against the United States

separate from the Tucker Act.” Todd v. United States,

386 F.3d 1091, 1094 (Fed. Cir. 2004). The Takings

Clause of the Fifth Amendment of the U.S. Constitution can provide such a substantive right. See U.S.

Const. amend. V. However, the claim must be ripe for

adjudication for the court to have subject-matter jurisdiction over the claim. Schooner Harbor Ventures,

Inc. v. United States, 92 Fed. Cl. 373, 378-79 (2010).

United, as plaintiff, must establish jurisdiction by

a preponderance of the evidence. See Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed.

Cir. 2011) (citing Reynolds v. Army & Air Force Exch.

Serv., 846 F.2d 746, 748 (Fed. Cir. 1988)). When ruling on the government’s motion to dismiss for lack of

28a

jurisdiction, the “court must accept as true all undisputed facts asserted in the plaintiff’s complaint and

draw all reasonable inferences in favor of the plaintiff.” Trusted Integration, Inc., 695 F3d at 1163 (citing

Henke v. United States, 60 F.3d 795, 797 (Fed. Cir.

1995)). When the parties dispute alleged facts bearing

upon jurisdiction, the court “may weigh relevant evidence.” Labruzzo v. United States, 144 Fed. Cl. 456,

470 (2019) (quoting Mildenberger v. United States,

643 F.3d 938, 944 (Fed. Cir. 2011)). “If a court lacks

jurisdiction to decide the merits of a case, dismissal is

required as a matter of law.” Gray v. United States,

69 Fed. Cl. 95, 98 (2005) (citing Ex parte McCardle, 74

U.S. (7 Wall.) 506, 514 (1868); Thoen v. United States,

765 F.2d 1110, 1116 (Fed. Cir. 1985)); RCFC 12(h)(3)

(“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”).

ANALYSIS

A. Jurisdiction

The government contends that this court lacks jurisdiction over the case on regulatory-takings

grounds. See Def.’s Mot. at 4-5. The Tucker Act, 28

U.S.C. § 1491(a)(1), grants this court jurisdiction over

non-tort claims against the government for money

damages. Claims in the Court of Federal Claims are

subject to a six-year statute of limitations. 28 U.S.C.

§ 2501. By contrast, United avers that this court has

jurisdiction because its claim for a physical taking

arises under the Takings Clause of the Fifth Amendment, which permits just compensation, or money

damages. See Compl. ¶ 7. United contends that its

claim accrued after the 2016 OLE letter, which discussed protecting the Santa Clara River steelhead

trout, and therefore was filed within the six-year

29a

statute of limitations. See Compl. ¶ 8; Def.’s Mot.

Ex. A, at 1-3.10 The government argues that the taking was not a physical taking but instead a regulatory

taking, and therefore its motion contests the court’s

subject-matter jurisdiction on the basis of ripeness.

See Def.’s Mot. at 4-5. The government avers that

United’s claim is not yet ripe because United’s water

rights are subject to a permit process under the ESA

and United has not yet applied for a permit. See Def.’s

Mot. at 9-10; Def.’s Reply at 5-9. Because the case and

controversy clause of the Constitution requires a ripe

controversy for a federal court to hear a case, see U.S.

Const. art. III, § 2, the court must address the context

in which United’s claim arises to satisfy itself that jurisdiction exists. See Shinnecask Indian Nation v.

United States, 782 F.3d 1345, 1348 (Fed. Cir. 2015),

citing Abbott Labs. v. Gardner, 387 U.S. 136, 148

(1967), abrogated on other grounds by Califano v.

Sanders, 430 U.S. 99 (1977).

B. Water Rights

The government argues that United’s water rights

are not categorical but instead are subject to the ESA.

Water rights, including both approrpriative and riparian rights, are usufructary under California law. See

Casitas Mun. Water Dist. v. United States, 708 F.3d

1340, 1353-54 (Fed. Cir. 2013) (Casitas II). Under

California law, appropriative rights are private property rights, but those rights are limited to the beneficial use of water; the only compensable right “is a

10

United filed its complaint on May 17, 2022. See Compl. The

government argues that the 2016 OLE letter, to which plaintiff

tethers its claim, was not final agency action. See Def.’s Mot. at

4-5. Final agency action is relevant in the analysis of regulatory

takings and certain physical takings. See Def.’s Reply at 7-8.

30a

right to beneficial use.” Id. (“[T]he holder of an appropropriated water right, in other words, receives nothing more than this right to beneficial use and possesses no legal entitlement to water that is diverted

but never beneficially used.”) (quoting and upholding

Casitas Mun. Water Dist. v. United States, 102 Fed.

Cl. 443, 455 (2011)). In Casitas II, plaintiff argued

that the right to divert and store an amount of water

in turn meant it had a right to beneficially use that

amount of water. The court rejected this argument.

Casitas II, 708 F.3d at 1355.11 The court also held that

diverting and storing water were not in and of themselves beneficial uses. Id. at 1356.

International Paper Co. v. United States, 282 U.S.

399, 407 (1931) also recognizes the right to use water.

In that case, International Paper Company had a conveyance and lease to divert 730 cfs of water from the

10,000 cfs of water that Niagara Falls Power Company was entitled by New York state to divert via a

canal. See id. at 404-05. When the President “place[d]

an order . . . and . . . requisition[ed] the total quantity

and output of the electrical power which [was] capable

of being produced and/or delivered . . . through the use

of all waters diverted or capable of being diverted

through [an] intake canal,” id. at 405, the Court held

that the taking of power included the taking of water

rights, specifically, the right to use the water, id. at

407.

11

In rejecting the argument, the court noted that the pertinent

license stated that Casitas could divert 107,800 acre-feet of water

per year but “expressly limited the amount ‘placed to beneficial

use’ at only 28,500 acre-feet per year.” Casitas II, 708 F.3d at

1355.

31a

Both United and the government recognize the

beneficial-use standard for water rights. See Compl.

¶¶ 62, 65, 67; Def.’s Mot. at 9-10.12 United claims that

under its license and permit, it has the right to appropriate and divert up to an instantaneous rate of 375

cfs of water, or 144,630 acre-feet of water per year,

Compl. ¶ 61, and that it “has a cognizable property

interest to put . . . water diverted, up to its limits, to

beneficial use.” Compl. ¶ 62.13 United uses the diverted water to recharge groundwater aquifers, deliver surface water to groundwater users, and stabilize the riverbed, putting it to beneficial use. See

Compl. ¶ 15; Hr’g Tr. 29:8 to 30:23.

Nonetheless, United and the government interpret differently the limits on United’s right to beneficially use the water. United suggests the right to beneficial use is categorical while the government claims

it is limited by the ESA. United contends that the

2016 OLE letter caused it to implement NMFS’s interpretation of RPA 2, therefore “increas[ing] the volume of bypass flow water to the [Diversion dam’s] fish

ladder and/or downstream of the [Diversion dam] for

ESA purposes.” See Compl. ¶¶ 62-65. It avers that

this water otherwise would have been “appropriated,

12

The government indirectly recognizes the beneficial use

standard stating, “As a result, to the extent that the ESA will

require United to divert water that it would otherwise have put

to beneficial use, that claim is not yet ripe.” Def.’s Mot. at 9; see

also Hr’g Tr. 14:24 to 15:3; Hr’g Tr. 37:9-18.

13

As noted previously, the parties did not submit United’s permit, license, or amendment to the permit to the court. However,

unlike in Casitas II, United does not represent that either the

permit or license distinguished between the amount it could appropriate and divert and the amount it could put to beneficial

use. See Casitas II, 708 F.3d at 1355.

32a

diverted[,] and put to beneficial use, as authorized by”

its license and permit. Compl. ¶ 65. At the hearing

on the government’s motion to dismiss, counsel for

United stated that its “license had a categorical right

for it to be able to divert up to the maximum that it’s

allowed,” and that at the time of the license, the ESA

did not restrict this right. Hr’g Tr. 25:1-7.14 The government focuses on when the government action enforcing ESA limitations on water rights occurs, including the Act’s permit procedures statutorily laid out.

See Def.’s Reply at 8-9; Hr’g Tr. 49:22 to 50:13.

United’s beneficial-use rights are subject to the ESA.

See 16 U.S.C. § 1538 (applying to the take of any designated species “within the United States”). Although

United recognizes that the government can repurpose

the use of water under the ESA, the court must consider the limitations that the ESA puts on the rights

involved.

C. Takings Law

The parties disagree about whether United’s

claim should be analyzed under the physical takings

doctrine or the regulatory takings doctrine. The Takings Clause of the Fifth Amendment states that private property shall not “be taken for public use, without just compensation.” U.S. Const. amend. V. To establish a taking under the Fifth Amendment, a party

14

Counsel for United continued to state, “this is a new development that is impinging upon . . . the amount . . . that it can

divert up to its property rights.” Hr’g Tr. 25:4-7. United’s counsel noted, however, that “the government . . . ha[s] the ability under the ESA to repurpose the use of the water for its own public

purpose . . . but . . . if they are going to do that, they have to compensate United for the lost beneficial use it had of the water.”

Hr’g Tr. 25:8-16. “[T]he [g]overnment has to bear that externality of the ESA.” Hr’g Tr. 25:16-18.

33a

must prove that it had “a property interest for purposes of the Fifth Amendment” at the time of the alleged taking. See Caquelin v. United States, 140 Fed.

Cl. 564, 572 (2018) (quoting Members of the Peanut

Quota Holders Ass’n v. United States, 421 F.3d 1323,

1330 (Fed. Cir. 2005)); Wyatt v. United States, 271

F.3d 1090, 1096 (Fed. Cir. 2001) (“[O]nly persons with

a valid property interest at the time of the taking are

entitled to compensation.”). A party also must prove

that the government’s actions “amounted to a compensable taking of that property interest.” Caquelin, 140

Fed. Cl. at 572 (quoting American Pelagic Fishing Co.

v. United States, 379 F.3d 1363, 1372 (Fed. Cir. 2004)).

A taking can be either a physical taking or a regulatory taking. Caquelin, 140 Fed. Cl. at 573.15 A physical taking occurs when the government directly appropriates property or “engages in the functional equivalent of a practical ouster of [the owner’s] possession.”

Katzin v. United States, 908 F.3d 1350, 1361 (Fed. Cir.

2018) (quoting Washoe Cnty. v. United States, 319

F.3d 1320, 1326 (Fed. Cir. 2013) (internal quotations

omitted); see also Lingle v. Chevron U.S.A., Inc., 544

U.S. 528, 537 (2005). Although property can be regulated without giving rise to a Fifth Amendment taking, a regulatory taking occurs when a regulation goes

too far. Caquelin, 140 Fed. Cl. at 576-577. Three different circumstances lead to regulatory takings; the

first two result in per se regulatory takings. The first

circumstance occurs when government regulation

causes a person “to suffer a permanent physical invasion of [their] property.” See Katzin, 908 F.3d at 1361

(quoting Casitas Mun. Water Dist. v. United States,

15

A physical taking or regulatory taking can be either categorical or non-categorical and can be either temporary or permanent. Caquelin, 140 Fed. Cl. at 573.

34a

543 F.3d 1276, 1289 (Fed. Cir. 2008) (“Casitas I”));

Loretto v. Teleprompter Manhattan CATV Corp., 458

U.S. 419, 438-441 (1982) (holding that installation of

cable television wires was a permanent physical invasion of the owner’s property and was a regulatory taking requiring just compensation under the Fifth

Amendment). The second circumstance occurs when

government regulation “denies [an owner] all economically beneficial or productive use” of their property.

Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015-16

(1992). The third circumstance, which is analyzed under a multi-factor balancing test, occurs when a regulation restricts the owner’s use of their property to an

extent that is compensable under the Fifth Amendment. See Penn Cent. Transp. Co. v. City of New York,

438 U.S. 104, 124 (1978). When determining if a taking was physical or regulatory, a court should focus on

the character of the government action. See Casitas I,

543 F.3d at 1290.

Both Casitas and International Paper Co. involve

an alleged taking of a water right. In both cases, the

alleged taking was physical in nature. See Casitas I,

543 F.3d at 1296; International Paper Co., 282 U.S. at

407. In Casitas, Casitas had the right to divert water

from the Ventura River into the Robles-Casitas Canal

for its beneficial use. See Casitas I, 543 F.3d at 12861287. In 1997 NMFS listed the West Coast steelhead

trout as an endangered species under the ESA. Id. at

1282. The government in turn required Casitas to

build a fish ladder and divert water to it. See id. at

1281-82, 1290-92.16 The Federal Circuit held that “the

16

For purposes of summary judgment, the government “conceded that Casitas has a valid property right in the water in

35a

government[’s] requirement that Casitas build the

fish ladder and divert water to it [for the public purpose of protecting the West Coast steelhead trout]

should be analyzed under the physical takings rubric.”

Id. at 1293, 1296 (emphasis added). It reasoned that

although government action restricted Casitas’s use of

its right like in some regulatory takings cases, here,

in contrast to regulatory takings cases, the government “actively caused water to be physically diverted

away from Casitas after the water had left the Ventura

River and was in the Robles-Casitas Canal.” Id. at

1294 (emphasis added).17 The court emphasized that

some water had already left the Ventura River and

was in the Robles-Casitas Canal when it was diverted.

Id. at 1291-92 (“[T]he government did not merely require some water to remain in stream, but instead actively caused the physical diversion of water away

from the Robles-Casitas Canal—after the water had

left the Ventura River and was in the Robles-Casitas

Canal—and towards the fish lader, thus reducing Casitas’[s] water supply.”).18 The court in Casitas also

question” and adopted the plaintiff ’s stated scope of its property

interest. See Casitas I, 543 F.3d at 1288. The government also

admitted that “it required Casitas to build the fish ladder facility,” id. at 1290, and that “Casitas was forced by the [Bureau of

Reclamation]’s adoption of the BiOp to build the fish ladder and

divert the water,” id. at 1293.

17

“The fact that the government did not itself divert the water

is of no import.” Casitas I, 543 F.3d at 1292-93.

18

In Casitas, “the government admits that the operation of the

fish ladder includes closing the overshot gate . . . which is located

in the Robles-Casitas Canal, and that the closure of this gate

causes water that would have gone into the Casitas Reservoir via

the Robles-Casitas Canal to be divereted into the fish ladder.”

Casitas I, 543 F.3d at 1291 (emphasis added).

36a

discussed the physical taking in International Paper

Co. Id. at 1292.19 According to the Federal Circuit in

Casitas I, the Supreme Court in International Paper

focused on the active role of the government. Id. It

also specifically considered the fact that the water

from the canal was already within International Paper Company’s mill when the government issued its

requisition. See id. When discussing the taking, the

Court said, “The petitioner’s right was to the use of

the water; and when all the water that it used was

withdrawn from the petitioner’s mill and turned elsewhere by government requisition for the production of

power it is hard to see what more the [g]overnment

could do to take the use.” International Paper Co., 282

U.S. at 407 (emphasis added).

In contending that a physical taking occurred,

United draws parallels between its case and Casitas,20

in which the court held that the physical takings doctrine applied. United avers that in both cases, the

plaintiff was required “to reduce its diversion of water

to avoid liability under ESA.” Pl.’s Opp’n at 14.21

United also compares its claim to that in International

Paper Co., stating that in both cases, the government’s restriction, which appropriated the use of water for a public purpose, decreased the amount of

19

The Federal Circuit in Washoe Cnty. also recognized that International Paper Co. involved a physical taking of water rights

by the government. Washoe Cnty., 319 F.3d at 1326.

20

United alleges that its claim is “nearly identical” to the claim

in Casitas. Pl.’s Opp’n at 14.

21

United acknowledges that Casitas was required to “return

water that had been diverted into the Ventura River Project to

the Casitas fish ladder and the Ventura River,” but does not directly address the significance of this fact. See Pl.’s Opp’n at 14.

37a

water the plaintiff could access for its use. See Hr’g

Tr: 22:21 to 24:21. At the hearing, United emphasizes

that in International Paper Co. “the [g]overnment directed a power company to divert water away from a

paper company that had a right to use the water.”

Hr’g Tr: 23:11-21.22

In contending the alleged taking should be analyzed under the regulatory taking doctrine the government distinguishes the physical takings in Casitas

and International Paper Co. from the case at hand. It

states that these cases were analyzed under the physical takings doctrine because plaintiffs had to “return

water [they] had already removed from the river.” See

Def.’s Reply at 6-7. Here, the government contends

that NMFS “at most” required water to stay in the

river. See id. at 7.

In the factual circumstances at hand, United’s

claim should be analyzed under the regulatory takings doctrine. Unlike Casitas and International Paper

Co., United does not allege that water that was already diverted into its diversion canal was required to

be returned to the river. Instead, United states that,

to comply with the ESA and protect the endangered

steelhead trout, water it otherwise could have diverted

under its license and permit was used “as bypass flow

into the [Diversion dam] fish ladder and/or remained

in the river.” See Compl. ¶ 6.23 Because United does

22

In drawing the comparison, counsel for plaintiff quoted International Paper Co., stating that in that case, water was “withdrawn from [International Paper Company’s] mill.” Hr’g Tr:

24:8-14 (quoting Intertional Paper Co., 282 U.S. at 407).

23

Counsel for the government emphasized that “United Water’s complaint makes clear that the water it claims to have a

38a

not allege that it had to return water it had already

diverted, it has not stated a physical takings claim,

unlike in Casitas or International Paper Co. United’s

allegation that its right to appropriate and divert water (or use water) was restricted by the 2016 OLE letter’s “ESA requirement,” Pl.’s Opp’n at 19, should be

analyed as a regulatory taking. Therefore, the court

turns to the permitting scheme under the ESA to determine if the regulatory takings claim is ripe for adjudication.

D. Ripeness

The parties disagree about whether United’s

claim is ripe for adjudication. For a regulatory taking

claim to ripen, there must be final agency action. “[A]

claim that the application of government regulations

effects a taking of a property interest is not ripe until

the government entity charged with implementing the

regulations has reached a final decision regarding the

application of the regulations to the property at issue.”

Schooner Harbor Ventures, Inc. v. United States, 569

F.3d 1359, 1365 (Fed. Cir. 2009) (quoting Williamson

Cnty. Reg’l Plan. Comm’n v. Hamilton Bank, 473 U.S.

172, 186 (1985), overruled on other grounds by Knick

v. Township of Scott, 139 S.Ct. 2162 (2019)). With respect to a regulatory taking claim that arises under

right to use has remained at all times in the Ventura River and

that United has merely let the water flow by.” Hr’g Tr. 8:15-18,

12:17 to 13:1. Counsel for United demurred, stating that he

“would not concede that . . . none of the water entered into the

diversion canal or into the facility at the [Diversion dam].” Hr’g

Tr. 17:7-22. In support, he suggested that diverted water could

have first entered the diversion canal or the facility if an auxiliary pipe existed. He did not aver in the pleadings or at the hearing that an auxiliary pipe existed. See Hr’g Tr. 17:7-22; see generally Compl.; Pl.’s Opp’n.

39a

the ESA, a plaintiff (that is eligible to apply under

Section 10) must have applied for and been denied an

incidental-take permit for their claim to ripen. See

Doyle v. United States, 129 Fed. Cl. 147, 156 (2016).

“[A]bsent denial of the permit, only an extraordinary

delay in the permitting process can give rise to a compensable taking.” See Boise Cascade Corp. v. United

States, 296 F.3d 1339, 1349 (Fed. Cir. 2002). Boise

Cascade recognizes that “delay is inherent in complex

regulatory schemes,” and that the existence of a permitting requirement alone is not sufficient.24 See id.

(quoting Wyatt, 271 F.3d at 1098).

To reiterate the parties’ basic positions, United argues that its claim is ripe for adjudication because it

alleged a physical taking, not a regulatory taking, see

Pl.’s Opp’n at 14-20, while the government argues that

the claim is not ripe for adjudication because United

alleged a regulatory taking and has not yet applied for

and been denied an incidental-take permit under Section 10 of the ESA. See Def.’s Reply 8-9.

United’s claim is not yet viable for adjudication.

Because the claim should be analyzed under the regulatory takings doctrine, see supra, at 10-12, United

must follow the ESA’s permitting scheme for its claim

to ripen. United has not yet applied for an incidentaltake permit under Section 10. See supra, at 10. If

United applies for an incidental-take permit and the

government does not act in a timely fashion in response to its application, United might have a claim

24

The ESA applies retroactively to licenses and permits, for example, that were entered before the ESA was passed in 1973. A

compensable taking can occur if a government action under the

ESA limits water use rights acquired before the ESA. See Casitas, 102 Fed. Cl. at 455.

40a

that agency action was unreasonably withheld, see

Boise Cascade Corp., 296 F.3d at 1349-50; however,

those facts are not before the court at this time.

CONCLUSION

For the reasons stated, the government’s motion

to dismiss pursuant to RCFC 12(b)(1) is GRANTED.

The Clerk shall dismiss plaintiff ’s complaint for

failure to state a viable claim.

No costs.

It is so ORDERED.

s/ Charles F. Lettow

Charles F. Lettow

Senior Judge

41a

APPENDIX C

NOTE: This order is nonprecedential.

United States Court of Appeals

for the Federal Circuit

______________________

UNITED WATER CONSERVATION DISTRICT,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________

2023-1602

______________________

Appeal from the United States Court of Federal

Claims in No. 1:22-cv-00542-CFL, Senior Judge

Charles F. Lettow.

______________________

ON PETITION FOR PANEL REHEARING AND

REHEARING EN BANC

______________________

42a

Before MOORE, Chief Judge, LOURIE, DYK, PROST,

REYNA, TARANTO, CHEN, HUGHES, STOLL,

CUNNINGHAM, and STARK, Circuit Judges1 and

GILSTRAP, District Judge2.

PER CURIAM.

ORDER

Appellant United Water Conservation District

filed a combined petition for panel rehearing and rehearing en banc. The Association of California Water

Agencies, California Special Districts Association;

Family Farm Alliance, Modesto Irrigation District,

Rowland Water District, Santa Clarita Valley Water

Agency, South San Joaquin Irrigation District, and

Turlock Irrigation District requested leave to file a

brief as amicus curiae, which the court granted. The

California Avocado Commission, California Cherry

Growers and Industry Association, California Cotton

Ginners and Growers Association, California Farm

Bureau Federation, California Fresh Fruit Association, California Pear Growers Association, California

Seed Association, Western Growers Association, and

Western Tree Nut Association requested leave to file

a brief as amicus curiae, which the court granted. The

petition was first referred as a petition for rehearing

to the panel that heard the appeal, and thereafter the

petition for rehearing en banc was referred to the circuit judges who are in regular active service.

1

Circuit Judge Newman did not participate.

2

Honorable Rodney Gilstrap, District Judge, United States

District Court for the Eastern District of Texas, sitting by designation, participated only in the decision on the petition for panel

rehearing.

43a

Upon consideration thereof,

IT IS ORDERED THAT:

The petition for panel rehearing is denied.

The petition for rehearing en banc is denied.

FOR THE COURT

July 29, 2025

Date

Jarrett B. Perlow

Clerk of Court