Amicus Curiae Brief — United Water Conservation District, Petitioner v. United States

No. 25-523

In the

Supreme Court of the United States

UNITED WATER CONSERVATION DISTRICT,

Petitioner,

v.

UNITED STATES,

Respondent.

On Petition For A Writ Of Certiorari To The United

States Court Of Appeals For The Federal Circuit

BRIEF OF ATLANTIC LEGAL FOUNDATION

AS AMICUS CURIAE

IN SUPPORT OF PETITIONER

Lawrence Ebner

Counsel of Record

Atlantic Legal Foundation

1701 Pennsylvania Avenue,

NW, Suite 200

Washington, DC 20006

(202) 729-6337

lawrence.ebner@

atlanticlegal.org

120739

Nancie G. Marzulla

Marzulla Law, LLC

1150 Connecticut Avenue, NW,

Suite 1050

Washington, DC 20036

(202) 822-6760

nancie@marzulla.com

Attorneys for Amicus Curiae

A

(800) 274-3321 • (800) 359-6859

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES...................................... iii

INTEREST OF THE AMICUS CURIAE ...................1

INTRODUCTION ........................................................2

SUMMARY OF ARGUMENT .....................................3

ARGUMENT ...............................................................6

I. This Court Has Consistently Analyzed the

Government’s Appropriation of a Right to Use

Water as a Per Se Taking .......................................6

A.

The court below misread this Court’s

rulings in the leading water rights taking cases:

International Paper, Gerlach, and Dugan ..........7

1.

Under the Federal Circuit’s new water

rights taking rule, even International Paper,

Gerlach, and Dugan would be considered

regulatory takings ...........................................9

2.

That the water rights were riparian did

not figure into the Court’s taking analysis in

Gerlach and Dugan ........................................ 12

3.

Although Penn Central identified

relevant factors for ad hoc, fact-based inquiry

for analyzing takings, that case did not

overrule its earlier water rights decisions .... 14

B.

The court below misread its own ruling in

Casitas................................................................ 16

ii

C.

The court below mistakenly concluded

that appropriative water rights under California

law do not vest as property rights until the

water has been diverted .................................... 20

II. The Rationale Behind Treating the Taking of

Water Rights as Per Se or Physical Takings Is

Consistent With the Nature of the Water Right

and the Court’s Analysis of Other Discrete

Interests in Property Such as Trade Secrets and

Money ..................................................................... 24

CONCLUSION .......................................................... 30

iii

TABLE OF AUTHORITIES

Cases

Page(s)

Allegretti & Co. v. Cnty. of Imperial,

138 Cal. App. 4th 1261 (2006) ............................. 26

Argent v. United States,

124 F.3d 1277 (Fed. Cir. 1997) ............................ 24

Baley v. United States,

134 Fed. Cl. 619 (2017) ..........................................7

Ball v. United States,

1 Cl. Ct. 180 (1982) .............................................. 27

Boise Cascade Corp. v. United States,

296 F.3d 1339 (Fed. Cir. 2002) ............................ 24

Brown v. Legal Found. of Washington,

538 U.S. 216 (2003) ........................................ 26, 27

Casitas Mun. Water Dist. v. United States,

543 F.3d 1276 (Fed. Cir. 2008) .. 5, 7, 16, 17, 18, 19

Cedar Point Nursery v. Hassid,

594 U.S. 139 (2021) .............................................. 28

Dugan v. Rank,

372 U.S. 609 (1963) .................. 3, 4, 6, 8, 10, 11, 13

Eddy v. Simpson,

3 Cal. 249 (Cal. 1853) .......................................... 24

Griggs v. Allegheny County,

369 U.S. 84 (1962) ................................................ 11

iv

Hodel v. Irving,

481 U.S. 704 (1987) .............................................. 27

Int’l Paper Co. v. United States,

282 U.S. 399 (1931) ...................... 3, 4, 5, 6, 8, 9, 10

Ivanhoe Irrigation Dist. v. All Parties,

47 Cal. 2d 597 (1957) ........................................... 25

Ivanhoe Irrigation Dist. v. McCracken,

357 U.S. 275 (1958) .............................................. 25

Kidd v. Laird,

15 Calif. 161 (1860) .............................................. 25

Klamath Irrigation v. United States,

129 Fed. Cl. 722 (2016) ..........................................7

Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419 (1982) .............................................. 26

Louisville Joint Stock Land Bank v. Radford,

295 U.S. 555 (1935) .............................................. 27

McDonald v. Bear River & Auburn Water & Min. Co.,

13 Calif. 220 (1859) .............................................. 25

Millview Cnty. Water Dist. v. State Water Res.

Control Bd.,

229 Cal. App. 4th 879 (2014) ............................... 21

Palazzolo v. Rhode Island,

533 U.S. 606 (2001) .............................................. 15

Penn Cent. Transp. Co. v. City of New York,

438 U.S. 104 (1978) ................................ 4, 8, 15, 16

v

Pennsylvania Coal Co. v. Mahon,

260 U.S. 393 (1922) ................................ 8, 9, 14, 15

People of the State of California v. United States,

235 F.2d 647 (9th Cir. 1956) ................................ 20

People v. Shirokow,

605 P.2d 859 (Cal. 1980) ................................ 22, 23

Portsmouth Co. v. United States,

260 U.S. 327 (1922) .............................................. 11

Ruckelshaus v. Monsanto Co.,

467 U.S. 986 (1984) .............................................. 27

San Bernardino Valley Mun. Water Dist. v. Meeks &

Daley Water Co.,

226 Cal. App. 2d 216 (Cal. App. 1964) ..................7

San Diego Gas & Elec. Co. v. City of San Diego,

450 U.S. 621 (1981) .............................................. 15

Store Safe Redlands Associates v. United States,

35 Fed. Cl. 726 (1996) .......................................... 27

Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Plan.

Agency,

535 U.S. 302 (2002) ............................................ 2, 3

Tulare Lake Basin Water Storage Dist. v. United

States,

49 Fed. Cl. 313 (2001) ............................................7

United States v. Causby,

328 U.S. 256 (1946) .............................................. 11

vi

United States v. Fallbrook Pub. Util. Dist.,

165 F. Supp. 806 (S.D. Cal. 1958) ................. 13, 20

United States v. Gerlach Live Stock Co.,

339 U.S. 725 (1950) ............ 3, 4, 6, 8, 11, 12, 13, 25

United States v. State Water Resources Control Bd.,

182 Cal. App.3d 82 (1986).................................... 25

Washoe Cnty., Nev. v. United States,

319 F.3d 1320 (Fed. Cir. 2003) ............................ 16

Yee v. Escondido,

503 U.S. 519 (1992) ............................................ 2, 3

Statutes

Cal. Water Code § 1225 ............................................. 21

Cal. Water Code § 1381 ............................................. 21

Cal. Water Code § 1455 ............................................. 23

Cal. Water Code § 1610 ............................................. 23

Cal. Water Code §§ 1052, 1831 ................................. 22

Cal. Water Code §§ 1201, 1240, 1253, 1257 ............. 21

Cal. Water Code §§ 1205, 1225 ................................. 21

1

INTEREST OF THE AMICUS CURIAE 1

Established in 1977, the Atlantic Legal

Foundation (ALF) is a national, nonprofit,

nonpartisan, public interest law firm whose mission is

to advance the rule of law and civil justice by

advocating for individual liberty, free enterprise,

property rights, limited and responsible government,

sound science in judicial and regulatory proceedings,

and effective education, including parental rights and

school choice. With the benefit of guidance from the

distinguished legal scholars, corporate legal officers,

private practitioners, business executives, and

prominent scientists who serve on its Board of

Directors and Advisory Council, the Foundation

pursues its mission by participating as amicus curiae

in carefully selected appeals before the Supreme

Court, federal courts of appeals, and state supreme

courts. See atlanticlegal.org.

The Fifth Amendment’s Just Compensation (or

takings) Clause recognizes that private ownership of

property, and in turn, economic liberty, is intrinsic to

our nation’s social fabric. ALF has participated as

amicus curiae in many cases where, as here, overly

aggressive, and indeed avaricious, governmental

action raises serious taking concerns.

Petitioner’s and Respondent’s counsel were provided timely

notice of this brief in accordance with Supreme Court Rule 37.2.

No counsel for a party authored this brief in whole or in part, and

no party or counsel other than the amicus curiae and its counsel

made a monetary contribution intended to fund preparation or

submission of this brief.

1

2

This is such a case. The question presented—

whether the federal government’s taking or impairing

of a private party’s ability to make beneficial use of its

vested water rights should be analyzed as a

regulatory taking rather than a per se or physical

taking—squarely aligns with ALF’s mission of

advocating for protection of private property from

unjust and uncompensated governmental actions.

INTRODUCTION

This Court has never analyzed the taking of

any water right as a regulatory taking. And, other

than the decisions below, no federal court has ever

held that the taking of water rights should be

analyzed as a regulatory taking. The decision below

holds that the taking of Petitioner’s water rights

should be analyzed as a regulatory taking because the

taking was not an actual physical appropriation of the

water or did not require United Water to return water

that it had already diverted. Unless reversed, this

holding would result in the undoing of more than a

century of decisions holding that the taking or

impairment of the ability to make beneficial use of

one’s water right is analyzed as a per se or physical

taking. 2

2 A per se taking, also referred to as a “categorical taking,” may

arise in a regulatory context but its impact on property rights so

closely mirrors a classic physical taking that “‘courts . . . apply a

clear rule.’” Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Plan.

Agency, 535 U.S. 302, 323 (2002). (quoting Yee v. Escondido, 503

U.S. 519, 523 (1992)). Where, however, a regulation merely

prohibits certain private uses, a court’s analysis “‘necessarily

entails complex factual assessments of the purposes and

3

SUMMARY OF ARGUMENT

The Federal Circuit’s decision conflicts with

more than a century of precedent recognizing water

rights as compensable property and treating

government

appropriations

or

compelled

redistributions of the right to use water as a per se,

physical taking—not a regulatory taking.

This Court has consistently analyzed takings of

water rights under the per se or physical taking

framework in cases such as International Paper, 3

Gerlach, 4 and Dugan, 5 without requiring a

government seizure of already-diverted water or a

physical occupation of land. The court below misread

these decisions by limiting per se treatment to an

actual physical appropriation or to the taking of

riparian rights—a limitation found nowhere in this

Court’s holdings.

In International Paper, the government

requisitioned all of the electricity generated by a

hydropower company, which in turn cut off a paper

company mill’s water supply. This government’s

requisition—a regulatory action—was held to be a per

economic effects of government actions.’” Tahoe-Sierra, 535 U.S.

at 323 (quoting Yee, 503 U.S. at 523).

3 Int’l Paper Co. v. United States, 282 U.S. 399 (1931).

4 United States v. Gerlach Live Stock Co., 339 U.S. 725 (1950).

5 Dugan v. Rank, 372 U.S. 609 (1963).

4

se taking of the paper company’s water rights. 6 Dugan

flatly rejected any requirement of physical invasion,

or appropriation equating the government’s upstream

interference with downstream water rights to

overflight takings. 7 Gerlach similarly treated the

government’s newly adopted plan of operations—a

regulatory action—which reduced adjacent plaintiffs’

farm lands to dried, parched land, as a per se taking

requiring just compensation, stating that “public

interest requires appropriation; it does not require

expropriation.” 8

The

riparian/appropriative

distinction,

employed by the court below, played no role in the

Gerlach and Dugan takings analyses, and all three

cases could have easily been characterized as

regulatory takings under the Federal Circuit’s

analysis. And, contrary to that analysis, California

law recognizes that a state issued water rights permit

is a usufructuary right that is vested property

protected by the Just Compensation Clause.

Also contrary to the ruling of the court below,

this Court’s ruling in Penn Central 9 did not overrule

and does not justify jettisoning a long-standing

physical takings rule for water rights taking cases.

The regulatory takings framework long predates

6 See Int’l Paper, 282 U.S. at 407.

7 See Dugan, 372 U.S at 625.

8 Gerlach, 339 U.S. at 753.

9 Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978).

5

these decisions and did not displace the per se

analysis applied to appropriations of core property

interests, such as the right to use water. Consistent

with International Paper 10 and this Court’s water

rights takings jurisprudence, the Federal Circuit in

Casitas Municipal Water District v. United States, 11

held that a government-compelled diversion of water

for Endangered Species Act (ESA) purposes

constitutes a physical appropriation of a usufructuary

right, regardless of who turns the valve. 12 Casitas

does not support the holding reached here.

In United Water, 13 as in Casitas, NMFS’s

Biological Opinion required United Water to

reallocate substantial quantities of water to a fish

ladder and to maintain flows in the river to benefit

fish, depriving United Water of roughly 49,800 acrefeet otherwise available for beneficial use 14—facts

that fit squarely within the per se framework.

This case presents a consequential error with

enormous ramifications for the agricultural

community, which has invested countless dollars over

the decades in founding and sustaining their familyowned farms. The decision below invents a novel rule

10 See Int’l Paper, 282 U.S. at 407.

11 Casitas Mun. Water Dist. v. United States, 543 F.3d 1276 (Fed.

Cir. 2008).

12 Casitas, 543 F.3d at 1283.

13 Pet. App 1a–14a.

14 See id. at 4a.

6

that relegates government appropriations of water

rights to being analyzed under the multi-factor, ad hoc

factual analysis suitable for regulatory takings of land

under Penn Central and imposes a burdensome

regulatory requirement not required to ripen any

other water rights taking case.

Review is warranted to restore uniform

adherence to this Court’s takings precedents and to

reaffirm that the per se or physical takings ruling

applies whenever government actions deprive a water

rights holder of the ability to make beneficial use of

its water rights.

ARGUMENT

I.

This Court Has Consistently Analyzed the

Government’s Appropriation of a Right to

Use Water as a Per Se Taking

This Court has never analyzed any water rights

takings case as a regulatory taking. Instead, the

Court has always analyzed the taking of water rights

using the per se taking test. 15 And none of those

rulings required that there be a physical

appropriation or seizure of water for the taking to be

analyzed as a per se taking.

15 See, e.g., Gerlach, 339 U.S. 725 (analyzing government taking

of water owed to claimants under water delivery contracts as

physical taking); see also Dugan, 372 U.S. 609; Int’l Paper, 282

U.S. 399.

7

Until the decision below, the Federal Circuit

too has held that the taking of water rights is analyzed

as a per se taking. 16 The trial court, the U.S. Court of

Federal Claims, has also consistently held that the

taking of water rights is analyzed as a per se taking. 17

And under California law, the taking of water rights

is analyzed as a per se taking. 18

A.

The court below misread this Court’s

rulings in the leading water rights taking

cases: International Paper, Gerlach, and

Dugan

The court of appeals erroneously held that the

physical or per se taking test did not apply here,

limiting the per se test to apply only when the

government physically appropriates the water or

requires the water rights holder “‘to return water it

See, e.g., Casitas, 543 F.3d at 1297 n.17 (holding that the

taking of Casitas’s water rights was “properly analyzed under a

physical taking rubric”).

16

See, e.g., Tulare Lake Basin Water Storage Dist. v. United

States, 49 Fed. Cl. 313, 319 (2001) (“[B]y preventing plaintiffs

from using the water to which they would otherwise have been

entitled, have rendered the usufructuary right to that water

valueless, they have thus effected a physical taking.”); see also

Klamath Irrigation v. United States, 129 Fed. Cl. 722 (2016);

Baley v. United States, 134 Fed. Cl. 619, 660-66 (2017).

17

18 See San Bernardino Valley Mun. Water Dist. v. Meeks & Daley

Water Co., 226 Cal. App. 2d 216, 223, (Cal. App. 1964) (taking of

a shareholder’s right to receive water “amounts to the taking of

a shareholder’s property without just compensation, in violation

of both the State and Federal Constitutions”).

8

had already diverted.’” 19 The court mischaracterized

the leading water rights cases, International Paper, 20

Gerlach, 21 and Dugan, 22 reading these cases to

support its new limited takings rule.

The court below found that the per se taking in

International Paper turned on the finding that the

government “completely cut off [the paper company’s]

access to the water[.]” 23 And the court concluded that

the per se takings in Gerlach and Dugan were because

the water rights were riparian. 24 The court also

concluded that none of the cases even considered

whether the taking was regulatory because this Court

had not yet decided Penn Central, 25 which the court

described as having clarified the regulatory taking

test announced in Pennsylvania Coal Co. v. Mahon. 26

Otherwise, under the lower court ruling, the

taking of water rights is to be analyzed as a regulatory

19 Pet. App. 6a (quoting Pet. App. 38a).

20 Int’l Paper, 282 U.S. 399.

21 Gerlach, 339 U.S. 725.

22 Dugan, 372 U.S. 609.

23 Pet. App. 11a.

24 See id. at 13a.

25 Penn Central, 438 U.S. 104.

26 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922).

9

taking. 27 No holding of any federal court decision

supports this newly announced rule.

1. Under the Federal Circuit’s new water

rights taking rule, even International

Paper, Gerlach, and Dugan would be

considered regulatory takings

None of this Court’s three leading water rights

cases involved a situation in which the water rights

holder had to return water that had already been

diverted. Not a single one involved an instance where

the federal government physically appropriated the

water rights holder’s water. What unifies all three

cases is that in each case the government

appropriated, by a requisition order or a plan of

operations for a dam, the water rights holder’s right

to use or divert the water for its own beneficial use.

In International Paper, the government had

requisitioned the output of a hydroelectric power

plant on the Niagara River during World War I. 28 The

paper company, however, had a contract from the

permit holder to receive a portion of the water from

the same canal that the power company received its

water. 29 By taking the output of the hydroelectric

plant, the government also cut off the water flow to

27 Id.

28 See Int’l Paper, 282 U.S. at 405–406.

29 See id. at 405.

10

International Paper’s sawmill. 30

The Court held that this mandatory diversion

of water was a per se taking of plaintiff’s right to

receive water. The requisition and redistribution of

hydropower by order of the Secretary of War resulted

in a taking of International Paper’s water rights. 31

The action that gave rise to the taking in

International Paper was a government requisition of

the electric company’s hydroelectric power that

temporarily interrupted the paper company’s water

supply for its sawmill. The government did not take

over the operations of either Niagara Power or

International Paper, nor did it physically direct the

flow of the water. And, importantly, the government

did not require the paper company to return any

water to the power company. The government merely

directed Niagara Power to distribute the electricity to

certain of its customers. 32 Under the court below’s

reasoning, International Paper should have been

analyzed as a regulatory taking.

Likewise, in Dugan, 33 the U.S. Bureau of

Reclamation adopted an operations plan for the

Friant Dam that would diminish water available to

water rights holders, who sued for a taking. The Court

again analyzed the government action as a per se or

30 Id. at 405–406.

31 Id. at 408.

32 Id. at 407.

33 Dugan, 372 U.S. 609.

11

physical taking of the plaintiffs’ water flows.

Comparing the taking of water rights to the taking of

land by overflight, the Dugan court held that a

physical invasion was not required to establish a per

se taking:

A seizure of water rights need not

necessarily be a physical invasion of

land. It may occur upstream, as here.

Interference with or partial taking of

water rights in the manner it was

accomplished here might be analogized

to interference or partial taking of air

space over land[.] 34

But under the court below’s holding, because

the government did not “completely cut off” 35 the

plaintiffs’ water rights in Dugan, the case would be

analyzed as a regulatory taking.

The Court’s decision in Gerlach also involved a

regulation—the government’s operation plan for the

Friant Dam. In Gerlach, implementation of that plan

meant that, except in “rare intervals, there will be no

spill over Friant Dam, the bed of the San Joaquin

along claimants’ lands will be parched, and their grass

lands will be barren.” 36 The Court stated that

34 Id. at 625 (citing Griggs v. Allegheny County, 369 U.S. 84, 89–

90 (1962); United States v. Causby, 328 U.S. 256, 261–263, 267

(1946); and Portsmouth Co. v. United States, 260 U.S. 327, 329

(1922)).

35 Pet. App. 11a.

36 Gerlach, 339 U.S. at 730.

12

Gerlach’s “claim of right” is “to enjoy natural, seasonal

fluctuation unhindered, which presupposes a peak

flow largely unutilized.” 37

There is no hint that this Court applied any

taking test other than a per se taking test in Gerlach.

Instead, the Court emphasized that “[n]o reason

appears why those who get the waters should be

spared from making whole those from whom they are

taken. Public interest requires appropriation; it does

not require expropriation.” 38

2. That the water rights were riparian did

not figure into the Court’s taking

analysis in Gerlach and Dugan

The court below held that Gerlach and Dugan

did not apply to the taking of United Water’s property

(water) rights because United Water held

appropriative water rights, which the court below

erroneously concluded did not become vested water

rights until the water had actually been diverted for

beneficial use. The court below found “significant”

that the water rights at issue in Gerlach and Dugan

were riparian water rights because riparian rights

“exist by virtue of land ownership” and their

acquisition does not “depend on any physical acts of

diversion and beneficial use of water as is required for

37 Id.

38 Id. at 752–53.

13

appropriative water rights.” 39

But, as discussed in this brief, since 1914

appropriative water rights cannot be obtained by

physical diversion—only by a state-issued permit—

and diversion before first obtaining a permit (like

United’s) is not legal under California law. 40

The court below therefore erroneously

concluded that only appropriative water-rights

holders who had physically diverted their water rights

are eligible for the physical taking rule to apply. 41

More importantly, in neither decision did the

Court indicate that its holding was based on the fact

that the water rights were riparian, as opposed to

appropriative. In fact, both cases discuss that

appropriative water rights were also the subject of

federal condemnation actions. 42

In short, the court below simply invented out of

whole cloth a rationale for its new rule.

39 Pet. App. 13a.

United States v. Fallbrook Pub. Util. Dist., 165 F. Supp.

806, 830 (S.D. Cal. 1958).

40 See

41 See Pet. App. 13a.

42 See, e.g., Gerlach, 339 U.S. at 754; see also Dugan, 372 U.S. at

625.

14

3. Although Penn Central identified

relevant factors for ad hoc, fact-based

inquiry for analyzing takings, that case

did not overrule its earlier water rights

decisions

In its opinion below, the court suggested that

International Paper, Gerlach, and Dugan were not

analyzed as regulatory taking cases because the Court

had not yet “clarified” when a regulatory taking went

“too far” so as to constitute a compensable taking. 43

That this Court analyzed its three leading

water rights taking cases as per se takings because it

lacked the constitutional framework to do otherwise

lacks any support in takings jurisprudence.

The regulatory taking test was first announced

by Justice Holmes in 1922, in the seminal case

Pennsylvania Coal Co. v. Mahon, 44 a case in which a

Pennsylvania statute eliminated the company’s

ability to mine coal near support structures on its

property. Writing for the Court, Justice Holmes stated

that “while property may be regulated to a certain

extent, if the regulation goes too far it will be

recognized as a taking.” 45 Because the statute had the

effect of “appropriating or destroying [the coal’s

43 See Pet. App. 13a (internal quotations omitted).

44 Pennsylvania Coal, 260 U.S. 393.

45 Id. at 415.

15

value,]” 46 the Court held that the statute had gone too

far.

Justice Brennan in his now-famous dissent in

San Diego Gas & Electric Co. v. San Diego, 47 described

the Pennsylvania Coal decision as the touchstone of

takings analysis. 48 Later, writing for the Court in

1978, Justice Brennan declared, based on his survey

of fifty years of takings jurisprudence, that “this

Court, quite simply, has been unable to develop any

‘set formula’ for determining when ‘justice and

fairness’ require that economic injuries caused by

public action be compensated by the government,

rather than remain disproportionately concentrated

on a few persons.” 49

Penn Central’s three factors were not identified

as a regulatory taking test, but instead as

“guideposts” as part of an overall fact-based, ad hoc

inquiry in determining whether the Fifth Amendment

has been violated. 50 The Court did not discuss water

rights taking cases nor did the Court indicate that it

was overruling any prior decision in which any per se

or physical taking tests had been applied. Notably,

46 Id. at 414.

47 San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621

(1981).

48 Id. at 649–50 (Brennan, J., dissenting).

49 Penn Central, 438 U.S. at 124.

See Palazzolo v. Rhode Island, 533 U.S. 606, 634 (2001)

(O’Connor, J., concurring).

50

16

even in Penn Central, the Court focused its conclusion

that no taking had occurred on one significant fact: no

economic harm had occurred because the company

could operate the Station profitably even without the

permit and the company could transfer its air rights

to another property it owned downtown. 51

More importantly, the Penn Central formula

has never been applied to recent water rights takings

cases. As the Federal Circuit itself has stated “[i]n the

context of water rights, courts have recognized a

physical taking where the government has physically

diverted water for its own consumptive use or

decreased the amount of water accessible by the

owner of the water rights.” 52

In short, there is no support for the argument

that under Penn Central, the decisions in

International Paper, Gerlach, and Dugan are no

longer good law.

B.

The court below misread its own ruling in

Casitas

In both United Water and Casitas, the

Biological Opinion required the water district to

reduce the quantity of water it was authorized to use

by its permit to increase the river flows available for

the endangered fish. 53 The only factual difference

51 See Penn Central, 438 U.S. at 134–35.

52 Washoe Cnty., Nev. v. United States, 319 F.3d 1320, 1326 (Fed.

Cir. 2003).

53 See Casitas, 543 F.3d at 1291–92; and see Pet. App. 2a–4a.

17

between the two cases was that, as constructed,

Casitas’ fish ladder was fed by water from its

diversion canal while United’s was fed directly by

water flowing through the dam. The key question in

this case is whether that happenstance of fish ladder

construction makes a constitutional difference.

The court below found that the governmentimposed water-use requirements imposed on the

water rights holder were merely “regulatory

restrictions” 54 that did not involve a direct

appropriation of water as occurred in Casitas

Municipal Water District v. United States, which the

court relied on for reaching its decision that the taking

was regulatory. 55 But under the court below’s

decision, the taking of Casitas’s water would likely be

held to be a regulatory taking.

The government in both cases argued that the

taking should be analyzed as a regulatory taking. 56 In

Casitas, the government argued that it did not “seize,

appropriate, divert, or impound” any water, but

merely required water to be left in the stream. 57

Based on these concessions, and comparing the

Casitas taking with the facts in International Paper,

the Federal Circuit found that the government

54 Pet. App. 12a (internal quotations omitted).

55 Id.

56 Casitas, 543 F.3d at 1283.

57 Id. at 1290.

18

appropriated Casistas’s right to use its own water for

the government purpose of protecting an endangered

fish, stating that “[t]herefore, we conclude that the

government physically appropriated water that

Casitas held a usufructuary right in.” 58

The Casitas court acknowledged that the

government had not itself physically diverted the

water:

When the government forces Casitas to

divert water away from the RoblesCasitas Canal to the fish ladder for the

public purpose of protecting West Coast

Steelhead trout, this is a governmental

use of the water. The fact that the

government did not itself divert the water

is of no import. 59

The government’s actions in United Water and

Casitas both involved regulatory restrictions on the

water right holder’s use of water under the federal

Endangered Species Act, 60 by the National Marine

Fisheries Service (NMFS). In both cases, the

biological opinion required that both districts send

downriver water they otherwise would have diverted

and put to beneficial use, to protect an endangered

fish species—the Southern California steelhead trout

in United Water, and the West Coast steelhead trout

58 Id. at 1292.

59 Id. at 1292–93 (emphasis added).

60 See id. at 1282; see also Pet. App. 3a–4a.

19

in Casitas. 61

NMFS issued a biological opinion that required

United Water to increase water flowing through the

fish ladder that United Water was required to

construct. 62 United Water estimates that it lost, for

fish protection purposes, 49,800 acre-feet of water

that it otherwise would have diverted to the Freeman

Diversion Canal and put to beneficial use. 63

In Casitas, the court found that the government

appropriated an average of 3,200 acre-feet per year of

Casitas’ water for fish protection purposes. 64

The key difference between Casitas and this

case is that in Casitas, the Federal Circuit relied on

International Paper, Gerlach, and Dugan for

“guidance” finding that in each case, the government

required that the water be diverted or “caused water

to be diverted away[,]” 65 and that the government’s

actions were analyzed as a per se takings.

61 See Casitas, 543 F.3d at 1282; see also Pet. App. 3a–4a.

62 See Pet. App. 4a.

63 Id.

64 See Casitas, 543 F.3d at 1282, n.4.

65 See id. at 1290.

20

C.

The court below mistakenly concluded

that appropriative water rights under

California law do not vest as property

rights until the water has been diverted

Mistakenly relying on the law as it existed a

century ago, the court below erroneously asserted that

“water rights are acquired by diverting water and

applying it for a beneficial purpose.” 66 Applying this

erroneous legal principle to the facts of this case led

the court below to the wrong conclusion—that “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[.]” 67 But,

although “[p]rior to December 19, 1914, the effective

date of the Water Commission Act . . . such method for

appropriating water existed under California law and

could result in a vested appropriative right[,]” 68 that

has not been the law for more than a hundred years.

To the contrary, “under the law of California since

1913, a valid water right by appropriation can be

acquired only by filing an application with the state

authorities and pursuing it through the steps required

by law.” 69

66 Pet. App. 10a (internal quotations omitted).

67 Id. at 13a.

68 United States v. Fallbrook Pub. Util. Dist., 165 F. Supp. 806,

830 (S.D. Cal. 1958).

69 People of the State of California v. United States, 235 F.2d 647,

660 (9th Cir. 1956).

21

The statutorily required steps for obtaining a

water right permit from the State Water Board

include an application, notice to affected parties, and

a hearing before the Board. 70 If the Board determines

that unappropriated water is available, and the

application is for a beneficial use and in the public

interest, a permit is granted. 71 “The issuance of a

permit gives the right to take and use water only to

the extent and for the purpose allowed in the

permit.” 72

United Water’s State Water Resources Control

Board permit defines how much water it may divert

from the Santa Clara River; United’s actual

diversions from the River are irrelevant to defining its

state-granted water right. “Post-1914 appropriators

may possess water rights only through a permit or

license issued by the Board, and their rights are

circumscribed by the terms of the permit or license.” 73

California Water Code § 1225 provides: “[N]o right to

appropriate or use water subject to appropriation

shall be initiated or acquired except upon compliance

with the provisions of this division.” 74 California

courts have interpreted 1225 to declare that the

permit system—not actual appropriation—is “the

70 See Cal. Water Code §§ 1205, 1225.

71 See Cal. Water Code §§ 1201, 1240, 1253, 1257.

72 Cal. Water Code § 1381.

73 Millview Cnty. Water Dist. v. State Water Res. Control Bd., 229

Cal. App. 4th 879, 889 (2014).

74 Cal. Water Code § 1225.

22

exclusive means of acquiring the right to appropriate

or use water[.]” 75

Here, “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.” 76 The permit precisely

defines the extent of United Water’s right to withdraw

water from the River—and so precisely defines United

Water’s property right. Whether a compensable Fifth

Amendment taking occurred is determined by the

extent to which Government action interfered with

that property right—the quantity of water it is legally

allowed to withdraw from the Santa Clara River. And

it is the Government’s interference with United

Water’s right to divert that quantity of water that

constitutes the taking.

Contrary to the court below, United Water was

not required to actually divert any water to create its

water right. Just the opposite—until United Water

received its permit it could not divert any water at all

from the Santa Clara. For, without a permit

authorizing the diversion, the diversion is

unauthorized and subject to enforcement pursuant to

Water Code sections 1052 and 1831. 77

Because actual diversion of water cannot occur

until after the State Board permit issues, authorizing

75 People v. Shirokow, 605 P.2d 859, 863 (Cal. 1980).

76 Pet. App. 4a.

77 See Cal. Water Code §§ 1052, 1831.

23

the diversion, the diversion plays no part in creating

or defining the water right—or United Water’s

property right. The court below’s reliance on this

irrelevant factoid to determine Fifth Amendment

liability rests on a glaring error of water law—leading

it to wrongly decide the case.

Although actual diversion may once have

created a California water right, this has not been

true for more than a century: Initially, rights to

appropriate water were acquired by actual diversion

and use of the water. 78 Beginning in 1914, however, a

statutory scheme has provided the exclusive method

of acquiring appropriation rights. 79

The issuance of a permit establishes an

appropriative right as of the date of the application

and grants the “right to take and use the amount of

water specified in the permit until the issuance of a

license . . . .” 80 The license is the last step in the

process which “confirms the right” established by the

permit. 81

78 See Shirokow, 605 P.2d at 865.

79 Id.

80 Cal. Water Code § 1455.

81 Cal. Water Code § 1610.

24

II.

The Rationale Behind Treating the

Taking of Water Rights as Per Se or

Physical Takings Is Consistent With the

Nature of the Water Right and the Court’s

Analysis of Other Discrete Interests in

Property Such as Trade Secrets and

Money

Courts have developed different taking rules

for different forms of property that involve discrete

interests in property or limited rights associated with

the property interest such as easements, leases,

contracts, trade secrets, pension plans, money,

interest earnings, causes of action, business interests,

and water rights. Courts have fashioned takings rules

to be sufficiently flexible so as to accommodate the

taking of the different rights associated with different

forms of properties. 82

The California water rights at issue in this case

are a unique type of property, consisting not of

ownership of the liquid itself, but rather merely of the

right to use the water for a particular purpose. As the

California Supreme Court explained nearly one

hundred and fifty years ago, “[i]t is laid down by our

law writers, that the right of property in water is

usufructuary, and consists not so much of the fluid

itself as the advantage of its use.” 83 From the earliest

82 See Argent v. United States, 124 F.3d 1277, 1283 (Fed. Cir.

1997) (“The Government ascribes to takings jurisprudence an

inflexibility that does not exist.”); see also Boise Cascade Corp. v.

United States, 296 F.3d 1339 (Fed. Cir. 2002) (en banc).

83 Eddy v. Simpson, 3 Cal. 249, 252 (Cal. 1853) (emphasis added).

25

days of its statehood, California has recognized that

an appropriative water right is a private property

right, subject to ownership and disposition by the

owner as in the case of other private property. 84 The

right to the use of water is “regarded and protected as

property” and is “substantive and valuable

property.” 85 As such, they cannot be infringed by

others or taken by governmental action without due

process and just compensation. 86

Regulatory taking rules make perfect sense

when applied to land, which has many sticks within

its bundle of rights. But water rights are diametrically

different from land, in that the sticks in its bundle of

rights are more limited; as a usufruct the rights

include a use right, and in some instances, the right

to divert or store the water for later beneficial use.

As this Court explained in Loretto v.

Teleprompter Manhattan CATV Corp., the taking

“chops through the bundle, taking a slice of every

Wells A. Hutchins, THE CALIFORNIA LAW OF WATER RIGHTS

120–121 (1956); see also id. at 37.

84

85 Id. at 121 (citing Kidd v. Laird, 15 Calif. 161, 179–180 (1860)

and McDonald v. Bear River & Auburn Water & Min. Co., 13

Calif. 220, 232 (1859)).

86 United States v. State Water Resources Control Bd., 182 Cal.

App.3d 82, 101 (1986) (citing Ivanhoe Irrigation Dist. v. All

Parties, 47 Cal. 2d 597, 623 (1957), rev’d. on other grounds in

Ivanhoe Irrigation Dist. v. McCracken, 357 U.S. 275 (1958), and

Gerlach, 339 U.S. 725, 752–754)).

26

strand” 87 and constitutes a per se violation of the Just

Compensation Clause. But with water, a taking slices

through a bundle of just one stick—the right to use

the water. In real property terms, when the

government takes a water right it absolutely

dispossesses the owner and renders the water right

estate valueless to the owner. 88

In Brown v. Legal Foundation of Washington, 89

a case involving the taking of interest on lawyers’

IOLTA accounts, the issue before the Court was

whether a per se or Penn Central analysis should be

used to analyze the regulatory requirement that

interest on lawyers’ trust accounts be transferred to a

public legal foundation. The government argued

there, as it does here, that no physical occupation had

occurred, and that therefore Penn Central analysis

was required. Rejecting the government’s argument,

the Court explained:

We agree that a per se approach is more

consistent with the reasoning in our

Phillips opinion than Penn Central’s ad

hoc analysis. As was made clear in

Phillips, the interest earned in the

IOLTA accounts “is the ‘private property’

of the owner of the principal.” 524 U.S.,

at 172. If this is so, the transfer of the

87 Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419,

435 (1982).

88 Allegretti & Co. v. Cnty. of Imperial, 138 Cal. App. 4th 1261,

1274 (2006).

89 Brown v. Legal Found. of Washington, 538 U.S. 216 (2003).

27

interest to the Foundation here seems

more akin to the occupation of a small

amount of rooftop space in Loretto. 90

In Ball v. United States, 91 the Court of Claims

summed up the rule on the taking of water rights: “In

general terms, water rights in surface waters,

whether riparian or appropriative, constitute

property, and, under familiar principles, cannot be

taken ‘except for the public use and upon payment of

just compensation.’” 92

As one commentator stated:

First, different kinds of property

interests, such as ownership in fee,

leaseholds, and easements, enjoy

different kinds of rights. Among these

different rights are some whose

importance is so central to the property

interest that the infringement of this

“core” right will likely result in a per se

90 Id. at 235; see also Hodel v. Irving, 481 U.S. 704, 716 (1987)

(regulation that “abolishes both descent and devise” of interests

in land is a per se taking); Ruckelshaus v. Monsanto Co., 467 U.S.

986 (1984) (taking of a trade secret is a per se taking); Louisville

Joint Stock Land Bank v. Radford, 295 U.S. 555, 596–602 (1935)

(taking of real estate lien analyzed as per se taking).

91 Ball v. United States, 1 Cl. Ct. 180 (1982).

92 Id. at 183 (quoting 2 NICHOLS ON EMINENT DOMAIN § 5.79 (3d

ed., rev. 1981)); see also Store Safe Redlands Associates v. United

States, 35 Fed. Cl. 726, 730 (1996) (concluding that the alleged

taking of plaintiff’s water rights “share[d] many commonalities

with the so-called physical taking”).

28

treatment of the taking, similar to a

physical or categorical taking.

***

This accepted recognition of core rights

with regard to property rights in land

justifies the same outcome with regard to

property rights in water. A water right,

like other property interests, enjoys

different rights and among these

different rights is the core right – the

right to use.

***

Thus, the right to use, the chief

characteristic of a water right,

necessarily includes the right to exclude

others from using the water, similar to a

landowner’s right to exclude others from

entering his property. 93

The rationale for applying a per se rule for

physical occupation of real property is that such action

often boils down to a fundamental notion of protecting

an individual’s right to exclude others. 94 In the

context of water rights, denying the water rights

owner the use of the water destroys the sole stick in

the bundle of property rights, and likewise destroys

93 Jesse

W. Barton, Tulare Lake Basin Water Storage Dist. v.

United States: Why It Was Correctly Decided and What This

Means for Water Rights, 25 ENVIRONS ENVTL. L. & POL’Y J. 109,

130–32 (2002).

94 Cedar Point Nursery v. Hassid, 594 U.S. 139, 149 (2021).

29

the water rights holder’s right to exclude others—

notably, the government—from using its water.

30

CONCLUSION

The Court should grant the petition for a writ

of certiorari.

Respectfully submitted,

NANCIE G. MARZULLA

MARZULLA LAW, LLC

1150 Connecticut Ave.,

NW

Suite 1050

Washington, DC 20036

(202) 822-6760

November 28, 2025

LAWRENCE S. EBNER

Counsel of Record

ATLANTIC LEGAL FOUNDATION

1701 Pennsylvania Ave., NW

Washington, DC 20006

(202) 729-6337

lawrence.ebner@atlanticlegal.org

Counsel for Amicus Curiae