Reply 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 OF AMERICA,

Respondent.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

REPLY BRIEF FOR PETITIONER

FRANK S. MURRAY

FOLEY & LARDNER LLP

3000 K Street, N.W.

Suite 600

Washington, DC 20007

DAVID T. RALSTON, JR.

DAVID T. RALSTON, JR., ESQ., PLLC

6510 Rockland Drive

Clifton, VA 20124

THOMAS H. DUPREE, JR.

Counsel of Record

JONATHAN C. BOND

GIBSON, DUNN & CRUTCHER LLP

1700 M Street, N.W.

Washington, DC 20036

(202) 955-8500

TDupree@gibsondunn.com

PATRICK J. FUSTER

GIBSON, DUNN & CRUTCHER LLP

333 South Grand Avenue

Los Angeles, CA 90071

Counsel for Petitioner

TABLE OF CONTENTS

Page

REPLY BRIEF FOR PETITIONER ........................... 1

I. The Federal Circuit’s Decision Is Wrong ........... 3

II. The Federal Circuit Should Not Have The

Last Word On Water-Rights Takings ................. 8

III. The Government’s Vehicle Objections Fail ........ 9

ii

TABLE OF AUTHORITIES

Cases

Page(s)

Army Corps of Engineers v. Hawkes Co.,

578 U.S. 590 (2016) .............................................. 11

Ashwander v. TVA,

297 U.S. 288 (1936) ................................................ 5

Bingham v. Roosevelt City Corp.,

235 P.3d 730 (Utah 2010) ...................................... 9

Cedar Point Nursery v. Hassid,

594 U.S. 139 (2021) ........................................ 2, 4, 6

Dugan v. Rank,

372 U.S. 609 (1963) ............................................ 5, 6

Free Enterprise Fund v. Public Company

Accounting Oversight Board,

561 U.S. 477 (2010) .............................................. 11

Horne v. Department of Agriculture,

569 U.S. 513 (2013) ................................................ 8

Horne v. Department of Agriculture,

576 U.S. 351 (2015) ................................................ 4

International Paper Co. v. United States,

282 U.S. 399 (1931) ............................................ 4, 5

Keystone Bituminous Coal Ass’n v.

DeBenedictis,

480 U.S. 470 (1987) ........................................ 6, 7, 8

iii

Cases (continued)

Page(s)

Knick v. Township of Scott,

588 U.S. 180 (2019) .............................................. 11

Kobobel v. Colorado Department of

Natural Resources,

249 P.3d 1127 (Colo. 2011) .................................... 9

Nollan v. California Coastal Commission,

483 U.S. 825 (1987) ................................................ 4

Penn Central Transportation Co. v.

New York City,

438 U.S. 104 (1978) ................................................ 2

Phillips v. Commissioner,

283 U.S. 589 (1931) ................................................ 5

Sheetz v. El Dorado County,

601 U.S. 267 (2024) .............................................. 12

United States v. Central Eureka Mining Co.,

357 U.S. 155 (1958) ............................................ 6, 7

United States v. Clarke,

445 U.S. 253 (1980) ................................................ 6

United States v. Gerlach Live Stock Co.,

339 U.S. 725 (1950) ............................................ 4, 6

Washington Department of Ecology v.

Grimes,

852 P.2d 1044 (Wash. 1993) .................................. 9

iv

Cases (continued)

Page(s)

Wishtoyo Foundation v. United Water

Conservation District,

2018 WL 7571315 (C.D. Cal. Dec. 1, 2018) ......... 11

Constitutional Provisions

U.S. Const. Amend. V............................................ 2, 11

Statutes

16 U.S.C. § 1540(a) .................................................... 10

16 U.S.C. § 1540(b) .................................................... 10

28 U.S.C. § 2501 ........................................................ 11

Cal. Water Code § 102 ................................................. 3

IN THE

Supreme Court of the United States

No. 25-523

UNITED WATER CONSERVATION DISTRICT,

Petitioner,

v.

UNITED STATES OF AMERICA,

Respondent.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

REPLY BRIEF FOR PETITIONER

Amici have come out in force because the Federal

Circuit’s decision sets a dangerous national precedent.

That decision relegates physical appropriations of water rights to the murk of regulatory-takings balancing.

The United States does not defend the court of appeals’

reasoning yet embraces its result. But its arguments

go even further and amplify the need for review.

The government tries to rebrand its command to

send billions of gallons of water to its own preferred

destination as mere “water-use regulatio[n].” Br. in

Opp. 14. That bureaucrat-speak should fool no one:

Petitioner is legally entitled to a fixed quantum of

river water; the government ordered it to forfeit a

massive amount. That is a textbook physical taking.

2

That the government’s appropriation of petitioner’s

water necessarily stopped petitioner from using it cannot transform its action into a mere use restriction.

This Court rejected the same semantic shell game in

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

where it rebuked an effort to trivialize the Takings

Clause by deeming the “appropriation” of the central

stick in the property-rights bundle “‘a mere restriction

on its use.’” Id. at 154 (citation omitted). The government’s position would go further still, confining heartland physical takings to Penn Central Transportation

Co. v. New York City, 438 U.S. 104 (1978), whenever

expropriation inhibits use.

The government also overshoots the Federal Circuit in addressing this Court’s water-rights cases.

Abandoning the arbitrary distinctions the court of appeals deployed to circumvent those decisions, the government now announces its revelation that each case

concerned regulatory takings all along. None bears

that relabeling, and the government’s effort to shoehorn them into a regulatory-takings framing again

runs into Cedar Point.

The government offers nothing to refute the importance of the question presented. It speculates that

the issue might someday arise outside the Federal Circuit but gives no reason to await a split. As amici explain, the issue is urgent, has nationwide consequences, and warrants review now.

The government urges the Court to forgo review

to await a better vehicle, but it identifies no defects

here. Illustrating how far it has strayed, the government argues that it never “compelled” petitioner to

forfeit its water but “merely threatened an enforcement action” if petitioner did not comply, on pain of

civil penalties and even criminal punishment. Br. in

3

Opp. 16 (internal quotation marks omitted). That remarkable response blinks the reality any property

owner would recognize upon receiving such a threat.

But it aligns with the government’s view that demanding 16 billion gallons of water from petitioner is

not a physical taking.

The petition should be granted.

I.

THE FEDERAL CIRCUIT’S DECISION IS WRONG

A. The government does not defend the Federal

Circuit’s rationale that no physical taking of water

rights occurs unless the government “completely cut[s]

off ” a property owner’s “access to [its] water” or requires it to “return any volume of water it had previously diverted.” Pet. App. 11a (emphases added). Refusing to absorb the lessons of Cedar Point, the government urges an even broader carveout from the

physical-takings framework that would shunt any appropriation of water rights to Penn Central.

The government’s argument amounts to a word

game. It (correctly) recognizes that petitioner owns a

“right to the use of water” from the river—not particular water molecules, which are continuously replaced. Br. in Opp. 2 (quoting Cal. Water Code § 102);

see Pet. 24. But the government reasons that, because

its conscription of billions of gallons “limited petitioner’s right to the use of the River’s flows,” it imposed

only a “use restriction” governed by Penn Central. Br.

in Opp. 11 (brackets, citation, and emphasis omitted).

That account is at war with the English language

and this Court’s precedent. As the Court explained

decades ago and reiterated in Cedar Point, “[s]aying

that appropriation” of another’s property “‘does not

constitute the taking of a property interest but rather . . . a mere restriction on its use, is to use words

4

in a manner that deprives them of all their ordinary

meaning.’” 594 U.S. at 154 (quoting Nollan v. California Coastal Commission, 483 U.S. 825, 831 (1987)).

Petitioner has a right to divert a fixed quantity of water from the river to its facilities, which it then may

use in myriad ways. But the government directed water away from petitioner to the government’s own preferred uses—taking the central stick in petitioner’s

bundle of rights. Atlantic Legal Foundation Br. 2429.

The government’s position also lacks any limiting

principle. By its logic, any appropriation could be euphemistically rechristened a use restriction. Any

physical taking of property—whether a house, raisins,

or water rights—necessarily deprives the owner of its

use. E.g., Horne v. Department of Agriculture, 576 U.S.

351, 361-362 (2015). But that consequence cannot

“transform” a confiscation “from a physical taking into

a use restriction.” Cedar Point, 594 U.S. at 154. The

regulatory-takings doctrine comes into play only when

“the government, rather than appropriating property

for itself or a third party, instead imposes regulations

that restrict an owner’s ability to use his own property.” Id. at 148 (emphasis added). The government

would perversely extend Penn Central’s balancing test

to all physical takings, which inevitably impair use.

B. The government similarly does not stand by

the Federal Circuit’s arbitrary distinctions of this

Court’s key water-rights cases, which confirm that reallocating water to the government’s use is a per se

taking. Pet. App. 11a-13a. Three times the Court has

held that government actions reallocating water to its

own use were physical appropriations of another’s water rights. International Paper Co. v. United States,

282 U.S. 399, 407-408 (1931); United States v. Gerlach

5

Live Stock Co., 339 U.S. 725, 753 (1950); Dugan v.

Rank, 372 U.S. 609, 625 (1963). The government does

not endorse the court of appeals’ attempt to gerrymander a general rule for physical takings of water rights

confined to those cases’ particular facts. Cf. Pet. 20-27.

Instead, once again, the government goes further (Br.

in Opp. 12-14), arguing that International Paper, Gerlach, and Dugan all concerned regulatory takings.

That the government is forced to reframe the whole

trilogy is further evidence that its position is fundamentally unsound.

International Paper resists a regulatory-takings

rewrite. There, as here, the “petitioner’s right was to

the use of the water,” and the government “t[ook] the

use” by directing the water “elsewhere” for purposes

it “deemed more useful.” 282 U.S. at 407-408. That

diversion established that “the Government took the

property that the petitioner owned.” Id. at 408. To its

credit, the Federal Circuit correctly recognized that

International Paper involved a “direct physical appropriation.” Pet. App. 10a.

This Court has understood International Paper

the same way. Before the ink dried on the opinion,

the Court cited it as an example of “the property of

citizens” being “summarily seized in war-time.” Phillips v. Commissioner, 283 U.S. 589, 597 (1931) (emphasis added). And it later reiterated that the government had “exercised its power of eminent domain” and

was “bound to make compensation” to the person “who

lost the use of the water to which he was entitled.”

Ashwander v. TVA, 297 U.S. 288, 335 (1936) (citing

International Paper, 282 U.S. at 407-408).

Gerlach, too, cannot fairly be recast as a regulatory taking. The government built a dam that deprived

landowners of water they had a right to use. In holding

6

that they were entitled to compensation, the Court put

takings of water rights on the same footing as “other

takings where private rights are surrendered in the

public interest.” 339 U.S. at 752. Wherever “[p]ublic

interest requires appropriation,” the Court stressed, “it

does not require expropriation.” Id. at 753.

The government’s revisionist reading of Dugan as

a regulatory-takings case is equally untenable. The

Court itself has classified Dugan among other “physical takings by governmental bodies.” United States v.

Clarke, 445 U.S. 253, 256 (1980). Indeed, Dugan drives

a stake through the government’s contention that appropriating a right to use water is a mere use restriction. Dugan observed that the water rights at issue were “‘usufructuary’” (meaning a right to the use

of the water) but nevertheless analogized that “seizure of water rights” to a “partial taking of air space

over land”—a textbook physical taking. 372 U.S. at

625 (citation omitted); see Pet. 26. Although the government tries to dismiss that discussion in Dugan as

dictum, this Court’s determination that the plaintiffs

had alleged a “partial taking” of their water rights

formed the basis for the conclusion that they had to

seek just compensation instead of an injunction

against the responsible officers. 372 U.S. at 620; see

id. at 623-626.

Cedar Point reaffirmed that governments must

accept decisions from before Penn Central on their

physical-takings terms. 594 U.S. at 158. The United

States did not get the message.

C. Unable to square the decision below with directly pertinent precedents, the government looks elsewhere to mining-restriction cases. Br. in Opp. 11-12

(citing United States v. Central Eureka Mining Co.,

357 U.S. 155 (1958); Keystone Bituminous Coal

7

Ass’n v. DeBenedictis, 480 U.S. 470 (1987)). Neither

case authorized the Federal Circuit’s departure from

fundamental physical-takings principles or International Paper, Gerlach, and Dugan. And even if tension

existed in the Court’s decisions, only this Court could

resolve it—all the more reason to grant review.

In Central Eureka, the government ordered the

shutdown of gold mines to prioritize resources for mining different metals that were critical to national defense during World War II. 357 U.S. at 157-160. Two

plaintiffs claimed that the government had taken

their “rights to operate their respective gold mines.”

Id. at 156. This Court considered that order a mere

regulation of the right to use the gold mines because

“the Government did not occupy, use, or in any manner take physical possession of the gold mines or of

the equipment connected with them.” Id. at 165-166.

And, critically, the government had no “need for the

gold,” which remained in the ground for the plaintiffs

to mine later. Id. at 166. Here, by contrast, the government did need petitioner’s water—that is the

whole point. And it took that water by directing petitioner to forfeit it by forgoing diversion of nearly

50,000 acre-feet, so that the water would instead

reach the government’s favored destination.

The divided decision in Keystone is of a piece.

Pennsylvania required mining companies to leave half

the coal in place under certain buildings to prevent

subsidence. 480 U.S. at 476-477. This Court applied

the balancing framework of Penn Central because “no

coal ha[d] been physically appropriated” for the State’s

own use. Id. at 499 n.27. It expressly disavowed any

“suggest[ion] that the State may physically appropriate relatively small amounts of private property for its

own use without paying just compensation.” Ibid.; see

8

id. at 493-502. Even then, four Justices dissented

from the Court’s conclusion that no taking occurred.

Id. at 515-518 (Rehnquist, C.J., joined by Powell,

O’Connor, and Scalia, JJ., dissenting). Whatever one

thinks of Keystone, it casts no doubt on this Court’s

decisions analyzing the government’s reallocation of

water to its own use as a physical taking.

II. THE FEDERAL CIRCUIT SHOULD NOT HAVE THE

LAST WORD ON WATER-RIGHTS TAKINGS

The government makes no effort to refute the realworld significance of the question presented. It does

not deny that the proper framework for water-rights

takings is important and recurring, or that it will take

full advantage of the decision below. And it has no

answer to the nationwide array of amici who explain

that the decision below makes vital water rights

uniquely vulnerable to expropriation. E.g., Western

Growers Br. 14-16; Texas Farm Bureau Br. 8-12.

The government stresses (Br. in Opp. 15) the lack

of a circuit conflict. But given the Court of Federal

Claims’ near-exclusive jurisdiction over takings claims

against the United States and the nationwide applicability of the Federal Circuit’s precedential decision,

there is no reason to await a split. The government

identifies no benefit from further percolation. All it

can say is that the question presented conceivably

“may arise outside the Federal Circuit.” Id. at 16.

That hypothetical prospect is hardly a reason to leave

the court of appeals’ harmful decision unexamined and

property owners like petitioner without recourse.

The Court should not hold its breath for a split either. As for federal courts, the government gestures at

a lone statute about raisins and other agricultural products. Br. in Opp. 15-16 (citing Horne v. Department of

9

Agriculture, 569 U.S. 513, 516 (2013)). But the Federal

Circuit’s takings docket overflows with water-rights

cases precisely because no such specialized statute exists in this context. Pet. 28-29.

The government’s suggestion (Br. in Opp. 16) that

this Court await a case from state court is less sensible

still. Because States grant water rights, takings cases

routinely hit a dead end long before the state court confronts the question whether an alleged taking was

physical or regulatory—for example, because preexisting state-law limitations deprived the plaintiff of any

property right to begin with. Kobobel v. Colorado Department of Natural Resources, 249 P.3d 1127,

1137-1138 (Colo. 2011); Bingham v. Roosevelt City

Corp., 235 P.3d 730, 744 (Utah 2010); Washington Department of Ecology v. Grimes, 852 P.2d 1044, 1055

(Wash. 1993).

The wait for a suitable state-court vehicle could be

long indeed. It is no accident that the Court’s seminal

water-rights takings decisions (International Paper,

Gerlach, and Dugan) arose from actions by the federal

government.

III. THE GOVERNMENT’S VEHICLE OBJECTIONS FAIL

The government is left to argue (Br. in Opp. 16-17)

that the case is an unsuitable vehicle, but it identifies

no genuine obstacle to review. The question presented

was thoroughly pressed and passed upon below and

was the sole basis of the Federal Circuit’s decision.

The government does not dispute that it is outcome

determinative: If the Federal Circuit should have analyzed the appropriation as a physical taking, then petitioner has plausibly alleged a taking. Pet. 19-20.

Ignoring the pleading-stage posture, the government argues that no taking occurred because (it says)

10

the National Marine Fisheries Service’s 2016 letter to

petitioner demanding the water “did not compel anything” at all. Br. in Opp. 16. But its preferred characterization of events is off-limits at the pleading

stage. The government itself purports to “assum[e]

the truth of the allegations in the complaint,” id. at 2

n.*, only to cast that constraint aside. The Federal

Circuit properly focused on the pleadings and credited

petitioner’s allegation that the letter’s demand “compelled [it] to increase the amount of water” for the Service’s use, thus decreasing the amount left for itself.

Pet. App. 11a (quoting C.A. App. 20). The court thus

proceeded to address the right question—whether

that alleged demand is a physical taking—but simply

gave the wrong answer. Id. at 9a-13a.

Even on its own terms, the government’s portrayal

of its demands as mere “[r]ecommendation[s]” is disquieting double-speak. Br. in Opp. 6 (citation omitted).

The government says that the Service’s 2016 missive

was not a mandate because it “merely threatened an

enforcement action against petitioner if petitioner did

not reduce its diversion of water to comply with” the

government’s directions. Id. at 16-17 (emphasis added;

brackets and citation omitted). The Service accused

petitioner of violating the Endangered Species Act

and ordered that the demanded measures—i.e., sending more water downstream to facilitate steelhead migration—“must be in place before December 1, 2016.”

C.A. App. 55. It further threatened to “pursue legal

options” under the Act if petitioner did not “timely implement” those measures. Ibid. Those “legal options”

included civil enforcement with a $25,000 penalty per

violation—and even criminal prosecution, with the potential for a year of imprisonment and a heftier fine.

See 16 U.S.C. § 1540(a)-(b).

11

No one would label a letter from a federal agency

threatening civil penalties and hard time in federal

prison a polite request. Cf. Br. in Opp. 17. The government would put property owners in an untenable

position. On its view, petitioner’s only choices were to

(A) refuse to comply, provoke civil or criminal enforcement, and have its officers risk a stint in a federal penitentiary, or (B) surrender its property and submit to

a permitting process that remains ongoing long after

the six-year statute of limitations would have run on

the physical taking. Pet. 30; see 28 U.S.C. § 2501.

That is no choice at all. It would “relegat[e] the

Takings Clause ‘to the status of a poor relation’ among

the provisions of the Bill of Rights.” Knick v. Township of Scott, 588 U.S. 180, 189 (2019) (citation omitted). The default rule—which the government sometimes forgets, e.g., Army Corps of Engineers v. Hawkes

Co., 578 U.S. 590, 600-601 (2016)—is that plaintiffs

need not “bet the farm” by disobeying a government

order and incurring potentially ruinous penalties.

Free Enterprise Fund v. Public Company Accounting

Oversight Board, 561 U.S. 477, 490 (2010) (citation

omitted). Yet the government’s position would force

them to do just that.

The government’s parting contention (Br. in Opp.

17) that the Takings Clause never came into play because petitioner complied with the Service’s demand

after entry of an injunction is even less coherent. The

district court in Wishtoyo Foundation v. United Water

Conservation District, 2018 WL 7571315 (C.D. Cal.

Dec. 1, 2018), had held that the Endangered Species

Act required petitioner to “continue to adhere to the

water diversion operating rules” formulated by the

Service. Id. at *1. That decision demolishes the government’s argument that petitioner forfeited its water

12

freely. Petitioner did so as required by federal law,

implemented by an agency letter and a court order.

The government stresses (Br. in Opp. 17) that it was

“not a party” in Wishtoyo, but that is of no moment:

The just-compensation mandate does not “var[y] according to the branch of government effecting the expropriation.” Sheetz v. El Dorado County, 601 U.S.

267, 276 (2024) (citation omitted). Whether the most

immediate cause was the Act, the Service’s demands,

or the injunction, the United States took petitioner’s

property. That taking demands just compensation.

*****

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

FRANK S. MURRAY

FOLEY & LARDNER LLP

3000 K Street, N.W.

Suite 600

Washington, DC 20007

DAVID T. RALSTON, JR.

DAVID T. RALSTON, JR., ESQ., PLLC

6510 Rockland Drive

Clifton, VA 20124

THOMAS H. DUPREE, JR.

Counsel of Record

JONATHAN C. BOND

GIBSON, DUNN & CRUTCHER LLP

1700 M Street, N.W.

Washington, DC 20036

(202) 955-8500

TDupree@gibsondunn.com

PATRICK J. FUSTER

GIBSON, DUNN & CRUTCHER LLP

333 South Grand Avenue

Los Angeles, CA 90071

Counsel for Petitioner

February 11, 2026