Amicus Curiae Brief — Ariyoshi v. Robinson

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No. 85-406 ~ Nov 15 1985

irt. F. SPANIOL, JR.

In the Supreme Court ««

|

OF THE

United States

OCTOBER TERM, 1985

GeorGE R. ArRIyosH!, Governor, STATE OF HAWAII, et al.,

Petitioners,

¥.

SELWYN A. ROBINSON, et al.,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE STATES OF ALASKA, CALIFORNIA,

MONTANA, NEVADA, NORTH DAKOTA, OREGON,

UTAH, WASHINGTON AND WYOMING

AS AMICI CURIAE

IN SUPPORT OF THE PETITION

FOR A WRIT OF CERTIORARI

= BOWNE OF SAN FRANCISCO, INC. « 190 NINTH ST. « S.F.. CA 94103 « (415} 864-2300

JOHN K. VAN DE Kamp

Attorney General of

the State of California

ANDREA SHERIDAN ORDIN

Chief Assistant

Attorney General

(Counsel of Record)

RICHARD C. JACOBS

Special Counsel to the

Attorney General

N. GREGORY TAYLOR

Assistant Attorney General

DENNIS M. EAGAN

Deputy Attorney General

3580 Wilshire Blvd., Rm. 800

Los Angeles, CA 90010

Telephone: (213) 736-2352

(Continued on inside cover)

HAROLD M. BROWN

Attorney General of

the State of Alaska

MIKE GREELY

Attorney General of

the State of Montana

BRIAN McKay

Attorney General of

the State of Nevada

NicHeoias J. SPAETH

Attorney General of

the State of North Dakota

DAVE FROHNMAYER

Attorney General of

the State of Oregon

Davip L. WILKINSON

Attorney General of

the State of Utah

KENNETH O. EIKENBERRY

Attorney General of

the State of Washington

JEFF GOLTZ

Senior Assistant

Attorney General

A. G. MCCLINTOCK

Attorney General of

the State of Wyoming

TABLE OF CONTENTS

Page

a l

ee eee ee th va Reed wvaveyeee y's 3

ocean vees cE RE RRR RE 5

I. This Court Should Grant the Petition Because the

Lower Court Erroneously Decided an Issue That Is Not

CM Grek n a Shake as hokvesu Sens 5

II. In Concluding That Hawaii Had “Taken” Property by

Judicial Decision, the Lower Court Ignored Both the

Unsettled Nature of Hawaii Water Law and Supreme

Court Cases Holding That Courts, in Declaring What

the Law Is, Are Not Subject to “Taking” Claims.... 8

A. The Lower Court’s Premise That McBryde

Effected a “Major Change” in Hawaii Law Con-

flicts With the Hawaii Supreme Court’s Conclu-

sion that Prior Cases Were in Conflict and the Law

TN od x G5 oud nlc os bs i bo eae ae OOS 8

B. The Conclusion That Courts, in Declaring Law,

Can “Take” Property Conflicts With Supreme

Court Precedent Directly to the Contrary ....... 9

III. Assuming That Court Decisions Can “Take” Property,

No Such Taking Was Established Here ............ 12

Ee Pe eee oa sd so Fe sk ehh K ea RRA eee ae eS 17

ii

TABLE OF AUTHORITIES CITED

Cases

Page

Agins v. City of Tiburon (1980) 447 U.S. 255........ 6, 12, 13

Brinkerhoff-Faris Co. v. Hill (1930) 281 U.S. 673 ....... 9,10

California v. United States (1978) 438 U.S. 645......... 4

Central Land Co. v. Laidley (1895) 159 U.S. 103 ....... 9

Chevron Oil Co. v. Huson (1971) 404 U.S. 97 .......... 11

City of Berkeley v. Superior Court (1980) 26 Cal.3d 515,

Ge Seis Oe Fo SR bese Seisew ec eees a MB

Coiorado River Water Conservation District v. United States

ee CIE oo rcs coe deca eee cusawe ences ee 2,3

County of Oneida v. Oneida Indian Nation (1985)

US. SP eS BOE i eo alee wc cece ons 11

Davies Warehouse Co. v. Bowles (1944) 321 U.S. 144 ... 9

Demorest v. City Bank Co. (1944) 321 U.S. 36 ......... 9,15

peey v. Sempean (IGS) 3 Cal 2 .n kw. ccc ccwcesess 14

Energy Reserves Group, Inc. v. Kansas Power & Light Co.

Pe ee RP ES ols ee) crea ae when Cow aeeaees 13

Fox River Paper Co. v. Railroad Commission (1927) 274

0 th » » DAA ER ae Cp en iat ts tip dea PPG ae roe yi Sel SL 9

Garcia v. San Antonio Metropolitan Transit Authority

1. oo te ere 11

Gould v. Eaton (1897) 117 Cal. 539 .................... 14

Great Northern Ry. v. Sunburst Co. (1932) 287 U.S. 358 9

Home Building & Loan Assn. v. Blaisdell (1934) 290 U.S.

Pe ae ee ee gh en Reet meyer Le ean e ne 13

Hughes v. Washington (1967) 389 U.S. 290 ............ 3,8

Illinois Central Railroad v. Illinois (1892) 146 U.S. 387 ..2, 14

Kaiser Aetna v. United States (1979) 444 U.S. 164...... 13

Mason v. Hill (1833) 110 Eng.Rep. 692................ 3,14

McBryde Sugar Company, Limited v. Robinson (Haw.

Se A RE 6 Sak oh ahs 2 Oh ee eee passim

ili

TABLE OF AUTHORITIES CITED

CASES

Page

Muhlker v. New York & Harlem Railroad Co. (1S 5) 197

National Audubon Society v. Superior Court (1983) 33

Cal.3d 419, 189 Cal.Rptr. 346, 658 P.2d 709, cert. den.,

atcenscen WEN commana TU Gita EE ask oe dee fo oe

National League of Cities v. Usery (1976) 426 U.S. 833.. 11

Oregon ex rel. State Land Board v. Corvallis Sand & Gravel

Ca: CEP7T) GE SLE Ses. ls eens cueeens eee 9,11, 14

Penn Central Transp. Co. v. New York City (1978) 438

Ue SOs ov cuieees cous eewersemsceee eee 13, 15, 16

Pollard’s Lessee v. Hagan (1845) 44 U.S. (3 How.) 212.. 14

Pruneyard Shopping Center v. Robins (1980) 447 U.S. 74

a: win 9:9 by ob cant oe aw: oe ee sat ee 13,14

Reppun v. Board of Water Supply (Haw. 1982) 656 P.2d57 7

Robinson v. Ariyoshi (Haw. 1982) 658 P.2d 287.

item ekvee deneaen ees taeeeleetae 2, 6, 8, 12, 14, 15, 16

Robinson v. Ariyoshi (9th Cir. 1985)

Tae Die POs 59S ch ebb echo toe eee 2, 8, 15

Ross v. Cee (IED) Zar UR. Se on sess covee oes 9

Ruckelshaus v. Monsanto Co. (1984) __. U.S. ____, 104

AA, FOS + 660 nonin OAS e SOR ee eee 12, 16

Simpson v. Union Oil Co. (1969) 396 U.S. 13 .......... 11

Tidal Oil Co. v. Flanagan (1924) 263 U.S. 444.......... 9,10

United Plainsmen v. North Dakota State Water

Conservation Comm’n (N.D. 1976) 247 N.W.2d 457...2, 14

United States v. Chandler-Dunbar Water Power Co. (1913)

BAe MIB FS one vs vs Sb5s a hon then Tee 15

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

TEE on dene nau ds 00ch Owen ete eee 3,14

United States v. Willow River Power Co. (1945) 324 USS.

GID inn vnvcynotues cbaeuse eee 15

United States Trust Co. v. New Jersey (1977) 431 U.S. 1 13

iV

TABLE OF AUTHORITIES CITED

CASES

Page

Williamson County Regional Planning Comm’n v. Hamilton

Bank (1596S) ne UD. cccicy G0 Deer FIO elses 6, 12, 16

Wood v. Waud (1849 Ex.) 154 Eng.Rep. 1047, 1058..... 3, 14

United States Constitution

Aat. ©, 9 0 Divino eee eee 13

Fikth Ame occ cecnnceden seers 4,11, 13

Poussin Ame og 6 kc vas ocee decor takeeeen 4,13

Texts

1 Hutchins, Water Rights Laws in the Nineteen Western

Semees CISTEY Ge cn wad Ure eee a 3

1 Wiel, Water Rights in the Western States (3d ed. 1911)

a SY 5 Serre fare Cater, eed ra alte 14, 15

No. 85-406

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1985

GEORGE R. ARIYOSHI, Governor, STATE OF HAwaIl, et al.,

Petitioners,

V.

SELWYN A. RUBINSON, et 4i.,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE STATES OF ALASKA, CALIFORNIA,

MONTANA, NEVADA, NORTH DAKOTA, OREGON,

UTAH, WASHINGTON AND WYOMING

AS AMICI CURIAE

IN SUPPORT OF THE PETITION

FOR A WRIT OF CERTIORARI

INTEREST OF THE AMICI CURIAE

The amici States have a compelling interest in this case.

All of them have comprehensive water mghts systems that

attempt to accommodate the diverse and conflicting claims of

public agencies, private parties, and the people as a whole in this

vital public resource. The touchstone for the sovereign

stewardship over the distribution of water, as well as for the

judicial articulation of principles of state water law, is the

principle that this precious public resource should be put only to

reasonable and beneficial use. This is particularly true in the arid

2

and semi-arid States of the West, where the articulation of

principles of state water law is animated by the “critical

[problem] of scarcity of water’ (Colorado River Water

Conservation District v. United States (1976) 424 U.S. 800, 804).

It was this principle of reasonable and beneficial use that

underlay the decision of the Supreme Court of Hawaii here. It

viewed the arguments of the private parties as leading to the

conclusion that “there existed no apparent common law restraint

upon the right of private parties to drain rivers dry for whatever

purposes they saw fit.” (Robinson v. Ariyoshi (Haw. 1982) 658

P.2d 287, 311.) In rejecting these arguments, the Supreme Court

of Hawaii likened the State’s stewardship over the allocation of its

waters to the public trust held by the States in the oeds of

navigable waterways, thus recognizing a concept that has been set

forth in the water rights decisions of other States (e.g., United

Plainsmen vy. North Dakota State Water Conservation Comm'n

(N.D. 1976) 247 N.W.2d 457, 469-463; National Audubon

Scciety v. Superior Court (1983) 33 Cal.3d 419, 425, 437-438,

445, 447 [189 Cal.Rptr. 346, 658 P.2d 709], cert. den., __ US.

___., 104 S.Ct. 423). This Court has itself held that this public

trust is governmental in nature and cannot be alienated. (//linois

Central Railroad v. Illinois (1892) 146 U.S. 387, 452.)

The decision of the Court of Appeals for the Ninth Circuit,

however, nullified the decision of the Supreme Court of Hawaii,

concluding that its articulation of state water law constituted a

“taking” of “vested” property rights without just compensation.

(Robinson y. Ariyoshi (9th Cir. 1985) 753 F.2d 1468, 1474.)

This conclusion was based upon the Ninth Circuit’s own

independent interpretation on several matters of state law: the

import of prior Hawaii case law, the meaning of the decision of

the Supreme Court of Hawaii in the case under review, and the

manner in which that decision would be applied in future state

court cases. (See 753 F.2d at pp. 1473-1474.) These

interpretations of state law conflicted with those of the Supreme

Court of Hawaii on the very same questions.

The decisions of state courts defining sovereign rights in public

trust resources have been attacked with increasing frequency in

recent years based on the “taking” argument that proved

3

successful below. (E.g., National Audubon Society v. Superior

Court, supra, 33 Cal.3d 419, cert. den., __ U.S. , 104 S.Ct.

413 (water rights allocation must consider environmental impacts

on trust resources; see Pet. for Cert., heading III, U.S. 83-300);

City of Berkeley v. Superior Court (1980) 26 Cal.3d 515 [162

Cal.Rptr. 327, 606 P.2d 362], cert. den., 449 U.S. 840 (public

trust interest impliedly reserved in deeds to lands beneath waters

of San Francisco Bay; see Pet. for Cert., heading 2, U.S. 79-

2008).)

These assertions have been based principally on what was the

sole authority offered by the Ninth Circuit here: a concurring

opinion by Justice Stewart in Hughes v. Washington (1967) 389

U.S. 290, 294, 296-297, which suggested that property owners

enjoy constitutional protection against “unpredictable” changes in

state court case law.

The Ninth Circuit’s decision will fundamentally alter the

ability of state supreme courts to define, as a matter of state law,

public and private rights in public trust resources. For that reason,

the amici States strongly support Hawaii’s petition and ask that

this Court accept the case and reverse the lower court’s decision.

INTRODUCTION

The sovereign governmental interest of the States in the

allocation of water is of particular importance to the arid and

semi-arid States of the West. (See Colorado River, supra, 424

U.S. at p. 804.) In constitutiora!l and statutory provisions, and by

court decisions, various western States F-ve recognized the

established common law concept that flowing water, like light and

air, is publici juris—the property of the public.' The reference is

not to an interest or title in the proprietary sense, but rather to a

' The concept has been recognized in the English cases (e.g., Wood v.

Waud (1849 Ex.) 154 Eng.Rep. 1047, 1058; Mason v. Hill (1833) 110

Eng.Rep. 692), as well as by this Court (United States v. Gerlach Live

Stock Co. (1950) 339 U.S. 725, 744-745 (tracing the concept to the

Institutes of Justinian)). Articulations of the concept in state

constitutions, statutes, and case law are collected in | Hutchins, Water

Rights Laws in the Nineteen Western States (1971) pp. 3-7.

a

4

State’s power, in a sovereign capacity as the representative of all

of its people, to assure that the common nights of all are

protected.”

As pointed out by the Supreme Court of Hawaii here, this

sovereign governmental interest is akin to the public trust held by

the States in the beds of navigable waterways, and cannot be

alienated.

In recognition of the strong sovereign interest of the States in

this area, the federal government has traditionally deferred to the

States in their development of separate water law regimes

designed to meet their own particular needs. (See, e.g., California

v. United States (1978) 438 U.S. 645, 653, 663.)

It is therefore particularly surprising that the lower court chose

this area of state property law in which to establish the doctrine

that state supreme courts, in declaring what state property law is,

are subject to having their decisions invalidated in this Court or in

the lower federal courts based on the allegation that their

declaration of state law has “taken”’ vested private property rights

in violation of the Fifth and Fourteenth Amendments.

What is equally disturbing, the lower court brushed aside well-

established principles of this Court concerning ripeness and

justiciability in its haste to reach and decide this issue of “judicial

taking”. The issue should never have been reached.

Rather than heed these principles, which counsei and require

judicial restraint, the lower court instead proceeded to

characterize, define, and limit the content of Hawaii’s water law.

It reached its own independent conclusions concerning the import

of prior state case law concerning Hawaiian water nghts, which

conclusions were directly at odds with the Supreme Court of

Hawaii’s own characterization of prior Hawaii law. It also reached

its own independent conclusions concerning the interpretation and

future application of the state supreme court’s opinion, again in

flat contradiction of the state court’s own interpretation of the

decision which it had rendered. Finally, it forestalled any future

development or case-by-case -application of the principles set

? See id., at p. 6.

; 5

forth in the state supreme court’s decision by declaring that the

decision was invalid as a “taking” of vested rights.

In response to past arguments that a particular decision would

cause economic dislocations because of past reliance on earlier

case law, state courts have applied recognized institutional rules

(for example, prospective overruling) to ease any perceived

departure from past precedent, or have expressly ieft resolution of

such problems to future litigation. (E.g., City of Berkeley v.

Superior Court, supra, 26 Cal.3d 515, 533-536 (decision only

partially retroactive); National Audubon Society v. Superior

Court, supra, 33 Cal.3d 419, 447-448, 452 (competing interests to

be resolved in subsequent phase of litigation).) Here, for the first

time, the invocation and application of such institutiona! rules has

been rendered superfiuous by the interposition of a constitutiona!

bar to “change” (as perceived by the federal courts) in state court

case law.

The stultifying and intrusive impact that the principle

announced below would have upon the evolutionary, case-by-case

development of a State’s common law is evident. The decision is

particularly disturbing to the amici States because it has been

applied in an area in which, historically and by definition, the

sovereign has retained the governmental right to insist that

water—a vital public resource—be put only to reasonable and

beneficial uses that are consistent with the interests of the public

as a whole.

For that reason, the amici urge that this Court grant the

petition and summarily reverse, or, in the alternative, set the case

for plenary consideration.

ARGUMENT

I. THIS COURT SHOULD GRANT THE PETITION BECAUSE

THE LOWER COURT ERRONEOUSLY DECIDED AN ISSUE

THAT IS NOT RIPE FOR DECISION

Even assuming that court decisions can “take” property, the

Ninth Circuit acted prematurely in reaching and deciding that

issue here.

6

This Court has held in recent cases that the question whether

state action has resulted in an unconstitutional “taking” of

property is not ripe for judicial consideration until the State has

actually imposed specific, concrete limitations on the property

interest. (E.g., Williamson County Regional Planning Comm'n v.

Hamilton Bank (1985) __ U.S. __, 105 S.Ct. 3108, 3117-3121;

Agins v. City of Tiburon (1980) 447 U.S. 255, 262-263.)

Here, the general principles of Hawaiian water law set forth in

McBryde Sugar Company, Limited v. Robinson (Haw. 1973) 504

P.2d 1330, have yet to be applied to a specific situation. The

Supreme Court of Hawaii, in answering the questions posed by

the Ninth Circuit, declared that the McBryde decision does not, in

itself, result in a limitation upon any specific landowner’s water

rights, and that any such limitations will only be considered in

future proceedings, in which traditional equitable principles will

be applied, along with the “public use” doctrine, to determine

whether a particular diversion is permissible. (See Robinson v.

Ariyoshi, supra, 658 P.2d 287, 294-295.)°

>In the answers to the certified questions, the Supreme Court of

Hawaii stated that:

“[Wle did not [in McBryde] actually enjoin or explicitly

prohibit the diversion of water from the watershed. Rather, we

sought only to establish that these private usufructory interests were

not so broad as to include any inherent enforceable right to transmit

water beyond the lands to which such private interests appertained

“We did not say that such transfers are prohibited as a matter of

law, for McBryde cid not discuss and therefore cannot be

understood to be conclusive of the circumstances under which a

private party or the State could obtain injunctive relief against

unsanctioned transfers. And, even in circumstances where some

relief would be appropriate, the issuance of any injunction would of

course be subject to all of the considerations that serve to limit

equitable relief. These limiting doctrines include estoppel, laches,

and most particularly with respect to wrongful diversion of water,

the public use doctrine as applied to our unique situation. See,

Reppun v. Board of Water Supply, 656 P.2d 57 (Haw. 1982)

[holding that the public use doctrine may validate an otherwise

wrongful diversion ].

Therefore, McBryde does not actually limit any landowner’s

existing water right. Such limitations will only be imposed, if at

all, in future proceedings, as the general water law principles

established in McBryde are measured against each landowner’s

equitable interest and the public use doctrine.

The ripeness doctrine applies with particular force here because

even the general principles announced in McBryde are subject to

further definition and refinement in the context of their future

application to particular sets of facts. (See, e.g., Reppun v. Board

of Water Supply (Haw. 1982) 656 P.2d 57, 59, 72 (limiting broad

language in McBryde concerning the nature of riparian rights, and

noting that the doctrine will continue to evolve).)

In light of the decisions of this Court, which require that a

challenged regulation must be applied to a specific factual

situation before a taking claim can properly be assessed, the lower

court should never have reached the question whether the

decision in McBryde constituted a “taking” of vested rights. The

error being clear, the decision below should be summarily

reversed on this ground alone, quite apart from the merits of the

question whether court decisions can “take” property.

“Thus we take issue with the federal district court’s

characterization of McBryde as ‘restraining the free diversion of

surface waters for use outside the lands of the plaintiffs to which

they are appurtenant.’ [Citation omitted.] McBryde merely

established that there was no right on the part of the plaintiffs to

benefit from such diversions. But, as was the case in our pre-

existing law governing the transport of water, [footnote omitted]

diversions will be restrained only after a careful assessment of the

interests and circumstances involved indicates a need for restraint.

A delineation of these interests and circumstances were not before

us in McBryde and we did not order the cessation of any diversions.

Consistently with our statutory prerogative, we merely defined the

appropriate scope of the rights established in the case and left the

actual enforcement of these limitations to appropriate subsequent

actions brought by the parties, including the State.” (Emphasis in

the original.) (658 P.2d 287, 294-295.)

8

Hl. IN CONCLUDING THAT HAWAII HAD “TAKEN”

PROPERTY BY JUDICIAL DECISION, THE LOWER

COURT IGNORED BOTH THE UNSETTLED NATURE OF

HAWAII WATER LAW AND SUPREME COURT CASES

HOLDING THAT COURTS, IN DECLARING WHAT THE

LAW IS, ARE NOT SUBJECT TO “TAKING” CLAIMS

Putting aside the infirmities of the lower court decision on

ripeness grounds, its determination that the Supreme Court of

Hawaii committed a “judicial taking” is supported neither by the

facts nor by the decisions of this Court, which establish that

courts are not subject to “taking” claims in the exercise of their

law-declaring function.

A. The Lower Court’s Premise That McBryde Effected a

“Major Change” in Hawaii Law Conflicts With the Hawaii

Supreme Court’s Conclusion That Prior Cases Were in

Conflict and the Law Unsettled

The premise for the lower court’s legal conclusion that

McBryde constituted a “judicial taking” is its determination, after

its own independent review of state case law, that McBryde

effected a “major change” in state water law. (753 F.2d 1468,

1471.) In making this determination, the Ninth Circuit

completely ignored the state supreme court’s contrary conclusion

on that very question, which the court of appeals had expressly

requested. (See Robinson v. Ariyoshi, supra, 658 P.2d 287, 294,

306-309.)

In an exhaustive review of prior case law, the Supreme Court of

Hawaii concluded that the cases were in conflict, that the law was

unsettled, that confusion existed concerning the issues of water

law presented for decision, and that a decision harmonizing the

conflicting precedents was necessary. (/bid.) The state court

pointed out that the briefs of the parties themselves reflected this

conflict and uncertainty. (/d., at p. 309.) In such circumstances,

there was no basis for concluding, in the words of Justice

Stewart’s concurring opinion in Hughes (389 U.S. 290, 296-297),

that there had been an “unpredictable” change in state water law.

Precisely because prior iaw was unsettled, concerned parties, prior

to McBryde, could not comfortably predict what the Hawaii

Supreme Court’s determination would be concerning these issues.

9

Here, too, the lower court had no occasion to reach the issue

that it decided. The predicate for such a decision—a “major

change” in state water ilaw—was absent. Thus, even assuming

that judicial declarations of state property law can “take”

property, and further assuming that the standard for whether such

a taking has occurred is simply the predictability of the result, no

such taking was established here.

B. The Conclusion That Courts, in Declaring Law, Can

“Take” Property Conflicts With Supreme Court Precedent

Directly to the Contrary

Under our federal system, the definition of “property” depends

on state law. (Oregon ex rel. State Land Board v. Corvallis Sand

& Gravel Co. (1977) 429 U.S. 363, 378; Davies Warehouse Co. v.

Bowles (1944) 321 U.S. 144, 155.) And state courts, no less in

the area of property law than in other areas of state law, have the

discretion to overrule past decisions in order to correct perceived

error.

The argument that a court decision overruling a prior precedent

regarding state property law constitutes a prohibited taking of

property has been repeatedly rejected by this Court. (Tidal Oil

Co. v. Flanagan (1924) 263 U.S. 444, 450; Central Land Co. v.

Laidley (1895) 159 U.S. 103, 112; see Brinkerhoff-Faris Co. v.

Hill (1930) 281 U.S. 673, 680, 681, fn. 8; Great Northern Ry. v.

Sunburst Co. (1932) 287 U.S. 358, 365; but cf. Muhlker v. New

York & Harlem Railroad Co. (1905) 197 U.S. 544; Demorest v.

City Bank Co. (1944) 321 U.S. 36; Fox River Paper Co. v.

Railroad Commission (1927) 274 U.S. 271.)4

* Muhlker can be read as saying that courts are sometimes sut oct to

constitutional inhibitions in reconsidering earlier cases upon which

parties may have relied to their detriment. The case has not been so

construed by this Court, however. The Court has treated Muhlker as

solely a Contract Clause case. (Tidal Oil Co. v. Flanagan, s«pra, 263

U.S. 444, 452-453 (state court judgment alone, without a statute, cannot

impair contract); Ross v. Oregon (1913) 227 U.S. 150, 163-164.)

Demorest and Fox River involved challenges to state legis!ative

enactments that were alleged to constitute takings of property. Aithough

rejecting the challenge in both instances, this Court stated that a state

10

In Tidal Oil, supra, a case where a deed apparently valid when

executed had later been held invalid in light of a reinterpretation

of applicable law, this Court stated:

“The parties to this action have been fully heard in the state

court in the regular course of judicial proceedings and in

such a case the mere fact that the state court reversed a

former decision to the prejudice of one party does not take

away his property without due process of law. This was

expressly held in the case of Central Land Co. v. Laidley, 159

U.S. 103, 112.” (263 U.S. at p. 450.)

This result was confirmed in Brinkerhoff-Faris, supra, a case in

which Justice Brandeis explained the underlying rationale as

follows:

“The process of trial and error, of change of decision in

order to conform with changing ideas and conditions, is

traditional with courts administering the common law. Since

it is for the state courts to interpret and declare the law of the

State, it is for them to correct their errors and declare what

the law has been as well as what it is. State courts, like this

Court, may ordinarily overrule their own decisions without

offending constitutional guaranties, even though parties may

have acted to their prejudice on the faith of the earlier

decisions.” (281 U.S. at p. 681, fn. 8.)

This distinction between the courts and the other branches of

government for purposes of taking liability is well-grounded in the

inherent nature of what courts do and what gives legitimacy to

their workproduct.

The courts do not function as an instrument of the popular will,

nor as the agent of any particular segment of society,

governmental or private. Rather, their function is to act as neutral

court determination of the related subsidiary issue of what the claimant’s

property rights were under state law could not be used as a means of

evading federal jurisdiction over the claim that a state statute had taken

property. The Court stated that it would, in determining whether such

an evasion had been attempted, assess whether the state court’s

determination of state property law had a “fair or substantial basis”.

11

arbiters of the disputes that are placed before them in the form of

particular cases. Their decisions may redound to the benefit or

detriment of the other branches of government, or indeed may

have no effect on government at all; and this is a generalization

that holds true in cases involving the articulation of property law

principles: an alleged “change” in such principles may “hurt” or

“help” government, or may have no effect upon it at all. There is

thus no essential identity of interest between the courts and other

branches of the state or federal governments.

Nor does the nature of a court’s function confer upon it a free-

ranging charter to implement its concept of what the law should

be, in contradistinction to the role of a legislature. The Supreme

Court of Hawaii here, for instance, although it thought that the

“taro cultivation” test for allocation of water rights was a “quaint”

and perhaps inappropriate modern-day test for conferral of such

rights, nonetheless recognized that such a standard was

indisputably part of the law of Hawaii, and that any change would

be solely for the legislature to make. (McBryde, supra, 504 P.2d

1330, 1340, fn. 15.)

It is of course true that courts, including this Court,

occasionally make decisions that arguably will cause

unanticipated and adverse economic consequences among persons

who may have relied on an earlier contrary precedent. (See, e.g.,

Garcia v. San Antonio Metropolitan Transit Authority (1985)

__. U.S. __, 105 S.Ct. 1005, overruling National League of

Cities v. Usery (1976) 426 U.S. 833; cf. County of Oneida v.

Oneida Indian Nation (1985) __. U.S. __, 105 S.Ct. 1245, 1272

(voiding 1795 deed from Indian tribe, thereby “upset[ting] long-

settled expectations”).) But this truism does not render either

this Court or other courts subject to taking claims under the Fifth

Amendment.

The courts, both state and federal, have developed their own

institutional rules for easing any such perceived hardships. (See,

e.g., Oregon ex rel. State Land Board v. Corvallis Sand & Gravel

Co,, supra, 429 U.S. 363, 381-382 (overruling case in property

law area decided several years earlier); Chevron Oil Co. v. Huson

(1971) 404 U.S. 97, 105-109 (prospective overruling); Simpson

v. Union Oil Co. (1969) 396 U.S. 13 (denying request for

12

prospective overruling); City of Berkeley v. Superior Court, supra,

26 Cal.3d 515, 533-536 (overruling prior case that had held that

deeds to lands beneath San Francisco Bay conferred absolute

title; contrary conclusion that public trust interest impliedly

retained applied by court only to lands still wet, where reliance

had been minimal).) Indeed, in this very case, the Supreme

Court of Hawaii mentioned possible future application of

estoppel, laches, and the public use doctrine as mitigating

principles that could blunt or avoid any adverse economic impacts

of its decision. (Robinson v. Ariyoshi, supra, 658 P.2d 287, 294-

295.)

The lower court’s decision would render superfluous such

devices for softening the impact of any alleged departure from

past precedent. Its decision absolutely forbids a court, as a matter

of constitutional law, from departing from past precedent if to do

so would injure “vested” nghts.

Ill. ASSUMING THAT COURT DECISIONS CAN “TAKE”

PROPERTY, NO SUCH TAKING WAS ESTABLISHED

HERE

Even assuming, contrary to the above arguments, that the

Ninth Circuit properly reached the issue, and further, that state

court declarations of common law in the area of water rights are

subject to “taking” claims, no taking was established here. If

there is to be Taking Clause review in this area, a balancing test

should be applied, by analogy to this Court’s decisions involving

state regulations that restrict the use of private property. No such

balancing test was applied by the Ninth Circuit here. Nor could

such a test have been applied, given the unanswered questions

that exist concerning concrete application of the general

principles set forth in McBryde.

In dealing with alleged regulatory takings, this Court has

adopted a balancing test—under which public needs are weighed

against private interests and expectations—in determining

whether state regulation of property rights constitutes an

unconstitutional “taking” of such rights. (See, e.g., Williamson

County Regional Planning Comm'n v. Hamilton Bank (1985)

— US. —_, 105 S.Ct. 3108; Ruckelshaus v. Monsanto Co.

(1984) __ U.S. __, 104 S.Ct. 2862; Agins v. City of Tiburon

13

(1980) 447 U.S. 255; Kaiser Aetna v. United States (1979) 444

U.S. 164; Penn Central Transp. Co. v. New York City (i978) 438

U.S. 104.) .

In Penn Central, the Court stated that, “quite simply, [the

Court] 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 in

a few persons.” (438 U.S. at p. 124.) Generally, the Court stated,

it must consider the “economic impact of the regulation” on the

property owner, particularly the extent to which the regulation

“has interfered with distinct investment-backed expectations,”

and must balance these factors against the “character of the

governmental action.” (/bid.) An unconstitutional taking is more

likely to be found, the Court stated, where the state action

constitutes a “physical invasion” of the property interest than

where the interference arises from a “public program adjusting

the benefits and burdens of economic life to promote the common

good.” (Ibid.)°

In Pruneyard Shopping Center v. Robins (1980) 447 US. 74,

for instance, this Court applied the balancing test in reviewing a

state constitutional! provision that had been interpreted by the

state supreme court to entitle citizens to exercise free expression

and petition nghts on shopping center property. The question was

whether the state constitutional provision effected a “taking” of

the shopping center owner’s property rights in violation of the

Fifth and Fourteenth Amendments. (/d., at pp. 76-77, 82.) This

Court applied the balancing test and affirmed, concluding that

“there is nothing to suggest that preventing the appellaits from

* A similar balancing test has been applied in determining whether

state legislative action unreasonably impairs contracts in violation of the

Contract Clause of the Constitution. (See U.S. Const., art. I, §10, cl. 1;

Home Building & Loan Assn. v. Blaisdell (1934) 290 U.S. 398; United

States Trust Co. v. New Jersey (1977) 431 U.S. 1; Energy Reserves

Group, Inc. v. Kansas Power & Light Co. (1983) 459 U.S. 400, 410-

413.)

14

prohibiting this sort of activity will unreasonably impair the value

or use of their property as a shopping center.” (/d., at p. 83.)

If any such balancing test were to be applied to state judicial

decisions that give content to local water law, presumptive weight

would have to be accorded the sovereign state interest is assuring

that water allocation decisions comport with the interests of the

people as a whole.

This Court has held that the States, as an attribute of

sovereignty, reserve the right to exercise sovereign ownership and

control over their navigable waters and underlying beds. (See,

e.g., Pollard’s Lessee v. Hagan (1845) 44 U.S. (3 How.) 212,

224-229; Oregon ex rel. State Land Board v. Corvallis Sand &

Gravel Co., supra, 429 U.S. 363, 370-376.) Further, the common

law of the various States, following the English common law, has

generally recognized that flowing water, like light and air, is

publici juris, that is, it is owned by the whole community and thus

cannot be privately owned. (See, e.g., United States v. Gerlach

Live Stock Co. (1950) 339 U.S. 725, 744-745; Eddy v. Simpson

(1893) 3 Cal. 249, 252; Gould v. Eaton (1897) 117 Cal. 539;

Mason y. Hill (1833) 110 Eng.Rep. 692; Wood v. Waud (1849

Ex.) 154 Eng.Rep. 1047, 1058; 1 Wiel, Water Rights in the

Western States (3d ed. 1911) pp. 13-21 (hereinafter “Wiel’’).)

Under this principle of common ownership, the States are

deemed to hold navigable waters and the lands beneath them in

trust for certain public uses, principally navigation, commerce,

fisheries, and the preservation of recreational and environmental

values. ([/linois Central Railroad v. Illinois, supra, 146 U.S. 387;

National Audubon Society v. Superior Court, supra, 33 Cal.3d

419, 435-437.) Regarding the waters themselves, this public trust

responsibility is not limited to navigable waterways. (See United

Plainsmen v. North Dakota State Water Conservation Comm'n,

supra, 247 N.W.2d 457, 460-463; National Audubon Society,

supra, 33 Cal.3d at pp. 425-426, 434, 437, 441; Robinson v.

Ariyoshi, supra, 658 P.2d 287, 310.)

Thus, the States possess a sovereign governmental interest in

their waters that is different from and greater than their

regulatory powers over ordinary species of property. Since the

States retain a sovereign interest in water, a landowner acquires a

15

different interest in water than in the appurtenant lands. (See,

e.g., Wiel, at pp. 13-21.) A landowner’s water rights are

usufructuary rather than possessory, in that he does not own the

water but merely has a limited night to its use. (/bid.)

Accordingly, the balance between state and private interests in

water rights cases is markedly different than the balance in land

use cases. Because the State retains a sovereign interest in water

for public purposes, the state interest is qualitatively higher in

water nights cases; and since the landowner lacks a fee interest,

his reasonable expectations of non-interference are qualitatively

different.° Therefore, any balancing of state and private interests

in water rights cases would have to be presumptively struck in

favor of the sovereign powers of the State.

The Ninth Circuit of course made no effort whatsoever to

balance the competing interests of the State and the private

parties. It held that any interference with “vested” rights is

unconstitutional. For instance, although the decision mentions

private expenditures made in contemplation of a continued right

to divert waters to other watersheds (753 F.2d 1468, 1473)

(impliedly assuming that suca diversions will be prevented by the

future application of McBryde), there is absolutely no mention of

the public’s interest in reasonable and beneficial use of the State’s

waters.

In contrast, the Supreme Court of Hawaii was acutely

conscious of the implications of the arguments being advanced by

the private parties. The import of these arguments, it said, was

that “there existed no apparent common law restraint upon the

right of private parties to drain rivers dry for whatever purposes

they saw fit.” (Robinson v. Ariyoshi, supra, 658 P.2d 287, 311.)

° For cases bearing on the interrelationship between alleged regulatory

takings and a property owner’s “reasonable expectations” concerning his

property, see Penn Central Transp. Co., supra, 438 U.S. at pp. 124-125,

and the cases there cited: United States v. Willow River Power Co.

(1945) 324 U.S. 499; United States v. Chandler-Dunbar Water Power

Co. (1913) 229 U.S. 53; Demorest v. City Bank Co. (1944) 321 U.S. 36;

and Muhlker v. New York & Harlem Railroad Co. (1905) 197 U.S. 544.

16

In rejecting the interpretation of prior case law proffered by the

private parties, the state court concluded:

“Such a system may have been deemed both appropriate and

beneficial in other historical contexts. But this is no longer

the case. The reassertion of dormant public interests in the

diversion and application of Hawaii’s waters has become

essential with the increasing scarcity of the resource and

recognition of the public's interests in the utilization and flow

of those waters [footnote omitted]. (Emphasis added.)

(bid.)

Concerning the other two aspects of the balancing approach

used in the regulatory taking cases, the economic impact on the

private party and the extent to which distinct investment-backed

expectations have been interfered with, the lower court could not

have considered these elements even had it attempted a balancing

test. The balancing process of the regulatory taking cases involves

no set formula and each case involves an essentially ad hoc

inquiry, with the determination of whether a taking has occurred

depending upon the particular circumstances of each case.

(Ruckelshaus v. Monsantu Co., supra, 104 S.Ct. 2862, 2874-

2875; Penn Central Transp. Co. v. New York City, supra, 438

U.S. 104, 124.) As stated in Williamson County Regional

Planning Comm'n v. Hamilton Bank, supra, 105 S.Ct. 3108,

3119:

“[{ The three factors] simply cannot be evaluated until the

administrative agency has arrived at a final, definitive

position regarding how it will apply the regulations at issue to

the particular land in question.”

As discussed under heading I above, the general principles set

forth in McBryde Sugar Company, Limited v. Robinson have yet

to be applied to individual landowners. Only then, when those

principles are measured against the equities and evaluated for the

possible exceptions to their application provided by the public use

doctrine of Hawaii water law, will the balance between state and

private interests be determined. I[t is not inconceivable that

Hawaii courts may hold in future cases that a landowner’s

equitable interests or the public use doctrine will permit only a

17

modest adjustment of his past practices, or none at all. The

question whether the landowners’ rights have _ been

unconstitutionally taken is thus not just: able at this time. The

Hawaii courts should have been allowed to determine the rights of

individual landowners in subsequent proceedings.

CONCLUSION

The lower court disregarded established principles concerning

justiciability to reach and decide the “taking” issue. Its decision

conflicts with this Court’s cases and gravely impairs the ability of

the state courts to shape local law regarding a resource of vital

importance to their citizens—water.

This Court should grant the petition and summarily reverse.

Alternatively, the case should be set for plenary consideration.

November 1985

JOHN K. VAN DE Kamp

Attorney General of

the State of California

ANDREA SHERIDAN ORDIN

Chief Assistant

Attorney General

(Counsel of Record)

RICHARD C. JACOBS

Special Counsel to the

Attorney General

N. GREGORY TAYLOR

Assistant Attorney General

DENNIS M. EAGAN

Deputy Attorney General

3580 Wilshire Bivd., Rm. 800

Los Angeles, CA 90010

Telephone: (213) 736-2352

HAROLD M. BROWN

A.torney General of

the State of Alaska

MIKE GREELY

Attorney Geueral of

the State of Montana

Respectfully submitted,

BRIAN McKay

Attorney General of

the State of Nevada

NICHOLAS J. SPAETH

Attorney General of

the State of North Dakota

DAVE FROHNMAYER

Attorney General of

the State of Oregon

Davip L. WILKINSON

Attorney General of

the State of Utah

KENNETH O. EIKENBERRY

Attorney General of

the State of Washington

Jerr GOLTz

Senior Assistant

Attorney General

A. G. McCLINTOCK

Attorney General of

the State of Wyoming