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November 15, 2005 The Water Report Takings Precedents Reimbursement Property Attributes 5th Amendment Public Burdens Contractual Shift Treaty Rights NAFTA Rights protect spawning steelhead trout (a species listed under the Endangered Species Act), and dedicate substantial bypass flows to the facility (for which Casitas claims a taking of its water rights). The case is currently in discovery, and is expected to go to trial next year. CONSTITUTIONAL PROTECTION OF WATER RIGHTS All of these cases have a venerable pedigree, stretching back to Justice Holmes' opinion in International Paper Co. v. United States, 282 U.S. 399, 407 (1931): "The petitioner's right was to the use of the water; and when all the water that it used was withdrawn from the petitioner's mill and turned elsewhere by government requisition for the production of power it is hard to see what more the Government could do to take the use ... The Government purported to be using its power of eminent domain to acquire rights that did not belong to it and for which it was bound by the Constitution to pay." See also United States v. Gerlach Live Stock Co., 339 U.S. 725, 737 (1950): "[T]his Court has never permitted the Government to pervert its navigation servitude into a right to destroy riparian interests without reimbursement where no navigation purpose existed "); Dugan v. Rank, 372 U.S. 609, 625 (1963) (citations omitted): "[T]he United States was empowered to acquire the water rights of respondents by physical seizure ... such rights could be acquired by the payment of compensation `either through condemnation or, if already taken, through action [for just coitip:nsation] of the owners in the courts." Because water rights are a somewhat unusual type of property, these cases have forced the court to reach deeply into the fundamental nature of property rights and to articulate explicitly the kinds of government actions that can constitute a taking (e.g., "reasonable and prudent alternatives" contained in a biological opinion). See for example, Tulare Lake Basin Water Storage Dist. v. United States, 59 Fed. Cl. 246 (2003); see also Hage v. United States, 35 Fed. Cl. 147, 172 (1996) (citations omitted): "[T]he right to appropriate water can be a property right. Amici provide no reason within our constitutional tradition why water rights, which are as vital as land rights, should receive less protection... This court holds that water rights are not `lesser or diminished' property rights unprotected by the Fifth Amendment. Water rights, like other property rights, are entitled to the full protection of the Constitution." The Fifth Amendment to the United States Constitution states, in part, that private property shall not be "taken for public use, without just compensation." This clause of the Fifth Amendment, referred to as the Just Compensation Clause, requires that society as a whole, rather than a particular property owner, bear the burden of the exercise of eminent domain power in the public interest. As the court has often stated, "[t]he Fifth Amendment's guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Armstrong v. United States, 364 U.S. 40, 49 (1960). The Supreme Court has applied a similar principle to statutory provisions (e.g., the Endangered Species Act or Central Valley Project Improvement Act) which purport to abolish the contract rights of private parties. In United States v. Winstar Corp., the Supreme Court stated that just as the Court has recognized that the Constitution prohibits the government from forcing some people alone to bear public burdens which ... should be borne by the public as a whole, so we must reject the suggestion that the Government may simply shift costs of legislation onto its contractual partners who are adversely affected by the change in the law, when the Government has assumed the risk of such change. 518 U.S. 839, 883 (1996) (internal citations omitted). INTERNATIONAL WATER RIGHTS: THE NAFTA CASE An expropriation of water rights claim, not dissimilar to the cases discussed above, is currently pending in arbitration before the International Center for the Settlement of Investment Disputes in Washington, DC. The claim arises out of Mexico's withholding of approximately 1 million AF of water which, under a 1944 treaty, belongs to the United States (and, under the law of the United States, to those holding water permits from the State of Texas). The claim is brought by a group of water users — which include 17 Texas irrigation districts, 29 independent water rights holders, and the North Alamo Water Supply Corp. — in the Lower Rio Grande Valley (see map). The claim was filed under Chapter 11 of the North American Free Trade Agreement ( NAFTA) in August 2004. NAFTA requires compensation for expropriated property and discriminatory treatment of foreign investors. Copyright© 2005 Envirotech Publications; Reproduction without permission strictly prohibited.