BOARD00208

• Board Meeting Date: 3/16/2004
• Description: ISF Section - Federal Ditch Bill Easements and Associated Bypass Flow Requirements
• Board Meetings - Doc Type: Memo

only a single strand, or partial interest in the fee simple, was restricted and did not focus its .
. examination on the fee simple interest in its entirety. Continuation ofthisanalysis might enable a
property owner to claim compensation where government regulations render valueless some, but
not all, of the property right ownership. It suggests that the government could be liable to a
property owner for simple reductions in property value associated with government regulation. .

~

"Takings" cases are extremely fact dependent and there is no easy per se test for determining
when a "taking" has occurred. .In general, courts have identified three factors of particular .
importance in detennining whether goverrnnen!action works a '.'taking'.::.(l) the. character of the
governrnentaction; (2}the economic'impact oftheregulation;-and (3) the extent to which the.
action interferes with reasonable investment-backed expectations. Penn Central Transportation
CO. Y. City of New York, 438 U.S. 104, 124 (1978).

The response by the Office of the G~neral Counsel (OGC)to the bypass-flow-as-a-"taking"
assertion consistently has been that access to a state decreed water right is not granted with or as
part of the water right; this is simply a real property issue resolved independent of the water right
and, thus, a water right is not "taken" if access is .restricted. il In essence, while a water right
allocates, in priority, the private rights to beneficially use water, it does not address or resolve real
property issues concerning access to the water right: Moreover, if access to the water right is
denied at one. location, the holder of the water right retairis the right to divert the water from a
new location.. To date, a full analysis of the legal complexities inherent in the "taking" question
presented by federal bypass flows has not occurred. Despite this, it remains the opinion ofOGC .
that the better legal argument would find no "taking" of a water right to occur when access across
National Forest System lands for a water right is conditioned by a bypass flow. We would note
that when questions have arisen in the past concerning the Forest Service authority to regulate a
water diversion facilities and water rights located on National Forest System lands, the U.S..
Supreme Court has. articulated the issues and addressed them, not as questions of water right, but
rather of issues pertaining to the federal right to control its property.l2

However, 'we do not believe that the effect of a bypass flow requirement on the water rights of a
Ditch Bill easement holder should be considered from a "takings" perspective. Rather, we believe
that the F ores! Service should consider the extent to which the rights conveyed to the easement
holder under the Ditch Bill limit the authority of the Forest Service to impose restrictions or
requirements, such as bypass flows, as FLPMA conditions in the Ditch Bill easement.

As noted above, the Ditch Bill expressly provides that "(e)xcept as otherwise provided in this
subsection; all righfs~of-way issued pursuant to this subsection are subject to all conditions and

II A water right does not include the right of way across federal lands Utah Power and.Light Co. v, United
States. 243 U.S. 389 (1917); The right to appropriate water does not include the right to burden the lands of another
with a ditch Snyder v. Colorado Gold Dredging Co. 181 F. 62, 69 (8'" Cir. 1910);The right of one person to conduct
water over the land of another is an interest in real estate and is not part of the water right Yunder v. Nichols. 1
Colo. 551 (1872), also see Application of Bubb, 610 P. 2d 1343 (1980)

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Utah Power and Light Co. v. United States. 243 U.S. 389 (1917) .

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