Summary of a Recent
Judicial Development in
Environmental Law

Plaintiffs' Rights to Irrigation Water are Creatures of State Water Law
and General Contract Law

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In Klamath Irrigation District v. United States, 67 Fed. Cl. 504 (Fed. Cl. 2005), the United States Court of Federal Claims granted in part and denied in part the parties' cross-motions for partial summary judgment, holding that water rights are subject to the same rules that govern all forms of property and enjoy no elevated or more protected status. Water rights take the form of contract claims and the court resolved them as such.

Background

Since the late nineteenth century, the Klamath River Basin has been the site of extensive water reclamation and irrigation projects. Id. at 509. The Klamath Project, originally authorized in 1905, was one of the first to be constructed under the Reclamation Act. Id. It was operated by the Department of Interior's Bureau of Reclamation (Bureau) to provide water to about 240,000 acres of irrigable land and several national wildlife refuges. Id. Because the project lacked a major water storage reservoir, the Bureau could not store enough water during wet years for use in subsequent dry years, which made the Klamath Project more vulnerable to droughts. Id.

The plaintiffs, agricultural landowners and water, drainage, or irrigation districts in the Klamath River Basin area of Oregon and northern California, received water from the Klamath Project. Id. at 507. They traced their interests in the water to a number of sources, including federal reclamation law, general state water law principles, water-delivery contracts between the irrigation districts and the United States, deeds to real property purporting to convey a right to receive water, and a federal-state water law compact. Id. For decades, Klamath Basin landowners generally received as much water as necessary for irrigation. Id. at 512. However, in the spring of 2001, several government agencies produced findings indicating that the water levels in the basin were so low that certain endangered species were being threatened by the Klamath Project. Id. In January 2001, the Bureau sent a biological assessment of the Project's effect on the Coho salmon and requested the initiation of formal consultation with the National Marine Fisheries Service (NMFS) under section 7 of the Endangered Species Act (ESA). Id. at 513. Two months later, the same procedure was conducted in relation to the shortnose and Lost River suckerfish. Id. The assessments concluded that the Project was likely to have an adverse effect on the three species in violation of the ESA. Id. On April 5, 2001, the Fish and Wildlife Service (FWS) issued a final biological opinion stating that the Klamath Project threatened endangered species, and on April 6, 2001, the Bureau issued a revised operation plan that terminated the delivery of irrigation water to the plaintiffs for the year 2001. Id. at 513.

Arguments

The parties filed cross-motions for summary judgment regarding the nature and scope of the property interest and whether the United States was liable to pay just compensation for the taking of that interest.

Analysis and Holdings

The Fifth Amendment provides: "[N]or shall private property be taken for public use, without just compensation." U.S. Const. amend. V. To begin its discussion of the case, the court identified the plaintiffs' burden. Id. at 515. It stated, "[i]n order to prevail on their claim under this amendment, the plaintiff-irrigators must each establish that they had a property interest in the waters of the Klamath Basin as of the date of the alleged taking in 2001." Id.

After examining the evidence and relevant case law, the court determined that the plaintiffs were third party beneficiaries of contracts between the United States and the water districts for supply of irrigation water from the Klamath Basin reclamation project. Id. at 538. As such, the plaintiffs' claims against the government arising from temporary reduction in the supply of water were contract claims, not claims grounded in the Takings Clause. Id. Because Oregon follows the law of prior appropriation, the plaintiffs' rights to the Project's waters, provided through deeds and permits, were subservient to the prior interests of the United States in the same. Id. at 539. Although the plaintiffs had an expectation that the waters of the Klamath Basin would continue to flow uninterrupted for irrigation, those expectations did not give them any additional property rights against the United States or the application of the ESA than they actually obtained and possessed. Id. at 540.

The case was decided on August 31, 2005.