California Eminent Domain Report : a blog following condemnation, inverse condemnation, and regulatory takings written by attorneys with Nossaman LLP.

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The U.S. Court of Appeals for the Federal Circuit recently issued an interesting opinion which addresses the question of whether or not a government agency's application of the Endangered Species Act can trigger a property owner's Fifth Amendment Takings Claim.

My colleague Ben Rubin has a more detailed post about the case, Klamath Irrigation District v. United States, on our firm's Endangered Species Law and Policy Blog.  More generally, the Klamath Irrigation District case analyzes whether the US Bureau of Reclamation's decision to reduce water delivery to farmers utilizing the Klamath River Basin in order to comply with the Endangered Species Act (ESA) can result in a taking of the farmers' water rights. 

The Bureau claimed it was required to reduce the water supply in order to avoid harming upstream threatened and endangered species, and if it did not undertake the reduction, it would face liability under the ESA.  The farmers, on the other hand, claimed that they had a compensable property interest in receiving the water, and the reduction in the water supply resulted in a taking.

While the case has a long procedural history, the bottom line is that the US Court of Appeals for the Federal Circuit at least acknowledged that (1) the Bureau could be liable for a taking even if it did so in order to comply with the ESA and (2) the farmers had a compensable property interest in receiving the water.  The case has currently been remanded to the district court with these concepts guiding the case going forward.

The case, while still left to be ultimately decided, is still a major victory for property rights advocates.  Nancie Marzulla, counsel for the Klamath water users, stated that "the government's decision not to deliver any water at all to the farmers in the Klamath Basin was devastating. We are extremely pleased that the Federal Circuit and Oregon Supreme Court have confirmed that these farmers have a property interest in water that they have put to beneficial use for over 100 years."