## Facts

- The federal Klamath Irrigation Project diverts water from Upper Klamath Lake and the Klamath River for irrigation under federal project operations and related contracts.
- In 2001, during severe drought conditions, the Bureau of Reclamation sharply curtailed irrigation deliveries to maintain lake levels and river flows intended to protect ESA-listed fish, including coho salmon and the Lost River and shortnose sucker species.
- The Klamath Tribes and other basin tribes possess treaty-based fishing rights that imply federal reserved water rights sufficient to support fisheries, including instream flows.
- Those tribal reserved rights were recognized as having a “time immemorial” priority date, senior to other basin uses, including Klamath Project irrigation uses.
- Klamath Project irrigators and landowners sued the United States in the Court of Federal Claims seeking compensation (about $30 million), alleging that the 2001 curtailment took their water-related property interests and contract-based interests.
- The Court of Federal Claims entered judgment for the United States, concluding irrigators lacked a compensable property interest in water that had to remain instream to satisfy ESA requirements and senior tribal rights.
- The irrigators appealed to the U.S. Court of Appeals for the Federal Circuit.

## Issues

1. Whether Klamath Project irrigators had a compensable property interest in water deliveries curtailed in 2001 for ESA-related flow and lake-level requirements.
2. Whether senior federal reserved tribal water rights limited or defeated the irrigators’ asserted property and contract interests for purposes of a Fifth Amendment takings claim.
3. Whether the government effects a compensable taking when it restricts junior water uses to comply with pre-existing senior rights and governing federal law.

## Decision

- The Federal Circuit affirmed the judgment for the United States.
- The court held that no compensable taking occurred because the withheld water was required to satisfy senior tribal reserved water rights and related operational obligations.
- The court concluded the irrigators could not establish a property interest—under state law, contract, or otherwise—in water that was not legally available to them due to prior and paramount tribal rights.
- The Supreme Court later denied certiorari, leaving the Federal Circuit’s decision in place.

## Legal Principles

- A Fifth Amendment takings claim requires a cognizable, compensable property interest; a claimant cannot show such an interest in water that must remain instream to satisfy senior rights.
- Federal reserved tribal rights implied by treaty fishing rights may include instream flows sufficient to sustain fisheries and may have priority senior to later-developed irrigation uses.
- Contractual expectations of project water deliveries do not create an entitlement to water beyond what is available under governing priority rules and superior rights.
- Government action that enforces or operates within pre-existing limitations on a claimant’s rights (including superior reserved rights and applicable federal statutes) does not take property the claimant possessed free of those limitations.
- ESA-driven project operations, when consistent with and overlapping senior tribal instream rights, do not create a compensable taking of junior users’ interests in water they were never entitled to use.

## Conclusion

The Federal Circuit held that Klamath Project irrigators were not entitled to compensation for the 2001 curtailment because any asserted delivery, contract, or state-law interest was subordinate to senior tribal reserved water rights requiring instream flows, and restricting junior uses to satisfy those superior rights did not take a compensable property interest.


Baley v. United States, 942 F.3d 1312 (Fed. Cir. 2019)