## Facts

- Casitas Municipal Water District operated the Ventura River Project, diverting water at the Robles Diversion Dam through a canal to Lake Casitas for municipal, industrial, and agricultural service.
- Casitas held a California license allowing diversion up to 107,800 acre-feet per year, but limiting water that could be put to beneficial use to 28,500 acre-feet annually.
- After NMFS listed West Coast steelhead trout as endangered under the ESA, Casitas’s operations risked “take” liability.
- NMFS issued a 2003 biological opinion requiring Casitas to construct and operate a fish passage facility and to bypass additional water to maintain habitat.
- Casitas built the fish ladder (opened in 2004) at a cost of about $9.5 million and claimed that required bypass flows reduced water available for diversion and storage.
- Casitas pursued Fifth Amendment compensation, asserting (1) loss of water allegedly diverted away from its use and (2) reimbursement of fish-ladder construction costs.

## Issues

1. Under California law, what compensable property interest in water did Casitas hold for Fifth Amendment takings purposes?
2. Whether the government could defeat takings liability under a *Lucas* “background principles” defense based on state-law limitations (including public trust principles).
3. Whether Casitas’s takings claim was ripe absent proof that bypass requirements actually reduced Casitas’s beneficial use (e.g., deliveries).
4. Whether the fish-ladder construction costs constituted a separate compensable taking.

## Decision

- The court held Casitas had a cognizable property interest, but only in the right to beneficial use of water, not an absolute ownership interest in the water itself.
- The court rejected the government’s *Lucas* background-principles defense on the record presented because the government did not show state law would have produced the same result as the federal requirements.
- The court held the fish-ladder construction expense was not separately compensable as a taking because Casitas’s contract obligated it to bear relevant operation, maintenance, and replacement costs.
- The court dismissed the takings claim without prejudice as unripe because Casitas had not shown actual interference with its beneficial use (no demonstrated reduction in lawful beneficial-use deliveries).

## Legal Principles

- Property interests for takings purposes are defined by state law; in California, the compensable water right is a usufructuary right limited to beneficial use.
- A claimant must show that government action interfered with the protected beneficial use; a diversion entitlement exceeding beneficial-use limits is not, by itself, a compensable interest.
- Under *Lucas*, the government must prove that an alleged restriction merely enforces limitations inherent in title under state property or nuisance law; failure to show state law would compel the same outcome defeats the defense.
- Takings claims require a concrete, present injury; where asserted losses are contingent on future conditions (such as demand or drought), dismissal for lack of ripeness is appropriate.
- Costs contractually assumed for operating and maintaining project facilities generally are not recoverable as Fifth Amendment takings damages.

## Conclusion

The Court of Federal Claims recognized Casitas’s protected interest as a California beneficial-use water right, rejected a categorical state-law “background principles” bar on the existing record, held fish-ladder construction costs noncompensable due to contractual cost-allocation, and dismissed the physical-takings claim without prejudice because Casitas had not shown an actual, present reduction in its beneficial use of water.


Casitas Mun. Water Dist. v. United States, 102 Fed. Cl. 443 (2011)