## Facts

- Casitas Municipal Water District operated the Ventura River Project in Ventura County, California, including the Robles Diversion Dam and the Robles–Casitas Canal, under a 1956 repayment contract with the United States.
- Casitas held contract-based and California-law water rights to divert water from the Ventura River into its canal for storage and delivery.
- After the West Coast steelhead trout was listed as endangered, the National Marine Fisheries Service issued a biological opinion concluding that project operations would likely cause an unlawful “take” absent changes.
- Federal requirements compelled construction and operation of a fish ladder at the Robles Diversion Dam and operating criteria that routed water to support fish passage.
- Operating the fish ladder required physically diverting a quantifiable portion of water away from the canal and back toward the river system, causing an ongoing loss of water otherwise available to Casitas.
- Casitas built and operated the fish ladder and made the required diversions under protest, asserting the diversions reduced water available under its rights and contract.

## Issues

1. Whether the compelled construction/operation of a fish ladder and the associated diversion of water is properly analyzed as a physical taking or a regulatory taking under the Fifth Amendment.
2. Whether summary judgment was properly granted against Casitas on its breach-of-contract claim under the 1956 repayment contract.

## Decision

- The Federal Circuit held that Casitas possessed a cognizable property interest in its appropriative water rights under California law, as well as contract rights under the repayment contract.
- The court reversed the Court of Federal Claims’ characterization of the takings claim as regulatory and held the claim should be analyzed as a physical taking because the government required a physical diversion of water away from Casitas’s canal, permanently depriving Casitas of use of that water.
- The court remanded the takings claim for further proceedings under physical takings standards, including determination of the extent of diversion and just compensation issues.
- The court affirmed summary judgment for the United States on the breach-of-contract claim, concluding the challenged actions did not constitute a contractual breach.
- Disposition: affirmed in part, reversed in part, and remanded.

## Legal Principles

- A Fifth Amendment takings claim requires a cognizable property interest; state-law appropriative water rights and contract rights may qualify as protected property interests.
- Government action that physically diverts a discrete, measurable resource from the owner’s control for a public purpose is analyzed as a physical taking, not under regulatory balancing tests.
- A public purpose such as endangered-species protection can satisfy public use but does not eliminate the duty to pay just compensation when property is physically taken.
- When physical-taking analysis applies, further proceedings generally address the scope of the appropriation (e.g., volume and duration), causation, and valuation of just compensation.

## Conclusion

The Federal Circuit held that compelled diversion of water to operate an ESA-related fish ladder is properly treated as a physical taking of water otherwise available to the water-right holder, requiring remand for physical-takings and compensation analysis, while affirming judgment for the United States on the separate breach-of-contract claim.


Casitas Mun. Water Dist. v. United States, 543 F.3d 1276 (Fed. Cir. 2008)