Casitas Mun. Water Dist. v. United States

• Decision Date: 27 February 2013
• Docket Number: No. 2012–5033.,2012–5033.
• Citation: 708 F.3d 1340
• Parties: CASITAS MUNICIPAL WATER DISTRICT, Plaintiff–Appellant, v. UNITED STATES, Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

708 F.3d 1340

CASITAS MUNICIPAL WATER DISTRICT, Plaintiff–Appellant,

v.UNITED STATES, Defendant–Appellee.

No. 2012–5033.

United States Court of Appeals, Federal Circuit.

Feb. 27, 2013.

Roger J. Marzulla, Marzulla Law, of Washington, DC, argued for plaintiff-appellant. With him on the brief was Nancie G. Marzulla.

Katherine J. Barton, Attorney, Environment and Natural Resources Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief was Ignacia S. Moreno, Assistant Attorney General.

Jennifer L. Spaletta, Herum Crabtree, of Stockton, CA, for amicus curiae Stockton East Water District.

Roderick E. Walston, of Best Best & Krieger LLP, Walnut Creek, CA, for amici curiae Westlands Water District & Sweetwater Company.

Clifford T. Lee, Deputy Attorney General, California Department of Justice, of San Francisco, CA, for amicus curiae, California State Water Resources Control Board. With him on the brief were Kamala D. Harris, Attorney General of California, and Mark Breckler, Chief Assistant Attorney General. Of counsel on the brief was Tara L. Mueller, Deputy Attorney General, of Oakland, CA.

John D. Echeverria, Vermont Law School, of South Royalton, VT, for amicus curiae Natural Resources Defense Council. Of counsel on the brief was Katherine S. Poole, Natural Resources Defense Council, of San Francisco, CA.

J. David Breemer, Pacific Legal Foundation, of Sacramento, California, for amicus curiae Pacific Legal Foundation.

Before NEWMAN, LOURIE, and SCHALL, Circuit Judges.

SCHALL, Circuit Judge.

Casitas Municipal Water District (“Casitas”) operates the Ventura River Project (the “Project”). The Project, which is owned by the U.S. Bureau of Reclamation (“BOR”), provides water to residential, industrial, and agricultural customers in Ventura County, California. Ventura County is located on the southern coast of California, approximately sixty miles northwest of Los Angeles.

On January 26, 2005, Casitas brought suit in the United States Court of Federal Claims, alleging that, by imposing certain operating criteria on the Project, the United States had taken its property without just compensation, in violation of the Fifth Amendment to the Constitution. On December 5, 2011, the Court of Federal Claims dismissed Casitas's complaint without prejudice, on the ground that Casitas's takings claim was not ripe. In dismissing the complaint, the court held that Casitas's claim was not ripe because Casitas had failed to demonstrate that the operating criteria had as yet caused it to deliver less water to its customers than it otherwise would have delivered. Casitas Mun. Water Dist. v. United States, 102 Fed.Cl. 443 (2011) (“Casitas V ”). Casitas now appeals the dismissal of its complaint. For the reasons set forth below, we affirm.

Background

I. The Ventura River Project

The Project includes Casitas Dam, Casitas Reservoir, the Robles Diversion Dam, and the Robles–Casitas Canal. The Project combines water from Coyote Creek and the Ventura River into Casitas Reservoir, also known as “Lake Casitas.” Casitas Reservoir is located on Coyote Creek and is formed by Casitas Dam. Coyote Creek provides approximately sixty percent of the Project's water. The remaining forty percent comes from the nearby Ventura River, which flows through Ventura County to the Pacific Ocean. Water from the Ventura River is diverted by the Robles Diversion Dam into a four-and-a-half-mile-long canal (the Robles–Casitas Canal), which carries water from the Ventura River to Casitas Reservoir. Water from the Reservoir is distributed to Casitas's customers via a conveyance system comprising thirty-four miles of pipeline, five pumping stations, and six balancing reservoirs.

The Project was constructed pursuant to a contract between BOR and Casitas dated March 7, 1956 (the “1956 Contract” or the “Contract”). Under the Contract, BOR agreed to build the Project in exchange for a commitment by Casitas to repay the construction costs over a forty-year period. Casitas also agreed to pay all operating and maintenance costs of the Project. Article 4 of the Contract states that Casitas “shall have the perpetual right to use all water that becomes available through the construction and operation of the Project.” Finally, the Contract requires that Casitas apply to the State of California to appropriate the water for the Project. State water permits were issued to Casitas on May 10, 1956, and the Project was completed and transferred to Casitas for operation in 1959.

Casitas's diversion and use of water for the Project are governed by a license granted to it by the State Water Resources Control Board (“SWRCB” or the “Board”), the state agency responsible for the issuance of permits and licenses for the appropriation of water in California. SeeCal. Water Code §§ 1225, 1250 (West 2012). The current version of Casitas's license (which is the version in effect at all times pertinent to the case) is dated January 17, 1986 (the “License”). The License provides that Casitas may divert up to 107,800 acre-feet of water per year from the Ventura River and other tributaries and may put up to 28,500 acre-feet of water per year to beneficial use for the Project.

II. Listing of the West Coast Steelhead Trout

In August of 1997, the National Marine Fisheries Service (“NMFS”) listed the West Coast steelhead trout as an endangered species under the Endangered Species Act (“ESA”), 16 U.S.C. §§ 1531–44. In its final listing, NMFS determined that the primary cause of the decline of the steelhead was “extensive loss of steelhead habitat due to water development, including impassable dams and dewatering.” Endangered and Threatened Species: Listing of Several Evolutionary Significant Units (ESUs) of West Coast Steelhead, 62 Fed.Reg. 43,937, 43,949 (Aug. 18, 1997). As a result of the listing, Casitas, its officers, and the BOR faced possible civil and criminal liability under section 9 of the ESA if continued operation of the Project resulted in harm to the steelhead trout. See16 U.S.C. §§ 1538(a)(1), 1540(a)–(b).

Following the NMFS listing, Casitas explored ways to mitigate the impact of Project operations on the steelhead population. A report by a consulting firm commissioned by Casitas and other local water agencies concluded that “[p]roviding access to habitats upstream of Robles Diversion is one of the most important actions that can be taken to improve steelhead populations in the Ventura River.” Casitas V, 102 Fed.Cl. at 446–47. The report also stated:

The best long-term passage can probably be provided by (1) constructing a fish ladder at Robles Diversion, (2) installing a fish collection/bypass facility in the canal, and (3) perhaps maintaining a low flow passage channel ... to Robles Diversion to assist fish in low flow years.

Id. at 447.

Eventually, on March 31, 2003, NMFS issued a biological opinion in which it concluded that construction and operation of a fish ladder at the Robles Diversion Dam would not jeopardize the continued existence of steelhead trout, but might result in incidental take of the fish.¹ The opinion thus included an incidental take statement relieving Casitas (the Project operator) and BOR (the Project owner) of liability under the ESA if the two implemented a set of nondiscretionary, reasonable, and prudent measures designed to minimize the incidental take of the steelhead. See16 U.S.C. § 1539(a)(1)(B), (a)(2)(A). In addition, the opinion called for a flow regime (“biological opinion operating criteria” or “operating criteria”) that would increase the amount of water to be bypassed by Casitas during steelhead migration periods in order to maintain an adequate flow of water in the Ventura River for fish passage to upstream spawning sites. Under protest, Casitas's board of directors passed a resolution implementing the biological opinion operating criteria on April 9, 2003.

Casitas formally opened the Robles fish ladder facility on December 9, 2004. The facility directs steelhead trout moving downstream in the Ventura River into a diversion flume, which then guides the fish into a ladder to prevent them from entering the Robles–Casitas Canal. The ladder also allows steelhead trout moving upstream to pass around the Robles DiversionDam. See Casitas Mun. Water Dist. v. United States, 543 F.3d 1276, 1291 Fig. 2 (Fed.Cir.2008) (diagram of the fish ladder facility).

III. Casitas's Suit in the Court of Federal Claims

On January 26, 2005, Casitas filed suit in the Court of Federal Claims. In its suit, Casitas asserted that, by imposing the biological opinion operating criteria, the United States had breached the 1956 Contract. In the alternative, Casitas asserted that, by imposing the operating criteria, the United States had taken Casitas's property without just compensation, in violation of the Fifth Amendment. Under its contract theory, Casitas sought reimbursement of the approximately $9.5 million that it had spent to build the fish ladder facility. Under its takings theory, it sought compensation for the water it claimed it had lost by the imposition of the operating criteria.

In due course, the government moved for summary judgment on the breach of contract claim and for partial summary judgment on the takings claim. On October 2, 2006, the Court of Federal Claims dismissed Casitas's contract claim. The court ruled that the costs associated with the construction of the fish ladder facility were operation and maintenance costs and thus not reimbursable under the Contract. Casitas Mun. Water Dist. v. United States, 72 Fed.Cl. 746, 751 (2006) (“Casitas I ”). In addition, the court ruled that, even if the government had breached the Contract, the sovereign acts doctrine shielded it from liability. Id. at 755.²

In a subsequent decision, issued on March 29, 2007, the Court of Federal Claims addressed the government's motion concerning Casitas's takings claim. Casitas Mun. Water Dist. v. United States, ...