Water as property and habitat under the Takings Clause

Can preventing take (of endangered species) cause a take (of private property)?

That is the question I will be answering tomorrow morning, along with a distinguished panel, in our special session on Water Rights and Regulatory Takings at the 2014 Annual Water Resources Conference, sponsored by the American Water Resources Association.  I will be focusing on the interaction of the Endangered Species Act’s treatment of water as habitat for endangered wildlife, and the Fifth Amendment’s prohibition of uncompensated takings of private property for public use.

The law recognizes property rights in the use of water, and Western States generally treat these rights as appurtenances to real property.  The Takings Clause requires government to compensate owners of water rights when regulation amounts to a taking.

Meanwhile, a remarkable expanse of surface water has been designated as critical habitat for endangered wildlife under the Endangered Species Act, and more will be considered in the future.  PLF has challenged some of those designations. Where aquatic species are listed, and rivers and lakes are designated as critical habitat for them, then water diversions can result in direct take of these species and in adverse modification of their habitat. Federal and state wildlife and water resource agencies engage in numerous permitting programs that regulate diversions and storage of water in order to prevent or minimize take.

PLF’s landmark Supreme Court victories in Nollan v. California Coastal Commission and Koontz v. St. Johns River Water Management have been chiefly applied to land use permitting cases.  But they may also apply to permits that limit the use of water rights in order to protect wildlife.  Nollan and Koontz teach that exactions of property as a condition of permit approval are only constitutional if they have an essential nexus with and are roughly proportional to an adverse impact of the permitted action.

When these standards are applied to wildlife protection permits which reduce or eliminate the use of water rights, it appears that some conditions in these permits could violate the Takings Clause.  While some limited adjustment or coordination of diversion schedules on a case by case basis might pass constitutional muster, a demand to actually transfer a water right to the government, or agree to permanent reduction or even waiver of the water right, would not be a constitutionally valid condition of approval of an incidental take permit.