Volume 8, Number 5 May 2013 EXECUTIVE EDITOR CONTENTS Robert M. Schuster, Esq. Argent Communications FEATURE ARTICLE Group Auburn, California The Federal Circuit Decision in Casitas: Does the Takings Clause Apply to Water Rights? by Roderick E. Walston, Best Best & Krieger, LLP, Walnut Creek, California. 127 EDITORIAL BOARD Andrea Clark, Esq. Downey Brand, LLP EASTERN WATER NEWS Sacramento, California Richard S. Davis, Esq. U.S. Fish and Wildlife Service Announces Five-Year Plan to List Hundreds Beveridge & Diamond, PC of New Endangered Species under the Federal Endangered Species Act . 133 Washington, D.C. Jeffrey M. Pollock, Esq. News from the West . 134 Fox Rothschild Princeton, New Jersey JUDICIAL DEVELOPMENTS Harvey M. Sheldon, Esq. Hinshaw & Culbertson Federal: Chicago, IL D.C. Circuit Upholds U.S. Fish and Wildlife’s Listing of the Polar Bear as Jill N. Willis, Esq. ‘Threatened’ . 137 Best Best & Krieger, LLP In re Polar Bear Endangered Species Act Listing and Section 4(d) Rule Litigation, Los Angeles, California ___F.3d___, Case No. 11-5219 (D.C. Cir Mar. 1, 2013). Patrick H. Zaepfel, Esq. Zaepfel Law, PC Lancaster, PA Eighth Circuit’s Decision in Iowa League of Cities Will Put Some EPA Letters under Appellate Review Scrutiny . 139 Iowa League of Cities v. U.S. Environmental Protection Agency, ___F.3d___, Case No. 11-3412 (8th Cir. Mar. 25, 2013). First Circuit Holds Plaintiffs’ Pre-Suit Notice Met the Clean Water Act’s ‘Reasonably Specific’ Requirement . 141 Paolino v. JF Realty, LLC, ___F.3d___, Case No. 12-2031 (1st Cir. Mar. 13, 2013). District Court Finds Release of PCBs from General Electric’s Transformers Exposed Company to CERCLA Operator Liability . 143 American Premier Underwriters, Inc. v. General Electric Company,___F. Supp.2d___, Case No. 1:05cv437 (S.D. Ohio Mar. 15, 2013). Continued on next page RGENT A COMMUNICATIONS GROUP WWW.ARGENTCO.COM District Court Holds ‘9-11’ Claims Are Subject to Federal Court Jury Finds State Farm Liable under Dismissal under the ‘Act of War’ Defense to CERCLA Federal False Claims Act for Claims Submitted to Liability . 145 the National Flood Insurance Program . 150 In re September 11 Litigation: Cedar & Washington Rigsby v. State Farm, Case No. 1:06-CV-433-HSO- Associates v. The Port Authority of New York and New RHW (SD Miss. April 8, 2013). Jersey, et al., ___F.Supp.2d___, Case Nos. 21 MC 101 (AKH), 08 Civ. 9146 (AKH) (S.D. NY Mar. 20, District Court Finds Appointment of Expert to Review 2013). a Consent Decree Is Proper when that Appointment Is Reasonable and Necessary . 153 District Court Holds State Law Claims Involving PCB U.S. v. City of Akron, ___F.Supp.2d___, Case No. Contamination Are Not Preempted by CERCLA 5:09CV272 (N.D. Ohio Mar. 13, 2013). Section 107(a) . 148 MPM Silicones, LLC v. Union Carbide Corporation, ___F.Supp2d___, Case No. 1:11-CV-1542 (N.D. NY Mar. 18, 2013). Publisher’s Note: Accuracy is a fundamental of journalism which we take seriously. It is the policy of Argent Communica- tions Group to promptly acknowledge errors. Inaccuracies should be called to our attention. As always, we welcome your comments and suggestions. Contact: Robert M. Schuster, Editor and Publisher, P.O. Box 506, Auburn, CA 95604-0506; 530-852-7222; [email protected] WWW.ARGENTCO.COM Copyright © 2013 by Argent Communications Group. All rights reserved. No portion of this publication may be reproduced or distributed, in print or through any electronic means, without the written permission of the publisher. The criminal penalties for copyright infringement are up to $250,000 and up to three years imprisonment, and statutory damages in civil court are up to $150,000 for each act of willful infringement. 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Information has been obtained by Argent Communications Group from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, or others, Argent Communica- tions Group does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Subscription Rate: 1 year (11 issues) $655.00. Price subject to change without notice. Circulation and Subscription Offices: Argent Communica- tions Group; P.O. Box 506; Auburn, CA 95604-0506; 530-852-7222 or 1-800-419-2741. Argent Communications Group is a division of Argent & Schuster, Inc.: President, Gala Argent; Vice-President and Secretary, Robert M. Schuster, Esq. Eastern Water Law & Policy Reporter is a trademark of Argent Communications Group. EWL FEATURE ARTICLE THE FEDERAL Circuit DECISION IN CASITAS: DOES THE TAKINGS Clause Apply TO Water RIGHTS? By Roderick E. Walston In a highly anticipated decision involving the gov- The combined decisions of the Federal Circuit ernment’s authority to regulate water rights, the Fed- and the Court of Federal Claims in Casitas will have eral Circuit Court of Appeals recently held that the broad national effect and significance, both because federal government was not required to pay compen- of the importance of the issues and the stature of sation under the Takings Clause of the Constitution the courts. The Federal Circuit is the appellate body for restricting a water district’s water rights in order to that hears appeals from the Court of Federal Claims, provide more water for the benefit of an endangered and the latter court has exclusive jurisdiction to hear species. Casitas Municipal Water District v. U.S., 708 claims for monetary relief against the United States. F.3d 1340 (Fed. Cir. Feb. 27, 2013). The Federal Cir- Thus, the Federal Circuit and the Court of Federal cuit held that water rights are “property” within the Claims decisions, unlike decisions of most other meaning of the Takings Clause, but that the property federal circuit and trial courts, apply throughout the right is limited to “beneficial use” of water. The court nation rather than only in limited circuit areas. then held that the government was not required to pay compensation for restricting the water district’s Background right to divert and store water in its reservoir, because diversion and storage in a reservoir are not a “benefi- The Casitas Project cial use” of water. In the earlier trial proceeding in Casitas, the U.S. The Casitas Municipal Water District (Casitas) op- Court of Federal Claims held that the government’s erates the Ventura River Project in southern Califor- restriction of the water district’s rights was not sup- nia. The project diverts water from the Ventura River ported by “background principles” of California water to a reservoir, Lake Casitas, where the water is stored law—specifically by the reasonable use doctrine and for later use for Casitas’ customers. The U.S. Bureau public trust doctrine—and therefore the government of Reclamation built the project and transferred it to could not defeat the water district’s taking claim Casitas after Casitas repaid the construction costs. In under the Supreme Court’s decision in Lucas v. South 1956, Casitas acquired an appropriative water right Carolina Coastal Council, 505 U.S. 1003 (1992); in permit for the project from the State Water Resources Lucas, the Supreme Court held that a government re- Control Board (SWRCB), which was later replaced striction of property that is supported by “background by a license. The license authorizes Casitas to divert principles” of state law is not an unconstitutional 107,800 acre-feet of water annually from the Ventura taking of the property. Since the government did not River for storage in the reservoir, and to put 28,500 appeal this aspect of the trial court’s decision, the trial acre-feet of water each year to “beneficial use” by court’s decision establishes a significant precedent delivering it from storage to its customers. regarding the “background principles” of California In 1997, the National Marine Fisheries Service water law. (NMFS) listed the west coast steelhead trout, which The opinions expressed in attributed articles in Eastern Water Law & Policy Reporter belong solely to the contributors and do not necessarily represent the opinions of Argent Communications Group or the editors of the Eastern Water Law & Policy Reporter. May 2013 127 is found in the Ventura River, as an endangered thus reducing Casitas’ water supply. 543 F.3d at species under the Endangered Species Act (ESA). 1291-1292. In 2003, NMFS issued a Biological Opinion that concluded that Casitas’ project was jeopardizing the The appellate court remanded the matter to the steelhead, and required Casitas to construct a fish lad- trial court to determine whether, under the physical der and divert a portion of its water supply to the fish taking doctrine, Casitas has “property” that has been ladder for the benefit of the steelhead. “taken.” The full court by a divided vote denied the United States’ petition for rehearing en banc.