Casitas Municipal Water District v. United States

Casitas Municipal Water District (Casitas) (plaintiff) operated the Robles Diversion Dam as part of a water project providing water to customers in Ventura County, California. The dam diverted water from the Ventura River through a canal to Lake Casitas, a manmade reservoir. Casitas’ license specified it could divert up to 107,800 acre-feet of water annually, but Casitas could put at most only 28,500 acre-feet to beneficial use. In 1997 the National Marine Fisheries Service (NMFS) listed the West Coast steelhead trout as endangered, concluding its decline resulted primarily from habitat loss because of impassable dams and dewatering habitat. NMFS issued a biological opinion (BiOp) requiring Casitas to install fish-passage devices and let more water bypass its facility. Casitas opened the Robles fish passage in 2004, then sued the United States (defendant) claiming the BiOp either required Casitas to violate its contractual obligations to operate the water project or constituted a taking without compensation. Casitas sought reimbursement of the $9.5 million spent building the fish passage as contract damages and just compensation for the water it lost as a taking. The court dismissed the contract claim but concluded Casitas had a regulatory-takings claim. The appellate court affirmed the dismissal and remanded the takings claim. The two sides presented competing models for calculating damages. A government expert testified Casitas had enough water to meet demands since installing the fish passage and had supplied new customers without instituting conservation measures or hiking water prices. Instead Casitas had far more water available than the 28,500 annual acre-feet of use its license allowed.