Klamath Irrigation District v. United States
635 F.3d 505
| Fed. Cir. | 2011Background
- Plaintiffs are fourteen water, drainage, and irrigation districts and thirteen landowners in Oregon and California challenging the United States' actions in the Klamath Project.
- ESA obligations forced the Bureau to modify operations in 2001, leading to the cessation of irrigation deliveries from April to July 2001 to protect endangered species.
- Plaintiffs asserted takings, Klamath Basin Compact, and breach-of-contract claims arising from the 2001 water reductions.
- The Court of Federal Claims dismissed these claims in two summary-judgment decisions; the Federal Circuit certified three questions to the Oregon Supreme Court.
- Oregon Supreme Court answered questions in Certification Decision (2010), holding 1905 Act did not preclude equitable/beneficial interests and outlining a three-factor test for such interests; some questions were not definitively resolved due to record limits.
- The Federal Circuit vacated and remanded to determine whether plaintiffs hold cognizable property interests under the three-factor test, and to assess sovereign acts and impossibility defenses on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the 1905 Act preclude equitable/beneficial interests? | Klamath users argue 1905 Act does not bar such interests. | Government contends 1905 Act precludes these interests. | Not precluded; remand to apply three-factor test. |
| Is beneficial use alone enough to confer a property interest? | Plaintiffs rely on state-law rights conferred by use and appurtenance. | Beneficial use alone is not sufficient under Oregon law. | No; three-factor test required (use, government acquisition for use/benefit, and contractual relationships). |
| Are equitable/beneficial interests subject to Adjudication in the Klamath Basin Adjudication? | Plaintiffs may pursue interests in adjudication. | Adjudication should determine rights only if appropriate. | Not a categorical exclusion; interests can be pursued outside adjudication per Oregon decision. |
| Does the sovereign acts doctrine bar breach-of-contract liability here, and is impossibility of performance required? | Impossibility should be required; sovereign acts do not excuse liability without it. | Sovereign acts doctrine provides complete defense regardless of impossibility. | Impossibility of performance is relevant; remand to evaluate whether performance was impossible and whether sovereign acts defense applies. |
Key Cases Cited
- Nevada v. United States, 463 U.S. 110 (1983) (three-factor framework for water-right interests and contracts)
- Ickes v. Fox, 300 U.S. 82 (1937) (state law governs usufruct rights in water)
- Nebraska v. Wyoming, 325 U.S. 589 (1945) (priority rights and state-law control of water rights)
- Horowitz v. United States, 267 U.S. 458 (1925) (sovereign acts doctrine foundations)
- Winstar Corp. v. United States, 518 U.S. 839 (1996) (impossibility defense within sovereign acts doctrine)
- Casitas Municipal Water District v. United States, 543 F.3d 1276 (Fed. Cir. 2008) (sovereign acts doctrine applied to ESA-driven water reductions)
- Seaboard Lumber Co. v. United States, 308 F.3d 1283 (Fed. Cir. 2002) (impossibility/impracticability standard for sovereign acts defense)
- Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206 (Fed. Cir. 2005) (property rights analyses under federal framework)