United States Court of Appeals 

for the Federal Circuit ______________________ 

CASITAS MUNICIPAL WATER DISTRICT,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

______________________ 

2012-5033

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 05-CV-168, Senior Judge John P. Wiese.

______________________ 

Decided: February 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 defendantappellee. With her on the brief was IGNACIA S. MORENO, 

Assistant Attorney General. 

JENNIFER L. SPALETTA, Herum Crabtree, of Stockton, California, for amicus curiae Stockton East Water 

District. 
2 CASITAS MUNICIPAL WATER DIST v. US

RODERICK E. WALSTON, of Best Best & Krieger LLP, 

Walnut Creek, California, for amici curiae Westlands 

Water District & Sweetwater Company. 

CLIFFORD T. LEE, Deputy Attorney General, California Department of Justice, of San Francisco, California, 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, California. 

JOHN D. ECHEVERRIA, Vermont Law School, of South 

Royalton, Vermont, for amicus curiae Natural Resources 

Defense Council. Of counsel on the brief was KATHERINE 

S. POOLE, Natural Resources Defense Council, of San 

Francisco, California.

______________________ 

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 
 CASITAS MUNICIPAL WA TER DIST v. US 3

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 fourand-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 fortyyear period. Casitas also agreed to pay all operating and 

maintenance costs of the Project. Article 4 of the Contract 
4 CASITAS MUNICIPAL WATER DIST v. US

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. See

Cal. 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 
 CASITAS MUNICIPAL WA TER DIST v. US 5

Project resulted in harm to the steelhead trout. See 16

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 

1 ESA makes it illegal to “take” any species listed as 

endangered under the Act. 16 U.S.C. § 1538. “Take” is 

defined as “harass, harm, pursue, hunt, shoot, wound, 

kill, trap, capture, or collect, or to attempt to engage in 

any such conduct.” Id. § 1532(19). An “incidental take” is 

defined as a take that “result[s] from, but [is] not the 

purpose of, carrying out an otherwise lawful activity 

conducted by the Federal agency or applicant.” See 50 

C.F.R. § 402.02; see also 16 U.S.C. § 1539(a)(1)(B). 

 
6 CASITAS MUNICIPAL WATER DIST v. US

a set of nondiscretionary, reasonable, and prudent 

measures designed to minimize the incidental take of the 

steelhead. See 16 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 Diversion Dam. 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.
 CASITAS MUNICIPAL WA TER DIST v. US 7

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, 76 Fed. Cl. 100 (2007) (“Casitas II”). To resolve the takings issue, the government 

accepted for purposes of its motion Casitas’s characterization of its property right. Specifically, the government 

accepted Casitas’s claim that it possessed the right to 

divert 107,800 acre-feet of water per year from the Ventura River and the right to put 28,500 acre-feet of water to 

beneficial use each year. For purposes of summary judg2 Under the sovereign acts doctrine, “‘the United 

States[,] when sued as a contractor[,] cannot be held liable 

for an obstruction to the performance of the particular 

contract resulting from its public and general acts as 

sovereign.’” Yankee Atomic Elec. Co. v. United States, 112 

F.3d 1569, 1574 (Fed. Cir. 1997) (quoting Horowitz v. 

United States, 267 U.S. 458, 461 (1925). The doctrine 

recognizes that “[t]he two characters which the government possesses as a contractor and as a sovereign cannot 

be thus fused; nor can the United States while sued in the 

one character be made liable in damages for their acts 

done in the other.” Yankee Atomic, 112 F.3d at 1574 

(quoting Jones v. United States, 1 Ct. Cl. 383, 384 (1865)). 

 
8 CASITAS MUNICIPAL WATER DIST v. US

ment, the government challenged only Casitas’s claim 

that diversion of water from the Robles-Casitas Canal 

constituted a physical taking, arguing that any taking 

that took place was regulatory in nature. For its part, 

Casitas conceded that, if the alleged taking were deemed 

to be regulatory, it could not prevail.3 In other words, to 

dispose of the case in the trial court on summary judgment, the parties asked the court to decide only the 

question of whether a diversion of water from the RoblesCasitas Canal would constitute a physical or a regulatory 

taking. Ruling for the government, the court held that 

the alleged taking was regulatory because it involved the 

government’s restraint on Casitas’s use of its property 

rather than the government’s takeover of the property 

(either by physical invasion or by directing the property’s 

use to its own needs). Casitas II, 76 Fed. Cl. at 105–06. 

Based upon the parties’ stipulations, it therefore entered 

summary judgment for the government on Casitas’s 

takings claims and dismissed the complaint. Casitas 

appealed the dismissal of its complaint to this court.

IV. THE FIRST APPEAL

On appeal, we affirmed the dismissal of Casitas’s 

breach of contract claim in Casitas I. Casitas Mun. Water 

Dist. v. United States, 543 F.3d 1276, 1288 (Fed. Cir. 

2008) (“Casitas III”), reh’g and reh’g en banc denied, 556 

F.3d 1329 (Fed. Cir. 2009) (“Casitas IV”). However, we 

reversed the dismissal of Casitas’s takings claim in Ca3 Casitas’s concession was prompted by the fact 

that a plaintiff pursuing a regulatory takings claim must 

demonstrate a significant loss in value relative to the 

property as a whole. See Penn Cent. Transp. Co. v. City of 

New York, 438 U.S. 104, 130-31 (1978). No such limitation exists, however, in the case of a physical taking. 

Lorreto v. Teleprompter Manhattan CATV Corp., 458 U.S. 

419, 436 (1982). 

 
 CASITAS MUNICIPAL WA TER DIST v. US 9

sitas II and remanded the case for further proceedings on 

that claim. Casitas III, 543 F.3d at 1296–97.

Addressing the question of whether the alleged taking 

in this case was physical or regulatory, we noted that the 

government had admitted, for purposes of summary 

judgment, that Casitas had a property right in the water 

diverted from the Ventura River, Casitas III, 543 F.3d at 

1288, and that the government admitted that it had 

required Casitas to build the fish ladder facility, id. at 

1290. We also noted the government’s admission that the 

operation of the fish ladder caused water, which prior to 

the ladder’s construction flowed into Casitas Reservoir via 

the Robles-Casitas Canal, to be physically diverted away 

from the canal and into the fish ladder. Id. at 1291. 

Specifically, we noted the government’s admission that 

the operation of the fish ladder includes closing a gate 

located in the Robles-Casitas Canal, and that the closure 

of the gate causes water that would have gone into Casitas Reservoir via the Robles-Casitas Canal to be diverted into the fish ladder. Id. “These admissions,” we 

stated, “make clear that the government did not merely 

require some water to remain in stream, but instead 

actively caused the physical diversion of water away from 

the Robles-Casitas Canal—after the water had left the 

Ventura River and was in the Robles-Casitas Canal—and 

towards the fish ladder, thus reducing Casitas’s water 

supply.” Id. at 1291–92 (footnote omitted). In conclusion, 

we held that “[t]he government requirement that Casitas 

build the fish ladder and divert water to it should be 

analyzed under the physical takings rubric.” Id. at 1296. 

We thus reversed the decision of the Court of Federal 

Claims in Casitas II and remanded the case to the court 

for further proceedings. We closed the opinion with a 

footnote stating:

We have reversed the grant of summary judgment 

in favor of the government based solely upon our 

determination that the governmental actions at 
10 CASITAS MUNICIPAL WATER DIST v. US

issue in this case are properly analyzed under a 

physical taking rubric. On remand, after receiving the views of the parties and ruling on any 

matters left open during the summary judgment 

proceedings, the Court of Federal Claims will be 

in a position to determine the ultimate question of 

whether a taking occurred in this case.

Id. at 1297 n.17.

The government moved for panel rehearing and 

rehearing en banc. Concurring in the order denying the 

motions, the Casitas III majority explained that, because 

of the government’s concessions, it had not undertaken to 

decide “if, under California law, there can be a right to 

divert water.” Casitas IV, 556 F.3d at 1331 n.1. The 

panel majority further explained: “Nor did we undertake 

to reach a conclusion about whether Casitas will experience a reduction in the amount of water that it can beneficially use. These concerns and others are undoubtedly 

critical to the ultimate outcome of Casitas’s action, but 

they are not before us in this appeal.” Id. 

V. PROCEEDINGS ON REMAND FOLLOWING THE FIRST APPEAL

On remand, the Court of Federal Claims held a trial 

on Casitas’s takings claim. At the trial, Casitas alleged 

that the operation of the fish ladder facility at the Robles 

Diversion Dam had annually deprived it of 3,492 acre-feet 

of water previously granted it by the State of California. 

Casitas V, 102 Fed. Cl. at 451. Following the trial, the 

court issued a lengthy opinion in which it held that Casitas’s claim was not ripe. Id. at 471–72. Accordingly, the 

court directed the dismissal of Casitas’s complaint without prejudice, stating that the complaint could be “refiled 

(without the payment of additional filing fees) if and when 

plaintiff’s action accrues consistent with this decision.” 

Id. at 478.
 CASITAS MUNICIPAL WA TER DIST v. US 11

The court’s dismissal was based upon its conclusion as 

to the scope of Casitas’s property right. The government 

argued that Casitas had neither an absolute, unqualified 

right to divert a specific quantity of water at all times, nor 

a possessory right to all of the water it diverted into the 

Robles-Casitas Canal and stored in Casitas Reservoir. Id.

at 452–53. Under California law, the government urged, 

Casitas had a compensable property interest only in the 

amount of water it put to beneficial use, regardless of the 

amount of water it may have diverted or stored. Id. at 

453. According to the government, in order to establish a 

taking, Casitas had to demonstrate that the specific 

amount of water actually taken otherwise would have 

been put to beneficial use. Id. For its part, Casitas 

contended that, under the License, it possessed the right 

to divert up to 107,800 acre-feet of water annually and 

that this right was integral to its ability to meet its customers’ needs. In Casitas’s view, the court was required 

to focus not on the effect of the operating restrictions on 

beneficial use of the water, but, rather, on the effect of 

those restrictions on Casitas’s total water supply (including the water stored in the reservoir). Id. 

The Court of Federal Claims viewed the dispute 

between the parties as boiling down to one question: 

“[D]oes California law recognize a right to divert independent of a right to beneficial use?” Id. The court answered this question in the negative. First, the court 

stated that it did not read California law as recognizing a 

separate, independently compensable right to divert 

water. Id. Instead, the court concluded, “the only compensable right under California water law is a right to 

beneficial use.” Id. at 455. Noting that under the License 

Casitas’s water right was “‘limited to the amount [of 

water] actually beneficially used for the stated purposes,’” 

the court stated that “[t]he holder of an appropriated 

water right . . . receives nothing more than this right to 

beneficial use and possesses no legal entitlement to water 
12 CASITAS MUNICIPAL WATER DIST v. US

that is diverted but never beneficially used.” Id. at 454–

55. Thus, the court held that, in order to succeed on its 

claim, Casitas had to “demonstrate an interference 

with . . . beneficial use in order to establish a Fifth 

Amendment taking of its property.” Id. at 455. 

Addressing the dispute within this framework, the 

Court of Federal Claims concluded that Casitas’s right to 

“beneficial use [would be] affected when its customers 

(whether actual or potential) receive less water as a result 

of the biological opinion operating criteria than they 

otherwise would have received under the [prior operating] 

criteria.” Id. at 470. Because the court found, based upon 

the record before it, that Casitas had failed to show that 

the biological opinion operating criteria had thus far 

resulted in any reduction of water deliveries, it held that 

Casitas’s takings claim was not yet ripe. Id. at 471–72. It 

therefore ordered Casitas’s complaint dismissed without 

prejudice. Id. at 478. Casitas now appeals that dismissal. 

We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

DISCUSSION

I. FIFTH AMENDMENT TAKINGS

The Fifth Amendment to the Constitution proscribes 

the taking of private property “for public use, without just 

compensation.” U.S. Const. amend. V, cl. 4. When evaluating whether governmental action constitutes a taking, a 

court employs a two-part test. First, the court determines 

whether the claimant has identified a cognizable Fifth 

Amendment property interest that is asserted to be the 

subject of the taking. Second, if the court concludes that a 

cognizable property interest exists, it determines whether 

the government’s action amounted to a compensable 

taking of that interest. See, e.g., Palmyra Pac. Seafoods, 

L.L.C. v. United States, 561 F.3d 1361, 1364–65 (Fed. Cir. 

2009); Am. Pelagic Fishing Co. v. United States, 379 F.3d 

1363, 1372 (Fed. Cir. 2004); see also Air Pegasus of D.C., 
 CASITAS MUNICIPAL WA TER DIST v. US 13

Inc. v. United States, 424 F.3d 1206, 1212–13 (Fed. Cir. 

2005). 

“Because the Constitution protects rather than creates property interests, the existence of a property interest is determined by reference to existing rules or 

understandings that stem from an independent source 

such as state law.” Phillips v. Wash. Legal Found., 524 

U.S. 156, 164 (1998) (internal quotations and citation 

omitted); see also Maritrans Inc. v. United States, 342 

F.3d 1344, 1352 (Fed. Cir. 2003) (noting that “‘existing 

rules and understandings’ and ‘background principles’ 

derived from an independent source, such as state, federal, or common law, define the dimensions of the requisite 

property rights for purposes of establishing a cognizable 

taking”). 

II. THE POSITIONS OF THE PARTIES

Under the License, Casitas is permitted to divert 

water from the Ventura River for storage in Casitas 

Reservoir. Casitas V, 102 Fed. Cl. at 446. In that regard, 

Article X, section 2, of the California Constitution provides as follows: “The right to water or to the use or flow 

of water in or from any natural stream or watercourse in 

this State is and shall be limited to such water as shall be 

reasonably required for the beneficial use to be 

served . . . .” Cal. Const. art. X, § 2. Likewise, under the 

California Water Code, “[t]he right to the water or to the 

use or flow of water in or from any natural stream or 

watercourse in this State is and shall be limited to such 

water as shall be reasonably required for the beneficial 

use to be served.” Cal. Water Code § 100 (West 2012); see 

Erickson v. Queen Valley Ranch Co., 22 Cal. App. 3d 578, 

584 (1971) (“Plaintiff’s existing appropriative right is 

measured not by the flow originally appropriated and not 

by the capacity of the diversion ditch, but by the amount 

of water put to beneficial use at the delivery point plus 

such additional flow as is reasonably necessary to deliver 
14 CASITAS MUNICIPAL WATER DIST v. US

it.”). On appeal, Casitas and the government agree that, 

under California law, beneficial use is the proper measure 

of Casitas’s property right. See Appellant’s Br. 39 (“Beneficial use is the measure of the water right, and any water 

license that purported to authorize diversion of water 

without a sufficient showing of beneficial use would, in 

fact, be invalid.”); Appellee’s Br. 21–22 (“California law 

recognizes a right not to the use of water per se but only to 

its ‘beneficial use.’”). Where Casitas and the government 

part company is on the question of what, under the facts 

of this case, beneficial use encompasses.4 

A. CASITAS’S POSITION

Preliminarily, Casitas asserts that, in Casitas V, the 

Court of Federal Claims ignored the statement in Casitas 

III that “the governmental actions at issue in this case are 

properly analyzed under a physical taking rubric,” 543 

F.3d at 1297 n.17. Casitas states that the court’s holding 

that a taking did not occur when water was diverted away 

from the canal “cannot be squared with [the alleged 

holding in Casitas III] that the physical taking occurred 

at the Robles facility, and consisted of the Government’s 

appropriation for public use of water belonging to Casitas.” Appellant’s Br. 28. Casitas contends that, had the 

court applied the “physical taking rubric, as instructed” in 

Casitas III, it would have concluded that Casitas had 

experienced a total water loss of 3,492 acre-feet per year. 

Id. at 27–28. According to Casitas, this loss comprises 

1,915 acre-feet to operate the fish ladder and 1,577 acrefeet to operate and maintain the screen in the fish ladder 

4 Stockton East Water District has submitted an 

amicus brief in support of Casitas, urging reversal of the 

decision of the Court of Federal Claims. A similar amicus 

brief has been submitted by the Westlands Water District 

and Sweetwater Company. The SWRCB and the Natural 

Resources Defense Council have submitted amicus briefs 

in support of the government, urging affirmance.

 
 CASITAS MUNICIPAL WA TER DIST v. US 15

that prevents fish from being swept into the RoblesCasitas Canal. Id.

Turning to the concept of beneficial use, Casitas 

argues that the Court of Federal Claims erred in determining that, in this case, beneficial use does not encompass the right to divert and store annually 107,800 acrefeet of water, the amount set forth in the License. Id. at 

22. Under California law, Casitas contends, when the 

SWRCB issued the License, it necessarily determined 

that Casitas’s right to divert and store water is for beneficial use. Id. Citing California Water Code § 1610 (“the 

board shall issue a license which confirms the right to the 

appropriation of such an amount of water as has been 

determined to have been applied to beneficial use”) and 

Central Delta Water Agency v. State Water Resources 

Control Board, 124 Cal. App. 4th 245 (2004) (stating at 

260 that “[t]he Water Code . . . requires that the applicant 

set forth and the Board determine the beneficial purpose, 

place of use, amount of use and method of use to which 

the appropriated water will be put”), Casitas states: 

“There can be, quite simply, no variance between the 

amount one is entitled to divert under a valid California 

water license and the amount one beneficially uses: They 

are the same thing.” Appellant’s Br. 39. Casitas thus 

reasons that, “[b]y issuing a water license to Casitas, the 

[Board] . . . has already determined that Casitas can 

make beneficial use of 107,800 acre-feet of diversions per 

year,” id. at 41, and that the License “represents the 

[Board’s] determination that Casitas puts those quantities to beneficial use,” id. at 43.

Pointing to our determination in Casitas III that the 

government actively caused the diversion of water away 

from the Robles-Casitas Canal and towards the fish 

ladder, thus reducing Casitas’s water supply, 543 F.3d at 

1291–92, Casitas argues that its takings claim has already accrued and is not dependent on some future water 

loss. That is because, Casitas asserts, when the water 
16 CASITAS MUNICIPAL WATER DIST v. US

was diverted “Casitas actually, physically lost water that 

the Government appropriated—a taking of water that is 

forever gone.” Appellant’s Br. 52. 

Casitas further argues that its claim has accrued even 

if one accepts the holding of the Court of Federal Claims 

that a taking would only occur upon there being “an 

impact on plaintiff’s ability to deliver water.” Casitas V, 

102 Fed. Cl. at 473. Appellant’s Br. 52–53. Casitas urges 

that “the facts demonstrate that the biological opinion 

already reduced Casitas’s safe yield—that is, the water 

that Casitas had available to deliver to its customers—by 

an average 1,915 acre-feet per year.” Appellant’s Br. 54. 

According to Casitas, that is the portion of Casitas’s water 

that entered the fish ladder instead of remaining in the 

canal to be transported to Casitas Reservoir for later 

delivery to Casitas’s customers. Id. Casitas maintains 

that this safe-yield amount is the amount of water that it 

must have on hand in order to be able to serve its customers in periods of future drought.5 See Oral Argument at 

9:30–10:17, Casitas Mun. Water Dist. v. United States, No. 

2012-5033 (Fed. Cir. Nov. 6, 2012), available at

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

12-5033.mp3. 

Finally, relying on Lynch v. United States, 292 U.S. 

571 (1934), and Lion Raisins, Inc. v. United States, 416 

F.3d 1356 (Fed. Cir. 2005), Casitas claims that there was 

a taking of a contract right, which it argues it possessed 

under Article 4 of the 1956 Contract. Appellant’s Br. 49–

50. As noted above, Article 4 of the Contract states that 

5 As noted by the Court of Federal Claims, the term 

“safe yield” refers to “a commonly used water-planning 

tool that attempts to limit delivery risk by calculating the 

amount of water a project can safely deliver to its customers on an annual basis without drawing its reservoir down 

to a dangerously low level at the end of a critical drought 

period.” Casitas V, 102 Fed. Cl. at 462. 

 
 CASITAS MUNICIPAL WA TER DIST v. US 17

Casitas “shall have the perpetual right to use all water 

that becomes available through the construction and 

operation of the Project.” Casitas contends that, “[b]y 

appropriating 3,492 acre-feet of Ventura Project water,” 

the government has taken this right of perpetual use. 

Appellant’s Br. 49.

B. THE GOVERNMENT’S POSITION

The government argues that the Court of Federal 

Claims did not err in dismissing Casitas’s takings claim 

as unripe. The government contends that, under California water law, private rights in public waters are limited 

to the right of use and that California law recognizes a 

right not to water’s use per se, but only to its beneficial 

use. Appellee’s Br. 23–24. According to the government, 

the court correctly held that Casitas “must demonstrate 

an interference with th[e] beneficial use” authorized in 

the License “in order to establish a Fifth Amendment 

taking of its property.” Id. at 26.

Turning to Casitas’s principal argument, the government urges us to reject the contention that the License 

gives Casitas a compensable property right to divert 

water, even if, as the government sees it, that water is not 

applied to a beneficial use. The government points to the 

fact that the License enumerates particular purposes for 

which the Ventura River’s water may be used: “Municipal, 

Domestic, Irrigation, Industrial, Recreational and 

Standby Emergency uses.” Id. at 27. In the government’s 

view, the License then places “an overarching caveat on 

the scope of the license” when it states that “the amount 

of water to which this right [of use] is entitled and hereby 

confirmed is limited to the amount beneficially used for 

the stated purposes” and when it further limits the right 

of use by providing that “the amount of water put to 

beneficial use * * * shall not exceed 28,500 acre-feet per 

year.” Id. In addition, the government asserts that, 

according to its own records, for the 40-year period from 
18 CASITAS MUNICIPAL WATER DIST v. US

1966 to 2006, Casitas has used, on average, only 17,543 

acre-feet of water per year. Id. at 28. 

The government also urges us to reject the proposition—advanced by Casitas—that, in granting the License, 

the Board necessarily determined that Casitas could put 

to beneficial use 107,800 acre-feet of water per year. Id. 

The government contends that, since Casitas’s license 

limits it to the beneficial use of 28,500 acre-feet per year, 

it cannot divert 107,800 acre-feet per year to beneficial 

use. Id. It further contends that the 107,800 acre-feetper-year figure in the License does not represent a guarantee as to beneficial use, but, rather, simply states the 

maximum amount of water that Casitas may divert per 

year. Id. at 28–30. In addition, the government argues 

that Casitas is incorrect in contending that, in Casitas III, 

we instructed the Court of Federal Claims to proceed on 

remand on the basis that Casitas has a property interest 

in the diversion of water. Id. at 33–34. In the government’s view, Casitas III left open the critical question of 

the scope of Casitas’s property interest, as evidenced by 

the panel majority’s concurrence in the denial of rehearing and rehearing en banc in Casitas IV. Id. at 35–37. 

The government thus urges us to affirm the dismissal of 

Casitas’s takings claim as unripe on the ground that there 

has been no interference with Casitas’s right under the 

License to beneficial use of diverted water. 

As to actual accrual of the takings claim, the government argues that, in situations where governmental 

action and impingement on a compensable property 

interest are not coincident, a takings claim does not 

accrue until damages are apparent. Id. at 50–51. The 

government also argues that, under a physical takings 

rubric, a compensable taking “will not accrue unless and 

until Casitas experiences a compensable harm in the form 

of the loss of the beneficial use of water.” Id. at 58. The 

government contends that the trial court’s finding that up 

to this point there has been no encroachment on Casitas’s 
 CASITAS MUNICIPAL WA TER DIST v. US 19

right to beneficial use is supported by the record. Id. at 

41–49. 

Lastly, the government asserts that Casitas has 

waived its argument that it has suffered a taking of a 

contractual right, by failing to raise the argument prior to 

this appeal. Id. at 37. 

III. ANALYSIS

A. STANDARD OF REVIEW

This court reviews legal conclusions by the Court of 

Federal Claims de novo and factual findings for clear 

error. Estate of Hage v. United States, 687 F.3d 1281, 

1285 (Fed. Cir. 2012). The nature or scope of a compensable property interest in a takings analysis is a question 

of law. Tex. State Bank v. United States, 423 F.3d 1370, 

1378 (Fed. Cir. 2005). In addition, whether the Court of 

Federal Claims properly dismissed a complaint for lack of 

subject matter jurisdiction also is a question of law. 

Howard W. Heck and Assocs., Inc. v. United States, 134 

F.3d 1468, 1471 (Fed. Cir. 1998) (citing Wheeler v. United 

States, 11 F.3d 156, 158 (Fed. Cir. 1993)). Finally, the 

Court of Federal Claims must address ripeness as a 

“threshold consideration[]” before addressing the merits. 

See Palazzola v. Rhode Island, 533 U.S. 606, 618 (2001). 

B. APPLYING THE PHYSICAL TAKINGS RUBRIC

We first address Casitas’s argument that the Court of 

Federal Claims did not follow this court’s prior holding

that, on remand after the first appeal, “[t]he government 

requirement that Casitas build the fish ladder and divert 

water to it should be analyzed under the physical takings 

rubric.” Casitas III, 543 F.3d at 1296. As part of its 

argument, Casitas repeatedly asserts that, in Casitas III, 

we held that a taking had, in fact, already occurred based 

on the diversion of water down the fish ladder:
20 CASITAS MUNICIPAL WATER DIST v. US

So the trial court’s contrary holding that “the takings claim does not accrue when the water is actually diverted,” and that Casitas’s claim is 

therefore not ripe, cannot be squared with this 

Court’s holding that the physical taking occurred

at the Robles facility, and consisted of the Government’s appropriation for a public use of water 

belonging to Casitas.

Appellant’s Br. 28 (emphasis added); see also id. at 22 

(“For what was taken in this case (as this Court held) was 

a specific quantity of water that Casitas was entitled to 

divert and store in its reservoir under the terms of its 

License.”); id. at 27 (“This Court carefully explained that 

the taking consists of the Government-required diversion 

of water out of the Robles-Casitas canal and into the fish 

ladder—an appropriation of Casitas’s water for a public 

use . . . .”); id. at 36 (“The fact is that (as this Court held) 

the physical appropriation of water belonging to Casitas 

began when the fish ladder went into operation in 2005, 

and the location of the taking was the Robles facility.”). 

In support of its argument, Casitas highlights statements 

from this court’s prior opinions that water diverted into 

the canal “has become the property of Casitas” and that 

“[t]he operation of the fish ladder diversion works thus 

takes the property of Casitas.” Id. at 28 (quoting Casitas 

IV, 556 F.3d at 1332); see also Appellant’s Br. 36–37 

(quoting Casitas III, 543 F.3d at 1296, 1294, 1291). In 

essence, Casitas argues that, in the first appeal, this court 

determined that the diversion amounted to a physical 

taking, and that the Court of Federal Claims thus erred 

in not finding in Casitas’s favor on its takings claim on 

remand. 

Casitas’s argument fails, however, because it reads 

too broadly from our prior opinions. Any statements in 

Casitas III or Casitas IV addressing the scope of Casitas’s 

property interest in the diverted water must be read in 

light of (1) the government’s temporary concessions for 
 CASITAS MUNICIPAL WA TER DIST v. US 21

purposes of summary judgment and Casitas III’s review of 

the grant of summary judgment based upon those concessions; and (2) the narrowness of the issue actually addressed in Casitas III. We discuss these points in turn. 

First, as noted above, in order to put the case in a 

posture for summary judgment, the government made 

certain temporary concessions regarding the scope of 

Casitas’s property interest. Casitas III, 543 F.3d at 1297 

n.17 (“[T]he government made certain conditional concessions in order to put the case in a posture for summary 

judgment.”); Casitas V, 102 Fed. Cl. at 450 (“[D]efendant 

filed a summary judgment motion in which it accepted, 

for the purposes of the motion, plaintiff’s characterization 

of its property right.”). Specifically, the government 

conditionally accepted Casitas’s assertion that it had a 

right to divert up to 107,800 acre-feet of water per year 

and may put up to 28,500 acre-feet of water per year to 

beneficial use. Casitas III, 543 F.3d at 1288. Since they 

were integral to the Court of Federal Claims’s decision in 

Casitas II, this court relied on those concessions throughout the first appeal. Casitas III, 543 F.3d at 1288; Casitas 

IV, 556 F.3d at 1331. The government’s concessions (and 

this court’s reliance on those concessions) only persisted, 

however, through the first appeal. See Begnaud v. White, 

170 F.3d 323, 327 (6th Cir. 1948) (noting that concessions 

made solely for the purposes of summary judgment are 

“no longer effective” if the motion is denied). We thus find 

misplaced Casitas’s reliance on statements from Casitas 

III and Casitas IV based on the government’s concessions 

for purposes of summary judgment. 

The narrowness of the issues addressed in the first 

appeal also undercuts Casitas’s position. Prior to the 

instant appeal, this court has neither substantively 

considered the scope of Casitas’s rights in the diverted 

water nor addressed whether a taking actually occurred. 

Casitas IV, 556 F.3d at 1331 n.1 (“Because of the government’s concessions, the majority did not undertake to 
22 CASITAS MUNICIPAL WATER DIST v. US

decide if, under California Law, there can be a right to 

divert water.”); Casitas III, 543 F.3d at 1297 n.17 (“On 

remand, . . . the Court of Federal Claims will be in a 

position to determine the ultimate question of whether a 

taking occurred in this case.”). Instead, as acknowledged 

by Casitas, the only currently relevant issue before this 

court in the first appeal was the trial court’s determination, at summary judgment, that a regulatory takings 

analysis rather than a physical takings analysis should 

apply to Casitas’s claim. Appellant’s Br. 20 (“In fact, the 

entire reason behind the first appeal was to determine 

whether a physical or regulatory takings analysis applied.”); see Casitas III, 543 F.3d at 1288–97. The precise 

scope of Casitas’s property right was, in fact, not addressed until the trial leading to the opinion now on 

appeal. Casitas V, 102 Fed. Cl. at 445 n.2 (“Although an 

examination of the nature of a claimant’s property interest is generally a threshold inquiry in a takings case, that 

issue was not addressed as part of the earlier proceedings 

before this court.”). 

For these reasons, any statements in Casitas III or 

Casitas IV seeming to characterize Casitas’s property 

right or an alleged taking in no way bound the Court of 

Federal Claims on remand, because those statements 

were either based explicitly and solely on the government’s now-obsolete concessions or related to issues not 

actually addressed in the first appeal. See Begnaud, 170 

F.3d at 327; Nat’l Am. Ins. Co. v. United States, 498 F.3d 

1301, 1306 (Fed. Cir. 2007) (noting that the Court of 

Federal Claims is not bound by statements “unnecessary 

to the decision in the case”). Thus, on remand, the Court 

of Federal Claims was correct to perform a full physical 

takings analysis, beginning with an assessment of the 

scope of Casitas’s right to the diverted water. See, e.g., 

Palmyra Pac. Seafoods, 561 F.3d at 1364–65. We now 

address that assessment.
 CASITAS MUNICIPAL WA TER DIST v. US 23

C. THE SCOPE OF CASITAS’S PROPERTY INTEREST—

CALIFORNIA LAW

In the opinion currently on appeal, the Court of 

Federal Claims held that “the only compensable right 

under California water law is a right to beneficial use” 

and that “[t]he holder of an appropriated water right, in 

other words, receives nothing more than this right to 

beneficial use and possesses no legal entitlement to water 

that is diverted but never beneficially used.” Casitas V, 

102 Fed. Cl. at 455. We agree with that holding and with 

the court’s assessment of the scope of Casitas’s rights. 

Under well-established California law, “the right of 

property in water is usufructuary, and consists not so 

much of the fluid itself as the advantage of its use.” Eddy 

v. Simpson, 3 Cal. 249, 252 (1853), quoted in United 

States v. State Water Res. Control Bd., 182 Cal. App. 3d 

82, 100 (Cal. Ct. App. 1986). In other words, a party 

having a right to use a given amount of California surface 

water does not have a possessory property interest in the 

corpus or molecules of the water itself. See People v. 

Shirokow, 26 Cal. 3d 301, 307 (1980) (“Both riparian and 

appropriative rights are usufructuary only and confer no 

right of private ownership in the watercourse.”); Kidd v.

Laird, 15 Cal. 161, 180 (1860) (stating that a right to use 

“carries with it no specific property in the water itself”); 

Allegretti & Co. v. Cnty. of Imperial, 138 Cal. App. 4th 

1261, 1271 n.5 (Cal. Ct. App. 2006) (“Water rights carry 

no specific property right to or in the corpus of any water.”); Cent. and W. Basin Water Replenishment Dist. v. S. 

Cal. Water Co., 109 Cal. App. 4th 891, 905 (Cal. Ct. App. 

2003) (“Water rights holders have the right to take and 

use water but they do not own the water and cannot 

waste it.”) (internal quotations omitted). The California 

Water Code reflects this view, clarifying that it should not 

be “construed as giving or confirming any right, title, or 
24 CASITAS MUNICIPAL WATER DIST v. US

interest to or in the corpus of any water.” Cal. Water 

Code § 1001 (West 2012). 

Despite this preclusion on a private entity’s ownership of the corpus of water itself, appropriative water 

rights (such as those at issue here) have long been recognized by California courts as private property subject to 

ownership and disposition. Thayer v. Cal. Dev. Co., 164 

Cal. 117, 125 (1912) (“Under the law of this state as 

established at the beginning, the water-right which a 

person gains by diversion from a stream for a beneficial 

use is a private right, a right subject to ownership and 

disposition by him, as in the case of other private property.”); Wells A. Hutchins, The California Law of Water 

Rights 120–21 (1956); see also State Water Res. Control 

Bd., 182 Cal. App. 3d 82, 100 (Cal. Ct. App. 1986) (“It is 

equally axiomatic that once rights to use water are acquired, they become vested property rights. As such, they 

cannot be infringed by others or taken by government 

action without due process and just compensation.”). In 

other words, although a private entity cannot own water 

itself, the right to use that water is considered private 

property. The California Water Code reflects this legal 

framework and describes appropriative rights as being 

“acquired.” Cal. Water Code § 102 (West 2012) (“All 

water within the State is the property of the people of the 

State, but the right to the use of water may be acquired by 

appropriation in the manner provided by law.”) (emphasis 

added). 

Although appropriative rights are viewed as property 

under California law, those rights are limited to the 

“beneficial use” of the water involved. See Hufford v. Dye, 

162 Cal. 147, 153 (1912) (“It is the well-settled law of this 

state that one making an appropriation of the waters of a 

stream acquires no title to the waters but only a right to 

their beneficial use and only to the extent that they are 

employed for that purpose.”). This principle, set forth 

explicitly in the California Constitution, limits water 
 CASITAS MUNICIPAL WA TER DIST v. US 25

rights holders to the use of the amount of water “reasonably required for the beneficial use to be served . . . .” Cal. 

Const. art. X, § 2. The same limitation is found in the 

California Water Code. See Cal. Water Code § 100 (West 

2012) (adopting the constitutional language related to 

beneficial use); id. § 1240 (limiting appropriations to 

“some useful or beneficial purpose”). California courts 

have found the beneficial use limitation a valid exercise of 

state power to regulate water rights for public benefit and 

have deemed it an “overriding constitutional limitation” 

on those rights. State Water Res. Control Bd., 182 Cal. 

App. 3d at 105–06. 

D. THE SCOPE OF CASITAS’S PROPERTY INTEREST—

ANALYSIS

With that background, we now turn to the scope of 

Casitas’s property interest, addressing first Casitas’s 

argument that the License demonstrates that the SWRCB 

determined Casitas can make beneficial use of, and thus 

has a potentially compensable property right in, 107,800 

acre-feet of water per year. Appellant’s Br. 38–48. Casitas relies on Central Delta Water Agency v. State Water 

Resources Control Board, 124 Cal. App. 4th 245 (Cal. Ct. 

App. 2004), to argue that, because the Board is the entity 

that determines “the estimated amount which can be put 

to beneficial use,” “[b]y issuing a water license to Casitas, 

the [Board] . . . has already determined that Casitas can 

make beneficial use of 107,800 acre-feet of diversions per 

year.” Appellant’s Br. 41. 

In Central Delta, various parties challenged a decision 

of the SWRCB issuing permits for the appropriation of 

water for a wetlands project and certifying a final environmental impact report for the project. Central Delta, 

124 Cal. App. 4th at 252. In so doing, the parties argued 

that the Board’s decision was defective because the permits, which allowed the impoundment of water in a 

reservoir, failed to identify any actual beneficial use (or 
26 CASITAS MUNICIPAL WATER DIST v. US

estimated amounts of beneficial use) for the impounded 

water. Id. at 253. Agreeing, the appeals court found that 

the Board’s general statement of potential use did not 

satisfy its statutory and constitutional obligations to 

determine “that an actual, intended beneficial use, in 

estimated amounts [would] be made of the impounded 

waters.” Id. The court therefore reversed the decision of 

the trial court sustaining the Board’s decision and ordered 

the court to set aside the permits and to direct the Board 

to require amendment of the permit applications. Id. 

In this case, in the License, the Board set a limit of 

107,800 acre-feet per year on the total amount of water to 

be diverted by Casitas. At the same time, it limited the 

amount of water that could be put to beneficial use to 

28,500 acre-feet per year, thereby satisfying the requirements set forth in Central Delta. It is the License’s diversion limitation—set at 107,800 acre-feet per year—that 

Casitas seeks to change from a limitation to a right, i.e., a 

right to beneficial use. Central Delta, however, does not 

stand for the proposition that the presence of a maximum 

diversion amount in a water license demonstrates that 

the Board has determined that that maximum amount 

can be applied to beneficial use. In addition, here the 

Board expressly limited the amount “placed to beneficial 

use” at only 28,500 acre-feet per year.6 Central Delta does 

not help Casitas. 

6 Framing this argument slightly differently, Casitas asserts that “[t]here can be, quite simply, no variance between the amount one is entitled to divert under a 

valid California water license and the amount one beneficially uses: They are the same thing.” Appellant’s Br. 39. 

In essence, Casitas argues that two alleged predicates—

(1) the License gives Casitas a right to divert 107,800 

acre-feet of water per year and (2) in a valid license, 

rights are limited to beneficial use—lead to a conclusion 

that Casitas’s alleged right to divert 107,800 acre-feet of 

 
 CASITAS MUNICIPAL WA TER DIST v. US 27

We now turn to the question of whether the storage of 

water or diversion to storage of water, in and of themselves, constitute beneficial uses. We conclude that they 

do not. The Court of Federal Claims correctly determined 

that the state of California does not categorize storage or 

diversion for storage, in and of themselves, as beneficial 

uses. See Lindblom v. Round Valley Water Co., 178 Cal. 

450, 456 (1918) (“Storage of water in a reservoir is not in 

itself a beneficial use. It is a mere means to the end of 

applying the water to such use.”); see also Bazet v. Nugget 

Bar Placers, 211 Cal. 607, 618 (1931) (same). The language of the License supports this interpretation of the 

beneficial use limitation, clearly identifying only “withdrawal from storage”—in contrast to “collection to storage”—as a beneficial use. J.A. 7781. 

Casitas relies on Meridian v. City and County of San 

Francisco, 13 Cal. 2d 424, 449 (1939), for that case’s 

statement that “the storage of water for the purposes of 

flood control, equalization and stabilization of flow and 

future use, is included within the beneficial uses to which 

the waters of the rivers and streams of the state may be 

put” under the doctrine of beneficial use. Appellant’s Rep. 

Br. 15–16 (emphasis added). In Meridian, the California 

Supreme Court denied a downstream landowner’s request 

to enjoin the upstream governmental entities’ proposed 

increase in storage because “the water allotted to the 

plaintiff by the trial court is abundantly sufficient in 

amount to supply all of its needs and . . . no substantial 

damage to its land has in that respect resulted by reason 

of the city’s storage.” Meridian, 13 Cal. 2d at 451. The 

water per year must therefore be for beneficial use. This 

argument fails, however, because diversion and beneficial 

use are not the same thing and because the License 

clearly entitled Casitas only to the amount “placed to 

beneficial use,” an amount limited to 28,500 acre-feet per 

year.

 
28 CASITAS MUNICIPAL WATER DIST v. US

issue in Meridian was whether the state had the right to 

divert to storage water “in excess of the present and 

future needs” of downstream appropriators. Id. at 444. 

The court found that when such an excess exists, “it is for 

the state to say whether, in the conservation of this 

natural resource in the interest of the public, the diversion is excessive.” Id. at 450. Thus, Meridian stands for 

the narrow proposition that government diversion of 

excess water for storage is not improper when holders of 

downstream rights are not affected. Meridian does not, 

however, stand for the broader proposition asserted by 

Casitas—i.e., that an appropriative rights holder’s diversion to storage of water that may be put to “future use” 

necessarily amounts to a beneficial use, in and of itself.

In addition to seeking to expand its limit on beneficial 

use from 28,500 acre-feet per year to 107,800 acre-feet per 

year, Casitas asserts that its compensable property right 

is not limited to water put to beneficial use. See Appellant’s Rep. Br. 5 (“[T]he Government cannot prevent 

Casitas from accessing water it was entitled to divert 

under its California permit without paying just compensation.”); see also id. at 6–7; Appellant’s Br. 44–48. We 

find this argument unpersuasive. Pertinent sections of 

the California Water Code, relevant case law, and the 

language of the License itself demonstrate that the water 

rights conveyed to Casitas in the License were limited to 

the water beneficially used. 

Section 1240 of the California Water Code states that 

“[t]he appropriation must be for some useful and beneficial purpose, and when the appropriator or his successor 

in interest ceases to use it for such purpose the right 

ceases.” Cal. Water Code § 1240 (West 2012). Section 

1627 of the Water Code similarly limits an appropriative 

rights holder, stating that “[a] license shall be effective for 

such time as the water actually appropriated under it is 

used for a useful and beneficial purpose in conformity 

with this division but no longer.” Id. § 1627 (emphasis 
 CASITAS MUNICIPAL WA TER DIST v. US 29

added); see also id. § 1390 (stating a similar limitation for 

“permits”). The License includes language from § 1627, 

J.A. 7783, and also states that “the amount of water to 

which this right is entitled and hereby confirmed is limited to the amount actually beneficially used for the stated 

purposes” of “Municipal, Domestic, Irrigation, Industrial, 

Recreational and Standby Emergency uses.” J.A. 7781 

(emphasis added). The License then explicitly limits 

“[t]he total amount of water to be placed to beneficial use” 

to 28,500 acre-feet per year. Id. 

As discussed above, under California law, the concept 

of beneficial use provides an “overriding constitutional 

limitation” on a party’s water rights. State Water Res.

Control Bd., 182 Cal. App. 3d at 105. In addition, the 

California Supreme Court has stated that an appropriative rights holder is entitled only to the amount of water 

beneficially used, not necessarily the entire amount 

diverted: 

The quantity of water to which a person becomes 

entitled by such diversion is not determined by 

the capacity of the ditch diverting the water; the 

extent of the right gained by the diversion is limited to the amount of water applied to a beneficial 

use, which has been interpreted to mean the 

amount actually used and reasonably necessary 

for a useful purpose to which the water has been 

applied. 

Haight v. Costanich, 184 Cal. 426, 431 (1920). It is the 

holder’s rights (as limited by beneficial use) that represent the property interest subject to a potential government taking. State Water Res. Control Bd., 182 Cal. App. 

3d at 100. Based upon this authority, we agree with the 

Court of Federal Claims’s holding that “the only compensable right under California water law is a right to beneficial use.” Casitas V, 102 Fed. Cl. at 455.
30 CASITAS MUNICIPAL WATER DIST v. US

The cases cited by Casitas do not undermine this 

conclusion. Contrary to Casitas’s argument, Appellant’s 

Rep. Br. 5–6, United States v. Gerlach Live Stock Co., 339 

U.S. 725 (1950), did not remove the beneficial use limitation to California water rights. Instead, that opinion 

explicitly noted that the beneficial use limitation, as 

stated in the California Constitution, “is not transgressed 

by the awards in question which only compensate for the 

loss of actual beneficial use.” Gerlach, 339 U.S. at 751–

52. At issue in Gerlach was whether the government’s 

action preventing spill over from Friant Dam from reaching the claimants’ land amounted to “waste or unreasonable use or unreasonable method of use or unreasonable 

method of diversion of water.” Id. at 730, 752. If the prior 

spill over had been deemed “waste,” the claimants could 

not have received compensation for its loss. Id. at 752. 

Because the spill over would have benefited claimants’ 

land, however, the Supreme Court found it was not waste 

but beneficial, and therefore compensable. Id. at 752–55. 

Thus, Gerlach stands for the same proposition stated by 

the Court of Federal Claims—that “the only compensable 

right under California water law is a right to beneficial 

use.” Casitas V, 102 Fed. Cl. at 455.

This court’s recent decision in Estate of Hage v. United States, 687 F.3d 1281 (Fed. Cir. 2012), also does not 

support Casitas’s argument. Casitas relies on general 

language from that decision noting that “the government 

could not prevent [claimants] from accessing water to 

which they owned rights without just compensation.” 

Appellant’s Rep. Br. 13–14. The outcome of the case, 

however, contradicts Casitas’s argument. In Estate of 

Hage, this court found no physical taking had occurred 

because, applying a beneficial use limitation under Nevada law similar to the one at issue here, the court determined that the claimants could not show “that the 

government actually took water that they could have put 

to beneficial use.” Estate of Hage, 687 F.3d at 1290. 
 CASITAS MUNICIPAL WA TER DIST v. US 31

Thus, Estate of Hage further confirms that under a beneficial use limitation, such as that applied under California 

law, compensable water rights are limited to water beneficially used. 

We have considered and find unpersuasive Casitas’s 

additional arguments on this issue. For these reasons, we 

agree with the Court of Federal Claim’s holdings regarding the scope of Casitas’s property interest. Casitas V, 

102 Fed. Cl. at 455. 

E. ACCRUAL OF CASITAS’S TAKINGS CLAIM

We now address the trial court’s determination that 

Casitas’s takings claim has not accrued and will not 

accrue until Casitas can demonstrate that the biological 

opinion operating criteria have caused Casitas to deliver 

to its customers less water than it otherwise would have 

delivered. Casitas V, 102 Fed. Cl. at 470–74. As noted 

above, the second step in a takings analysis is to assess 

whether governmental action amounted to a compensable 

taking of the identified property interest. See, e.g., Palmyra Pac. Seafoods, 561 F.3d at 1364–65. For the reasons discussed below, we conclude that the Court of 

Federal Claims did not err in finding that the diversion of 

the required amount of water down the fish ladder does 

not currently impinge on Casitas’s compensable property 

interest—the right to beneficial use. 

 The Court of Federal Claims determined that Casitas 

“can establish a compensable injury when . . . diversions 

resulting from the biological opinion criteria reduce the 

water project’s safe yield to the point when deliveries are 

affected—i.e., to the point when use becomes constrained.” 

Casitas V, 102 Fed. Cl. at 473. Casitas asserts that “even 

accepting the trial Court’s theory that the taking occurs 

when there is an ‘impact on plaintiff’s ability to deliver 

water,’ Casitas’s claim is ripe.” Appellant’s Br. 52–53; see 

also id. at 54–55. Casitas fails, however, to identify any 

way that “deliveries are affected.” See Casitas V, 102 Fed. 
32 CASITAS MUNICIPAL WATER DIST v. US

Cl. at 473. In other words, Casitas fails to demonstrate as 

clearly erroneous the “evidence before the court . . . that 

there has been no encroachment on plaintiff’s beneficial 

use to date.” See id. at 470 (listing various factual findings indicating that no encroachment has yet occurred). 

Next, Casitas challenges the trial court’s test for 

potential injury by asserting that the court “misapplied 

this Court’s accrual cases, which make clear that the 

triggering event for accrual (and statute of limitations) is 

the governmental action that gives rise to the claim, and 

not the damage that subsequently results.” Appellant’s 

Br. 53. Casitas argues that the issuance of the biological 

opinion in 2003 was the “sovereign act” that marked the 

accrual of Casitas’s takings claim, making future attempts to assert its claim after dismissal potentially 

barred by the statute of limitations. Id. We disagree that 

the court misapplied the relevant precedent in holding 

that “there is no injury—and thus no accrual of plaintiff’s 

taking claim—until plaintiff suffers an actual reduction in 

beneficial use.” Casitas V, 102 Fed. Cl. at 474. In our 

view, a compensable injury could not have occurred 

because the act constituting a taking has not yet occurred. 

 “The Tucker Act, 28 U.S.C. §1491(a)(1), provides the 

Court of Federal Claims with jurisdiction over takings 

claims brought against the United States.” John R. Sand 

& Gravel Co. v. United States, 457 F.3d 1345, 1354 (Fed. 

Cir. 2006), aff’d 552 U.S. 130 (2008). “Pursuant to 28 

U.S.C. § 2501, claims brought in the Court of Federal 

Claims under the Tucker Act are ‘barred unless the 

petition thereon is filed within six years after such claim 

first accrues.’” Id. A claim under the Tucker Act, including takings claims, “first accrues” “only when all the 

events which fix the government's alleged liability have 

occurred and the plaintiff was or should have been aware 

of their existence.” Hopland Band of Pomo Indians v. 

United States, 855 F.2d 1573, 1577 (Fed. Cir. 1988). The 

act that causes accrual of a physical taking claim is the 
 CASITAS MUNICIPAL WA TER DIST v. US 33

act that constitutes the taking. See Ingrum v. United 

States, 560 F.3d 1311, 1314 (Fed. Cir. 2009) (“[A] claim 

alleging a Fifth Amendment taking accrues when the act 

that constitutes the taking occurs.”). 

Casitas’s argument fails because it misidentifies the 

issuance of the biological opinion as the act causing 

accrual of its claim. As made clear in this court’s opinion 

in Casitas III, however, any taking in this case would be 

physical, not regulatory in nature. Casitas III, 543 F.3d 

at 1296 (“The character of the government action was a 

physical diversion for a public use—the protection of an 

endangered species. The government-caused diversion to 

the fish ladder has permanently taken that water away 

from Casitas.”). Further, as noted above, the only diversion relevant to the takings claim would be a diversion 

that impinges on Casitas’s right to beneficial use. No 

such diversion has yet occurred. Casitas V, 102 Fed. Cl. 

at 470–74. It is this potential future diversion of water 

(i.e., a diversion that impinges on Casitas’s right to beneficial use) that, if and when it occurs, will begin the cascade of “events which fix the government's alleged 

liability” under Hopland Band. Because the act constituting a taking has not yet occurred, Casitas’s takings claim 

has not yet accrued. See Ingrum, 560 F.3d at 1314.7 

Casitas relies on Estate of Hage v. United States, 

supra. In that case, the Hages filed a complaint in the 

Court of Federal Claims in 1991, alleging a physical 

taking of water rights based on the construction of fences 

around water sources on federal lands in which they held 

7 In the language of the cases relied on by Casitas, 

because there has not yet been any “government action” 

constituting a taking, there cannot be any damages, let 

alone those “complete and fully calculable.” Appellant’s 

Br. 55 (quoting Goodrich v. United States, 434 F.3d 1329, 

1336 (Fed. Cir. 2006), and Fallini v. United States, 56 

F.3d 1378, 1382 (Fed. Cir. 1995), respectively).

 
34 CASITAS MUNICIPAL WATER DIST v. US

grazing permits. Estate of Hage, 687 F.3d at 1288–89. 

The government had erected fences in 1981–82 and again 

in 1988–90. Id. at 1289. The Court of Federal Claims 

held that the construction of the fences amounted to a 

physical taking, but did not specify which fences—those 

erected in 1981–82, those built in 1988–90, or all—

constituted the taking. Id. This court dismissed as timebarred any takings claim based on fences erected in 1981–

82, more than six years prior to the filing of the complaint. Id. 

Casitas argues that this application of the accrual 

rule is proper, but that this rule would render its claim 

time-barred if dismissed and later refiled. See Appellant’s 

Rep. Br. 26. Estate of Hage does not, however, set forth a 

rule that would preclude Casitas’s claim if refiled after an 

alleged taking has actually occurred. In Estate of Hage, 

this court found any takings claim based on the fences 

erected in 1981–82 time-barred because the construction 

of those fences constituted the physical act causing accrual of any portion of the takings claim related to those 

fences. Estate of Hage, 687 F.3d at 1289. In contrast, 

here, a diversion constituting a physical taking—i.e., one 

impinging on Casitas’s right to beneficial use—has not yet 

occurred and may never occur. A takings claim based on 

an act that has yet to occur cannot be time-barred.

In conclusion, we hold that the Court of Federal 

Claims properly found that the diversion of water down 

the fish ladder to date has not impinged on Casitas’s 

compensable property interest—the right to beneficial 

use. If and when Casitas has sufficient evidence to file a 

complaint alleging a compensable injury, Casitas’s takings claims will have accrued.

F. CASITAS’S CONTACT-BASED TAKINGS ARGUMENT

We need not address the substance of Casitas’s contract-based takings argument because we agree with the 

government that Casitas failed to raise the argument 
 CASITAS MUNICIPAL WA TER DIST v. US 35

until this appeal. See San Carlos Apache Tribe v. United 

States, 639 F.3d 1346, 1354–55 (Fed. Cir. 2011) (“Because 

the Tribe did not raise this argument before the Court of 

Federal Claims, it is waived on appeal.”). Neither Casitas’s proposed conclusions of law, J.A. 1880–81, nor its 

post-trial briefs, J.A. 11253 ¶ 22 & J.A. 11355 ¶ 22, actually set forth its current argument—that the Contract 

was a property interest subject to a contract-based taking. 

The post-trial briefs merely recite Article 4 of the 1956 

Contract in a block quote. The proposed conclusions of 

law provide little more, adding only a quote from this 

court’s opinion in Casitas III, noting that Article 4 “constitutes a promise by the United States that Casitas shall 

have the perpetual right to water made available by the 

construction and operation of the Project . . . .” J.A. 1880–

81 (quoting Casitas III, 543 F.3d at 1286). 

CONCLUSION

For the foregoing reasons, we affirm the decision of 

the Court of Federal Claims dismissing Casitas’s complaint without prejudice. 

AFFIRMED

COSTS

Each party shall bear its own costs.