The Klamath Basin: The Tricky Business of Water Rights in the West

Last week, the Oregon Supreme Court agreed to decide whether irrigators in the Klamath Basin "own" water delivered by the federal Klamath Reclamation Project. This latest development is one more twist in an ongoing property rights case that illustrates both how difficult it can be to determine who holds precisely what rights in western water and how property rights claims, even spurious ones, can frustrate ecosystem restoration efforts.

Usually, claims of ownership are made to recover a resource from someone else. But that's not the issue here. The United States agrees that when the Project has water available it must deliver that water to these irrigators rather than to anyone else. But the irrigators want more than that. They want the United States to pay them for having limited deliveries from the Project in the drought year of 2001 in order to protect threatened and endangered fish. Having failed so far to get that result in the federal courts, they are now using procedural maneuvering to get another bite at the apple from the Oregon courts.

We detailed the complex history of water use in the Upper Klamath Basin in our 2008 Island Press book, Water War in the Klamath Basin: Macho Law, Combat Biology, and Dirty Politics. In a nutshell, in the critically dry summer of 2001, the federal Bureau of Reclamation closed the headgates of the Klamath Project because the U.S. Fish and Wildlife Service and National Marine Fisheries Service had determined that the needs of endangered suckers in Upper Klamath Lake and threatened salmon in the Klamath River left no water available for irrigation use.

Despite virulent protests and even scattered episodes of violence, Klamath Project deliveries were reduced by 90 percent that year. By 2002, however, normal deliveries were resumed, thanks to heavier rains and the Bush administration's creative (and, the Ninth Circuit later found, illegal) interpretations of the Endangered Species Act, which put the desires of irrigators ahead of the needs of the ecosystem.

The 2001 "train wreck" spawned litigation on a variety of fronts. The irrigators went the takings route. They have long gotten the benefit of almost all the water in the basin, and have decided to stand on their claimed rights to that water even as the ground shifts from under them. Shortly after the water shut-off, they hired lawyers known for aggressive pursuit of property rights claims, and soon were claiming that the United States owed them a billion dollars (far more than any documented losses) under the Fifth Amendment for having "taken" their water in 2001. The United States Court of Claims ruled for the United States, finding that the irrigators did not have property rights that would support a takings claim, and that their contracts for water delivery were subservient to the Endangered Species Act. On appeal of the takings claim, the Federal Circuit decided that the property issue depended "upon complex issues of Oregon property law." It certified three questions to the Oregon Supreme Court, essentially requesting that the state court resolve those issues, which it has now agreed to do.

The tribes and environmental groups, which had prevailed in the lower federal court, obviously would have preferred that the state court not be dragged into this dispute. The Federal Circuit could easily have concluded (as one dissenting judge did) that the arcane questions certified were not relevant to the takings determination, or even that the plaintiffs, who began with the claim that they had property rights under federal reclamation law, should not be allowed to switch midstream to a claim of rights under state law.

The choice of the Oregon Supreme Court to consider the questions asked by the Federal Circuit should not be read as necessarily presaging a determination that the irrigators actually have state law property rights. The Oregon court may simply be showing a kind of professional courtesy to the federal court, which has after all requested its views. Or it may want to be sure that it, rather than the federal courts, has the last word on Oregon property law. That might well be a good thing from the environmentalist perspective, given the tendency of the Federal Circuit to favor broad interpretations of property rights. Indeed, preliminary indications in the ongoing state administrative adjudication of water rights in the Klamath Basin are that the United States, not the irrigators, holds the relevant state property rights.