IWRA Proceedings

AbstractIn 2001, Roger Marzulla in won a historic legal case in the United States in Tulare Lake Basin Water Storage District v. United States, 49 Fed. Cl. 313 (Fed. Cl. 2001). This case threatened to change U.S. takings law as it applied to water. In Tulare Lake, Marzulla successfully sued the U.S. government on behalf of irrigators who had their water supply reduced to leave water in the streams for fish pursuant to the U.S. Endangered Species Act. The irrigators successfully argued that because the amount of their available water was reduced, the federal government had taken the irrigators’ water rights without financial compensation as required under the U.S. Constitution. The case was decided in the U.S. Court of Claims—the court in the U.S. that decides compensation claims against the federal government. Riding on the success in Tulare Lake, Mr. Marzulla filed a NAFTA Chapter 11 claim against Mexico on behalf of a group of Texas farmers and irrigators. This case is still pending. The claim alleges that Mexico withheld water that originates in Mexico but is rightfully owned by the irrigators pursuant to a 1944 Treaty between the U.S. and Mexico for the Rio Grande and Colorado Rivers. The Texas irrigators argue that Mexico appropriated the water, thereby violating the provisions of NAFTA’s Ch. 11. Recently, Mr. Marzulla also filed three more lawsuits in the Court of Claims alleging the taking of private irrigators’ water rights by the federal government. The courts in all three of these cases have determined that no takings occurred and that no compensation was due to the irrigators. The courts so held because water rights are treated differently than other forms of property. This paper analyzes the nature of water rights in the U.S. and under NAFTA. The NAFTA tribunal is poised to rule on the Texas irrigators’ Ch. 11 claim against Mexico. One of the issues in this case, and in other NAFTA cases over water resources, is the nature of water rights under NAFTA and whether U.S. water takings jurisprudence should be applied to NAFTA Ch. 11 appropriation claims. This paper will review water rights takings jurisprudence in light of the recent Court of Claims cases. This paper concludes that the courts were correct in determining that water rights should not be subject to the same takings jurisprudence as other forms of real property. Lastly, this paper argues that U.S. water law takings jurisprudence should not be used to evaluate NAFTA Ch. 11 compensation claims. However, if U.S. water takings law is used to evaluate the pending Texas irrigators Ch. 11 claim, the three recent Court of Claims cases should make it clear that no appropriation has occurred and that the Texas irrigators are not entitled to compensation. Other Themes Addressed: 1. Water Governance and Water Security: Improving legal and institutional frameworks 2. Water Governance and Water Security: Transboundary river basins and shared aquifers 3. Water Availability, Use and Management: Regional Sessions, North America