In CRV Enterprises, Inc. v. United States, No. 2009-5100 (Nov. 17, 2010), the U.S. Court of Appeals for the Federal Circuit concluded that the EPA's installation of a "log boom" in the Old Mormon Slough in Stockton, California as part of the remediation of a Superfund site was not a physical taking of CRV's riparian and littoral access rights:
Here, there has been no physical invasion of the plaintiffs’ land. The log boom is anchored to the bottom of the Slough. Plaintiffs do not contend that they own the bed of the Slough. Nor do the plaintiffs claim that they own the water itself. In fact, plaintiffs admit they do "not assert that [they] owned the [Slough], the waters within it, or the Slough’s bed." Appellant’s Reply Br. 8. Riparian and littoral rights do not convey ownership to the water but only rights to use the water. See United States v. State Water Res. Control Bd., 227 Cal. Rptr. 161, 167–68 (Cal. Ct. App. 1986) ("[W]hat is meant by a water right is the right to use the water."). Plaintiffs admit that "[t]he riparian owner, of course, does not own title to the waters (the State does, in public trust), but rather the rights to use it." Appellant’s Br. 26. However, plaintiffs assert that the United States, by restricting their right to use the Slough, has physically taken their riparian and littoral rights to access.Plaintiffs are correct that action not occurring on a plaintiff’s land can still lead to a physical taking of water rights. As the Supreme Court noted in Dugan v. Rank, 372 U.S. 609, 625 (1963), [a] seizure of water rights need not necessarily be a physical invasion of land." For example, the Supreme Court and this court have found a physical taking of riparian water rights when water in which the plaintiff held use rights was permanently removed. See id.; United States v. Gerlach Live Stock Co., 339 U.S. 725, 752–53 (1950); Casitas, 543 F.3d at 1289–96. However, these cases do not hold that a physical taking of water rights occurs merely when a particular use of the water is restricted.
Slip op. at 8-9 (footnote omitted).
The court also concluded that CRV could not assert a regulatory takings claim, since it was not the owner of the property at the time of the alleged taking. A takings claim ripens when a government entity charged with implementing the offending regulation has reached a final decision regarding the application of the regulations to the property. The CAFC held that "CRV’s regulatory takings claim accrued and ripened with the issuance of the [Record of Decision, in which the EPA decided to limit navigational access to the Slough and decided to install the log boom] in March 1999." Slip op. at 15. At that time, CRV did not own the property. The court rejected CRV's claim that the actual installation of the log boom after it purchased the property was the relevant time. The court concluded that any regulatory takings claim "if it existed, was owned by the prior owner." Slip op. at 16.
The court's analysis on this final point is somewhat facile, in that it does not account for the the likelihood that the former owner transferred its right to sue for a regulatory taking to CRV since the court noted that "in November 2002, CRV exercised its option and acquired the property from Dutra [the prior owner], who also assigned his rights to CRV." Slip op. at 5. The right to transfer the ability to bring a lawsuit is a property right and is also known as a "chose in action" to the Old School common law lawyers out there. Is the CAFC's conclusion simply a rephrasing of the "notice defense" rejected by the Court in Palazzolo?
What, if anything, are we missing here?
