Take and Take


February 16, 2005


Browse in Takings

I had this lawyer. Some big guys were suing me and I had this lawyer. The big guys, they used all the tricks. Shopped for a friendly forum. Pleaded hardship and poverty, even though some of them are rich as sheiks.

They won the first round, but no surprise there. We’d win on appeal I thought. I kept waiting for the lawyer to file. I was patient. The wheels of justice turn slowly, and all.

Then I find out that the lawyer — my lawyer — settled the case behind my back. He gave the big guys pretty much everything they wanted, even though the law was on my side. Not only that, it turned out that my lawyer was buddies with the other guys all along, but in such a way that I can’t do anything about it. (Guess who writes those rules.)

This actually happened, but the lawyer wasn’t working for me alone. It was the U.S. Justice Department, which is supposed to work for all of us. Instead the Department took a dive, and left us taxpayers on the hook for millions of dollars, and potentially a whole lot more. It also left our kids to inherit a world that is more impoverished and depleted. Worst of all, the Justice Department lawyers gave away something that was ours to begin with — namely, water.

Like much of the American West, California’s Central Valley, is essentially a desert that produces crops only because of massive infusions of water. This water comes by way of an elaborate — and hugely expensive — system built to varying degrees with taxpayer help. The system can move water around but it cannot manufacture more of it. As developers have pushed out into the desert and the population of the West exploded, the competing demands upon the region’s water are reaching a breaking point.

In the early 1990s there was a drought, which meant less water for everyone, growers included. The water managers had to maintain minimal levels in certain rivers, so as not to kill off fish that are on the edge of extinction. There was nothing extraordinary about this. Californians regularly have to cut back their water use during dry seasons. The growers had no legal or contractual guarantee to a certain amount of water to begin with. To the contrary, the California state constitution declares that water belongs to all the people and must be managed for the good of the whole.

But the growers claimed a contractual right to the water that they didn’t get. Since the government had not delivered it, they claimed that it had taken their property; and they demanded cash compensation in return.

This is not the first time that property owners have claimed a “taking” because of the Endangered Species Act. It is a crusade of the ideological Right, and so far it has failed. There was every reason to think it would fail this time too. The courts have long distinguished between a physical taking, as in eminent domain, and a regulatory action that merely restricts the use of property. No one compensates me because I can’t drive my car — my property — in the breakdown lane, or because I can’t open a video porn shop in my home.

Much of what government does involves restrictions on the use of property. Most of us recognize that the society cannot function any other way. But the plaintiffs brought the case before the U.S. Court of Claims in Washington, D.C., which views such matters in narrow contract terms. (The case was Tulare Lake Basin Water Storage District v. United States.) Interested parties cannot intervene in these cases — not even the State of California, which would be directly affected by a ruling.

Predictably, the Claims Court ruled for the growers. But then the Justice Department declined to appeal. Instead it settled with the plaintiffs, for no discernible reason other than that the Bush lawyers there were on the growers’ side to begin with.

Leave aside the dubious proposition that the plaintiffs here were entitled to a given amount of water, despite the drought and the competing demands upon the water, and despite the absence of a contractual commitment to provide them that amount of water. Let’s just look at the numbers. A fair assessment of the “takings” claim would include what the plaintiffs are getting already from us taxpayers, in addition to what we allegedly took from them. If I sue you for $17, but I owe you $1000 to begin with, a court isn’t going to make you pay and ignore my debt to you.

It turns out that the growers that went whining to the courts in Tulare have been sucking at the taxpayer teat for years. First there was the low-interest loan on the water project. Then there’s the hundreds of millions in federal crop subsidies these growers have been getting. The Environmental Working Group found that from 1993 to 2003 alone, the farms involved in the “takings” settlement got a quarter of a billion dollars in federal crop subsides and other programs. (See http://www.ewg.org/reports/CAWaterTakings/.)

They take our money, and then they say we are taking their water, even though it isn’t theirs.

These are not, for the most part, beleaguered family farmers. They include J.G. Boswell, the world’s biggest cotton producer, whose “farm” is one and a half times the size of Rhode Island. Boswell’s crop subsides alone from 1995 to 2003 were greater than the total amount the growers alleged they lost in the water “taking”.

And that’s not all. It turns out that the Kern County water agency that serves most of these growers has been selling subsidized water back to California taxpayers at market rates. It’s been taking more water than it actually needed, jacking up the price and selling the surplus back. Since 2001 the water district has made $40 million flipping water in this way.

So just who is “taking” what from whom here?

It all seems emblematic of the reigning spirit in Washington these days — the sense of entitlement of the rich and well-connected. What’s ours is ours, and what’s yours is ours too. First in line are the lawyers — the kind the Bush administration likes at least. “While common wisdom says the second Bush administration is a dark cloud for trial lawyers,” the California law Reporter observed, “some plaintiff attorneys expect it to rain good fortune on them.”

Did I mention that the attorney who brought these cases was a big gun in the Justice Department in the Reagan Administration? The Administration is determined the curb the ability of ordinary Americans to sue large corporations. But when it comes to them suing us as they did in Tulare Lake, for something that is rightfully ours — well that’s another matter.

Thus the Bush Administration has given the “takings” movement something it has devoutly wished — a precedent that can serve as a cudgel against the Endangered Species Act. It was a big wet kiss bestowed upon ideological allies, at the expense of the taxpayers it was supposed to represent. The Administration denies this of course. It says the settlement applies to this case only and can not serve as precedent. Coming up next is a $100 million “takings” case in Oregon. We’ll see.