One of the most important parts of the Constitution is a key protection: if the government takes something from you, then the government must pay you for it. Payment is required when land is taken, when personal property is taken, and when water is taken.

The United Water Conservation District has the right to use water in California. The federal government designated the steelhead trout in a California river as an endangered species; the federal government then decided that United had to reduce its water use to protect the steelhead trout. In short, the government took United’s water.

United sued, relying on the Constitution’s core protection against takings: If the government takes something, then the government must pay for it. The Federal Circuit then found in United Water Conservation District v. United States that, even though the water had been physically diverted, United had been subject at most to a possible regulatory taking. However, the Federal Circuit’s ruling is incompatible with Supreme Court precedent – which holds that any physical intrusion into one’s property rights constitutes a physical taking. (Government takings fall into two classes – physical takings and regulatory takings. Physical takings occur when the government physically takes something. Regulatory takings occur when the government regulates property in a way that is so restrictive that the owner can no longer exercise his or her property rights.)

A great deal of Supreme Court takings precedent – as reflected most recently in Cedar Point Nursery v. Hassid – rests on the property owner’s right to exclude. Here, United has lost its right to exclude. Water use in this case is zero-sum. If United diverts water, then they exclude that water from heading downstream. But Cedar Point Nursery is far from the only Supreme Court takings opinion that the Federal Circuit’s opinion ignored: It also excluded a trio of takings cases that expressly held that any physical appropriation of property effected a per se taking.

Cato therefore filed an amicus brief that asks the Supreme Court to take up this case. Unless the Supreme Court corrects the Federal Circuit’s mistaken interpretation of binding Supreme Court precedent, as a practical matter Cedar Point Nursery will lose much of its force.