Kaiser Aetna: Supreme CourtScuttles Federal Dominion Over Navigable Waters, Unsettles Takings Law

Few areas of federal environmental law show less clarity and consistency than the limits of the federal government's constitutional powers over the nation's navigable waters. In particular, the concept of the "navigational servitude" — the government's virtually unfettered privilege to preserve, enhance, or condemn rights in navigable waters — has evolved erratically from its various constitutional and common law sources to the point where it defies precise definition. The United States Supreme Court has acknowledged this unsteady history, for which it is itself largely responsible:

[T]he shifting back and forth of the Court in this area until the most recent decisions bears the sound of "Old, unhappy, far off things, and battles long ago."¹

This statement, however, is contained in a recent opinion demonstrating that the unhappy battles of long ago are far from settled. In Kaiser Aetna v. United States² the issue before the Court was whether a real estate developer, which had dredged a 500-acre "fishpond" next to a Hawaiian beach to construct a marina and build on its shores a large resort and shopping complex, was entitled to restrict access to the marina to the resort's residents and commercial clientele. The United States had requested a district court to issue an injunction prohibiting the developers from denying use of the waters to the general public. The district court denied the requested relief³ and, despite a reversal in the Ninth Circuit,⁴ was upheld by the High Court, at least as to its conclusion that the public enjoyed no general right of access to the pond.

Though it saw little question that in its improved state the pond constitutes a "navigable water of the United States" and thus falls within the government's broad regulatory jurisdiction under the Commerce Clause,⁵ the Court stated that this conclusion determined neither the question of the applicability of the navigational servitude nor the correlative issue of public access. Indeed, on behalf of the six-man majority, Justice Rehnquist flatly rejected the United States' assertion of an overriding interest in assuring free access to the waters, declaring expansively that any attempt to ehforce a public right of access to the marina would amount to a taking of private property under the Fifth Amendment and thus require payment of full compensation.

Unfortunately, summarizing the result in Kaiser Aetna is easier than explaining the rationale because the majority opinion is less than completely lucid. A persuasive argument can be made that the Court simply limited the scope of the navigational servitude so as not to encompass this type of small, artificially improved pond. At the same time, however, it seems that the Court has refashioned the doctrine of the navigational servitude by determining that it applies to the Kaiser Aetna pond but that, under a takings analysis, the owners are entitled to recover compensation for their loss of the right of exclusive use. Thus, this area of the law appears headed into uncharted regions in which the government, for the first time, may have to pay for using or prohibiting the use of navigable waters.

Additionally, Kaiser Aetna promises to generate new uncertainty in the area of takings law. The Court displayed an unprecedented sensitivity to a relatively minor infringement of property rights at the hands of the government. Perhaps more significant is its reliance on a conceptual model of private rights that treats individually rather than collectively the "bundle of rights"⁶ comprising property ownership for purposes of determining whether a taking has occurred. This approach is at odds with an explicit holding in the Court's 1978 decision in Penn Central Transportation Co. v. City of New York⁷ and may mark another area of drift in the law that will prove confounding if not costly to governments.

Background: The Navigational Servitude

Through the Commerce Clause the states ceded to the federal government a dominant right to exert control over the nation's navigable waters. Two purposes have been ascribed to the vesting of such control in the federal government. First was the recognition that the nation's navigable rivers and coastal waters form "highways of commerce,"⁸ the regulation of which should be entrusted to a central authority. Second was the preservation of the English common law rule that over such waters the public enjoys a "natural right" of "free and unhindered passage."⁹ This public right was deemed so fundamental by the English courts that it overrode the property rights of private persons as well as the Sovereign.¹⁰

The government exercises the public interest in navigable waters, much like a trustee,¹¹ in essentially two ways. It may protect navigability by preventing the private creation of obstructions such as bridges¹² and dams,¹³ and it [10 ELR 10029] may similarly order the removal of obstructions.¹⁴ More affirmatively, it may itself create obstructions for a wide variety of public purposes such as navigation improvement¹⁵ or electric power generation,¹⁶ and it may license others to do the same. In these activities, conflicts inevitably arise between the public/governmental powers and the interests of citizens who wish to exploit the same resource, who have already done so and must undo their work, or whose property is adversely affected by the federal or federally licensed project.

To resolve the claims of injured parties, the courts have fashioned a somewhat crude legal fiction known as the "navigational servitude." In brief, this rule absolves the United States, when exercising its power over navigable waters, of any Fifth Amendment obligation to compensate for its destruction of certain private property rights. However, private right may be taken without payment only to the extent that such rights depend for their value on the flow of the waters or on the land's proximity to the waters. Non-water related interests are fully compensable. For example, in United States v. Twin City Power Co.,¹⁷ the government had condemned riparian land that had been valued at $1.25 million based on its potential as a hydroelectric generating site. The Supreme Court affirmed an award for only one-tenth of that amount, ruling that compensation is to be determined by discounting the fair value of the property to the extent that it derives from the flow of the waters:

The landowner here seeks a value in the flow of the stream, a value that inheres in the government's servitude and one that under our decisions the government can grant or withhold as it chooses.¹⁸

Similarly, in United States v. Rands,¹⁹ the Court awarded payment of only one-fifth the cost of land that was uniquely valuable as a port site, emphasizing that no portion of a site's value attributable to its access to navigable waters is compensable.

The division between compensable and noncompensable interests is perhaps brought home most effectively in the "access cases." In United States v. Commodore Park,²⁰ the Court ruled that the owner of a lake-front real estate development, which lost all access to a navigable bay because of the Navy's dredge and fill activities, had no right to compensation. The Court expressly rejected the owner's claim to "a unique private right distinct from that held by all others, to have access to and enjoyment of navigable waters."²¹ Predating Commodore Park is Gibson v. United States,²² in which the construction of a federal dike had blocked a landowner's access to the Ohio River. The Court denied the claim for relief on two grounds. First, it stated that owners of rights in navigable waters must "suffer the consequences of improvement of navigation in the exercise of the dominant right of the government."²³ The advantage of access to the river was completely defeated when in conflict with the navigational servitude. The second prong of the Gibson rationale is more intriguing in the context of Kaiser Aetna because it hypothesizes the nonexistence of the navigational servitude and treats the matter as a takings question. The owner's claim would still fail, the Court concluded, because the property had not been reduced materially in value. The complete loss of access by water was declared only an "incidental consequence" of the government's efforts to improve the river's navigability.

Another question that bears significantly on the Kaiser Aetna decision concerns the geographic scope of the navigational servitude. The traditional rule in England, where there are few inland rivers capable of supporting navigation, is that the navigational servitude extends to all coastal waters and to such inland waters as are subject to the "ebb and flow" of the tides.²⁴ Application of the "ebb and flow" test brought virtually all of that country's naturally navigable waters within the reach of the public right of free passage.

In 1851 the United States Supreme Court recognized, however, that reflexive reliance on the British rule would exclude most of the United States' large navigable river systems from the scope of the government's navigation power. In The Daniel Ball the Court redefined the federal navigation power with the now famous language:

Those rivers must be regarded as public navigable rivers in law which are navigable in fact. And they are navigable in fact when they are used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water.²⁵

This "navigability in fact" test, though it represented a dramatic widening of federal powers, proved to be only the first of several expansions of the scope of the navigational servitude. For example, the Court has determined that a body of water, though not navigable in fact, is nevertheless subject to the government's dominant navigation power if it was navigable at any time in the past.²⁶ Furthermore, waters which are not currently and have never been navigable are subject to the navigational servitude if they are capable of being rendered navigable through "reasonable improvements."²⁷ Finally, the scope of the servitude is not even limited to the boundaries of navigable waters. Where the United States acts to improve navigable waters and adversely affects rights in nonnavigable tributaries thereof, there is no obligation to pay compensation.²⁸

[10 ELR 10030]

Kaiser Aetna

Prior to 1960, Kuapa Pond was a 500-acre pond on the coast of Oahu, separated from a navigable bay by a thin barrier beach. Openings had been cut into the beach and fitted with sluice grates that allowed water and fish to wash in from the sea but prevented fish from returning. Fishermen, with the aid of shallow-draft boats, could thus harvest both natural and artificially reared fish. Unusually high tides periodically breached the barrier beach and flooded the pond.

In 1961 the owner of the pond transferred to Kaiser Aetna rights to develop it and surrounding land into a large resort community. Portions of the pond were dredged, others were filled, an opening to the bay was established, and a marina, a shopping center, and thousands of homes were constructed. Prior to making these improvements, Kaiser Aetna notified the Corps of Engineers of its plans and received no objections. Since its modification, the pond has been used extensively. Hundreds of boats are moored at the marina, some owned by non-resident members of the public who pay an annual docking charge. For several years Kaiser Aetna operated a ferry which, for a fee, carried tourists, shoppers, and potential home purchasers to and from the area.

In 1972 the Corps demanded that Kaiser Aetna permit the public to enter the pond without payment of the fee that was then being charged. When the company refused, the United States filed suit in district court for injunctive relief, arguing that, at least since its improvement, the pond was a navigable water of the United States and therefore subject to the navigational servitude and the public's right of unrestricted passage. The trial court agreed that the pond satisfied the "ebb and flow" test of navigability but held that it was nevertheless immune from the servitude.²⁹ In the court's view, when Hawaii was annexed and later admitted into the Union, its lands and waters were given a unique legal status which in effect insulated them from any federal impairment of full ownership. Judge Pence thus denied the relief requested by the United States, noting briefly at the end of his opinion that "if the government wants the marina opened to free public use, the defendants must be paid."³⁰

Kaiser Aetna appealed from that portion of the judgment holding that the pond is a navigable water of the United States and is therefore subject to the government's regulatory jurisdiction. The United States appealed from the ruling that it could not exercise its navigational servitude power to guarantee unrestricted public access to the pond. The Ninth Circuit sided with the government on all counts.³¹ First, the court of appeals found that the pond met both the "navigable in fact" and the "reasonable improvements" tests of navigability and was thus fully subject to the navigational servitude. Second, the court emphasized that Hawaiian property law could not override the paramount federal interest in navigation. In its petition for certiorari to the Supreme Court, Kaiser Aetna presented the question of whether the pond is a navigable water for purposes of the navigational servitude and thus burdened with a dominant right of public access.

Justice Rehnquist's majority opinion bifurcated its reasoning along two lines. Segregating Congress' regulatory power from its powers to invoke the navigational servitude, the opinion first explored the breadth of the federal authority to regulate commerce.³² On the basis of earlier holdings that the Commerce Clause permits regulation of waters not only to improve navigation but also for other commerce-related purposes such as flood control and power generation, the Court reached the conclusion that "congressional authority over the waters of this Nation does not depend on a stream's 'navigability.'"³³ In its view, traditional Commerce Clause principles show that the government's authority is more expansive:

Congress may prescribe the rules of the road, define the conditions under which running lights shall be displayed, require the removal of obstructions to navigation, and exercise its authority for such other reason as may seem to it in the interest of furthering navigation or commerce.³⁴

It later noted that Congress' regulatory authority clearly includes the power to assure free public access to Kaiser Aetna's marina.³⁵

The Court's expression of the second issue before it may be as significant as the result. Instead of asking whether the navigational servitude applied to the pond to create a right of public access, it questioned whether the Corps' request for public access constituted a taking of private property under the Fifth Amendment. To be sure, the Court acknowledged its past reliance on the navigational servitude doctrine, noting that

[t]here is no denying that the strict logic of the more recent cases limiting the Government's liability to pay damages for riparian access, if carried to its ultimate conclusion, might completely swallow up any private claim for "just compensation" under the Fifth Amendment.³⁶

However, after invoking Justice Holmes' dictum that "the life of the law has not been logic, it has been experience," the Court went on to restate the doctrine in a formulation which Justice Holmes would not likely have recognized:

The navigational servitude is an expression of the notion that the determination whether a taking has occurred must take into consideration the important public interest in the flow of interstate waters that in their natural condition are in fact capable of supporting public navigation.³⁷

The Court thus appeared to have transformed the harsh "rule of no compensation" into merely a factor which is to be inserted into a takings analysis.

When it turned to the takings question, the Court focused principally on the nature of Kaiser Aetna's claim of exclusive use of the pond. The right to exclude the public from one's land has historically been recognized as [10 ELR 10031] a basic component of property ownership. In Justice Rehnquist's words, this right is "one of the most essential sticks in the bundle of rights that are commonly characterized as property …."³⁸ Further, the denial of this right through enforced public access resembles a physical invasion of the property that is almost by definition a taking.³⁹

Two other considerations enhanced the importance of Kaiser Aetna's right to bar the public from its pond. The opinion implies strongly that the Corps of Engineers might have destroyed the right merely by asserting a countervailing right of public access when first informed of the pond's modification, but the fact is that it did not do so. In the Court's view, this silence gave rise to expectations on Kaiser Aetna's part that its right to exclude the public would never be disturbed. Second was the fact that under Hawaiian law the pond was considered private property. Therefore, judicial protection of the right to exclude, which is historically a landowner's privilege, was deemed more appropriate. In light of all these factors, the company's right to exclusive use of the pond was held sufficiently important to fall within the "category of interests that the government cannot take without compensation."⁴⁰

It is notable that the Court never addressed the question of whether the pond fell within the scope of the navigational servitude, though it skirted the issue at places. It stated, for example, that the pond was not the sort of "great navigable stream" to which the servitude had been held to apply in past decisions. It also held that the pond was not a navigable water on the basis of the "historical use" test. But it ducked the application of the "ebb and flow" test, dismissing it as a "mechanical" formula that would not be dispositive of the issues in any event. Thus, it was an application of takings law, not the navigational servitude, which led the Court to conclude that

if the Government wishes to make what was formerly Kuapa Pond into a public aquatic park after petitions have proceeded as far as they have here, it may not, without invoking its eminent domain power and paying just compensation, require them to allow free access to the dredged pond.⁴¹

Justice Blackmun, in an opinion in which Justices Marshall and Brennan joined, dissented on four grounds. He criticized the majority's implicit rejection of the "ebb and flow" test of navigability, which he would have applied to hold that the pond had always been a "navigable water of the United States" and thus forever burdened with a dominant federal interest. Similarly, the dissenters disagreed that private persons could construct artificial bodies of water which, though "navigable in fact" and therefore subject to federal regulatory control, are nevertheless exempt from the navigational servitude.

Justice Brennan purported to balance the public interest in free navigation against Kaiser Aetna's interest in privacy in order to reach the judgment that the government should prevail. Actually, the reasoning is lifted directly from the "access cases": Kaiser Aetna can have no vested interest in navigable waters, and whatever interest they do have is not compensable under federal law. Finally, the dissenters departed from the majority decision to the extent that it accorded the pond higher protection because of its status as fast land under Hawaiian law.Their contrary view was that state law can have no effect on the scope of the navigational servitude and should have land no application in Kaiser Aetna.

Discussion

The decision in Kaiser Aetna is difficult and in some respects impossible to reconcile with preexisting case law. Because Justice Rehnquist declined to delineate the Court's differences with its earlier holdings and chose instead to weave only certain aspects of those holdings into the majority opinion, he was faced with a challenging drafting assignment. The clarity of the opinion suffers as a result. One way in which this problem is manifested is in the alternating discussions of the navigational servitude and takings law, without clear resolution of the direct conflict between these two theories. It is difficult to judge whether the majority ruled that the navigational servitude does not apply to Kaiser Aetna's marina, or that the servitude does apply to the pond but that under a takings analysis the loss of the right of exclusive use is compensable. Such questions are fundamental to an attempt to predict the ramifications of the decision.

The Scope of the Navigational Servitude

In past cases the Court has held that a body of water that meets but one of the traditional tests of navigability is subject to the navigational servitude and the correlative rule of no compensation for the destruction of private rights. Where necessary, the Court has undertaken exhaustive examination of a given river in order to make this crucial determination.⁴² In Kaiser Aetna, however, it opted neither to resolve nor to address this issue directly other than to state that the pond was not historically navigable and that it is currently navigable for regulatory purposes. However, sound arguments can be made that under the existing tests the pond has always been navigable,⁴³ so that the Court's equivocation on the matter casts some doubt as to the continued vitality of those tests.

One clear result of Kaiser Aetna is to overturn the rule that access to water is a noncompensable aspect of property ownership when condemned by the government via the navigational servitude. In the earlier "access cases," the Court established conclusively that riparian owners [10 ELR 10032] had no right to recover for even the complete elimination of their ability to travel from their shores to open waters. The broad, basic, and dertainly valuable rights which were so unsympathetically extinguished in those cases would surely seem to subsume the right sought to be protected by Kaiser Aetna, that is, the right to exclusive access. Yet the majority held this right to be so fundamental that it cannot be taken without compensation.

Takings Law

Recent cases on takings law resemble the older navigational servitude cases in that both are often characterized by harsh results based upon extreme deference to governmental regulatory activities and a general unwillingness to award compensation to injured parties. Typical takings cases exhibit exhaustive treatment of the benefits and purposes of the governmental action and an even greater attention to the magnitude of the burdens imposed on the property owner. A fine balancing between these competing concerns is the essential determinant. Compensation, however, will generally not be awarded unless a property has been rendered unable to earn a "reasonable return" or unfit for any "reasonable use."⁴⁴ Until Kaiser Aetna, the Court eschewed the singling out of one "stick" from the bundle of rights comprising property in assessing whether a taking has occurred.⁴⁵

The majority opinion in Kaiser Aetna, however, is not from the same mold as its redecessors. Nowhere does it show that the Court was concerned with the purposes and potential benefits of the Corps' attempt to open the marina to the public, other than to comment that public policy favors free navigation. Absent a serious inquiry into the merit of the governmental activity, there is little grist for a benefit/burden comparison.

As to the burden imposed on the property in question, the Court stated simply that Kaiser Aetna stood to lose "one of the most essential sticks in the bundle of rights — the right to exclude others."⁴⁶ There was no expression, either in monetary or more subjective terms, of the value of that right. In ruling that opening the marina to the public would constitute a taking, the Court concluded that the right of exclusive access is not just an "economic advantage" but one "with the law back of it to such an extent that courts may compel others to forbear from interfering with [it] or to compensate for its invasion."⁴⁷ But this tautological statement does not answer the question, it simply begs it. Obviously, the right to privacy, like all of the other rights attendant to property ownership, must have the law back of it to qualify as a right. The question to be resolved in each case, and the one not answered satisfactorily in Kaiser Aetna, is whether the regulatory action in question destroys so much of the entire package that it runs afoul of the Fifth Amendment.

From this vantage point, the threat of opening the marina to public use is not the kind of serious property damaging action which in the past was required to be shown to prove a taking and occurred. Has the Court therefore retreated from the stance adopted as recently as Penn Central, that governmental action totally depriving an owner of some component of his bundle of rights requires no compensation as long as the parcel retains some reasonable value?⁴⁸ Perhaps not, if Kaiser Aetna is subsequently viewed as a "navigable waters" case rather than a typical takings case. All bets are off, however, until the Court releases its next pure takings ruling. There can be little doubt, on the other hand, that when the next navigational servitude case reaches the Court, perhaps indeed any court, the climate will be changed. The writing on the wall says that the government will have to pay for much of what it once got, and planned to get, for free.

The Effect of State Law

The rationale of the majority opinion is blurred by confusion over the possible "reverse preemptive" effect of the Hawaiian rules of property ownership. The judgment of the trial court turned exclusively on this question. It ruled that, but for the effect of state law, the pond would be subject to the navigational servitude and that Kaiser Aetna would have no defense to the government's demand for a public right of access. However, it ruled that under state law the pond, like the hundreds of similar littoral fishponds in the state, is considered the equivalent of fast land and thus not subject to the federal power over navigation. While the Supreme Court did not explicitly embrace this reasoning, it emphasized that prior to its modification the pond "was private property under Hawaiian law,"⁴⁹ and that "the interest of petitioners in the now dredged marina is strikingly similar to that of owners of fast land adjacent to navigable waters."⁵⁰ This notion appears to influence not only the treatment of the navigational servitude issue but clearly underlies the Court's repeated emphasis on the landowner's right of privacy.

The dissenters and the Ninth Circuit confronted the question squarely and agreed on a different result. In their view, the impact of state law is necessarily limited to controversies between citizens or between citizens and the state. They construed the navigational servitude as a constitutionally derived limitation upon property ownership which is inherent in all navigable waters and which state law is powerless to define or limit. By rejecting this reasoning, the majority seems to say that if property is once private, it will always be private, even if made navigable.

Estoppel by Federal Officials

Another murky issue concerns the claim that when the Corps of Engineers was originally notified of the proposed modifications of the pond and neither objected nor demanded a public right of access, it thereby waived its [10 ELR 10033] right to do so at a later date. Both the trial and appellate courts rejected this reasoning on the ground that the dominant nature of the federal navigation power is inconsistent with the possibility that it might be destroyed through the inattention of a civil servant. Language in Justice Rehnquist's opinion seems to agree:

the consent of individual officials representing the United States cannot "estop" the United States ….⁵¹

But in the same sentence it is asserted that statements by government officials can nonetheless

lead to the fruition of a number of expectancies embodied in the concept of "property," — expectancies that, if sufficiently important, the Government must condemn and pay for before it takes over the management of the landowner's property.⁵²

In other words, if a person forms expectations based on communications with an official, such expectations can ripen into property rights which are immune from federal revocation without compensation.

The Court was probably using this line of argument merely to enhance the apparent importance of Kaiser Aetna's right to exclude the public. Yet this aspect of the decision is likely to have a real impact on the regulatory practices of the Corps. Henceforth, when it is informed of proposed modifications of waterways, it will not likely give its casual assent without asserting all federal rights including free public access. Otherwise, it might give rise to expectations for which it would have to pay to deflate in the future. Ironically, however, Kaiser Aetna may indicate that such an assertion of rights would require compensation.

Vaughn v. Vermillion Corp.

In Vaughn v. Vermillion Corp.,⁵³ a comparison case to Kaier Aetna decided the same day, the Court was presented with these essential facts: on private land and with private funds the respondent had dug a series of large canals that opened into the Gulf of Mexico at one end and onto the Intercoastal Waterway at the other. The Supreme Court eventually ruled the canals to be navigable in fact and subject to the ebb and flow of the tides. The question before the Court was whether the public, particularly the petitioners who wished to use the canals for hunting and fishing, enjoyed a federally protected right of access to the canals.

The result, the Court concluded, depended on the facts. If the canals were constructed without diverting naturally navigable waters then they were not subject to a public right of access. Kaiser Aetna controlled. If, on the other hand, it could be shown that navigable waters had been diverted or destroyed in the process of constructing the canals, there might be a public right of access. Because there was a question of fact on this point, the state court's award of summary judgment was remanded for further findings of fact.

Significantly, the Court in Vaughn did not state that the federal navigational servitude does not apply. The precise holding was that the private canals were subject to "no general right of use … by reason of the authority over navigation conferred upon Congress by the Commerce Clause of Art. 1 of the United States Constitution."⁵⁴ The Court's plain refusal both here and in Kaiser Aetna to deal in traditional concepts of the navigational servitude may imply that for practical purposes the doctrine is a relic of the past. More important is that in Vaughn the Court expresses clearly what it suggested obliquely in Kaiser Aetna: artificially constructed waters on private lands may be kept private.

What is intriguing about this ruling in Vaughn is that it was said to be controlled by Kaiser Aetna, on which new light has thus been shed. For example, the Court in Kaiser Aetna could have stated that the navigational servitude (or whatever federal power it embodies) simply did not apply to the Kaiser Aetna marina, that there was thus no public right of access, and that the government's request for an injunction would accordingly be denied. Instead, the Court embarked on a rather circuitous "takings" analysis in which it touched on the federal interest in free navigation, the importance of the landowner's privilege to exclude the public, and other concepts which in hindsight appear only to cloud the opinion. Although resort to a takings analysis does not seem inappropriate, it seems unnecessary in light of Vaughn.

The second ruling in Vaughn, that if navigable waters were diverted to fill the private canals a public right of access might be established, also raises interesting implications. The fact of private ownership of the canal beds is evidently not dispositive of the issue of public access. Vaughn suggests that the owner's efforts can cause the federal servitude, or its equivalent, to be physically moved to apply to once private property.⁵⁵ Moreover, if the petitioners in Vaughn were to prevail in their claim of access, would the canal owner's loss be compensable? Kaiser Aetna seems to establish that whenever the federal navigation power is used to destroy private rights, it remains an "entirely separate question"⁵⁶ whether a taking has occurred. Yet an award of compensation is not a conceivable result in Vaughn since the federal government was not involved in the case.

Finally, the two decisions, while not completely consistent, together illuminate the Court's thinking. The majority is of the view that artificial bodies of water constructed on private land are exempt frofm the government's authority to guarantee public access. Though it did not clearly say so, it found the Kaiser Aetna marina to fall within this category. The same is true for the canal system in Vaughn unless it is in fact only a rechannelled navigable stream. With respect to such private waters, the government may condemn a public right of access, but it must pay for it. But if the waters are determined not to be private, a determination which may not depend on the traditional tests of navigability, then the owner's loss of exclusive use will probably not be compensable.

Conclusion

If the opinion in Kaiser Aetna is viewed in isolation, it [10 ELR 10034] marks the demise of the navigational servitude as a "rule of no compensation." The Court has served notice that when the government calls for surrender of interests in waters, regardless of whether the interests were once thought servient to the federal navigation power, the question of compensation is to be resolved through application of a takings analysis borrowed from zoning the condemnation cases. It appears to make no difference whether the waters in question meet the traditional tests of navigability, since the Court plainly refused to apply those standards to the Kaiser Aetna marina, which appeared to satisfy them in any case.

The takings analysis employed in Kaiser Aetna seems to be cut from different cloth than the penetrating, strongly progovernmental approach found in prior takings cases. After breaking with precedent to hold exclusive access to waters a "fundamental" component of property ownership that "has the law back of it," the Court made no further attempt to value that right, to value the opposing interest of the public in free navigation, or to reconcile these competing interests. It is also notable that six members of the Court thought it proper to focus solely on this narrow aspect of ownership rights, rather than on the value of the parcel as a whole.

Vaughn crystallizes what was said obliquely in Kaiser Aetna but not without questioning its logical foundation. Vaughn gives complete assurance that if private developers construct artificial lakes or canals on private property, as long as they do not simply dike or divert a navigable stream, no court will rule that such waters are subject to free public use, although other federal regulatory requirements will nevertheless apply. The reason that the public may be excluded is not based on takings principles, however, for if, as in Vaughn, a private citizen rather than the government were to sue for access, the Fifth Amendment would be irrelevant. What the Court has ruled is that the navigational servitude does not extend to privately constructed waters, even though they may now meet the "navigable in fact" or other traditional tests of navigability.

Though this is clearly a break with precedent, it does not lead to a particularly troublesome result and arguably does not do violence to the historical bases and purposes of the navigational servitude. Unfortunately, the Court chose a long route to go a short distance and, in the process, generated dicta which muddy the waters in unrelated areas of the law.

1. Kaiser Aetna v. United States, 48 U.S.L.W. 4045, 4049, 10 ELR 20042, 20046 (Dec. 4, 1979).

2. 48 U.S.L.W. 4045, 10 ELR 20042 (Dec. 4, 1979).

3. United States v. Kaiser Aetna, 408 F. Supp. 42, 6 ELR 20526 (D. Hawaii 1976).

4. United States v. Kaiser Aetna, 584 F.2d 378, 8 ELR 20910 (9th Cir. 1978).

5. U.S. CONST. art. 1, § 8, cl. 3.

6. Cf. Hohfeld, Some Fundamental Legal Conceptions As Applied in Legal Reasoning, 23 YALE L.J. 16, 21-24 (1913).

7. 438 U.S. 104, 130-131, 8 ELR 20528, 20534 (1978).

8. The Daniel Ball, 77 U.S. (10 Wall.) 557, 563 (1870).

9. See Morreale, Federal Power in Western Waters: The Navigation Power and the Rule of No Compensation, 3 NAT. RES. J. 1, 26 (1963).

10. See TRELEASE, FEDERAL-STATE RELATIONS IN THE LAW OF WATER RIGHTS 74 (National Water Comm. 1971).

11. Morreale, supra note 9, at 10.

12. Union Bridge Co. v. United States, 204 U.S. 364 (1907).

13. Economy Light & Power Co. v. United States, 256 U.S. 113 (1921).

14. Louisville Bridge Co. v. United States, 242 U.S. 409 (1917).

15. United States v. Rio Grande Dam & River Irr. Co., 174 U.S. 690 (1899).

16. United States v. Twin City Power Co., 350 U.S. 222 (1956).

17. Id.

18. Id. at 225.

19. 389 U.S. 121 (1967).

20. 324 U.S. 386 (1945).

21. Id. at 390.

22. 166 U.S. 269 (1897).

23. Id. at 276.

24. See Morreale, supra note 9, at 25 n.132.

25. 77 U.S. (10 Wall.) 557, 563 (1870).

26. Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508 (1941); Arizona v. California, 283 U.S. 423, 453-54 (1931).

27. United States v. Appalachian Power Co., 311 U.S. 377 (1940).

28. United States v. Grand River Dam Auth., 363 U.S. 229, 233 (1960).

29. United States v. Kaiser Aetna, 408 F. Supp. 42, 6 ELR 20526 (D. Hawaii 1976).

30. 408 F. Supp. at 54.

31. United States v. Kaiser Aetna, 584 F.2d 378, 8 ELR 20910 (9th Cir. 1978).

32. Citing Wickard v. Filburn, 317 U.S. 111 (1942) (minimum wage laws); United States v. Darby, 312 U.S. 100 (1941) (agricultural marketing quotas); NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937) (labor relations).

33. 48 U.S.L.W. at 4048, 10 ELR at 20045.

34. Id.

35. Id.

36. 48 U.S.L.W. at 4049, 10 ELR at 20046.

37. 48 U.S.L.W. at 4048, 10 ELR at 20045.

38. 48 U.S.L.W. at 4049, 10 ELR at 20045.

39. See United States v. Causby, 328 U.S. 256, 265 (1946).

40. 48 U.S.L.W. at 4049, 10 ELR at 20046.

41. 48 U.S.L.W. at 4050, 10 ELR at 20046.

42. See, e.g., the Court's almost mile-by-mile description of the New River in United States v. Appalachian Power Co., 311 U.S. 377, 410-419 (1940).

43. Certainly the pond satisfied the "ebb and flow" test in its natural state, as it was little more than a tidal pool. The Court's response was that even if this is so, "[t]his Court has never held, however, that whenever a body of water satisifies this mechanical test, the government may invoke the 'navigational servitude' to avoid payment of just compensation irrespective of the private interests at stake." 48 U.S.L.W. at 4049 n.10, 10 ELR at 20046 n.10.

It could also be argued that the pond was always capable of being made navigable by "reasonable improvements," since it was separated from the adjacent bay only by grates placed in man-made openings in the barrier beach.

44. See Hadacheck v. Sebastian, 239 U.S. 394 (1915) (87.5 percent reduction in property value held not to constitute a taking); accord, Goldblatt v. City of Hempstead, 269 U.S. 590 (1962) (closure of sand and gravel excavation operation).

45. See Penn Central Transportation Co. v. United States, 438 U.S. 104, 8 ELR 20528 (1978). See also Comment, Historic Preservation and the Takings Issue: Supreme Court Upholds New York City's Landmarks Law, 8 ELR 10149, 10151 (1978).

46. 48 U.S.L.W. at 4049, 10 ELR at 20045.

47. 48 U.S.L.W. at 4049, 10 ELR at 20046.

48. It is noteworthy that this was the view taken by the six-man majority opinion, from which Justice Rehnquist dissented on the ground that loss of the air rights, i.e., development rights, above Grand Central Terminal was alone sufficient to establish a taking. 438 U.S. at 660-666, 8 ELR at 20537-40.

49. 48 U.S.L.W. at 4049, 10 ELR at 20046.

50. Id.

51. Id.

52. Id.

53. 48 U.S.L.W. 4053, 10 ELR 20050 (Dec. 4, 1979), remanding 356 So. 2d 551, writ denied, 357 So. 2d 558 (La. 1978).

54. Id.

55. Note, however, that the pond in Kaiser Aetna was opened to the sea in much the same way that the canals in Vaughan apparently are alleged to have been filled with navigable waters.

56. 48 U.S.L.W. at 4048, 10 ELR at 20045.