Kaiser Aetna v. United States

KAISER AETNA ET AL. v. UNITED STATES.

Certiorari to the United States Court of Appeals for the Ninth Circuit.

No. 78-738. Argued October 1, 1979 — Decided December 4, 1979.

584 F. 2d 378, reversed.

Richard Charles Bocken argued the cause for petitioners. With him on the briefs was George Richard Marry. Kathryn A. Oberly argued the cause for the United States. With her on the brief were Solicitor General McCree, Assistant Attorney General Moorman, William Alsup, Raymond N. Zagone, and Martin Green.

The report occupies pages 164 through 193 of volume 444 of the United States Reports. The opinion of the Court, delivered by Mr. Justice Rehnquist, begins at page 165 and closes at page 180. Mr. Justice Blackmun filed a dissenting opinion, in which Mr. Justice Brennan and Mr. Justice Marshall joined, beginning at page 180.

[444 U.S. 164] “Held: If the Government wishes to make what was formerly Kuapa Pond into a public aquatic park after petitioners 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 the public free access to the dredged pond. Although the dredged pond falls within [444 U.S. 165] the definition of ‘navigable waters’ as this Court has used that term in delimiting the boundaries of Congress' regulatory authority under the Commerce Clause, this Court has never held that the federal navigational servitude creates a blanket exception to the Takings Clause of the Fifth Amendment whenever Congress exercises its Commerce Clause authority to promote navigation. . . . Here the Government's attempt to create a public right of access to the improved pond goes so far beyond ordinary regulation or improvement for navigation involved in typical riparian condemnation cases as to amount to a taking requiring just compensation. Cf. Pennsylvania Coal Co. v. Mahon, 260 U. S. 393. Pp. 170-180.”

[444 U.S. 165] “584 F. 2d 378, reversed.”

[444 U.S. 165] “REHNQUIST, J., delivered the opinion of the Court, in which BURGER, C. J., and STEWART, WHITE, POWELL, and STEVENS, JJ., joined. BLACKMUN, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 180.”

[444 U.S. 165] “The Hawaii Kai Marina was developed by the dredging and filling of Kuapa Pond, which was a shallow lagoon separated from Maunalua Bay and the Pacific Ocean by a barrier beach. Although under Hawaii law Kuapa Pond was private property, the Court of Appeals for the Ninth Circuit held that [444 U.S. 166] when petitioners converted the pond into a marina and thereby connected it to the bay, it became subject to the ‘navigational servitude’ of the Federal Government. Thus, the public acquired a right of access to what was once petitioners' private pond. We granted certiorari because of the importance of the issue and a conflict concerning the scope and nature of the servitude.”

[444 U.S. 166] “Kuapa Pond, and other Hawaiian fishponds, have always been considered to be private property by landowners and by the Hawaiian government. Such ponds were once an integral part of the Hawaiian feudal system. And in 1848 they were [444 U.S. 167] allotted as parts of large land units, known as ‘ahupuaas,’ by King Kamehameha III during the Great Mahele or royal land division. Titles to the fishponds were recognized to the same extent and in the same manner as rights in more orthodox fast land.”

[444 U.S. 167] “When petitioners notified the Army Corps of Engineers of their plans in 1961, the Corps advised them they were not required to obtain permits for the development of and operations in Kuapa Pond.”

[444 U.S. 174] “In light of its expansive authority under the Commerce Clause, there is no question but that Congress could assure the public a free right of access to the Hawaii Kai Marina if it so chose. Whether a statute or regulation that went so far amounted to a ‘taking,’ however, is an entirely separate question. Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 415 (1922).”

[444 U.S. 175] “[T]his Court has generally ‘been unable to develop any ‘set formula’ for determining when ‘justice and fairness’ require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons.’ . . . Rather, it has examined the ‘taking’ question by engaging in essentially ad hoc, factual inquiries that have identified several factors — such as the economic impact of the regulation, its interference with reasonable investment backed expectations, and the character of the governmental action — that have particular significance.”

[444 U.S. 178] “Here, the Government's attempt to create a public right of access to the improved pond goes so far beyond ordinary regulation or improvement for navigation as to amount to a taking under the logic of Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 (1922). More than one factor contributes to this result. It is clear that prior to its improvement, Kuapa Pond was incapable of being used as a continuous highway for the purpose of navigation in interstate commerce. Its maximum depth at high tide was a mere two feet, it was separated from the adjacent bay and ocean by a natural barrier beach, and its principal commercial value was limited to fishing.”

[444 U.S. 179] “We have not the slightest doubt that the Government could have refused to allow such dredging on the ground that it would have impaired navigation in the bay, or could have conditioned its approval of the dredging on petitioners' agreement to comply with various measures that it deemed appropriate for the promotion of navigation. But what petitioners now have is a body of water that was private property under Hawaiian law, linked to navigable water by a channel dredged by them with the consent of the Government.”

[444 U.S. 179] “[The consent of individual officials representing the United States] can 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. In this case, we hold that the ‘right to exclude,’ so universally held to be a fundamental element of [444 U.S. 180] the property right, falls within this category of interests that the Government cannot take without compensation.”

[444 U.S. 180] “Thus, if the Government wishes to make what was formerly Kuapa Pond into a public aquatic park after petitioners 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 while petitioners' agreement with their customers calls for an annual $72 regular fee.”

[444 U.S. 180] “Accordingly the judgment of the Court of Appeals is Reversed.”

[444 U.S. 180] “The Court holds today that, absent compensation, the public may be denied a right of access to ‘navigable waters of the United States.’” — opening the dissent, which contends that navigability in fact brings the navigational servitude with it regardless of who paid for the improvement, and that petitioners assumed the risk of that consequence when they connected the pond to the bay.

Editorial note. This record is a research edition, not a substitute for the official reporter. It reproduces the Reporter of Decisions apparatus in full and reproduces the opinion of the Court in extended verbatim excerpts, arranged under the Court's own sequence of analysis, each bracketed with the official United States Reports page on which the passage appears. Every quotation mark encloses the Court's or the Reporter's own words.

Editorial note. Four limitations are declared. First, the discussion of Hawaiian history and title (pages 166 through 169) is reproduced only in the passages needed to establish that Kuapa Pond had always been treated as private property. Second, Parts II.A through II.C of the opinion (pages 170 through 178), which review the reach of Congress's authority over navigable waters, are reproduced only in the load-bearing sentences that carry the Court's holding forward; the survey of nineteenth- and early twentieth-century navigation cases is not reproduced. Third, the dissenting opinion of Mr. Justice Blackmun, joined by Justices Brennan and Marshall (pages 180 through 193), is presented as an opening quotation with an editorial summary of its ground of disagreement rather than reproduced in full. Fourth, the Court's footnotes are not reproduced, except where the Court's text itself relies on them; the reader is referred to the bound volume through the canonical source recorded with this authority.

Editorial note. Kuapa Pond was a shallow fishpond on the island of Oahu, separated from Maunalua Bay by a barrier beach and held in private ownership from the time of the Great Mahele. The petitioners, developers of the Hawaii Kai subdivision, dredged and improved the pond at their own expense and cut a channel connecting it to the bay, converting it into a marina serving the surrounding residential development. The Corps of Engineers was aware of the work and did not assert any public right of access at the time. Only later did the United States contend that the marina, having become navigable water, was subject to a public right of navigation and that the owners could not exclude the boating public.

Editorial note. The District Court held that the owners could exclude the public but that the Corps had regulatory jurisdiction over the marina. The Court of Appeals for the Ninth Circuit held that the pond had become navigable water of the United States and that the public acquired a right of access without compensation. The Supreme Court reversed.

Editorial note. Even assuming the marina had become navigable in fact, the imposition of a public right of access would take the owners' property, and the United States must pay just compensation if it wishes to open the marina to the public. The rule derived is that the navigational servitude, an incident of the federal commerce power over waters navigable in their natural condition, does not extend of its own force to waterways created by private investment; and that the right to exclude others, in the circumstances of investment and reliance shown, is an interest of sufficient consequence that its destruction requires payment.

Editorial note. Mr. Justice Rehnquist distinguished the reach of Congress's regulatory power from the reach of the servitude that permits the Government to act without compensation. He accepted that the marina fell within the regulatory authority conferred by the Commerce Clause, but reasoned that the consequences of navigability for compensation purposes depend on the history of the particular waterway. The owners had invested in reliance on their exclusive interest; the pond had never been open to the public in its natural state; and the Government had not asserted a right of access until the improvement was complete. In that setting the right to exclude, described as one of the most essential sticks in the bundle of rights that are commonly characterised as property, could not be appropriated gratuitously. Mr. Justice Blackmun, dissenting, took the view that navigability in fact brought the servitude with it and that the owners had assumed the risk of that consequence.

Editorial note. Kaiser Aetna supplies the formulation of the right to exclude that later per se takings decisions adopted, and it establishes that the classification of a waterway for regulatory purposes does not settle the compensation question. For the treatise it belongs both to the law of water rights and public access and to the law of takings, where it is the natural companion of Loretto and Cedar Point Nursery in the line of cases treating compelled access as a taking without regard to economic impact.

Editorial note. Followed. The characterisation of the right to exclude was relied on in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021). Distinguished in cases concerning waters navigable in their natural condition, where the servitude applies without compensation.

Editorial note. Read with U.S. Const. amend. V, and the treatise chapters on water rights and public access, on the right to exclude, and on physical takings.