December 22, 2017 Article

Is There a Compensable Taking When a Dam Release Causes Billions of Dollars in Damages?

Homeowners allege that the government, in causing flooding to homes post-hurricane Harvey from the Addicks and Barker dams, took their property under the Fifth Amendment

by Justin A. Hodge and Ashley M. Croswell

There exists a perception that takings liability for government-induced flooding is in a somewhat inconsistent state; cases with similar facts often yield conflicting results. But upon a closer analysis, courts have determined the existence vel non of compensable takings in a remarkably consistent way. Although many practitioners focus on the temporary nature of the flood and damage to determine liability, the way to analyze takings caused by floods, in a manner more consistent with the case law, is to examine causation and the foreseeability of the flooding. The Supreme Court declared in 2012 that flooding caused by the government, temporary in duration, is not categorically exempt from Takings Clause inspection. Arkansas Game & Fish Comm’n v. United States, 568 U.S. 23, 40 (2012). Said another way, government-induced flooding, even if temporary in nature, can rise to the level of a taking under the Fifth Amendment depending on the circumstances.    

Such is the situation for a large group of Houstonians, flooded not from Hurricane Harvey but via the massive releases of water from the Addicks and Barker reservoirs in West Houston. Defense Video Imagery Distribution System, USACE Harvey Timeline (Sept. 4, 2017), An estimated 9,000 homes flooded from that event. The owners of over a thousand of these homes have joined lawsuits alleging that the Army Corps of Engineers’ choice to flood their properties is a taking under the Fifth Amendment. These plaintiffs fall into two broad categories: (1) “upstream” plaintiffs whose homes were flooded from dam water backing up into their residences and (2) “downstream” plaintiffs whose homes were flooded from the Corps opening floodgates to allow water to rush through Buffalo Bayou at unprecedented levels.

In either situation, these plaintiffs will have their cases decided in the Court of Federal Claims, a non-Article III federal court with exclusive jurisdiction for certain claims against the federal government. These claims will likely total in the billions of dollars in potential damages and invoke takings jurisprudence as it applies to flooding from dams owned and operated by the government.

A takings analysis differs depending on whether the government has physically invaded a property (via water, sand, sewage, etc.) or whether it has restricted the use of the property through regulation. Regulatory takings usually occur when a governmental restriction on the use of private property “goes too far,” depriving the owner of some or all of the critical rights of ownership. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). Regulatory takings are generally examined under the factors set forth in Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978), which analyze (1) the character of the government’s action, (2) the economic impact on the property, and (3) the degree of interference with reasonable investment-backed expectations. For a more in-depth analysis of this area of the law, see this comprehensive law review article written by Brian T. Hodges, the attorney who filed amicus briefs in support of the landowners in the Arkansas Game & Fish case.

But physical takings result from invasions or occupations of private property by the government and are analyzed through a different legal lens. All flooding, physical-invasion-type takings cases can fit within a single framework: There is a taking when the government causes a physical invasion by water, intending or foreseeing that the water will cross certain properties, and, the flooding is permanent, causes significant harm, or significantly interferes with the owner’s possession or use and enjoyment of the property.

The government has previously argued—and will likely argue in these cases—that if a flood only occurs one time, then the government is not liable, reasoning that the flood is a non-compensable trespass and does not rise to the level of a taking. But this alleged “one-free-flood rule” will be a difficult theory to defend. The Fifth Amendment does not say “nor shall private property be taken more than one time for public use without just compensation.” Instead, for liability determinations, repetition merely provides evidence of the government’s intent or the foreseeability of the invasion—and is also relevant to whether an owner’s rights to possession or use and enjoyment have been significantly infringed.

And yet, specific intent to invade the plaintiff’s land is not required. As Arkansas Game & Fish explains, it is enough that the government knows that flooding will be the direct, natural, or probable result of its activity. The Supreme Court’s 2012 decision in Arkansas Game & Fish, about temporary government-induced flooding, will play a vital role in these Addicks and Barker dam-release cases. It holds that a permanent invasion of floodwater is not the only way to establish takings liability. There is a taking when personal property is destroyed or significantly damaged, even by temporary governmental action.

There are approximately 9,000 Houstonians who, after finding themselves virtually unharmed after Hurricane Harvey, suffered the destruction of their homes, cars, computers, clothes, furniture, family heirlooms, photographs, and other personal property, without much warning about the release of water. These landowners will be relying on the courts to uphold Supreme Court precedent on takings liability for government-induced flooding. With billions of dollars potentially at stake, the consolidated dockets for the upstream and downstream cases—17-9001, In re Upstream Addicks and Barker (Texas) Flood-Control Reservoirs v. USA and 17-9002, In re Downstream Addicks and Barker (Texas) Flood-Control Reservoirs v. USA—will be an important set of cases to watch.

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