In Stueve Bros. Farms, LLC v. United States, No. 21013-5012 (Dec. 11, 2013), the Federal Circuit concluded that the government is not liable for a physical invasion taking when a dam enlargement project raised the maximum flood line on the plaintiff's land by 10 feet, because there has yet to be an actual physical invasion of the property.
The landowner limited its claim to a physical taking, and did not make any claim for a regulatory taking (see slip op. at 5 n.1), and the court rejected each of its arguments that the totality of the circumstances added up to a physical take, because the government has not caused any flooding outside the scope of its previously-acquired flowage easement. The court acknowledged that the Corps of Engineers' dam improvement project has been ongoing for 20 years, and that the Corps intended at one point to acquire a flowage easement over the property subject to the heightened inundation line:
The sum and substance of the various governmental actions of which the plaintiffs complain is that the Corps of Engineers was authorized to acquire a flowage easement over the plaintiffs’ property. But after negotiations for the purchase of the property fell through, the Corps of Engineers and the local governmental agencies failed to acquire the property by eminent domain, while nonetheless continuing to treat the 566-foot line as the maximum level of flooding that could result from operation of the Prado Dam. The combination of the threat of flooding and the city’s zoning regulations, according to the plaintiffs, largely destroyed the value of their property by depriving them, or any potential purchaser, of the incentive or ability to develop the property.
Slip op. at 16-17. But the court held that's not enough, because the Corps had not "taken steps that directly and substantially interefered with the owner's property rights to the extent of rendering the property unusable or valueless to the owner,"and that under existing Supreme Court precedent, an actual flood is required in order for a plaintiff to show a physical take. Id. at 17.
The court affirmed the ruling of the Court of Federal Claims (available here), and in a footnote blew by the property owner's arguments that Arkansas Game rejected per se rules (such as "a flood is necessary to allege a physical take") and imposed a case-by-case "totality of the circumstances" test in cases where physical takings are alleged:
The plaintiffs also rely on the Supreme Court’s recent decision in Arkansas Game & Fish Comm’n v. United States, 133 S. Ct. 511 (2012), but that case merely held that a temporary period of flooding can give rise to a temporary physical taking. It said nothing about whether a physical taking by flooding requires actual flooding.Slip op. at 9 n.2.
We haven't quite made up our minds on this one. On one hand, the Federal Circuit's announced rule that there must be an actual flood in order for the plaintiff to allege that its property within the raised inundation zone has been physically taken by the Corps appeals to our logical side. We get that a "physical take" should require some physical invasion. Yet, something about the situation in this case strikes us as fundamentally unfair -- the Corps raised the inundation zone, which in essence declared that the plaintiff's property was going to be flooded eventually. As a result, the city downzoned the property, thereby limiting what could be done with it, even if the owner was willing to risk developing it. And, in the past, the Corps had eventually condemned a flowage easement on this very property when it originally constructed the dam. Besides, what was the Corps up to when it raised the inundation level and planted markers on the plaintiff's property if it wasn't intending to flood that land? It seems wrong to us that the Corps can place the property under a cloud, but then claim it doesn't need to actually take it.
Listen to the Federal Circuit oral arguments here.