We won't go into the details of the Court of Federal Claims' opinion and order in In re Upstream Addicks and Barker (Texas) Flood Control Reservoirs, No. 17-9001L (Dec. 17, 2019), since it is 46 single-spaced pages long. You can (and should) read the entire thing. But we shall highlight of a few of the highlights, since this is definitely a case to watch, especially as it progresses to the (inevitable) appeal to the Federal Circuit.
This is the case in which Texas owners whose property upstream of two government created and maintained dams was intentionally flooded by the Corps of Engineers after Hurricane Harvey sued the feds for just compensation for a taking. The government sought dismissal, but after a 10-day trial, the CFC held the government is "liable for a taking on a flowage easement on the [thirteen test] properties." Slip op. at 3.
The court summarized the case and issues:
After making landfall in August 2017, Tropical Storm Harvey (“Harvey”) doused Houston with an average of 33.7 inches of rain over a four-day period. Many properties, including over 150,000 homes, flooded during the storm. Those affected included private property owners within the Addicks and Barker Reservoirs, west of Houston, upstream of the federally designed, built, and maintained Addicks and Barker Dams. During Harvey, the Addicks and Barker Dams collected storm water in their respective reservoirs causing properties within the reservoir to flood from the impounded water. At issue in this bellwether trial is the liability of the government under the Tucker Act, 28 U.S.C. § 1491, and the Takings Clause of the Fifth Amendment of the Constitution, for the damage to thirteen of these properties.
Slip op. at 2 (footnote omitted). The Corps of Engineers could have released water from the dams, but doing so would have flooded downstream properties. The U.S. Supreme Court's opinion in Arkansas Game and Fish Comm’n v. United States, 568 U.S. 23, 37 (2012) remains the polestar for flooding cases, and that provided the lens through which the CFC looked at the facts and the law.
To us, the big issue is the “tort” vs “taking” argument the government put forward but which the CFC rejected. We presume the feds focused a lot of energy on that because of the MR/GO decision in which the Federal Circuit held that omissions by the government are torty not takings-y. While the issues presented are not the same here (indeed, the CFC opinion here doesn't reference the MR/GO decision at all, because this case involved what the court concluded was a "calculated" decision by the Corps to not release water, contrasted with MR/GO which was more about failure to maintain), we think the torty vibe of the government's argument will factor large in its Federal Circuit briefing.
To us, the most interesting part of the CFC opinion on that issue starts on page 45, “Defenses to Liability.” Especially the “necessity” defense. In short, the government argued that it can be excused from paying for the flooded properties because it was acting in the common and greater good, to protect everyone. This was an "emergency." But the CFC correctly recognized that the necessity defense only works – if at all – in situations where the harm caused was “unavoidable.”
The classic example is when the government blows up homes to create a firebreak when the city is on fire. If the homes blown up to save others’ homes were going to burn down in the fire anyway, there’s no taking according to the courts. As the CFC correctly put it, "'[t]hus, it was not that the government had to respond to Tropical Storm Harvey as an emergency that necessitated the flooding of private land,' but rather that the government had made a calculated decision to allow for flooding these lands years before Harvey, when it designed, modified, and maintained the dams in such a way that would flood private properties during severe storms.” Slip op. at 45. In other words, the government long ago purposefully chose that someone's private property would have to take the hit during severe storms.
To us, this is precisely the situation in which the Supreme Court held that the Takings Clause works to spread the cost over all who benefit, and not concentrate costs solely on the property owners whom the government selects to bear the brunt of the damage.
While not binding on any other courts, the CFC’s opinion certainly sets out a roadmap that other courts considering similar claims could follow. The Supreme Court’s “takings” doctrine isn’t necessarily one that is easy to comprehend, and this opinion does address it in an understandable way, in our view. The long-term usefulness of the CFC opinion will - as above - turn on whether it survives appellate review by the Federal Circuit, of course, and that takes us to our biggest question (as noted above), whether the decision will survive review by the Federal Circuit, which as you know has been somewhat of a mixed bag when it comes to these type of cases. In the MR/GO case involving Katrina-related flooding in New Orleans, for example, the Federal Circuit overturned the CFC’s takings verdict on the basis that the government’s actions there were more tort than takings. The Supreme Court denied review in that case. We shall see here.
The CFC also rightly rejected the Government's argument that Texas property is always subject to flood control projects, so the plaintiffs here have no right to be free of flood waters that emanate from such projects. But the CFC concluded that this isn’t some consequential side effect of a flood control project, but the Government making a “conscious decision” to flood Property A instead of Property B (pretty much the same circumstance that was presented in Arkansas Game).Finally, one thing that really sticks out to us is the government arguments the CFC rejected (see slip op. at 28, first paragraph for example). Especially the argument that “plaintiffs have no right to be free from invasions because their ownership post-dates the dams’ construction.” Oh my. That type of argument was rejected by the US Supreme Court in Palazzolo v. Rhode Island back in 2001 (you don’t lose property rights simply by obtaining property subject to regulatory restrictions), yet governments nationwide continue to make this very argument. Until the Supreme Court weighs in (again) to clarify, expect this to continue.
This opinion isn't the last we're all going to hear about this case, so stay tuned.
Order and Opinion, In re Upstream Addicks and Barker (Texas) Flood Control Reservoirs, No. 17-9001L
