Here's the latest in a case we've been following.
In Ideker Farms, Inc. v. United States, No. 21-1949 (June 16, 2023), the U.S. Court of Appeals for the Federal Circuit held that temporary, but recurring government-caused flooding was correctly treated by the Court of Federal Claims as a categorical per se taking, and not under Arkansas Game & Fish's Penn-Central-plus multifactor test. The court also held that the property owners are entitled to just compensation for their lost crops.
The opinion is pretty dense (39 single-spaced pages) so we're not going to provide a blow-by-blow account of the arguments and the court's reasoning. But we will hit some of the highlights:
- The Missouri River floods annually. In the 1990s, the Corps of Engineer and Fish and Wildlife Service "began discussions concerning proposed changes to the River designed to mitigate the environmental impact" of the federal flood control measures built and installed long ago. Eventually (you know where this is going, don't you?), the federal agencies decided to "restor[e] the Missouri River to a more natural state," and abandoned its former policy of prioritizing flood control (2004 Changes).
- Well guess what? "While the period from 2000-2006 was largely a drought, periodic flooding returned in 2007, 2008, 2010, 2011, 2013, and 2014." Slip op. at 7. Property owners on the short end "alleged the 2004 Change caused frequent and severe flooding on Plaintiffs' farms between 2007 and 2014 that amounted to permanent, physical takings under the Fifth Amendment." Id.
- Eventually, the CFC concluded the government caused the flooding and after a trial held the government liable for taking a permanent flowage easement. Just compensation awarded to the three representative plaintiffs: $7 million. That compensation did not include anything for the loss of the crops destroyed; the CFC held that loss was a consequential damage and not recoverable. Slip op. at 8. Both sides appealed: the government from the liability judgment, the owners from the denial of crop compensation.
- The Federal Circuit first rejected the government's statute of limitations argument (there always seems to be one of those, doesn't there?). The "stabilization" doctrine, which instructs courts to look when the impact of the government's acts or omissions stabilized when the impacts are spread out over time, applies here. See slip op. at 15 ("When a reasonable plaintiff knew or should have known that his claim stabilized does not need to correspond identically with the physical event giving rise to liability."). Thus, a takings claim need not invariably be triggered by the physical event giving rise to liability occurs. When the harm stabilizes is a fact question, and the CFC was not clearly erroneous when it concluded the damage settled in 2014, not earlier. Slip op. at 16.
- On to the merits of the takings claim. The court rejected the government's argument that the flooding must be analyzed under the Penn-Central-plus factors for temporary flooding outlined by the Supreme Court in Arkansas Game & Fish. True, the flooding here did not cover the plaintiffs' properties permanently with water. "The [CFC] accepted based on the parties' stipulation that the flooding in this case is permanent, not temporary, in nature. In short, the Government has not ceased and does not plan to cease flooding Plaintiffs' lands." Slip op. at 19. If it wasn't clear enough from Arkansas Game & Fish that permanent-yet-intermittent flooding is treated as a categorical taking, then the Supreme Court's more-recent Cedar Point opinion makes that "abundantly clear."
Where the government takes a permanent right of access, akin to an easement in gross, even if used only intermittently, it is unquestionably an appropriation of the owner’s right to exclude. It is undisputed that the Corps has permanently burdened Plaintiffs’ land with a right to access their land with flood waters.Slip op. at 20.
- Here's the holding: "Accordingly, Arkansas Game & Fish II’s multi-factor test does not apply to permanently recurring flooding. Instead, such flooding that foreseeably or intentionally results from government action is a categorical physical taking." Slip op. at 21-22.
- Some clarification: "To be clear, we do not alter or amend our trespass-versus-takings jurisprudence or question the applicability of Arkansas Game & Fish II to temporary floodings. Cedar Point, 141 S. Ct. at 2078 (“[O]ur holding does nothing to efface the distinction between trespass and takings. Isolated physical invasions, not undertaken pursuant to a granted right of access, are properly assessed as individual torts rather than appropriations of a property right.”). Nor do we establish a hardline rule for establishing what is a permanent or recurring flooding. We simply reinforce the principle that the permanent appropriation of a flowage easement is 'clear enough' to be on the side of a per se taking and not a trespass." Slip op. at 22 (some citations omitted).
- The Federal Circuit also upheld the CFC's causation analysis. Check out pages 22-29. We think the critical part of this analysis is the court's rejection of the government's assertion that this case is like the MR-GO case in which the Federal Circuit held that Katrina-related flooding is a tort not a taking.
- The crop-damage analysis begins at page 31. The court agreed with the property owners that their crops are "property" for which they are entitled to receive just compensation and the loss of the crops aren't (uncompensated) consequential damages. Those damages are damages that flow from the taking and are collateral. After all, the flooding wiped out the crops, and it wasn't just some side effect. Slip op. at 33.
- "Plaintiffs do not claim compensation consequential to the taking of an easement—rather, they seek compensation for the government’s appropriation
of two distinct property interests." Slip op. at 34.
Will the federal government try and take this one further up the chain? We'll see.
Ideker Farms, Inc. v. United States, No. 21-1849 (Fed. Cir. June 16, 2023)
