THE FLOOD OF TAKINGS CASES AFTER HURRICANE HARVEY

 

On August 27, as Hurricane Harvey blew through the Houston area, the U.S. Army Corps of Engineers found itself between the proverbial rock and hard place. Since the 1940s, it had operated a flood control project to control the risk of flood damage to downtown Houston and the Houston Ship Channel. It had accomplished this by carefully controlling the release of flood waters from the project’s dams. Now, however, the Corps confronted Hurricane Harvey, a megastorm generating massive, unprecedented volumes of flood water.

The Corps faced the choice of either limiting water releases from the project to protect downstream properties at the cost of flooding upstream properties, or increasing project releases to protect upstream properties at the cost of flooding downstream properties. Not surprisingly, the Corps’ decision on August 27 and on the following days, to release up to 13,000 cubic feet per second from the project dams, which arguably contributed to the flooding of both downstream and upstream properties, left everyone unhappy.

What is surprising is that property owners upstream and downstream from the project have now filed as least 61 – yes, 61! – separate lawsuits in the U.S. Court of Federal Claims (CFC) asserting  a “taking” of their private property under the Takings Clause of the Fifth Amendment of the U.S. Constitution. All told, the complaints seek “just compensation” from the U.S. government to the tune of several billions of dollars.

Generally speaking, the plaintiffs assert that the flooding of their properties would not have occurred in the absence of the Corps’ decision, noting in many complaints that their flooded properties were outside the 100-year floodplain. Downstream plaintiffs focus on the fact that the project release gates were undergoing repair at the time Harvey struck, and the Corps realized the gates might give way completely if it attempted to hold back too much water. These plaintiffs claim that by reducing water releases to safeguard the project – as well as to protect certain other property owners from flooding – the Corps sacrificed their properties to serve its own goals and benefit the other property owners. On the other hand, upstream plaintiffs assert that, because the Corps’ limited the release of flood waters, they suffered flooding and consequent property damage.

A quick review of these complaints reveals a number of interesting issues. The first point to emphasize, however, is that all of these cases would have been laughed out of court prior to the Supreme Court’s 2012 decision in Arkansas Game & Fish Comm’n v. United States. Prior to that decision, the United States could and did successfully argue that it could not be held liable under the Takings Clause for temporary flood events. In Arkansas, the Court repudiated that bright line rule, determined that even temporary (possibly even one-time) flooding events could give rise to takings liability, and set forth a complex, multi-factor, fact-specific framework for analyzing such claims. Arkansas does not necessarily mean the Harvey plaintiffs will necessarily prevail, but it gives them a shot.

Justice Ruth Bader Ginsburg, writing for the Court in Arkansas, contended, somewhat defensively, that the Court’s new, more expansive takings standard “augurs no deluge of takings liability.” The flood of takings claims filed in the aftermath of Harvey obviously will put Justice Ginsburg’s reassuring words to the test.

One major issue in these cases will be causation. Most of the complaints, filed by both upstream and downstream plaintiffs, allege that the flooding was the direct, natural, and probable consequence of the Corps’ releases – that plaintiffs’ properties would not have flooded otherwise. But at least with respect to the downstream properties, if the Corps had held back more water, would the project release gates have collapsed, causing even more downstream flooding? If so, there arguably was nothing the Corps could have done to avoid the flooding. Or, at a minimum, the Corps may have made the best decision it could in an emergency to reduce property damage.

Apart from the issue of the structural integrity of the release gates, the record-setting rainfall during Harvey suggests that, at bottom, the Corps’ Houston-area flood control project was simply inadequate to deal with Harvey. Viewed this way, the Harvey flooding cases are like the 2007 case of Nicholson v. United States, in which the U.S. Court of Federal Claims rejected the argument that the overtopping of the Corps levee protecting New Orleans during Hurricane Katrina was a taking. It was the hurricane, not the Corps, that caused the flooding, said the court, because the flooding was so great that the levee made no difference. In the same vein, as far back as 1939, the Supreme Court held in United States v. Sponenbarger that a government flood control program does not effect a taking of lands the government chooses not to, or cannot, protect.

Another issue is how the plaintiffs’ claims might fare under the Arkansas decisionThe Supreme Court explained in Arkansas that relevant factors will include the severity of the intrusion on private property caused by this single, unprecedented event, the character of the properties at issue and the owners’ “reasonable investment-backed expectations” relating to their lands, and the extent to which the flooding was the intended or the foreseeable result of authorized government action. Suffice it to say that it is difficult to predict how these factors will apply to different plaintiffs’ undoubtedly widely varying factual circumstances. The fact that Houston was already one of the most flood-prone cities in the country will certainly not cut in plaintiffs’ favor.

Third, the Corps’ choice of the rate at which to release water from the Houston project during Hurricane Harvey raises the issue of how the Takings Clause should apply when the government has nothing but bad options. In the famous 1928 case of Miller v. Schoene, the Supreme Court held that the government could not be held liable under the Takings Clause for ordering the destruction of ornamental cedar trees, which served as host to a fungus that threatened nearby apple orchards. If the government had not ordered the destruction of the cedars, the apple trees would have been destroyed by the fungus instead, the Court reasoned, and in this circumstance, the government could pick what it perceives to be the least harmful option without incurring takings liability. Does this venerable precedent control the Harvey flooding cases?

Looking to the future, and anticipating more frequent and larger precipitation events due to climate change, the Harvey takings cases might be the prelude to a veritable torrent of future takings litigation, especially if some or even a few of the Harvey claimants succeed. Takings doctrine might become a kind of social insurance program for risk associated with climate change, at least for those climate change victims fortunate enough to be able to point to a deep-pocketed defendant like the United States.  At the same time, successful takings litigation may actually impede initiative to take steps to avoid the worst effects of climate change, undermining our collective ability to build more resilient communities.

John Echeverria, Center for Progressive Reform, Member Scholar; Professor, Vermont Law School

Robert Meltz, Special Counsel, Defenders of Wildlife


Horne: Supreme Court Says Seizures of Personal Property Are Subject to a Per Se Rule

The U.S. Supreme Court issued its decision today in Horne v. Department of Agriculture, reversing the Ninth Circuit and ruling that the Hornes are not subject to monetary fines for violating the Department’s raisin marketing order.  The fines were invalid, the Court ruled, because compliance with the marketing order would have resulted in a taking of private property without compensation under the Takings Clause. The Court split along depressingly predictable partisan lines, with four justices (you know who they are) joining an opinion for the Court written by Chief Justice John Roberts, and four other justices (you know who they are) dissenting in whole or in part.  Many people will have interesting things to say about this case, which will deserve continued study, but here is a brief recap and a few initial observations.  Read the rest of this entry »


Catching Up

Ever since the cert. grant in Horne v Department of Agriculture in January, plus teaching responsibilities, plus a bunch of other things, I have been delinquent in keeping this blog up to date.  With the Horne argument before the U.S. Supreme Court yesterday and my last class today, I feel liberated.  I’ll have some observations on the oral argument in Horne tomorrow.   But first, some accounting of what I have been up to:

I filed this amicus brief on behalf of the International Municipal Lawyers Association in the Supreme Court in Horne.

Thirteen briefs were filed in support of the Petitioners,  and the second brief in support of the Respondent was filed by Sun-Maid Growers of California.  So, at a minmum, the IMLA brief offers the Court a unique perspective.

Here is a new article on Koontz, “The Costs of Koontz,” which will be published in the Vermont Law Review, 39 Vt. L. Rev. 573 (2015).   The purpose of the article is to lay out as plainly as I can the costs of Koontz in terms of (1) increased incoherence of takings doctrine, (2) impairment of separation of powers, (3) undermining of federalism values, and (4) lost effectiveness and efficiency of land protection and management.

It is a follow up to “Koontz: The Very Worst Takings Decision Ever?” published in the NYU Environmental Law Review.

Finally, this piece was just published by the Harvard Law Review Forum as a Response to an Essay by Professor Tom Merrill  published in the Harvard Law Review, “Eschewing Anticipatory Remedies for Takings: A Response to Professor Merrill,” responding to “Anticipatory Remedies for Takings,” 128 Harv. L. Rev. 1630 (2015).

Comments welcome.

John Echeverria

 


Cert Grant in Horne v. Department of Agriculture

Today the U.S. Supreme Court granted a petition for certiorari in the takings case of Horne v. Department of Agriculture.    As followers of this blog may recall, the U.S. Supreme Court has already been around once in this case.

The issues as presented in the cert petition are as follows:   “(1) Whether the government’s “categorical duty” under the Fifth Amendment to pay just compensation when it “physically takes possession of an interest in property,” Arkansas Game & Fish Comm’n v. United States, applies only to real property and not to personal property; (2) whether the government may avoid the categorical duty to pay just compensation for a physical taking of property by reserving to the property owner a contingent interest in a portion of the value of the property, set at the government’s discretion; and (3) whether a governmental mandate to relinquish specific, identifiable property as a “condition” on permission to engage in commerce effects a per se taking.”

Stay tuned.  More to follow.

 


Coastal Retreat and the Takings Clause

The recent decision by the federal District Court for the Eastern District of North Carolina in the case of Town of Nags Head v. Toloczko, provides some insight into the potential obstacles presented by the Takings Clause to the use of nuisance-abatement ordinances to effect orderly retreat from eroding shores in the era of climate change.

In November 2009, a powerful storm hit Nags Head, North Carolina, including the Toloczkos’ beachfront cottage. The storm caused considerable damage to the property, including leaving the septic system exposed.   In addition, while erosion had been a chronic problem for the Toloczkos, the 2009 storm substantially eroded the remaining beach in front of their property, leaving the cottage on the dry sand portion of the beach.

The Town declared the cottage a “nuisance” under a local ordinance which defined a storm- or erosion-damaged coastal structure a “public nuisance” when (1) the structure is “in danger of collapsing,” (2) the damaged structure or debris creates a “likelihood of personal or property damage,” or (3) the structure or debris “is located in whole or in part in a public trust area or public land.” In response to the Town’s request, the Toloczkos declined to remove the damaged cottage. Citing the second and third provisions of the ordinance, the Town filed suit seeking to abate the nuisance and penalties for failure to comply with the removal order.   (Subsequently, following completion of a beach renourishment project, the Town concluded that the cottage could safely remain in place but continued to pursue recovery of civil penalties.)  The Toloczkos filed counterclaims alleging, among other things, a taking of their property. Read the rest of this entry »


Is Government Failure to Act a Taking?

Can government inaction – as opposed to affirmative government action – give rise to takings liability?  A recent decision by the Wisconsin Court of Appeals, in Fromm v. Village of Lake Denton, is the latest decision to embrace the general understanding that a government failure to act cannot support a viable claim under the Takings Clause.   Read the rest of this entry »


Oregon Supreme Court on Physical Takings Claims

In the case of Dunn v. City of Milwaukie, the Oregon Supreme Court recently issued a valuable decision addressing the standards for when government can be held liable for a taking due to physical invasion of private property (at least under the Oregon Takings Clause, though the decision relies in part on federal precedent).

The case arose (hold your nose) when the city’s use of high-pressure “hydrocleaning” to wash the public sewer system caused sewage to back up and spill into the plaintiff’s house through toilets and other bathroom fixtures.   A jury found for the plaintiff and awarded compensation, and the award was affirmed by the Oregon Court of Appeals.  The Oregon Supreme Court has now reversed. Read on …


The Ninth Circuit Rules in Horne: The Plot Thickens

The Supreme Court’s takings decisions last term in Horne and Koontz have each generated considerable debate and consternation.  Now, the Ninth Circuit has issued a new ruling in Horne on remand that relies heavily on the analysis in Koontz to resolve the Hornes’ claim. The Ninth Circuit handed the government a win, ruling that the Hornes failed to demonstrate a taking due to the Secretary of Agriculture’s assessment of penalties against them for declining to “reserve” a portion of their raisin crop in accordance with the Agricultural Marketing Agreement Act of 1937.  Unfortunately, the Ninth Circuit’s legal analysis is an impenetrable tangle, largely because the Supreme Court itself has been so confusing, and the long-term implications of the Ninth Circuit’s decision are both unpredictable and troubling. Read on …