The Feds’ evasion of takings law

Hurricane Harvey. Words that struck fear into many Texans a couple of years ago. The pain still lingers -- as does the litigation. The latest round occurred in the United States Court of Federal Claims, when the court held the federal government liable for taking the property of those who were upstream of two dams. (Additional litigation is pending on behalf of some property owners who were downstream of the dams, but that is a different story for a different day.)

In fairness to the Feds, they had a problem. If they simply allowed the heavy rainwaters from the storm to accumulate behind the Addicks and Barker Dams, the plaintiffs' homes would be flooded. If they released the water, homes beneath the dams would have been flooded. What to do? The decision was to impound the water, thus flooding the upstream owners. The governmental defense was that it acted out of "necessity," i.e., it had to do something and this is what it chose to do.

But choices have consequences, and the fact that there is a choice does not mean that the chooser gets off the liability hook. To give you the bottom line in advance, the court held that the government's choice resulted in the taking of a flowage easement over these properties and that compensation was due under the 5th Amendment's takings clause and the Tucker Act, which places jurisdiction for such claims against the federal government in the United States Court of Federal Claims. Moreover, part of the governmental "choice" lay in the original design and construction of the dams and the acquisition of insufficient property upstream to contain all the water that might accumulate during a major storm. As the court found, those design choices set the stage for the flooding of these properties.

The analytical problem with the government's defense (i.e., we had to do something and this is what we chose) is that, when the government does its job by making choices deemed to be in the best interest of the common good, liability for resulting damage does not evaporate. Indeed, it becomes even more concrete and necessary. Flooding the upstream homes was simply a cost of the project. Indeed, as the court put it, such flooding was a designed part of the project. In the court's words, "'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."

When government does its job and provides for the common defense and reaches the solution believed to be the optimum way to achieve the most good for the most people, the government is responsible for the costs of those choices. That is no criticism of government. In fact, it is praise. It is a recognition that, when government does its job, it sometimes has adverse side effects and someone must pay for them. The logical choice for that payment is the entity that has the greatest ability to spread the cost, i.e., the government, not random individuals who happen to be in the way. E.g., Armstrong v. United States, 364 U.S. 40, 49 (1960). That is in line with settled Supreme Court holdings that "costs cannot outweigh the constitutional right" (Fuentes v. Shevin, 407 U.S. 67, 90, n.22 (1972)), and that "one who causes a loss should bear the loss." Owen v. City of Independence, 445 U.S. 622, 654 (1980). In sum, "[w]hen the government physically takes possession of an interest in property for some public purpose, it has a categorical duty to compensate the former owner." Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 322 (2002). Here, that physical possession was of a flowage easement that allowed the government to flood private homes. As a designed part of the project, its costs had to be subsumed.

Nor was the court impressed by the government's argument that it did not intend to take these properties. All it did was build a couple of dams. That old saw didn't work either. The lack of intent defense is one that is routinely raised by government entities and just as routinely rejected by the courts. It is really time to stop raising this knee-jerk defense. (Is it perhaps a macro built into all government computers?) The issue is not whether the result was intended but whether the action was intended and what its consequences were. No one doubted that the government intended to build these dams and that it knew (or should have known) what the consequences would be in the event of heavy rain. As the court found, the government knew that it had not acquired enough land to contain all the retained water in the event of a major storm. That is sufficient intent.

Seven years ago, the federal government sought to convince the U.S. Supreme Court that it could not properly function if it had to compensate every property owner who was injured by its programs. Interestingly, that was also a flood case. In Arkansas Game and Fish Comm'n v. United States, 568 U.S. 23, 37 (2012), the government asked the court to create the flooding equivalent of the mythical one dog bite rule (i.e., just as all dogs are entitled to one bite without liability because until then the owner doesn't know the dog is a biter, all federal dams are entitled to a one free flood rule before liability attaches). The court refused to buy it. In fact, its unanimous opinion scoffed at the governmental defense that liability would "impede the government's ability to act in the public interest." Justice Ruth Bader Ginsburg replied for the court: "Time and again in Takings Clause cases" the government has made this argument. However, when the argument was rejected in the past "the sky did not fall."

Either the federal government or its lawyers just don't get it. Their job is to protect the public, not to protect the fisc by figuring out some way to make individual, blameless, citizens pay for the consequences of government activities. The Court of Federal Claims reached a just conclusion. It should remain standing after the inevitable appeal. 