Earlier this month the Federal Circuit heard oral argument in Milton v. United States, a case arising from the Court of Federal Claims. We have been following this case because it attracted an amicus brief. In this case, 150 plaintiffs are appealing a grant of summary judgment for the United States. These plaintiffs-appellants have asserted takings claims against the federal government based on properties that were flooded as a result of government action when the Addicks and Barker Reservoirs released water during Hurricane Harvey. The amicus brief was filed by 205 other plaintiffs with similar cases that have been stayed by the Court of Federal Claims. Judges Lourie, Chen, and Cunningham heard the argument. This is our argument recap.
Russell Stanley Post argued for the plaintiffs-appellants. Post first argued that the dispute here is not whether plaintiff-appellants have a right to perfect flood control, but rather whether they must bear the cost of the government’s precautionary (not emergency) action. Post argued that the Court of Federal Claims incorrectly denied the property owners’s right to fee simple title that was unencumbered by any flowage easement. Post further argued the lower court ruling cannot be allowed given “bedrock principles of Texas property law.”
Judge Lourie asked if there is any Texas precedent regarding perfect flood control. Post contended there is no such precedent. Post, however, argued precedential cases from the Texas Supreme Court establish property rights with no flowage easements for both upstream and downstream property owners.
Judge Chen asked about the possible existence of a preexisting limitation to an owner’s property right in the situation where the owner purchased property downstream from a dam with floodgates. In response, Post argued that the government’s characterization of this right in their its was inaccurate. He argued that Texas state court decisions have held that inundating downstream properties for a public purpose can be compensable as a physical taking. As to the possible preexisting limitation on this right, Post maintained, the government’s cited cases all require necessity to invoke a police-type power. Here, he continued, there was no necessity because the elements of imminent danger and actual emergency were not present.
Judge Chen asked whether it is it wrong to call a hurricane an act of God. Post agreed to call the hurricane itself an act of God. But, he argued, the hurricane did not flood these properties. Post pointed to statements in the record by the Army Corp of Engineers as support for the contention that there was no “necessity” to open the flood gates.
Judge Cunningham asked what the plaintiffs-appellants seek from the court. Post responded that they would like the court to establish as matter of law that there exists a protected property interest and then to remand the rest of the case for full development.
Brian C. Toth argued for the United States. Judge Chen asked whether there is precedent for limiting a property right due to a preexisting condition in a water flooding case. In response, Toth argued in the absence of cases on point it is proper to look to the general principles of police power as well as the background consideration that the dams were built to alleviate flooding in this area.
Judge Chen inquired whether the choice to open the flood gates, rather than a levy breaking, is a material difference distinguishing some of the cases cited by the government. Toth argued that it is too narrow a distinction to make. Toth maintained that the gates were opened as specified in accordance with a preexisting manual.
Toth further argued the Federal Flood Control Act and police power do not allow for government liability under the Takings Clause. In response, Judge Chen asked whether property rights were normally governed by state law. Toth conceded this point, but he argued that here the Commerce Clause allows federal law to be relevant. He also argued the legislative history of the Act shows that dam projects like this one were not to allow tort-type claims to be brought under the Takings Clause.
In rebuttal, Post argued Texas Supreme Court precedent established no flood control easement within private property rights. Further, he contended, under Texas precedent police power cannot be invoked to invade a property interest without the paying of just compensation. With respect to the Federal Flood Control Act, Post maintained, Congress cannot overrule the Takings Clause. Finally, with respect to causation, Post argued that the precedential cases cited by the government include the government’s own arguments making a distinction between deliberate decisions to flood property and structural failures. Post maintained that these cited cases are materially different from the current case and anyway the government should be held to their prior arguments.
We’ll continue to monitor the case and report on any developments.