Last month, the Federal Circuit issued its opinion in Milton v. United States, a takings case we have been following because it attracted an amicus brief. In this case, the plaintiffs-appellants asked the court to reverse a Court of Federal Claims decision granting summary judgement in favor of the United States. Numerous parties asserted takings claims against the government based on properties being flooded by the U.S. Army Corps of Engineers when the Addicks and Barker Reservoirs released water during Hurricane Harvey. In a unanimous opinion authored by Judge Cunningham and joined by Judges Lourie and Chen, the Federal Circuit reversed the decision of the Court of Federal Claims and remanded the case for further proceedings. This is our opinion summary.
Judge Cunningham described the facts of the case:
In line with its responsibility for flood control, the Corps adopted the Addicks and Barker Reservoirs Water Control Manual published in 2012. See J.A. 974–1131. The Manual provides that if an inch of rain falls within a 24-hour period or if downstream flooding is expected, the Corps must close the dams’ floodgates. J.A. 1022. If the water in the reservoirs reaches set heights—101 feet behind Addicks Dam or 95.7 feet behind Barker Dam—a surcharge regulation kicks in. J.A. 1023. At this point, the Corps must monitor whether the inflow will continue to cause the reservoirs to rise. Id. “If inflow and pool elevation conditions dictate,” the Corps releases water from the reservoir according to a set schedule. Id. At the beginning of 2017, such induced surcharges had never been made. J.A. 1416.
Then, Hurricane Harvey approached Houston . . .
Substantial downstream flooding followed. The Government’s expert believes that some of Appellants’ properties were flooded for more than eleven days and some were flooded at a maximum depth greater than eight feet above the first finished floor. J.A. 2315. Several Appellants testified that they evacuated their homes by boat. J.A. 1674–94, 4195, 4270. Appellants assert that many of their properties incurred hundreds of thousands, if not millions, of dollars in damage each. See J.A. 1721–1861, 4195.
Following this tragedy, hundreds of property owners filed complaints in the Court of Federal Claims alleging that the flooding constituted an uncompensated, physical taking of their property by the Government. In re Downstream, 147 Fed. Cl. at 570, 574. The Court of Federal Claims joined all these cases into a Master Docket and then split them into an Upstream Sub-Docket—for properties upstream of the dams—and a Downstream Sub-Docket— for properties downstream of the dams. Id. . . .
The Downstream Sub-Docket proceeded differently. There, the court ultimately granted the Government’s motions to dismiss and for summary judgment and denied Appellants’ motion for summary judgment. In re Downstream, 147 Fed. Cl. at 584. Specifically, the court held that Appellants did not articulate a cognizable property interest that the Government could take because “neither Texas law nor federal law creates a protected property interest in perfect flood control in the face of an Act of God.” Id. at 570. Under Texas law, the court wrote, Appellants “own their land subject to the legitimate exercise of the police power to control and mitigate against flooding.” Id. at 578. The court held that “Texas law has specifically limited liability in both a takings and a tort context where the operator of a water control structure fails to perfectly mitigate against flooding caused by an Act of God.” Id. at 579. Finally, the court concluded that as “each of the plaintiffs in this case acquired their property after the construction of the Addicks and Barker Dams and Reservoirs, plaintiffs acquired their properties subject to the superior right of the Corps to engage in flood mitigation and to operate according to its Manual.” Id. at 580 (emphasis in original).
The court also did not find a cognizable property interest under federal law. Looking to the Flood Control Act of 1928, 33 U.S.C. § 702c, the court held that “simply owning property that benefits from flood control structures does not by itself confer upon those owners a vested right in perfect flood control.” Id. at 582. The court further wrote that the Supreme Court has “routinely” held that “the government cannot be held liable under the Fifth Amendment for property damages caused by events outside of the government’s control.” Id. at 583 (collecting cases). Thus, the court concluded that because there was no cognizable property interest under either state or federal law, Appellants had failed to state a claim upon which relief could be granted. Id. at 583–84.
These appeals followed.
Judge Cunningham began the Federal Circuit’s analysis by first rejecting the government’s argument that “the United States is immune from takings claims that stem from Government attempts at flood control.” She explained that the Tucker Act “granted the Court of Federal Claims jurisdiction over — and waived sovereign immunity from — ‘any claim against the United States founded either upon the Constitution, or . . . for liquidated or unliquidated damages in cases not sounding in tort.’”
The Federal Circuit then turned to “whether the Court of Federal Claims correctly determined that Appellants did not establish a cognizable property interest.” Judge Cunningham explained that the lower court erred, and a cognizable property interest exists. She highlighted that none of the cases the government cited turned on whether the plaintiffs had a cognizable property interest. The court, moreover, rejected the government’s claim that the first named plaintiff in the appeal did not have cognizable property interest because Hurricane Harvey was an Act of God. Judge Cunningham explained that “Acts of God relate, if at all, to whether a taking has occurred, not whether a party has a cognizable property interest.” She explained that the court also disagreed with the government’s claim that the plaintiffs-appellants’ property rights were “limited by the owners’ expectations as of the date they acquired their properties.”
As a result of its analysis, the Federal Circuit “reverse[d] the decision of the Court of Federal Claims and remand[ed] for further proceedings consistent with this opinion.”