Vol. 50-2 Water Rights

By Emily Williams Rogers, Kimberly Kelley and Patrick Maloney

Water Rights

Texas Flood-Controlled Reservoirs

Introduction

Houston is located at the junction of the Buffalo Bayou and the White Oak Bayou, which drains into the Galveston Bay. As a result, Houston has a history of flooding and is familiar with flooding hazards. In response, Congress created flood control measures with the Rivers and Harbors Act of 1938.[1] Through this Act, the U.S. Army Corps of Engineers (the Corps) built both Addicks and Barker Dams and connected them to the Buffalo Bayou as part of an extensive flood control effort.[2] The purpose of the program was to protect Houston as it existed at the time the law passed, namely downtown Houston and the areas nearby.

The city originally purchased substantial amounts of land upstream of the dams to create reservoirs to hold flood water.[3] While the Corps acquired a significant amount of upstream land, it acquired less than initially planned, meaning that “the dams were designed to contain more water than the acquired land could hold.”[4] The Corps diminished its land requirements based off a large 1935 storm, although the  risk of a more significant storm was considered—approximately the size of Hurricane Harvey—that could occur once every fifty years.[5] However, the Corps expected that the rural areas surrounding the reservoirs would stay rural, therefore mitigating the potential risk posed by flooding.[6] Despite the Corps’ original expectations, rapid urbanization ensued, and by the late 1970s, the area upstream of the reservoirs were no longer rural.[7]

 In 2017, Hurricane Harvey unexpectedly poured an average of thirty-four inches of water on Houston in four days.[8] The Corps followed its mandate and protected downtown Houston. Thus, the area upstream of the dams experienced significant flooding, causing extensive property damage.[9] According to the Corps, the dams functioned properly and per their original purpose.[10]        

Upstream Addicks and Barker Takings Claims

With the wave of litigation against the Corps that followed, the cases were split between the upstream properties and the downstream properties.[11] This article analyzes upstream property owners’ cases who successfully argued that the Corps is liable for taking. Interestingly, the claims court found the downstream property owners did not own a protected property interest and therefore could not recover.  

Takings derive from the Takings Clause of the Fifth Amendment, which states that “private property [shall not] be taken for public use without just compensation.”[12] The Takings Clause holds the government liable for negatively affecting the value of private property in exchange for a public purpose. There are two, layered elements to a takings analysis. The first element is whether the plaintiff has a property interest within the meaning of the Fifth Amendment.[13] The second element is whether the government’s action amounted to a compensable taking of that interest.[14] 

Property Interest

The court began its analysis by noting that the homeowners own private property without flowage easements, ultimately concluding that the plaintiffs maintained a property interest within the meaning of the Fifth Amendment.[15] The Corps provided three reasons why the homeowners do not hold compensable property interests, all of which the court rejected. First, the Corps argued that under Texas law, it has the right to mitigate floodwaters.[16] The court disagreed, explaining that the law the Corps cited was an exception for the specific circumstance of constructing or maintaining levees, not for consciously diverting water onto private property.[17]  Second, the Corps argued that the upstream homeowners purchased their property after the dams’ construction and therefore, cannot argue that they should be free from flooding.[18] The court disagreed, noting that this argument is more appropriate for analyzing the homeowners’ reasonable investment-backed expectations.[19] Third, the Corps argued that under the Flood Control Act of 1928, the homeowners’ right to compensation is limited. Again, the court disagreed, maintaining that the Flood Control Act did not override the Constitution’s requirement that the government compensate when it takes private property for public use.[20] With this analysis, the court established that the plaintiffs maintained a vested property interest under the Fifth Amendment.[21]

Takings

Whether government action requires compensation for taking requires considering six elements articulated by the Supreme Court in Arkansas Game and Fish Commission v. United States.[22] The factors include (1) time and duration, (2) intent, (3) foreseeability, (4) character of the land, (5) reasonable investment-backed expectations, and (6) severity.[23] The court addressed all factors except for the “character of the land.”

The time factor is highly weighted. When the taking is permanent, then a taking is virtually conclusive.[24] The court shot down the Corps’ argument that its actions only temporarily took the homeowners’ properties since the floodwater dissipated within days.[25] Instead, the court concluded that the Corps’ history with the dams, including construction, maintenance, and operation, demonstrates that the Corps took a permanent flowage easement.[26] The court reasoned that ever since the dams’ construction, the Corps’ actions subjected the upstream homeowners to the “probability” that the Corps will induce flooding.[27] That is, the time and duration does not mean the duration of the flooding; rather it involved the government’s permanent right to inundate the property with floodwater. But the court did not address the fact that the homeowners purchased their property after the construction of the dams.

The court cited precedent holding that in “the flooding context, ‘property may be taken by the invasion of water where subjected to intermittent, but inevitably recurring, inundation due to authorized government action.’”[28] Flooding by means of flood control is defined as a taking when the government retains the right to flood it in the future, since reserving such a right is more than an “isolated invasion.” [29] It is essentially a flowage easement.[30] The Corps responded by arguing that each upstream property was repairable, and therefore, the damage was temporary.[31] Even if the properties are repairable, however, the court countered that the likelihood of a similar event in the future is determinative.[32] Some properties required months for repairs due to structural damage; furthermore, the fact that the owners can repair the property to its previous condition is irrelevant in a severity analysis, especially when the Corps may flood the property again.[33]

Intent is defined as whether the Corps intended to occupy the homeowners’ property without authority or excuse, meaning that intent to occupy is sufficient without requiring intent to create a taking.[34] The court drew on the Corps’ failure to purchase the proper amount of land to affect the dams’ original design requirements.[35] Even though the Corps knew it did not have enough land upstream of the dams to prevent flooding for a storm the size of Harvey, it also knew that a storm the size of Harvey was probable.[36] Moreover, even though the Corps knew that if a storm like Harvey would occur, it never strayed from the primary objective to prevent downstream flooding.[37] The Corps’ decision to prevent downstream flooding, then, showed its intent to use the upstream homeowners’ properties for flood control because it knew a storm like Harvey would occur.[38]

The bulk of the court’s decision lies in its foreseeability analysis. Whether an invasion of private property is the foreseeable result of government action addresses whether the government intended to invade as the “direct, natural, or probable result of an authorized activity,” and not invasions incidental or consequential injuries from an action.[39] The distinction between intent and foreseeability is that the foreseeable result may not have been intended, but an action cannot be intended without being foreseeable.[40] As noted above, the court found intent, and therefore the taking was foreseeable.[41]

The court rejected two of the Corps’ important arguments. First, the Corps argued that the foreseeability analysis should focus on the time the Corps constructed the dams.[42] The Corps’ argument here focused on the fact that it could never have anticipated the vast urbanization that would occur in the late 20^th century, and that while the upstream flooding was possible, it was not the “direct, natural, or probable result.”[43] The court responded by saying that foreseeability “should not be so constrained” because foreseeability is an objective measurement.[44] The court asked, “would an objective person reasonably foresee that the actual results which occurred would have been the direct, natural or probably results of the government’s actions? Whether the Corps subjectively foresaw the results may bear on objective foreseeability, but it is not the only consideration.”[45] The court eventually concluded that measuring the date of foreseeability is irrelevant because the Corps objectively should have known that the water would invade private property.[46] Moreover, the Corps’ ongoing operation and modification of the dams occurred even as the possibility of flooding increased.[47]

The second notable argument focused on the extent of damages. The Corps argued that “the claimed losses were not the direct, natural, or probably result” since the Corps could not have anticipated the urbanization upstream of the dams.[48] Instead, the Corps said it should not be liable for damages to businesses and homes that did not exist in the 1940s.[49] The court cast the Corps’ argument aside and stated that unforeseeable urbanization is irrelevant.[50] Instead, the court focused on the fact that the Corps should have foreseen that when it did not purchase all of the required by the original project’s design, it effectively guaranteed a taking of private property via flooding easement.[51]

Two factors are relevant to investment-backed expectations. First, the expectation must be objectively reasonable.[52] Second, the court must consider the extent that the Corps’ action interfered with reasonable expectations.[53] The court concluded that the homeowners’ expectations were reasonable, and notice does not immunize the government. Further, the court said that even if the various forms of notice were sufficient, the Corps did not show that the homeowners were aware of the scale of the risk.[54] Whether the Corps’ action interfered with reasonable expectations, the court concluded that the degree of interference was substantial.[55] Importantly, the court also noted that after Harvey, the Texas Legislature passed a statute mandating disclosure if a property is located in a reservoir.[56] An interesting question is whether such a disclosure would bar future claims of this sort by upstream homeowners.

Conclusion

The potential ramifications of this case are significant. In a world where the government necessarily has limited resources requiring it to make incremental decisions, this case appears to hold the government liable for the ripple effects of decisions made generations ago that were considered reasonable by the Corps at the time. The fact that the Corps knew at all times that it would need to flood private property eventually appears to be central to the court’s decision.  The fact that landowners may have had notice of the potential for flooding was equally unpersuasive, with the court noting that the government cannot escape liability by simply notifying the landowner of a potential taking. The court reserved the question of damages for later proceedings. 

Emily Williams Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

Patrick Maloney is a third-year student at The University of Texas School of Law and Articles & Notes Editor of the Texas Environmental Law Journal.