20151205_145854

We’ve covered some of the litigation against the federal government for its actions flooding property during Hurricane Harvey, including at least one from the “upstream” owners. Well here’s one from the case involving the “downstream” owners.

In Milton v. United States, No. 21-1131 (June 2, 2022), the U.S. Court of Appeals for the Federal Circuit addressed the first question in every takings claim: does the plaintiff possess “private property?” The court held that the plaintiffs indeed have a property interest.

Now that may seem like an obvious conclusion. After all, it’s right there in the first sentence of the opinion that the plaintiffs are owners of … property: “[a]ppellants Virginia Milton and hundreds of other individuals and companies owned property downstream from the Addicks and Barker Dams in Houston, Texas.” Slip op. at 1 (emphasis added). But as you takings mavens know, owning property doesn’t mean you truly “own property” for purposes of the Fifth Amendment. You have to have a “cognizable property interest.” Slip op. at 9.

The Federal Circuit reversed the Court of Federal Claims’ conclusion that despite owning property that was flooded allegedly by or because of the U.S. Government, the “property” the owners owned was not their flooded land, but the right to not have the U.S. Government flood their land in these circumstances. In other words, what the CFC called “perfect flood control.” Slip op. at 7. And besides, the CFC held, the owners bought their properties after construction of the dams, so they took their properties subject to the dams and the possibility of flooding. 

The CFC’s method of determining the property interest is what we’ve called “bootstrap logic” where the reviewing court defines the property as the right to not have the very thing the plaintiffs are claiming happened, happen. This to us is a problem because it nearly always presages the outcome (no taking), by front-loading the merits question (does the government’s action have similar effects on the owner as eminent domain?) into the pleading stage, which deprives the factfinder of the opportunity to, you know, find the relevant facts.

The Federal Circuit did not go all in on our analysis (fee ownership is enough to establish a property interest) but came close. It focused on the sticks, and concluded that the plaintiffs essentially alleged an interest in flowage easements on their land, and that qualified. Under Texas law, an owner of real property can peel off one of the sticks and grant a third party the right to flood their land. Aka, a flowage easement. That sounds a lot like “plaintiffs own the fee simple, so yeah they own ‘property,'” but we are lawyers so we know we have to state the principle more complexly.

The Federal Circuit rejected each of the Government’s contrary arguments: 

  • There’s no general “police power” exception to takings (a point we harp on a lot). Slip op. at 10-11.
  • There’s no general “Act of God” exception, either. That’s a merits question. Slip op. at 12 (“Acts of God relate, if at all, to whether a taking has occurred, not whether a party has a cognizable property interest.”).
  • What about the fact that the owners bought their properties after the dams were built? “There is no blanket rule under Texas law that property rights are held subject to owners’ expectations on acquisition.” Slip op. at 13.
  • Finally, a claim of “necessity” isn’t something that defines property, but “is a defense.” Slip op. at 13.  

Having concluded that the plaintiffs own property, the Federal Circuit declined to determine whether the Government took that property (in the CFC, both sides sought summary judgment). The takings question is is a fact-intensive inquiry, and “summary judgment should not be granted precipitously.” Slip op. at 13-14. Now remember that this is a physical takings claim and subject to the Supreme Court’s categorical rule (which you might think makes summary judgment kind of appropriate). But the Federal Circuit was not comfortable deciding the issue “in the first instance,” because the CFC had not developed the record even for a physical taking. Remanded:

Thus, it is appropriate to remand this case to the Court of Federal Claims to address the second prong of the takings analysis in the first instance. In other words, we leave it for the lower court to consider: (1) whether Appellants have shown that a temporary taking occurred under the test applicable to flooding cases, Ark. Game & Fish Comm’n v. United States, 568 U.S. 23, 39 (2012); (2) whether Appellants have established causation when considering “the impact of the entirety of government actions that address the relevant risk,” St. Bernard Par. Gov’t v. United States, 887 F.3d 1354, 1364 (Fed. Cir. 2018), cert. denied 139 S. Ct. 796 (2019); and (3) whether the Government can invoke the necessity doctrine as a defense.

Slip op. at 14.

Milton v. United States, No. 21-1131 (Fed. Cir. June 2, 2022)