Tuesday, September 25, 2012

Takings Case to Watch before the U.S. Supreme Court: Arkansas Game & Fish Commission v. United States

Next week, on October 3d, the U.S. Supreme Court will hear an important case for property rights: Arkansas Game & Fish Commission v. United States, No. 11-597 (cert. granted Apr. 2, 2012). Property owners should be concerned about this case because it could affect their investment decisions, especially investments related to natural resources. If the decision below stands, landowners will oftentimes be uncertain of whether they deserve compensation when the government floods their property.

In this case, the Federal Circuit Court of Appeals, which reviews takings claims against the federal government, held that the flooding of private land cannot be a taking. The only exception is where the government intends for the flooding to be a permanently recur on the property. The Federal Circuit held that courts should not look at the damages caused by the flooding or the time it lasted, but rather on the character of the policy behind the intrusion. The Federal Circuit then held that each flooding instance was merely a temporary policy not subject to review. Consequently, the Commission could not recover for the timber that the federal government killed by flooding.

The Legal Information Institute at Cornell has published a concise summary of the case:
The Arkansas Game and Fish Commission (“the Commission”) is an agency that works to regulate and preserve Wildlife Management Areas in Arkansas. One of the areas that the Commission manages (the “Management Area”) is a bottomland hardwood forest in the Upper Mississippi Alluvial Valley, home to diverse wildlife and hardwood timber species. The Black River runs through the Management Area. One way that the Commission regulates the Management Area is by harvesting timber in the area and then planting new trees. The Commission also controls the flooding of multiple reservoirs in the Management Area to improve the habitat for migratory waterfowl. 
On March 18, 2005, the Commission filed a lawsuit in the Court of Federal Claims against the United States claiming that from 1993 through 2000, the United States effectuated a taking of the Commission’s property and failed to provide compensation. The Commission argued that during those years, the United States Army Corps of Engineers (“the Corps”), deviated from the Corps’ 1953 water control plan for the Clear Water Dam, which regulates the flow of the Black River. The Commission claims that the deviations caused increased flooding in the Management Area, which devastated the timber in the region. The Corps deviated from the 1953 water control plan to help farmers near the Management Area. 
In December 2008, the Court of Federal Claims conducted a hearing concerning the Commission’s lawsuit. At the hearing, the United States argued that the flooding in the Management Area was temporary and therefore did not constitute a taking. The Court of Federal Claims rejected the United States’ argument and awarded the Commission $5.5 million for the damage resulting from the flooding and $176,428.34 to regenerate the Management Area. The United States appealed to the Court of Appeals for the Federal Circuit (“Court of Appeals”), arguing that a taking had not occurred and the Commission cross-appealed, requesting more funds for regeneration. The Court of Appeals ruled in favor of the United States and then denied the Commission’s petition for a rehearing. On April 2, 2012, the Supreme Court of the United States granted the Commission certiorari to consider whether flooding has to be permanent to constitute a taking under theTakings Clause of the Fifth Amendment. On August 16, 2012, the Commission rejected a $13 million settlement offer from the United States because the United States refused to agree that the Corps would not increase the flooding in the Management Area again.
One interesting aspect of this case is that it has not pitted environmental interests against property rights, as is often the case. Jonathan Adler has gone so far as to call it "A Takings Claim Even Environmentalists Could Love." For more in-depth reading, here are the briefs in the case. You might also check out Robert Thomas's excellent blog, where Robert has discussed the case in depth along with the amicus brief that he filed supporting the property owner.

I'll prove updates in the coming weeks once reports from oral argument at the Supreme Court come in.