When is Government Liable for Damage Caused to Private Property?

Date: March 27, 2017

Arkansas Game & Fish

In 2012, the NFIB Small Business Legal Center led a coalition of concerned groups in an amicus filing in Arkansas Game & Fish Commission v. United States. In that case the Army Corps of Engineers had caused serious damage to private property—including in destroying valuable timber—through a series of government induced flooding events, all related to the Corps’ practices in releasing water from the Clearwater Dam in Missouri. As such, the owner sought just compensation for a taking of its property under the Fifth Amendment; however, Army Corps argued that it could not be liable for a taking because it had since decided to change its water release policies to avoid any further flooding events in the future. So the U.S. Supreme Court took the case to decide an important question: Can the government avoid the requirement to pay just compensation for a taking simply by virtue of the fact that a government-induced flood is rendered temporary?

Of course, it has been well established since the Nineteenth Century that government must pay just compensation if it permanently floods one’s property. For that matter, any physical occupation of private property is considered a per se taking—requiring payment of just compensation without question. But in this case the government was arguing that temporary invasions—however destructive they may be—are categorically exempt from the Takings Clause. This was a radical argument. If embraced it would effectively allow the government to invade and cause serious mayhem to private property without any liability. As such, we were pleased when the Supreme Court issued its opinion unequivocally rejecting the government’s categorical defense.

Arkansas Game & Fish
made clear that government may be liable under the Takings Clause for a temporary taking if it should invade one’s property—even if the invasion is considered non-permanent. Thus for example, if the Environmental Protection Agency decided it was going to set up weather monitoring station on your property for a year, it would still have an obligation to pay for the fair market value of a short-term lease. Or if Fish & Wildlife Services were to spend six months conducting extensive tests on a section of your land—keeping its equipment there the whole time—we would argue that it would be liable for a temporary taking just the same. Likewise, if a public works project is negligently designed in a manner that causes flooding on an adjoining property, we would argue that—under Arkansas Game & Fish—the government must compensate affected landowners, even if the authorities should eventually make changes to alleviate the problem.

The Controversy Continues

Nonetheless, there appears to be significant confusion among the lower courts as to how long a temporary invasion must persist before the government incurs an obligation to pay for a taking of property. For example, a controversial decision from the California Supreme Court recently suggested that there could be no automatic takings liability for a state agency that enters private property to bore holes in the ground for the purpose of conducting environmental tests. And for that matter, governmental defendants continue to argue—notwithstanding Arkansas Game & Fish—that they cannot be held liable for short-term or fleeting physical invasions of private property.

Case in point, Army Corps is once again arguing that it cannot be held liable for a one-time flooding event. In St. Bernard Parish v. Army Corps, a group of landowners—including affected small businesses—brought suit seeking compensation for flooding damages following Hurricane Katrina, which they argued, very convincingly, were caused (or at least exacerbated) by Army Corp’s negligent construction and maintenance of a canal. The Court of Federal Claims agreed, holding that Army Corps was in fact responsible for the flooding of these properties. But Army Corps now argues, on appeal, that it doesn’t matter because the agency has since taken corrective action to avoid future problems.

Obviously, it’s good that Army Corps has taken action to prevent further flooding, but Arkansas Game & Fish made clear that this does not absolve the agency of its constitutional obligation to pay for a temporary taking of private property. And of course, given the significance of the issue, the NFIB Small Business Legal Center filed in this case to protect the rights of small business property owners who may suffer catastrophic losses in the event of a government induced flood. To be sure, there is nothing “temporary” about the losses sustained in a flood. If destroyed by flood waters, the loss of a home or a businesses’ facilities is a very real and permanent injury that can only be made right upon payment of just compensation.

What if I have Suffered Damages as a Result of Government Conduct?

This is a very complicated area of the law. Accordingly, if you have suffered physical damage to your property as a result of government conduct, it’s a good idea to consult with an eminent domain attorney about your potential options. But here are a few points to keep in mind.

Negligence Claims. While it may be possible to pursue an action for pure negligence in some cases, the problem is that governmental defendants will usually invoke sovereign immunity to avoid liability for the sort of common law action that you might bring against a private party who negligently causes injury to your property. In some cases a public entity may be subject to suit for negligence if it can be argued that the Legislature of Congress has authorized the suit through an enactment waiving sovereign immunity. You should certainly talk with your attorney as to whether a negligence claim is an option or advisable.

State Constitutional Claims. If dealing with a situation with a state entity, you may be able to invoke your State Constitution. Helpfully, many states include constitutional provisions that expressly guarantee that private property shall not be damaged by government; however, the states vary greatly in how they apply these provisions. For example, some states allow for compensation only where the government intended to cause the damage in question, while other states require payment of compensation if the damage is deemed the reasonably foreseeable consequence of the government’s conduct.

The Fifth Amendment. Finally, as discussed at the outset, the Takings Clause of the Fifth Amendment provides guaranteed protections for property owners, which may be invoked both in cases where the government has physically invaded private property—or caused a physical invasion. For example, if a federal project were to cause mudslide, we would argue that the government would be responsible for resulting damage to private property. But as ever, government lawyers can be rather ingenious in crafting defenses to these sort of claims. So while we are doing what we can to clarify the government’s obligations under the Takings Clause, it’s still prudent for you to consult with a trusted attorney in a case like this.

Proving Causality. It goes without saying that if you are contemplating legal action along the lines discussed here, it’s essential to be able to prove that the government is responsible for either causing or exacerbating the damage in question. In some cases, this may be rather straightforward. But it could also be difficult to prove the causation in some cases without incurring serious costs. To be sure, your law suit will be significantly more expensive if you must seek out and pay for analysis from engineers, environmental consultants or other such experts.

Mutually Assured Destruction. In some cases, the government is faced with a catch-22 situation where private property will be destroyed no matter what happens. For example, the government may need to destroy trees infested with a noxious virus to prevent the spread to neighboring properties. Or the State may need redirect a flooding river channel over one person’s property in order to avoid destruction of an entire neighborhood that would otherwise be inundated if the waters were allowed to follow their natural course. In these cases, the government usually bears no liability.

*This article does not constitute legal advice. Readers are advised to consult a trusted attorney.

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