On April 20, 2018, the U.S. Court of Appeals for the Federal Circuit reversed the U.S. Court of Federal Claims. They concluded that the United States is not liable for flood damages to plaintiffs’ properties caused by Hurricane Katrina.
Saint Bernard Parish Government and various other owners of real property in St. Bernard Parish and the Lower Ninth Ward of the City of New Orleans brought suit in the Court of Federal Claims (“Claims Court”) under the Tucker Act, 28 U.S.C. § 1491(a)(1), alleging a taking. They claimed that the government was liable for flood damage to their properties caused by Hurricane Katrina because of government inaction, including the failure to properly maintain or to modify the Mississippi River-Gulf Outlet (“MRGO”) channel, and government action (the construction and operation of the MRGO channel). The lower Court of Federal Claims held the government liable and awarded compensation.
On appeal, the Federal Circuit Court reversed and held the government cannot be liable on a taking theory for inaction or action in constructing and operating the MRGO channel. They held it was not shown that this was the cause of flooding. Quite simply, they held the lower court failed to apply the correct legal standard; i.e. one which required that the causation analysis account for government flood control projects that reduced the risk of flooding.
New Orleans has a long history of flooding. The geographic location of the city makes it “particularly vulnerable to hurricanes.” The city was hit by major storms in 1909 and 1915, and much of the city flooded due to the Fort Lauderdale Hurricane in 1947. In 1955, Congress authorized the Army Corps of Engineers (“Corps”) to study the need for additional hurricane protection in the Lake Pontchartrain area. This resulted in a comprehensive report known as the “Barrier Plan,” which recommended a system of floodgates, levees, and floodwalls to protect the area from hurricanes. Later, in 1956, Congress authorized the Corps to construct the MRGO navigation channel in New Orleans. The purpose of the channel was to increase commerce by providing a direct connection between the port of New Orleans and the Gulf of Mexico. Construction was completed in 1968.
In 1965, while MRGO was still under construction, Congress authorized funding to implement the Barrier Plan through the Lake Pontchartrain and Vicinity Hurricane Protection Project (“LPV project”) to control flooding resulting from hurricanes. At an estimated cost of approximately $56 million ($447 million in today’s money), the LPV project included construction of levees and floodwalls in the St. Bernard basin along the banks of MRGO utilizing dredged material from the MRGO channel. The levee system was designed to, and did, reduce the risk of flooding in New Orleans, including specifically along the banks of MRGO. Construction began around the same time that construction of MRGO was concluding.
The plaintiffs in this suit alleged over the course of the next several decades, that the construction, operation, and improper maintenance of the MRGO channel caused various adverse impacts that increased storm surge along the channel: (1) increased salinity in the water by providing a direct route for saltwater to flow into the area from the Gulf of Mexico, (2) saltwater changed the character of the marshes and destroyed wetlands in the area that previously acted as a natural buffer against flooding, (3) “failure of the Army Corps to maintain the banks” caused erosion along the banks, which allowed more water to pass through the channel at higher velocities, and (4) MRGO created a funnel effect, which increased flooding during storms by compressing storm surge into the channel and causing it to rise faster and higher.
Whether a taking under the Fifth Amendment has occurred is a question of law; i.e. this is an inverse condemnation case, which means a landowner may recover just compensation under the Fifth Amendment for a physical taking of his property when condemnation proceedings have not been instituted. The issue presented here is whether the increased flooding from MRGO constituted a temporary taking. Proof of such a claim required plaintiffs establish government action caused the injury to their properties – that the invasion was the “direct, natural, or probable result of an authorized activity.” Establishing liability for a temporary taking also requires proof that the invasion was either intentional or foreseeable. While the theory that the government failed to maintain or modify a government-constructed project may state a tort claim, it does not state a takings claim. A property loss compensable as a taking only results when the asserted invasion is the direct, natural, or probable result of authorized government action.
Here, the sole affirmative acts involved by government was the construction of MRGO, which was completed by 1968, and the continued operation of the channel. The appeals court found it did not need to reach that question, because plaintiffs failed to establish that the construction or operation of MRGO caused their injury. The plaintiffs failed to present evidence comparing the flood damage that actually occurred to the flood damage that would have occurred if there had been no government action at all. The governing Supreme Court and Federal Circuit cases, particularly flooding cases, established the causation analysis must consider the impact of the entirety of government actions that address the relevant risk.
Because plaintiffs failed to show that government action, including both MRGO and the LPV project, caused their injury, the government was found not liable for a taking under the Fifth Amendment based on the construction or operation of MRGO.
The entire case can be found here.