December 3, 2013

Federal Circuit upholds takings decision in Arkansas Game & Fish

By Brian T. Hodges Senior Attorney

Earlier today, the Federal Circuit Court of Appeals issued its remand decision in Arkansas Game & Fish Commission v. United States, upholding the trial court’s conclusion that the Army Corps of Engineers took Arkansas Game & Fish’s property.

As you may recall, the Arkansas Game & Fish Commission owns and operates the Dave Donaldson Black River Wildlife Management Area in northeast Arkansas. The land is used for timber harvesting, hunting, recreation, and wildlife habitat and conservation. Much of the property was seriously damaged when the U.S. Army Corps of Engineers, as part of a dam management plan, inundated the forest with flood waters in each of six consecutive years during the 1990s.

The Commission successfully sued the federal government for inverse condemnation in the Court of Federal Claims. The court found that the government –induced flooding  “so profoundly disrupted certain regions of the Management Area that the Commission could no longer use those regions for their intended purposes.”  Although the Army Corps eventually stopped flooding the forest, the trial court concluded that “the damage done to the Commission’s property interest in its timber was permanent … and the Commission was preempted from exercising its property rights over its timber during and after the Corps’s deviations.” In conclusion, the Court of Federal Claims ruled that “the government’s temporary taking of a flowage easement over the Management Area resulted in a permanent taking of timber from that property” and ordered the Corps to pay approximately $5.7 million for the value of the timber destroyed by the floods, plus an additional $176,428.34 to restore the damaged recreation and conservation lands. However, in a 2-1 decision, the Federal Circuit Court of Appeals reversed the trial court’s judgment, concluding that, as a matter of law, government flooding of private property can never constitute a taking if it is the result of an “ad hoc” or “temporary” government policy because, according to the appellate panel, temporary flooding can never give rise to a taking.

Late last year, the U.S. Supreme Court held that temporary, government-induced flooding is not categorically exempt from the protections of the Takings Clause. The decision recognized that any government action that interferes with the enjoyment and use of private property can give rise to a takings claim: “In view of the nearly infinite variety of ways in which government actions can affect property interests, the Court has recognized few invariable rules in this area.” In so ruling, the Court closed a long-standing loophole in takings law that had allowed the federal government to avoid liability for having repeatedly flooded the Arkansas Game & Fish Commission’s land, and remanded the case for further proceedings.

PLF continued to support Arkansas Game & Fish on remand, arguing that the U.S. Supreme Court had neither modified nor overturned its well-established test for adjudicating physical takings. The trial court had correctly applied the physical takings test to conclude that the Army Corps was obligated to pay just compensation for having taken Arkansas Game & Fish’s timber.

The Federal Circuit agreed, and affirmed the trial court’s opinion and judgement.

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