The Nickel Report

The Corps Struggles to Balance Competing Constitutional and Statutory Duties

Federal agencies must often balance competing policy concerns and legal requirements. This process may be difficult and fraught with intense public feedback, and frequently results in litigation. The U.S. Army Corps of Engineers (the Corps) has found itself in the hot seat over how it manages the nation’s rivers, pitting its obligations under the Endangered Species Act (ESA) against private property rights. Litigation in the federal courts may soon determine whether, and if so how, responsible the federal government is for unintentional or incidental flooding when the government manages rivers for the benefit of listed species. These cases also bring to the fore a burning question: When can government agencies be held responsible for natural events? With the increase in climate change-related litigation nationwide, this issue will likely only rise in prominence.

Historically, flood control has been the Corps’ highest priority when managing dams and other civil works. Doing so, however, altered the Missouri River’s natural state to the detriment of fish and wildlife, include federally listed threatened and endangered species. After decades of failed consultation with the U.S. Fish and Wildlife Service, the Corps was successfully sued by several states and environmental groups to force compliance with the ESA. Under court order, the Corps revised its river management manual to focus less on preventing flooding and more on preserving habitat for fish and wildlife. For example, the Corps often released more water from dams in the spring to promote pallid sturgeon spawning, re-opened natural chutes to create more shallow water habitats (such as side channels), allowed the Missouri River to meander in the floodplain more (akin to its natural state), and constructed sandbars as nesting habitat for listed bird species.

In a couple of notable recent cases, flood victims have alleged that the federal government “took” their property without paying them. This theory relies on the takings clause of the Fifth Amendment to the U.S. Constitution. Typically in takings cases, the state or federal government permanently takes land for the public good, such as building a road. In certain circumstances, however, temporary invasions by the government on private property can qualify as a taking. This even extends to government-induced flooding that is unintentional but foreseeable. Ark. Game & Fish Comm’n v. U.S., 133 S.Ct. 511, 521 (2012). Flood victims are now seeking to hold the federal government liable for foreseeable flooding resulting from the Corps’ revised river management, adopted to comply with the ESA. This raises a host of legal and policy issues that could fundamentally affect how the Corps manages dams and other civil works.

In a lengthy decision in Ideker Farms v. United States, made public on March 13, 2018, Judge Firestone of the U.S. Court of Federal Claims held that increased and more severe flooding was a foreseeable result of the Corps’ revised  management of the Missouri River, which was done to reduce degradation of fish and wildlife habitat. The plaintiffs argued that all of these changes, taken together for the single purpose of protecting listed species, increased the water level of the Missouri River, causing flooding or more severe flooding and taking their property in the process. The government opposed the plaintiffs’ “single purpose” causation theory, arguing that the plaintiffs failed to show how each individual action by the government connected to flooding on specific parcels of property. Judge Firestone rejected the government’s arguments, holding that the single purpose theory applied here and that the cumulative and combined effects of the Corps’ revised management of the Missouri River showed causation here. Judge Firestone also rejected the government’s arguments that liability should be limited to damages “directly attributable to government action,” and that increasing the risk of flooding is insufficient to show foreseeability. Judge Firestone held instead that foreseeability is an objective test and that the evidence presented showed the damages were the “direct and natural consequence of the cumulative and combined effects of the System and River Changes taken by the Corps to meet its ESA obligations.”

There are two significant upcoming events that could undo or alter Judge Firestone’s opinion in Ideker Farms. First, briefing has just concluded on a motion for reconsideration that evaluates whether the case is affected by the Federal Circuit’s reversal of a takings decision regarding flooding during Hurricane Katrina, St. Bernard Parish Government v. United States.

In St. Bernard Parish, after a decade of litigation in the Hurricane Katrina case, Judge Braden, also of the U.S. Court of Federal Claims, held that the federal government was liable because of how the Corps managed the Mississippi River Gulf Outlet (MR-GO) and awarded damages for these temporary takings. Judge Braden relied heavily on documents showing that the Corps was aware of factors that could increase storm surge, including increased salinity, increased wetland loss, and increased erosion of the banks of the MR-GO. According to Judge Braden, it did not matter whether the Corps actually foresaw that a hurricane or severe storm would likely cause flooding because foreseeability is an objective test. Based on the evidence of increased risk factors for storm surge, the Corps should have known there would likely be flooding from a hurricane or severe storm.

But the U.S. Court of Appeals for the Federal Circuit disagreed. On April 20, 2018, the Federal Circuit held that there could be no liability for government inaction and that there was insufficient evidence to show that the government’s construction and operation of the MR-GO was the legal cause of the flooding.

The Federal Circuit’s decision regarding Hurricane Katrina caught the attention of Judge Firestone: She immediately ordered briefing on how that decision affected a pending motion for reconsideration of her earlier February 2018 decision. Briefing finished on May 31, 2018.

Second, even if Judge Firestone leaves in place her liability opinion, phase II of litigation in Ideker Farms provides opportunities for the government to defend itself. Currently planned for October of 2018, phase II will deal with any defenses the government can present and compensation issues (entitlement to just compensation, amount of compensation).

The ultimate result in Ideker Farms may have significant implications for how agencies act to preserve listed species. The ESA creates legal obligations to act to avoid jeopardy of listed species, yet agencies also have other legal duties. Will Judge Firestone find a way for the Corps to act between the Scylla of ESA requirements and the Charybdis of private property rights?  Stay tuned.