A recent Texas Supreme Court case on inverse condemnation has opened the door for a group of homeowners to continue in a lawsuit against their county and flood control district over property damage that was allegedly a known possibility when the government entities approved the housing development.  These cases are rare, so it’s an unusual opportunity to take a look at the concept of “takings” in a flood control context.

What is inverse condemnation?

There’s a fundamental concept in Federal and State Constitutions that the taking or damaging of private property for a public use must be compensated.  When private property is taken for public use without compensation, the property owner can file an inverse condemnation action to force the government to pay for the damage.  The policy underlying inverse condemnation claims is that a private individual should not be forced to bear a disproportionate share of the costs of a public project.

Can flooding lead to inverse condemnation claims?

Inverse condemnation cases arise in the context of flood control where a government action results in the flooding of private property.

In California, for example, current case-law suggests that an inverse condemnation action will be successful only if the deliberate design and construction of a project or public improvement causes physical injury to real property.  In other words, the project as planned must be the cause of the damage rather than faulty construction or maintenance of a project.  This high bar for success in an inverse condemnation case makes sense; if public agencies could be sued for just negligent maintenance, they may not choose to embark on projects that protect the public.

Recent Texas Supreme Court Decision

Texas has a similarly high bar for inverse condemnation, as a recent decision by the Texas Supreme Court confirms.  In the case, Harris County Flood Control District and Harris County, TX, v. Edward A. and Norma Kerr (TX Supreme Court No. 13-0303), a group of homeowners sued their county and flood control district for damages resulting from flooding of their property, where the risks of flooding from runoff and drainage issues was known but the county and district did nothing to mitigate for it.  The government entities moved for summary judgment, arguing that the homeowners hadn’t raised genuine issues of material fact on the elements of their takings claim.  The Supreme Court sided with the homeowners and determined they had established the basic elements of their takings claim, so the case can now move forward.

The basic elements under Texas law for a takings claim relate to intent, causation and public use.  Intent relates to a governmental entity knowing that an act is causing harm or that harm is substantially certain to result.  Not only must an act be intentional, but there must also be knowledge that harm will occur.  As in California, in Texas negligence is not enough to establish a taking.  In the Harris County case, the homeowners argued that the public agencies approved a private development without mitigating its consequences, and there was substantial certainty that unmitigated development would result in flooding. The government agencies argued that at the time of approval of the development, that certainty didn’t exist; it only came to light later.  The court, acknowledging the complexity of this question, noted that the entities knew that flooding occurred frequently in the area and had shifted from planning for 100-year events to planning for 10-year events.  This, along with the recurring nature of flooding events in the area, was sufficient to establish a factual question about intent.

Causation means whether the public agencies’ actions resulted in the property damage (“the taking”).  Here, the court held that there were legitimate factual questions about the cause of the flooding events, with the parties disagreeing about the extent to which the development contributed to the expansion of the floodplain. The unsettled nature of these questions was enough to establish factual questions about causation.

Finally, on the question of public use, the court determined that at some level the public entities’ actions to approve new development were actions for a public use because the homeowners were bearing the burden of a growing community.  The court spent little time on this particular element, which is intriguing because it seems far-fetched that approval of private development is an action “for public use.”

In any event, the court concluded by stating that it does not intend to imply that “government entities have a duty to prevent all flooding.”  It is, in fact, a relatively narrow ruling, but now that the door has been opened for the homeowners’ suit to continue, it will be interesting to watch the case unfold.