Case Summary
The “takings clause” of the 5th Amendment requires that just compensation be paid when government forcibly appropriates — “takes” — private property, against the wishes of a property owner, for a purported public use or benefit. Such “takings” most often occur through a controversial but legal process called “eminent domain.” But outright confiscation isn’t the only tool government can use to deprive a property owner of her rights and her property.
What compensation is a property owner due when government regulatory actions, also undertaken for a public good or benefit, diminish or destroy the value of her land or business? No physical property is forcibly seized in such a case. But such a “regulatory taking” can do an equivalent amount of harm – even if it’s gradually, quietly and imperceptibly, noticed only by the victims of such actions. Isn’t this also a “taking” the government should pay for, to be consistent with a long and firmly established constitutional principle?
This case raises the question of how property owners and businesses along the Missouri River should be compensated in response to government-caused flooding that destroyed crops, devalued their farmland and damaged their businesses. One Court already has ruled that they’re the victims of a government-caused taking. But Washington continues to appeal that ruling and resist paying the damaged parties just compensation for the harm Washington did.
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Case History
Between the 1940s and the 1960s, the federal government engaged in massive civil engineering efforts to transform the Missouri River — to create fertile new farmland, deepen the channel, and make the Missouri less prone to repeated flooding. Those changes were intended to — and did—entice private parties to invest in farming the land in “the basin” along the river.
But decades later, after farmers acquired and further improved the land, Washington abruptly reversed course. In 2004, under a consent decree settling litigation under the Endangered Species Act, the government again undertook a massive re-engineering of the river – this time aimed at returning it to its pre-1940s state.
Those changes predictably resulted in a return to repeat flooding of adjoining lands, leaving those who were enticed by the government to farm in “the basin” high and dry – but only figuratively speaking. In fact, their formerly prime farmland now became subject to repeat flooding, courtesy of their “friends in Washington, greatly diminishing if not destroying the value of those properties and the business that depended on them.
Hundreds of affected property and business owners in 2014 took their case to the Court of Federal Claims, arguing that recurring flooding, over the course of the prior decade, constituted a permanent property “taking,” and that the government should pay just compensation both for the diminished value of their land and for the crops that had been destroyed by flooding in the process. The plaintiffs argue that the government’s actions violate the takings clause of the Fifth Amendment, which bars the Government from taking private property without just compensation.
The government argued that there was no taking because plaintiffs’ lands—60 to 80 years before—had been created or improved by the government’s actions in re-engineering the Missouri River. The government also argued that it need not compensate property owners for the crop losses caused by flooding during the taking.
The Court of Federal Claims issued a final judgment in favor of the plaintiffs, finding that they had in fact been the victims of a “taking.” But the court also found, in a conclusory fashion, that crop losses should not be included in the just compensation calculation on the ground that the crop losses constitute “consequential damages.”
The government has appealed the judgment, evidently to challenge the takings holding), and plaintiffs have cross-appealed, and expect to raise (among other things) the question of including crop losses in the just compensation calculation.
The breadth and callousness of the government’s arguments in this case are stunning, given the pivotal role government played in this story. Washington squanders tax dollars on a massive, arguably obscene scale, but seeks to deprive countless property owners of payment for property damage and business losses that Washington caused?
MSLF and its allies at The Cato Institute are filing this amicus brief to highlight the callousness, absurdity and constitutional inconsistency of the government’s position in this case. If left unaddressed and uncorrected, the adverse consequences for property owners and property rights could be profound.
