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Arkansas Game and Fish Commission v. United States: Takings Law, Without a Theory

December 12, 2012

By Richard A. Epstein

A Four-Part Saga The recent decision of the Supreme Court of the United States in Arkansas Game and Fish Commission v. United States represents a victory of sorts for the property rights movement. I have already provided an earlier analysis of the underlying issues in this case, which stresses the need to clarify the relationship between common law tort actions that are subject to the defense of sovereign immunity and government takings for which the government is obliged to provide just compensation. While the Court passed by that question in silence, it fortunately did give, the Arkansas Game and Fish Commission (AGFC) a second chance to make a case for compensation on remand, in a unanimous decision (Justice Kagan recused). That door had previously been slammed shut by a divided Federal Circuit, which had adopted a per se rule denying compensation in all cases in which the government invaded property by temporary flooding. (The Circuit Court decision had overturned an excellent decision in the Court of Federal Claims by Judge Charles Lettow.) But what should have been a clean victory for the Arkansas Game and Fish Commission (AGFC) has turned into a messy remand to an unfriendly Federal Circuit for further proceedings. Three chapters of this saga have now been completed. A fourth remains.

In the opening chapter of this extensive litigation, the AGFC brought a suit against the US for its flood-control operations in Missouri during the years 1993-2000. The U.S. Army Corps of Engineers (Corps) was keen to provide farmers in Missouri with a longer growing season, and did so by ordering timed releases from behind its Clearwater Dam. In order to slow up releases during the growing season, the Corps had to release large quantities of water thereafter. Eventually, these reached the AGFC's Dave Donaldson Black River Wildlife Management Area, located 115 miles down stream. The waters did not permanently remain there, but even after they receded, the accumulated moisture destroyed or degraded some 18 million board feet of timber located on some 23,000 acres to the tune of $5.7 million. The Court of Federal Claims accepted the AGFC's claim that the Takings Clause embraces the principle that destruction of property by flooding is the same as its occupation by the government.

The divided Federal Circuit reversed the decision without challenging any of the factual findings below. Its argument was that no government action could ever give rise to a viable takings claim unless there was "permanent destruction" of the property. It seems easy enough to reject that claim if we start, as Justice Ruth Ginsburg did, from the familiar premise of the 1960 decision in Armstrong v. United States that the Takings Clause "is designed to bar Government from forcing some people alone to bear public burdens, which in all fairness and justice, should be borne by the public as a whole."

Note, however, that this language does not quite cover this case. The losses that were suffered by the AGFC were not done for the benefit of the public as a whole, but for a discrete group of Missouri farmers who benefited from the water supply in question. The ideal solution therefore is to impose some kind of special assessment on the winners to force them to compensate the downstream losers. Chances are they would not be prepared to pay the freight, at which point the correct result is for the Corps to discontinue the flooding, which would minimize the social losses to all parties, resulting from various government activities.

Balancing Forever In this instance, the government hasn't shown any willingness to seek compensation from the special beneficiaries, which means that special groups have yet a stronger incentive to lobby for particular programs that will give them localized benefits financed by the property losses sustained by others. But Justice Ginsburg's opinion shows no interest whatsoever in either the incentive effects of the compensation rules or in the public-choice dynamics that are unleashed by a narrow application of the Takings Clause. Nor does she worry how future water-management groups might seek to time their releases to minimize their liability to downstream owners. These major omissions come at a high intellectual cost. The only way to get to the right result is to reinstate the District Court's compensation award, without going through the costly and pointless relitigation on remand.

The Supreme Court, however, went into balancing tests with a vengeance. Justice Ginsburg's initial ploy was to explain at great length why its earlier decision in Sanguinetti v. United States did not commit the Court to the position that only permanent takings were compensable. In so doing, it used the familiar trope that broad language in judicial decisions should be limited by their context in which it appears. From that conclusion it noted that its increased willingness to allow for compensation cases of temporary total takings, governed by its 1987 decision in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, indicated a more receptive attitude toward temporary takings. But at this point it just fails to seal the deal. Instead of staying with the per se takings cases, the Court embraces in the context of a direct and immediate physical invasion the useless balancing tests developed under its misguided decision in Penn Central Transportation Co. v. City of New York, which, ironically, did say that physical invasion warrant greater scrutiny than regulatory takings. By citing Penn Central, the Supreme Court reinforced its unwillingness to back off the extraordinary deference that it shows to government regulators in cases of zoning and other land use restrictions. But the Court was willing to remand this decision on for further consideration on the unpersuasive technical ground that the Federal Circuit looked solely at the temporary nature of the taking, thereby ignoring other factors that could bear on the ultimate decision on compensation.

At this point, the factors came thick and fast, but without rhyme or reason. The Court insisted that some attention should be paid to "the property owner's distinct investment-backed expectations, a matter often informed by the law in force in the States in which the property is located." Why Missouri law might be ignored is not explained. It also found relevant "the degree to which the invasion is intended or is the foreseeable result of authorized government action." And the Court thought it was also fair game for the government to challenge the findings of the trial court as they related "to causation, foreseeability, substantiality, and the amount of damages." And the Court then stressed that it was worth considering, as the government urged only on its appeal to the Supreme Court, that "[w]hether the damage is permanent or temporary, damage to downstream property, however foreseeable, is collateral or incidental; it is not aimed at any particular landowner and therefore does not qualify as an occupation compensable."

The use of these multiple criteria reaches its climax in the proposition that what really matters is "the particular circumstances of each case." What is so sad about this unanimous opinion is that it seems to assume that the use of ad hoc balancing tests somehow counts as a sign of the Court's own intellectual sophistication. But the exact opposite is true. To mention everything is to understand nothing. There is no evidence as to why these factors are relevant or how they should be taken into account. We thus get complexity without clarity, which is of course a hallmark of many of the balancing tests that are adopted under state tort law. The upshot is the losing combination of high administrative costs and high levels of error. The welter of factors, each with an indeterminate weight, thus cuts off any meaningful prospect of judicial review.

It is all so unnecessary. This case should have been decided on two propositions. The first is whether the water the Corps released caused damage to the plaintiff's land, which the Court of Federal Claims's findings amply demonstrated. The second was that just compensation should be set at the value of the timber lost. The remainder of the factors listed in Justice Ginsburg's opinion have nothing to do with the merits of this case. A simple decision that reinstated the judgment of the Court of Federal Claims would have done far better than the misplaced erudition that passes for Takings jurisprudence in the Supreme Court.

Richard A. Epstein is the Laurence A Tisch Professor Law at New York University, the Peter and Kirsten Senior Fellow at The Hoover Institution, and the James Parker Hall Distinguished Service Professor of Law and senior lecturer at the University of Chicago, as well as a visiting scholar with the Manhattan Institute's Center for Legal Policy.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute

Published by the Manhattan Institute

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