Houston, Texas. On Friday, October 28, 2022, Senior Judge Charles F. Lettow of the United States Court of Federal Claims issued 44-page decision addressing the financial consequences to 6 bellwether test properties stemming from the U.S. Army Corps of Engineers’ decision to deliberately induce flooding on over 7,000 acres of private property located upstream of the Addicks and Barker Dams & Reservoirs during and after Tropical Storm Harvey. After receiving hundreds of lawsuits against the Army Corps, the court bifurcated the upstream cases into liability and damages phases, focused litigation on the bellwether plaintiffs, and, after a 2019 trial, found the Federal Government liable. With the liability issue decided, the cases moved to the just compensation phase, which was tried in June 2022.
At issue in the just compensation phase were how much the taking of a permanent flowage easement by induced flooding impacted the test properties’ market values, whether plaintiffs’ personal property losses were recoverable, plaintiffs’ displacement costs, and an appropriate award of pre-judgment interest to compensate plaintiffs for lengthy delays.
Armi Easterby, court-appointed lead counsel and the lead lawyer for 1,800 upstream plaintiffs, stated “unquestionably this decision is a massive win as well as a huge step forward in our ongoing mission to hold the Federal Government accountable under the Fifth Amendment.”
For real property losses, including flood damage to structures and easement impacts, the court found that the government’s decision to take an easement by storing highly contaminated floodwaters in plaintiffs’ homes substantially reduced the property’s market value. For example, in the decision the court found that a
- 2-story house worth $180,000 before the taking suffered real property damages of $115,000, reflecting nearly a 65% reduction in market value
- 2-story house worth $290,000 before the taking suffered real property damages of $130,000, reflecting a 45% decrease in market value
- 2-story house worth $530,000 before the taking suffered real property damages of $200,000, reflecting nearly a 40% decrease in market value
The decision also clarified the parties’ respective rights and obligations under the permanent easement. The decision states that plaintiffs and their successors retain all development rights and can continue to make all lawful use of these properties, subject to the risk of occasional flooding caused by the operation of the Addicks and Barker Dams. The decision also made clear that, because the easement is permanent, plaintiffs cannot recover from the government for future damages caused by flooding in the government’s easement area.
For losses to personal property (furniture, household items, etc.), the court awarded substantial amounts after finding these losses were “directly and naturally caused” by the government’s taking. Mr. Easterby commented that, “we are very pleased that the court accepted personal property methodology we used and awarded our client the exact amount we sought.”
The court’s decision also included financial awards for dislocation costs, including the costs of securing substitute housing for the period of time the induced flooding rendered plaintiffs’ homes uninhabitable until the homes were repaired and safe to occupy once again.
For pre-judgment interest, the decision awarded prejudgment interest at the rate of 3.62% compounded semi-annually from August 30, 2017, until the date of payment.
Mr. Easterby concluded with “it is important to know that there is still time for Upstream residents to file their claims.” Court records show that thousands of property owners who suffered Addicks Barker reservoir pool flooding have yet to file a claim. Property owners upstream of the Addicks and Barker dams who experienced flooding in late August of 2017 must file it before the statute of limitations expires in 2023 to receive any financial compensation.
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