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SCOTX Rules Against River Authority in Hurricane Harvey Flooding Case

April 16, 2021 Allen Pusey

The Texas Supreme Court ruled Friday that a state agency can be sued for property damage in the Houston area caused by waters released from Lake Conroe Reservoir during the height of Hurricane Harvey.

In its 8-1 decision, the court said, in effect, that a government action doesn’t have to be formal in nature — a regulation, an ordinance or an enforcement proceeding — to be a “physical taking” that provokes a waiver of sovereign immunity allowing a property owner to sue.

The ruling affirms a lower court ruling by Houston’s First Court of Appeals.

The San Jacinto River Authority is a conservation and reclamation district created by the Texas legislature in 1937. The authority controls the flow of waters behind an earthen dam across the West Fork of the San Jacinto River built in 1973 to create Lake Conroe.

During the peak of flooding by Hurricane Harvey in late August and early September 2017, the authority decided to release waters behind the dam to avoid damage to the structure, a move that resulted in flooding of residential properties as far as 30 miles downstream.

In three separate multi-party “inverse condemnation” lawsuits filed in two district courts, property owners contend that the River Authority can be held responsible for the damage under Chapter 2007 of the Texas Government Code which specifies how and when state agencies waive their immunity when they take actions that affect the value of private property.

In each case, the River Authority filed a motion to dismiss claiming sovereign immunity as a governmental agency, and in each case the trial court refused. The cases were consolidated on appeal and the River Authority argued that Chapter 2007 waivers of immunity are limited to “regulatory takings” — takings that are the result of formal and official government actions — and “physical takings” only to the extent they involve the enforcement of those specific acts.

Specifically, § 2007.003 (a) says the waiver — outside “the adoption or issuance of an ordinance, rule regulatory requirement, resolution, policy, guideline, or similar measure” — also applies to “an action that imposes a physical invasion or requires a dedication or exaction of private property.”

The River Authority argued that the property owners’ characterization of their lawsuits as “inverse condemnation” actions is, in itself, disqualifying because Chapter 2007 does not include condemnation proceedings, the “primary mode for physical takings,” among the government actions affected.

“Indeed, it does not,” wrote Justice John Devine for the court. “In fact, the chapter expressly excludes formal condemnation proceedings from its scope.”

But Devine noted that an “inverse condemnation” — a lawsuit seeking compensation for something the government has already done — is a common law action and, unlike condemnation, is not specifically excluded by Chapter 2007.

Lyndon Bittle, a partner at Carrington Coleman, noted that the court did not rule on the merits of the lawsuit or the River Authority’s defense.

“Because Rule 91a does not allow courts to consider any evidence outside the petition, the Court did not determine the merits of the underlying claims or the Authority’s defense that its actions were justified as good faith responses to an emergency situation presenting a ‘grave and immediate threat to life or property,'” Bittle said.

Appellate lawyer Chad Ruback said the opinion broke new ground, not so much because it expanded any interpretations of Chapter 2007, but because it pointed out the plain language of the law.”

“I’m doubtful that the legislature contemplated the statute being applied in a situation like this one. But, as the Supreme Court’s opinion emphasized by italicizing portions of the statutory language, the statute’s plain language seems to merit exactly this interpretation,” Ruback said.

Justice Jimmy Blacklock dissented.

The case is San Jacinto River Authority v. Vicente Medina (19-0400) consolidated with San Jacinto River Authority v. Burney (19-0401) consolidated with San Jacinto River Authority v. Argento (19-0402).

Allen Pusey

Allen Pusey is a senior editor and writer at The Texas Lawbook.

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