Today the U.S. Supreme Court heard oral arguments in Arkansas Game & Fish Commission v. United States. The NFIB Legal Center filed in the case because it raises an important issue impacting small business property rights. The question is whether and when government incurs an obligation to pay just compensation when it causes flooding on private property?

The Fifth Amendment’s Takings Clause provides that government shall not take private property without paying just compensation, and it has long been recognized that a taking occurs when government permanently floods private property. But, what if a government induced flood is only temporary? What if this “temporary flood” destroys your home or business?

In this case the Army Corp of Engineers caused flooding on private property for six consecutive years and now argues that it should have no takings liability because it eventually decided to stop flooding the property—never mind the fact that the owner lost all meaningful use of the property during these floods and suffered thousands of dollars in damages. Here the property owner lost acres and acres of timber.

We argued in our brief that government has an obligation to pay for property it destroys. In cases like this where the flooding is directly caused by government actions, there should be no way to avoid this obligation, regardless of whether or not the flooding is “permanent.” The government may try to characterize the flooding as temporary, but the damages suffered by landowners in these cases are permanent and very costly.

Yet in oral arguments, the United States said that it doesn’t matter how much damage it causes to private property—in the federal government’s view, there is no duty to pay compensation to a landowner unless government acts to intentionally and permanently take possession of private property. In other words, they argued that government is not responsible for any damage to private property resulting from its decisions to release waters from a dam, because the government does not actually intend to cause harm to downstream property owners. Here Army Corp merely made a decision to release water at certain times and at certain flows; whatever happened to downstream property owners is none of the government’s concern.

So what if you happen to be the unlucky property owner who loses a home or businesses downstream? Well, in the federal government’s view, that’s just a risk you take in buying a downstream property. The United States argued that government needs the flexibility to be able to make policy decisions without worrying about whether it will be on the hook for damage caused to private property; however, as Justice Scalia aptly noted, the Takings Clause was designed to protect property owners from policy decisions which force them to suffer for the benefit of the general public. Indeed, the fact that the government may conclude that there is a public benefit in maintaining a public works project, or in any other policy decision, will not shield the government from the duty to pay compensation when it forces a landowner to bear the costs of public progress.

Indeed, in this case the flooding directly resulted from Army Corps decision to change its water release policies. Army Corp decided to change its policies to accommodate various interests in the community. But as Justice Roberts noted, it does not matter whether other members of the public benefited from the changed release patterns, or whether a majority of the public encouraged the agency to adopt its water release policies. To draw on Justice Roberts comments, if the government is considering alternative plans which may potentially flood ten different properties, there may well be “public progress” in a decision to flood property 2 because property owners 1 and 3-10 will all benefit; however, the 2^nd property owner should not be made to suffer uncompensated as the sacrifice of public progress.

The good news is that the Court seemed very skeptical of the impunity rule which the United States advocated. But, we have learned that it is dangerous to put too much stock in oral arguments. We will have to wait and see what the Court decides; however, we remain cautiously optimistic.