4. Unconstitutional “takings” cases and implications for property rights. In 2013, several important property rights cases involving unconstitutional takings under the Fifth Amendment were decided. In June, the U.S. Supreme Court held that the Government cannot condition the issuance of a land-use permit on the landowner giving up a portion of his property unless there is a connection and “rough proportionality” between the condition and the effects of the proposed land use. The Court said there is no distinction between conditions precedent and conditions subsequent, and that the requirements of “nexus” and “rough proportionality” apply even though none of the landowner’s property is actually taken. That means that monetary exactions without a physical taking of property are subject to takings scrutiny. In the case, the landowner claimed that an unconstitutional taking of his property occurred when the state of Florida conditioned his receipt of a permit for commercial development on the landowner’s payment for improvements to a parcel of land that the government owned miles from his property. The landowner refused to accept the permit with the condition attached. The Florida Supreme Court held that no taking had occurred, but the U.S. Supreme Court reversed, citing two prior U.S. Supreme Court decisions. Koontz v. St. Johns River Water Management District, 133 S. Ct. 2586 (2013).

 

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Another case that ultimately spilled over into 2013 further defined the scope of taking jurisprudence. In this case, the United States Army Corps of Engineers deviated from its operating plan for a dam that resulted in increased downstream flooding of a wildlife management area that the plaintiff owned. The flooding was only temporary and was not “inevitably recurring.” The trial court determined that the Corp’s action constituted the taking of a temporary flowage easement over the plaintiff’s property and awarded damages of $5,778,758. On appeal, the Federal Circuit reversed. But, on further review by the U.S. Supreme Court, the Court agreed with the trial court and held that “recurrent floodings, even if of finite duration, are not categorically exempt from Takings Clause liability.” On remand, the Court of Appeals for the Federal Circuit affirmed the trial court’s ruling, determining that the government’s action had given rise to a temporary taking, compensable under the Fifth Amendment. The flooding was foreseeable and a sufficiently severe invasion to constitute a taking. Arkansas Game & Fish Commission v. United States, 2009-5121, 2010-5029, 2013 U.S. App. LEXIS 24006 (Fed. Cir. Dec. 3, 2013), on rem. from, 133 S. Ct. 511 (2012).

Railroad lines that have been converted from railroad use to recreational trails have also created takings issues over the years. Takings claims that arise from the conversion of a railroad line to a trail are analyzed under a three-part test: (1) a determination of the type of property interest that the railroad owned (e.g., an easement or a fee simple interest); (2) if the property interest was an easement, a determination of whether the terms of the easement limited use only for railroad purposes or whether the terms allow for future use as a public recreational trail and (3) if the railroad acquired a “broad enough” easement under applicable state law, a determination of whether the easements terminated before the alleged taking with the result that the property owners at the time held fee simple ownership interests unencumbered by the easements.

In 2013, the United States Court of Federal Claims held that the Federal Government was liable for an unconstitutional taking under the Fifth Amendment to the extent that the railroads involved in the case had been granted easements and the government converted the rail line to trail usage under the National Trail Systems Act. However, where the deeds in issue transferred a fee interest in the rail line to the railroad rather than an easement, the court dismissed the takings claims because the fee owners of the adjacent lands could not prove that they held sufficient property interests to establish a takings claim. Burgess, et al. v. United States, 109 Fed. Cl. 223 (2013).

At the state level, the Texas Supreme Court, in 2012, held that landownership in Texas includes interests in in-place groundwater. Accordingly, such groundwater cannot be taken for public use without adequate compensation under the Texas Constitution. The farmers in the case sought a permit to pump underground water for crop irrigation purposes. The permit was granted, but was limited in amount based on historical use. The court said limiting the amount of water that could be pumped to historical use was not in accordance with state law and remanded the case for a determination of whether a taking had occurred. In 2013, the Texas Court of Appeals held that a taking had occurred to the extent the permit limited pumping of in-place groundwater to an amount for the farmers’ crop irrigation purposes. The Edwards Aquifer Authority, et al. v. Bragg, No. 04-11-00018-CV, 2013 Tex. App. LEXIS 13854 (Tex. Ct. App. Nov. 13, 2013).