Dams in the Supreme Court: Two Cases To Watch This Term

November 2, 2012

Two cases of great importance to operators of dams, storm sewers, and other water works will be decided in the U.S. Supreme Court's current term. The first, Arkansas Fish & Game Commission v. United States (No. 11-597), involves a takings claim for flooding caused by a U.S. Army Corps of Engineers ("Corps") dam. The second, Los Angeles County Flood Control District v. Natural Resources Defense Council (No. 11-460), addresses whether a the operator of a municipal storm sewer system violated its permit under the Clean Water Act ("CWA") where its flood control structures channeled an already-polluted river, passing the polluted water through a man-made structure, but without adding new pollution.

In Arkansas Fish & Game, the state successfully asserted a claim that periodic flooding from a Corps dam, which caused significant damage at a wildlife refuge downstream from the dam, constituted a compensable "taking" under the Fifth Amendment of the U.S. Constitution. The property at issue, the Donaldson Black River Wildlife Management Area ("WMA") in northwest Arkansas, contains rare and important bottomland hardwood habitat. It is located approximately 115 miles downstream from the Corps' Clearwater Dam in Missouri, which was constructed in the 1940s as part of efforts to control flooding in the Mississippi Basin. In the 1990s, the Corps began to deviate from its accepted operating plan for the Clearwater reservoir in order to reduce damage to crops upstream from the dam. Arkansas claimed that the deviations from operating rules increased flooding in the WMA, damaging hardwoods and reducing the value of the habitat in the WMA.

The takings claim succeeded before the U.S. Court of Claims, which found that flooding caused by the Corps degraded about 18 million board feet of hardwoods and wildlife habitat. The Court of Claims awarded $5.7 million in damages to Arkansas. The U.S. Court of Appeals for the Federal Circuit, which has specialized jurisdiction over takings claims, reversed in 2-1 decision, holding that temporary flooding such as that experienced at the WMA, does not constitute compensable taking of property, and that flooding must be permanent before a compensable taking occur. The Court of Claims denied a request for rehearing en banc, by a 7-4 vote. The four judges favoring rehearing took the unusual step of filing opinions dissenting from the denial of rehearing.

The Supreme Court heard argument in Arkansas Fish & Game on October 3. The case has potentially great significance for government operators of hydroelectric and irrigation dams and flood control structures in the Pacific Northwest because downstream flooding is a regular source of litigation, and those claims may now take on constitutional significance. Further, as the facts of Arkansas Fish & Game demonstrate, dam operations are often a balancing act, with multiple actors pursuing conflicting interests, and the possibility of takings liability will only complicate this balancing act for government dam operators.

The second case, Los Angeles County Flood Control, involves L.A. County's stormwater management system, in particular the concrete flood control channels used to contain several rivers in the county. After monitoring stations in the flood control channels found pollutant levels exceeding the levels allowed under L.A. County's NPDES permit, Natural Resources Defense Council ("NRDC") brought a Clean Water Act citizen suit against the County. The District Court rejected the suit, concluding that the County had not "discharged" a "pollutant" into the water so as to violate the CWA, but had only transported already-polluted water in the flood control channels. The Ninth Circuit, however, reversed this holding, finding that the County "discharged" pollutants from its sewer outflows into navigable rivers.

The Flood Control District successfully sought review in the Supreme Court, arguing that the Ninth Circuit's opinion is contrary to the Supreme Court's holding in South Florida Water Management District v. Miccosukee Tribe. In that case, the Supreme Court held unanimously that no addition of a pollutant occurs triggering the requirement for a NPDES permit where the conveyance merely transfers water from one part of a water body to another without adding any pollutants. The L.A. County Flood Controlcase is important both because the Ninth Circuit's holding would significantly limit Miccosukee. The case is also important because the Ninth Circuit's opinion calls into question long-standing precedent holding that dams are not "point sources" of pollution requiring an NPDES permit under the CWA where they merely pass polluted water through the dam works without adding new pollutants.

The Supreme Court's recent history in overturning Ninth Circuit precedent, especially in environmental cases, does not bode well for the Ninth Circuit's Los Angeles County decision. The decision seems particularly at risk because the Court granted review only on the question whether the Ninth Circuit violated Miccosukee, denying review on the other question raised by the Flood Control District. On the other hand, the U.S. Solicitor General, filing a brief on behalf of the United States, took an interesting "split the baby" approach, agreeing with the petitioners on their reading of Miccosukee, but arguing that the case should be remanded for further fact-finding concerning the location of the monitoring stations at issue in the case, and whether they are measuring pollution adding by the Flood Control District rather than pre-exising pollution that merely flows through the flood control channels.

If you have any questions about the Supreme Court cases discussed in this post, the regulation of dams, or other matters related to the utility industry, natural resources, water, or environmental law, please contact a member of GTH's Energy, Telecommunications and Utilities practice group or Environment & Natural Resources practice group.