In Harvey's Wake, a Rush to the Courthouse

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The Wall Street Journal
Sara Randazzo

The plaintiffs’ lawyers lined up shoulder to shoulder on a recent Friday in a Houston courtroom, filling every available bench, jury box and table. All had come to hear how they could get a piece of sprawling litigation emerging from the devastation wrought by Hurricane Harvey.

“I’ve never seen so many suits in the same room, unless it was in church,” said Chris Johns, a Texas lawyer in attendance at the Oct. 6 hearing.

The lawyers have coalesced around a corner of eminent domain law they hope will lead to big payouts from the federal government. Dozens of lawsuits filed so far seek compensation for the damage homeowners say was caused when the U.S. Army Corps of Engineers released water from two area reservoirs in the days after a Category 4 hurricane and historic rainfall flooded Houston in late August.

With an estimated 10,000 homes or more affected by the reservoirs, the litigation has the potential to reach into the billions of dollars. But convincing a judge the controlled release counts as an improper “taking” of private property under eminent domain law could face challenges in court, and a payout isn’t a sure thing.

The Addicks and Barker dams were built in the 1940s to reduce the risk of flooding in Houston. By ordering the controlled release, the Army Corps alleviated water levels that could have poured over or around the two earthen dams, potentially rupturing them and causing significant damage.

The government said in a court filing the flooding was a 1,000-year event and that the release of water to relieve the Addicks and Barker dams doesn’t qualify as a taking under the Constitution’s Fifth Amendment. A “single flood—as opposed to an inevitably recurring flooding caused by the Government—is not a taking as a matter of law,” the filing says.

The Justice Department didn’t respond to a request for comment.

Affected homeowners and their lawyers are referring to the government’s position as the “one flood free” rule.

“I figured, they know what they’re doing, and are releasing water only when it won’t cause harm to everybody else,” said Jennifer Arriaga, 44 years old, whose home in Houston’s Memorial Bend neighborhood largely survived the storm before being flooded with 18 inches of water from the Addicks dam release. Her family faces an estimated $220,000 in damage in the house they’d only just built a year ago, and is pursuing litigation.

The plaintiffs in the cases fall into two buckets: those who live “upstream,” and were flooded in the reservoir areas as rain kept falling, and those “downstream” who were flooded once water was deliberately released.

Val Aldred, a 65-year-old retiree who is a plaintiff in the litigation, said he was shocked to see water inching closer to his Memorial Bend home that Tuesday after the storm when the rain had already stopped. “They didn’t even give me notice,” he said. “If they said look, we’re going to release the water, and you’ve got…even three hours to get out, I would have at least appreciated that. That angers me like you can’t believe.”

The cases have attracted the attention of plaintiffs’ lawyers from across Texas and other states, including those who typically specialize in personal injury, privacy cases and other unrelated specialties.

Those at the introductory hearing estimate at least 100 attorneys filled the room. Now, many of them are forming coalitions and vying for a leadership position in the cases, which would position them to help steer its direction and potentially be in line for extra compensation.
Houston attorney Derek Potts said he’s hosted two meetings in his office of lawyers from between 40 and 50 area firms to try to create a cohesive plan for the litigation. “This is a very high-profile case that strikes close to home for all of us,” he said.

Judge Susan Braden with the U.S. Court of Federal Claims, a specialized court used for claims against the federal government, set an Oct. 20 deadline for applications for lead counsel. The judge has also asked for input on the best way to consolidate the more than 50 cases that have been filed so far, some as proposed class actions and others on behalf of individuals or groups.

Lawyers involved say it looks like the court wants to avoid a repeat of the prolonged takings litigation against the federal government that followed Hurricane Katrina in 2005. Some of those cases are still on appeal.

The Justice Department, meanwhile, has proposed a timeline that wouldn’t determine if the case is a class action until 2018, with discovery starting after that.

In 2012, the U.S. Supreme Court ruled that temporary flooding could qualify as a taking eligible for compensation, in a case brought by the Arkansas Game and Fish Commission against the U.S. government over the flooding of a wildlife management area that destroyed timber.