Court Blames Corps on Mo. River Floods

Despite Court Victory, Basin Farmers Give Up Flowage Easements to Government

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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A federal judge ruled U.S. Army Corps of Engineers management of the Missouri River basin was to blame for repeated flooding and damages to farm ground. (DTN file photo by Elaine Shein)

OMAHA (DTN) -- Changes made in the management of the Missouri River basin contributed to extensive flooding and led to millions of dollars in property takings, including crops and farm infrastructure through the years, a federal judge ruled this week. However, no compensation was awarded for lost crops in the ruling by U.S. Court of Federal Claims Judge Nancy Firestone in a long-fought case filed by hundreds of farmers in the basin.

Instead, the judge ruled repeated floods dating back to 2007 resulted in a taking of farmers' flowage easements without compensation in violation of the Constitution. The court ruled farmers should be compensated for the loss of flowage easements.

Firestone said changes made to basin management by the U.S. Army Corps of Engineers in 2004 was to blame.

"Based on the foregoing, the court finds that the government's actions ... and the flooding of the three representative plaintiffs' properties constitutes the taking of a permanent flowage easement under the Fifth Amendment, and that the plaintiffs are entitled to just compensation for that taking," the judge said in her ruling.

Repeated flooding has led to significant damage to farms, including lost infrastructure, damaged farm ground and lost crops and future land usage.

Through it all the Corps of Engineers has maintained it has been following its master manual.

Plaintiffs' attorney R. Dan Boulware said in an interview with DTN he hopes the ruling will lead to changes in how the Corps of Engineers manages the basin.

"I would hope that the decision prompts changes in the river for everyone," Boulware said, "not just our clients but for the communities and farmers and citizens and businesses that are located along the river.

"They've changed the river and changed the river and it's prone to flooding. Now the Corps wants to deny that, but we've been through two lengthy trials now and they've lost on that."

The Corps of Engineers did not respond to DTN's request for comment.

Anthony Schutz, associate dean for faculty and associate professor of law at the University of Nebraska-Lincoln, told DTN that property owners essentially gave up land without a choice.

"One thing that I'm not sure many people realize is that this payment constitutes a payment for a permanent flowage easement," he said.

"That means the property owner will not be able to complain again. In other words, the landowner is selling -- involuntarily -- to the government the right to carry on the current program and flood at a duration and frequency that occurs under that plan."

Schultz said subsequent landowners also will be subject to the flowage easement.

"Nothing in these opinions will require the Corps to change its management plan," he said.

"In fact, once paid, the Corps' ability to continue is more entrenched."

HUNDREDS OF FARMERS AFFECTED

Though the ruling granted compensation to three bellwether cases, Boulware said there are hundreds of farmers in the basin who suffered damages. Bellwether cases are those determined to be representative of all other cases.

Whether farmers actually are compensated, he said, is a different matter.

"It's not over, the government has declared it to me that they intend to appeal," Boulware said.

"They have multiple claims for multiple years. So, I think it'll be appealed. The point is if they appeal it, what are they appealing? They're saying to the courts 'we shouldn't have to pay because of a legal technicality.' Now, they're not saying to the court 'reverse the findings of what judge Firestone found on the facts that we cause flooding. We just don't want to pay for it.' Right now, what kind of a policy is that?"

Boulware said he too is considering an appeal of the judge's decision not to include crop losses as a taking or to award cleanup costs to farmers.

"We disagree strongly with what the court did and we're evaluating our options and we have the right to appeal that if we decide to do so," he said.

CROP LOSSES NOT COMPENSATED

Firestone said in her ruling federal law doesn't permit the awarding of "consequential" damages, including lost crops.

"Here, plaintiffs are alleging damages above and beyond the value of the flowage easement that the government has taken," Firestone wrote.

"In particular, the plaintiffs allege through the testimony of their damages expert, Dr. (Merrill) Bateman, crop losses and lost profits based on reduced yields, damage to structures, damages to equipment, flood prevention expenses, and flood reclamation expenses. However, these are consequential damages that are an indirect result of the taking of the flowage easement. It is improper to both claim compensation for diminution in value and claim compensation for these consequential damages." Merrill J. Bateman is a retired economist and former president of Utah's Brigham Young University.

The court concluded the representative tracts were reduced in value by 30% from changes made by the Corps in the management plan.

Applying that to the 2014 values, the court ruled there was about $7 million to be paid on about 3,000 acres -- most of which was bottomland ranging from $6,000 to $8,000 per acre.

The amount will be collectible only on lands where a taking occurred.

Schultz said the extent to which the three bellwether properties are representative of the 400 who initiated the litigation is a different story.

"The concern from a governmental perspective is likely that future changes that increase the duration or severity of flooding may require compensation in the future," he said.

"This could become extraordinarily difficult to deal with if climate change makes river flows more volatile or unique relative to historic trends. But, so long as a change in management goals doesn't lead to increased flooding of the type that led to this litigation, then the Corps should not be forced to buy more land rights."

THREE PROPERTIES

The three bellwether cases include that of St. Joseph, Missouri, farmer Roger Ideker and two other farmers.

Phase two of the trial concluded in early August.

Though an expert testified at trial that Ideker could receive anywhere from about $23.9 million to $26.2 million in compensation for damage on his 1,493-acre tract of land, Boulware told DTN the total damages awarded for lost easements is about $8 million in the three cases.

In 2018, the court ruled the Corps was responsible for recurring floods that severely damaged Ideker's farm -- for several years post-2004, except 2011 -- and on March 11, 2019, the court moved to the compensation portion of the case. Ideker's farm was again underwater in 2019 as a result of the heavy flooding in the basin.

Ideker and hundreds of other basin farmers have been working to return large chunks of land buried in sand to production while holding out for a successful court case.

At the conclusion of the phase-two trial, both sides were far apart on the amount of compensation to award.

The lawsuit accused the Corps of Engineers of making changes to its flood manual that led to unprecedented releases from Gavins Point Dam in South Dakota following heavy spring rains and snowmelt in Montana in 2011. The Corps released large volumes of water from that dam in 2011, and all the levees along Ideker's farm were destroyed.

The 2011 flood caused an estimated $2 billion in damage in several states. The Corps had to make unprecedented water releases from northern dams, flooding farms and communities in the lower basin and bringing into question whether the Corps handled the situation correctly. Many landowners downstream blamed the Corps' water release for exacerbating the flood. A task force later found the Corps did all it could to manage the water.

Firestone ruled in 2018 that, in five of the six years in question dating back to 2007, the Corps of Engineers violated the Fifth Amendment by not compensating farmers for flood-damaged land. She disallowed flood claims from 2011.

Firestone ruled in 2018 the Corps deprioritized flood control in 2004. In 2004, the Corps instituted the Missouri River Recovery Program to accelerate changes to the river to enhance wildlife habitats.

The court found that, since 2007, flooding has been among the worst in the history of the river, and the Corps' changes in management either caused or contributed to the flooding.

In the summer of 2016, the U.S. Government Accountability Office issued a report saying the Corps is falling short on the system in place to update water-control manuals. Corps regulations state water-control manuals should be reviewed at least every 10 years.

Todd Neeley can be reached at todd.neeley@dtn.com

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Todd Neeley