Summary of San Jacinto River Authority v. Ross

by José de la Fuente

Recently, the 14th Court of Appeals issued an opinion in San Jacinto River Authority v. Ross—a case briefed and argued by Lloyd Gosselink—in favor of SJRA on the appeal of one of the numerous takings cases filed by downstream homeowners against SJRA arising from the flooding that occurred along the West Fork San Jacinto River during the Hurricane Harvey rain event. The Ross decision provides important and helpful guidance to dam operators (as well as the operators of other flood-control or water-diversion equipment or structures) in Texas that may help dam operators both avoid causing flooding and avoid liability for same.

Several of these flooding cases already have been decided in SJRA’s favor by courts of appeals (including the 1st District in Houston and the 9th District in Beaumont), based on hydrological evidence that established that SJRA’s operation of the Lake Conroe Dam to pass through incoming Harvey floodwaters did not cause the complained-of downstream flooding. The Ross case adds to that body of law, holding that (based on the factual record of that case, including SJRA having a gate operation policy designed to protect the integrity of the dam) passing floodwaters through the dam’s gates in a way so that the peak rate of outflow never exceeded the peak rate of inflow was an action taken under a reasonable good faith belief that doing so was necessary to prevent a serious threat to life and property.

The Ross case was unique among these takings cases in that it considered a claim brought under Chapter 2007 of the Government Code, asserting that the operation of the dam gates to pass through floodwaters amounted to a “regulatory taking” under that statute. Importantly, that statute has numerous exceptions, including a “good faith” exclusion under section 2007.003(b)(7), which provides that Chapter 2007 does not apply to government actions:

taken out of a reasonable good faith belief that the action is necessary to prevent a grave and immediate threat to life or property; . . .

During Hurricane Harvey, as a massive volume of floodwater reached Lake Conroe and eventually the Lake Conroe Dam, SJRA passed through such floodwater to prevent the overtopping of both the dam’s tainter gates and the dam itself. Based on a record reflecting that (1) SJRA developed its gate operation policy with the intention of protecting the dam and its structures, thus preventing catastrophic dam failure, (2) SJRA relied on engineers and prior court decisions in crafting that policy, and (3) SJRA followed that policy in (4) what was unquestionably an emergency flooding situation, the Court found that the exception was established, and SJRA thus was not liable for a taking under Chapter 2007.

The Court made several holdings and observations of interest and importance to dam operators, including:

• “[R]easonable good faith” requires that the evidence shows that the entity’s “decisionmakers subjectively believed that the action at issue was necessary” to prevent a serious threat to life or property, and such belief must be “objectively reasonable under the circumstances when viewed from the perspective of a reasonable dam operator.” (Emphasis added).
• SJRA used an engineer (Freese and Nichols) to design its gate operations policy to comport with applicable legal authority, including Wickham v. SJRA (a 1998 case generally holding that SJRA did not cause a flood because the dam’s peak rate of outflow during the event was lower than the peak rate of inflow).
• The Harvey flood event, a declared natural disaster, presented a grave and immediate threat to life and property.
• Water overtopping the dam and gates “could have resulted in dam failure and a catastrophic release of water,” and no engineer would recommend allowing the gates to be overtopped.
• The gate operations policy, which SJRA followed, was designed (1) “to reduce downstream flooding compared to what would naturally occur,” (2) “to comport with applicable laws,” and (3) “to ensure that the dam did not fail and cause catastrophic destruction downstream.”
• The court held that “[g]enerally, a governmental entity’s actions taken with intent to comply with valid laws and legal authority are objectively reasonable.”
• During a storm emergency, following a gate operations policy “that was intended to minimize threats to life and property and to comply with applicable rules and legal authority” was “objectively reasonable.”
• “It was not unreasonable for SJRA to rely on Wickham,” particularly because SJRA was a party to that case and the Beaumont Court of Appeals has continued to follow the Wickham rule.
• While there can almost always be argument that a dam could have been operated differently, better, etc., “given that preventing dam failure is the overriding priority of dam operators,” such operators must “exercise discretion in determining when and how much water to release” to protect the dam, and they “cannot be expected to predict rainfall with certainty,” a “more relaxed definition of ‘necessary’” (as that term is used in the Chapter 2007 exception) is appropriate.
• Thus, the requirement “means at most that SJRA’s acts must have been taken out of a reasonable good faith belief that the action would accomplish the purpose of preventing a grave and immediate threat to life or property.”
• “There is more than one reasonable way to operate a dam, and operators cannot be expected to be omniscient.”
• When facing a significant weather event, “any dam operator must decide on a course of action based on the information at hand and the reasonable assessments of it.”
• “The failure to achieve the least amount of flooding possible, or the choice of one reasonable course of action over another reasonable option, does not remove that act” from the purview of the Chapter 2007 exception.
• “The issue is whether devising and implementing the 2017 Gate Policy as it did during Harvey was outside the scope of reasonable action for a dam operator. We hold it was not.”
• “The decision of whether, when, and how much water to release was discretionary,” and there was no evidence “that the amount of water released was so extreme as to be objectively unreasonable.”

These holdings and observations suggest some key takeaways for dam operators with floodgates or any similar operators with flood control systems/equipment to properly exercise the section 2007.003(b)(7) emergency action exception:

• Utilize an engineer to design a gate operation policy (or similar policy) that—if at all possible—is designed to (1) reduce downstream flooding compared to what would naturally occur (e.g., follow the “peak outflow rate stays below peak inflow rate,” or a similar approach); (2) comport with applicable laws, including recent court decisions; and importantly, (3) ensure that the dam and its structures do not fail so as to cause catastrophic damage downstream.
• Maintain records of the reasoning, work done, and any changes made to a gate operation policy, including records of the decisionmakers approving the policy.
• During a flood event, use what would be recognized objectively as good and reliable data in implementing the gate operation policy: flow gage readings (both upstream and downstream as appropriate), actual and/or estimated rainfall amounts and rates from government sources (NWS, NOAA, etc.), measurements of water levels at key locations within the reservoir/at the dam, etc. Maintain records of all such data used in making gate operation decisions, including the time the data was gathered and used.
• Maintain records of the flood event as a whole, including official governmental warnings, declarations, statistics, etc.

While the Ross case was a Chapter 2007 case, following these steps, including consulting with engineers and legal counsel in developing such policies, may also help negate the elements of “intent” and being “substantially certain” that the entity’s activities will cause flooding in traditional takings cases as well.

Joe de la Fuente is the Chair of the Firm’s Litigation, Appellate, and Business Services Practice Groups. If you would like additional information or have questions related to this article or other matters, please contact Joe at 512.322.5849 or jdelafuente@lglawfirm.com.