April 3, 2014 – Subdivision residents near Lake Delton who said the Village of Lake Delton was responsible for allowing their properties to be flooded out won’t get the just compensation they were seeking, according to a recent state appeals court decision.
The 13 property owners argued that the village, which controls a dam that regulates water flows into Lake Delton, failed to make structural design changes that would have prevented severe flooding to their properties in 2008, a year of unusually heavy rains.
The dam was constructed in 1927. The village made no structural design changes to the concrete dam since assuming ownership of it in 1994. In 2005, though, the village altered the floodgates to open at four feet maximum instead of six feet.
Homeowners Timothy and Elizabeth Fromm, the lead plaintiffs, lost their home when severe flooding erosion caused the home to be swept into the nearby Wisconsin River. (A video posted to YouTube shows the violent damage caused by the 2008 flooding).
Based on the flooding event, the Fromm’s and others filed an inverse condemnation action, arguing the village “took” their property without just compensation. The circuit court disagreed, concluding the village took no action considered a “taking” of property.
The U.S. and Wisconsin constitutions prohibit the government from taking private property for public use without just compensation. Wisconsin courts follow federal takings jurisprudence when determining if a taking has actually occurred.
Property owners who allege a taking has occurred without compensation can initiate inverse condemnation proceedings to recover compensation under Wis. Stat. section 32.10. In this case, however, the appeals court affirmed no taking occurred.
In Fromm v. Village of Lake Delton, 2013AP14 (April 3, 2014), a three-judge appeals court panel explained that a takings claim relies on a physical occupation or a regulatory restriction that deprives the property owner of most beneficial use of their land.
Fromm had argued that the government allowed a “physical occupation” in the form of flooding to occur because the village’s action or inaction failed to prevent the flooding.
Specifically, the Fromm’s said the village altered the dam’s floodgates and failed to act on information that their property sat below the dam’s lowest point of elevation.
As to the first point, the appeals court found no facts to support the claim that adjusting the floodgates differently would have prevented the flooding.
As to the second argument – the village’s failure to take action based on elevation information – the appeals court was not convinced with Fromm’s assertion, even assuming that the village knew the flooding risk posed by elevation differentials.
“Even with all these assumptions, however, we agree with the Village that the failure to act on this information cannot form the basis for Fromm’s takings claim,” wrote Judge Brian Blanchard, noting a valid takings claim requires “affirmative government action.”
The court noted Nicholson v. United States, 77 Fed. Cl. 605 (Fed. Cl. 2007), where plaintiffs in New Orleans argued the government took their property by failing to design, build, and maintain levees to prevent the disastrous Hurricane Katrina flooding there.
In Nicholson, the court ruled that government “inaction” cannot serve the basis for a takings claim, but noted flooding situations that could rise to a taking of property.
Specifically, the Nicholson court said a takings scenario could occur if the floodwalls, as designed, “channeled the flood waters toward their property or had a net effect of increasing the level of flooding.” The Fromm’s seized on this language.
In their appellate brief, the Fromm’s said “the dam as designed and improperly maintained had the net effect of channeling increased amounts of water towards the plaintiffs’ property and increasing the level of flooding at their property.”
But the appeals court viewed this argument as defective, noting the village did not design the dam and took no action to somehow “channel” water to their property.
The panel also distinguished a Wisconsin case where the state supreme court determined a city-run airport took a compensable “aviation easement,” because the extension of a runway caused planes to fly very low above the landowners’ property.
“[A]s the Village points out and we have already noted above, the court in Brenner explicitly stated the rule that ‘government action of some sort is a prerequisite for a taking under the constitution,’” Judge Blanchard wrote for the panel.
The panel declined to fashion a per se taking rule where a dam across a navigable waterway that pools a lake “makes the government responsible for any consequential significant property damage that flows from the water not being controlled in that lake.”
“Fromm fails to cite to any authority to support his proposition that, by operating a dam designed and created by others, a government unit becomes strictly liable in the takings context for all flooding associated with the dam,” Judge Blanchard wrote.