U.S. Supreme Court hears Texas case that could change how states compensate landowners for their property

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Richie DeVillier’s property east of Houston has been owned by his family for generations and had never flooded, but that all changed when the state revamped Interstate 10.

His rice farm first flooded during Hurricane Harvey, and again during Tropical Storm Imelda.

The property faced substantial damage to its crops and livestock, and now turns into a lake every time there’s significant weather, an annual recurrence near the East Texas coast.

DeVillier sued Texas in 2020 and the case made it to the U.S. Supreme Court on Tuesday, where justices listened to arguments on whether he can seek federal relief.

Under the U.S. Fifth Amendment, governments have the right to take private property, but they must pay just compensation for it. DeVillier, along with several other Chambers County property owners who filed the suit, argues that the flooding, which stemmed from actions taken by the state, constitutes a form of government taking private property. The state has argued it should not need to pay because it did not intend to take the property, said Dan Charest, the original attorney who represented the property owners in state court.

Tuesday’s arguments focused on whether federal or state courts were the right venue for the case. But Charest said the Supreme Court’s ruling will likely broaden the Fifth Amendment’s interpretation and affect the nation as a whole.

If the Supreme Court finds in favor of the landowners, he said, the ruling could redefine what it means for a state to take someone’s property and set a standard for how it should compensate a property owner. If it rules in favor of the state, the court might broaden states’ ability to retract, restrict or eliminate remedies for landowners whose property is taken.

Regardless of the outcome, Robert McNamara, an attorney with the legal nonprofit Institute of Justice and the lead counsel now representing DeVillier, left the hearing optimistic that Texas landowners would prevail.

If the Supreme Court sides with the plaintiffs, it will bolster the case in the lower federal courts, he said; if the justices side with the state, the case goes back to state court, where state attorneys have said they would accept an amended case addressing some of their grievances without resistance.

“I think whatever happens with the court, we have already won this case,” McNamara said.

Tuesday’s proceedings were not about whether Texas should compensate the landowners — that question is still to be debated in lower courts. The hearing before the Supreme Court was in response to the state’s request that the issue be taken up in federal court, not state court.

The U.S. Constitution requires compensation for landowners whose property is taken by a government — but Aaron Lloyd Nielson of the Texas Attorney General’s Office said it doesn’t say how governments are supposed to do this, which allows the state to dictate what the process for those claims should be. He also argued that the petitioners failed to use the avenues set by the Texas’ constitution to make a claim.

The petitioners did file the lawsuit following state requirements, Charest said.

Texas asked for the case to be heard at the federal level, as this type of case is the U.S. Supreme Court’s “bread and butter,” Nielson said.

But in an argument some justices found perplexing, the state also said federal courts were not the right venue for the case because Texas has its own process for landowners to seek compensation for property taken by the government.

“Well, isn’t that a Catch-22,” said Supreme Court Chief Justice John Roberts.

Justice Sonia Sotomayor said this seemed like a bait-and-switch argument because the state remanded the case to federal court, but then said the plaintiffs needed to seek recourse in the state.

“This seems to be a totally made-up case, because [the plaintiffs] did exactly what they had to do under Texas law,” she said.

There was nothing else the landowners could have done, their filing was within Texas law and the state chose the arena, McNamara said.

Texas “decided to move the case to federal court and then try to extinguish these people's federal constitutional rights,” he said.

Nielson said the state would not oppose the plaintiffs if they amended their original complaint, currently sitting in state court, to add in additional language to address the state’s concerns.

“So if they go back down and say to the district court, ‘This has been remanded to the District Court. All we want is just compensation under the Texas Constitution and the Fifth Amendment.’ Under that case that you're mentioning, that's okay. And you're not going to resist them?” Sotomayor asked.

“We will not resist that, your honor,” Nielson said.