Tarrant Regional Water District v. Gragg
2004 Tex. LEXIS 590, 47 Tex. Sup. Ct. J. 707, 151 S.W.3d 546 (2004)
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Rule of Law:
A governmental entity's construction and operation of a public works project constitutes a compensable taking under the Texas Constitution when it causes recurrent, destructive, and significantly altered flooding on private property that renders the property unusable for its intended purpose. The requisite intent for a taking is established when the governmental entity knows or is substantially certain that its actions will cause the harm.
Facts:
- The Gragg family has owned the 12,516-acre Gragg Ranch since 1949, operating a large-scale cattle ranch on its fertile bottomlands along the Trinity River.
- The Ranch historically experienced regular, non-destructive flooding which contributed to the land's fertility.
- In 1987, the Tarrant Regional Water District (the District) completed construction of the Richland-Chambers Reservoir upstream from the Gragg Ranch for water supply purposes, not flood control.
- The reservoir was designed to be kept nearly full and its dam is connected to the Trinity River by a narrow, steeply banked discharge channel.
- In 1989, the Schwertner-Priest partnership leased the property and began a highly profitable calf pre-conditioning program that relied on the ranch's unique characteristics.
- In March 1990, the District released water from the reservoir for the first time following heavy rains.
- Immediately following the 1990 release, the Gragg Ranch suffered unprecedented and extensive flood damage, including breached levee roads and severe land erosion.
- In subsequent years, the Ranch experienced numerous similar destructive floods that were quicker, more forceful, deeper, and longer-lasting than any floods prior to the reservoir's construction, making the cattle operation economically infeasible.
Procedural Posture:
- O.L. Gragg and the Schwertner-Priest Partnership (Gragg) sued the Tarrant Regional Water District (the District) in trial court for inverse condemnation.
- The District denied liability and counterclaimed for a flowage easement over any property the court found to be taken.
- Following a bench trial, the trial court found that the District had inversely condemned a flood easement on the Gragg Ranch.
- The issue of just compensation was submitted to a jury, which awarded over $10.2 million to Gragg and over $4.2 million to the partnership.
- The trial court entered judgment on the verdict and awarded a permanent flowage easement to the District.
- The District, as appellant, appealed to the Texas Court of Appeals, which affirmed the trial court's judgment.
- The District then petitioned the Supreme Court of Texas for review, which was granted.
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Issue:
Does a governmental entity's construction and operation of a reservoir that causes recurrent, significantly changed, and more destructive flooding on private property, rendering it unusable for its intended purpose, constitute a compensable taking under Article I, Section 17 of the Texas Constitution?
Opinions:
Majority - Justice O'Neill
Yes, a governmental entity's construction and operation of a reservoir that causes such harm constitutes a compensable taking. The evidence was legally sufficient to show the District’s reservoir caused recurrent, destructive changes in the flooding characteristics at the Gragg Ranch, rendering the property unusable for its intended purpose. The court distinguished this from mere negligence, holding that the requisite intent for a taking is present when a government entity knows that an act is causing identifiable harm or is substantially certain that the harm will result. Here, the repeated and exacerbated nature of the floods demonstrated they were not an accident but an inevitable consequence of the reservoir's design and intended operation. Because the property was effectively damaged for a public use (water supply), the Constitution requires that the public bear the cost, not the individual property owner.
Analysis:
This case clarifies the standard for inverse condemnation in Texas for damages caused by public works projects, particularly flooding. It solidifies the principle that intent for a taking does not require malice, but rather knowledge or substantial certainty that the government's actions will result in specific, recurring harm. By emphasizing the importance of recurrence in flood cases, the decision provides a clearer line between a single, non-compensable negligent event and a permanent, compensable taking of a property interest. This precedent places a greater burden on governmental entities to anticipate and mitigate the inevitable, recurring negative impacts of their projects or compensate landowners accordingly.
