The Golden Hammer Staff Reports
Austin and Conroe, April 21 – Spending approximately $10 million in legal fees and expenses during the fiscal year ending August 31, 2021, the scofflaw San Jacinto River Authority (SJRA) lost a major appeal in the Supreme Court of Texas on Friday. In an eight (8) to one (1) decision, with conservative Justice John Devine writing the opinion for the majority, the Supreme Court held that the SJRA could be liable under Chapter 2007 of the Texas Government Code for releasing water from the Lake Conroe reservoir downstream during Hurricane Harvey in 2017 and flooding homes and businesses in consolidated cases appealed from an adverse ruling in the First Court of Appeals. The Supreme Court affirmed the Court of Appeals.
Specifically, Justice Devine wrote,
“During Hurricane Harvey in 2017, the San Jacinto River Authority released water from its Lake Conroe reservoir into the San Jacinto River. Contending that this release caused or contributed to the flooding of their properties, downstream property owners filed three multiparty suits in two different district courts, asserting both common-law inverse condemnation claims under Article 1, Section 17 of the Texas Constitution and statutory takings claims under Chapter 2007 of the Government Code. These cases reach us as interlocutory appeals from trial 2 court orders denying the River Authority’s motions to dismiss the three suits. The three cases have been consolidated for purposes of this appeal.1 The issue we must decide is whether Chapter 2007 applies strictly to regulatory takings, as the River Authority maintains, or whether it may also apply to a physical taking, as the property owners contend. The court of appeals affirmed the trial courts’ orders, which denied the River Authority’s motions to dismiss, concluding that Chapter 2007’s statutory takings claim included the physical takings claim alleged in the property owners’ pleadings. San Jacinto River Auth. v. Burney, 570 S.W.3d 820 (Tex. App. —Houston [1st Dist.] 2018). We agree and affirm.”
The Supreme Court ruled (1) chapter 2007 creates liability and waives government immunity for two causes of action, a statutory takings claim and a suit to rescind proposed governmental action; (2) the statutory takings claim may include a physical taking, such as the flooding alleged by the property owners; and (3) statutory exceptions to liability under the chapter are not established by the property owner’s pleadings and that the Court of Appeals therefore did not err in affirming the trial court orders that denied the River Authority’s motions to dismiss under procedural Rule 91a.
In its 2020 Financial Statement, SJRA stated, “There are eighteen (18) active lawsuits that have been filed against the Authority in Harris County, Texas, on behalf of numerous property owners that allege, among other claims, that the release of water from the Lake Conroe Dam following the landfall of Hurricane Harvey caused flooding on their properties in violation of the Takings Clause of the Texas Constitution and/or violation of the Texas Private Real Property Rights Preservation Act. There are also nine (9) cases in Montgomery County, Liberty County, Jefferson County, Brazoria County, Orange County, Wharton County, and San Jacinto County, Texas…The Authority is contesting all of the above lawsuits vigorously, and intends to continue to do so. The Authority cannot express a judgement as to the potential outcome of the lawsuits, estimate the amount or range of potential losses related to the lawsuits, or estimate legal expenses that may be incurred in contesting the lawsuits.”
Apparently, the Supreme Court of Texas disagrees.
The Harvey litigation alone totals hundreds of millions of dollars in claims against SJRA.
SJRA spent approximately $10 million during the last Fiscal Year. In its Financial Report, SJRA admitted that “Outside services employed increased by $2.5 million, an increase of 30% over the previous year. This increase is primarily due to legal expenses due to ongoing litigation.”
SJRA spent $1,531,811 for one lawsuit alone against the City of Conroe and others in a dispute over SJRA’s aggressive water pricing.
Out of its total $72.8 million of operating expenses, approximately 15% is for legal fees.