Posted by: Patricia Salkin | October 11, 2015

SC Supreme Court Finds Floodway Determination Did Not Constitute a Taking

Columbia Venture, LLC (“Columbia Venture”) purchased land to develop along the Congaree River in Richland County, South Carolina. It planned for a $1 billion development on the property, called the Green Diamond. Columbia Venture knew at the time of the purchase that FEMA was in the process of revising the area flood maps and designating most of the property as lying within a regulatory floodway. Under federal law and the Richland County, S.C., Code § 8–62(h), development was generally not permitted in a regulatory floodway.

On February 20, 2002, FEMA’s revised floodway determinations, placing 3,130 acres of Columbia Venture’s property within a regulatory floodway, became final. Columbia Venture appealed FEMA’s findings in federal court but was unsuccessful. Columbia Venture then filed suit, claiming the County’s actions constituted an unconstitutional taking and a substantive due process violation. The Special Referee granted summary judgment in favor of the County as to Columbia Venture’s per se taking claim and substantive due process claim, but denied summary judgment on Columbia Venture’s regulatory taking claim. Columbia Venture’s regulatory taking claim was tried before the Special Referee who found that Richland County’s actions did not constitute a taking.

On appeal the Supreme Court affirmed holding that:
1 The county did not take a flowage easement on property;
2 The county did not engage in exaction of property;
3 The county’s restrictions did not amount to a categorical taking of property; and
4 The county’s restrictions did not constitute a regulatory taking of property.

On the matter of flowage easement, Columbia Venture argued the County’s adoption of the revised FEMA flood maps was a flowage easement for which it was entitled to just compensation under the Takings Clause. The court disagreed stating that the Special Referee properly found Richland County’s floodway development restrictions were simply limitations on land use. The court acknowledged that government-induced flooding may constitute a taking that would justify compensation. For flooding to amount to a taking, there must be a causal connection between the challenged government act and the increased flooding. Additionally, a compensable taking occurs only where a claimant shows an actual increase in the frequency or severity of flooding. Here the existing levees had remained in place, and the County’s actions in adopting FEMA’s revised flood maps did not increase the flood hazard to which Columbia Venture’s property has historically been exposed. The County’s ordinances, which allowed for maintenance and repair but prohibit expansion of the existing levees, merely maintained the status quo in terms of the flood risk. Thus, in the absence of any increase in flooding attributable to an act of the County, the court affirmed the Special Referee’s finding that the County did not take a flowage easement.

The National Flood Insurance Program was enacted in 1968, and the County had been a participant before Columbia Venture purchased the property. At the time of the purchase, Columbia Venture was aware of the revised FEMA flood map’s floodway designation and the fact that such designation carried with it extensive regulatory implications affecting over seventy percent of the property. Although Columbia Venture may have subjectively believed that, in spite of all this, it would nevertheless be allowed to develop the extensive Green Diamond project, the court found any such expectation was not objectively reasonable because Columbia Venture did not know if it could convince FEMA to issue a Flood Map with no floodway. Columbia Venture did not know whether it could upgrade its levee to meet FEMA’s levee certification requirements. It did not know whether Richland County would ultimately accept responsibility for maintenance. It did not even have the financial resources in hand to undertake levee construction. This all made Columbia Venture’s expectations unreasonable.

The court concluded the Special Referee correctly determined that Columbia Venture’s lack of reasonable investment-backed expectations coupled with the legitimate and substantial health and safety-related bases for the County’s floodplain development restrictions outweighed Columbia Venture’s economic injury, and under Penn Central, no regulatory taking occurred

Columbia Venture, LLC v Richland County, 2015 WL 4751034 (SC 8/12/2015)

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