By: L.M. Sixel
Scores of lawyers, eager to get a piece of what could be the biggest payday since the multi-billion dollar Volkswagen emissions settlement, are rushing to sign up thousands of property owners whose homes were damaged by floodwaters released by the Army Corps of Engineers from two Houston-area reservoirs.
The case -- which legal analysts say could be worth as much as $10 billion -- is drawing lawyers from a wide range of specialties, from criminal defense to bankruptcy to class action, as they target the ultimate big pocket: the federal government. They're hosting seminars for flooded homeowners, advertising on social media and retooling websites to tout their expertise in property rights, hydrology and flood claims.
"We're getting an amazing number of cases," said Houston personal injury lawyer Eric Allen, whose firm, Zehl & Associates, typically represents consumers hurt in motor vehicle accidents, maritime-related industrial accidents and insurance disputes.
The case turns on an argument that the decision to release water from the Addicks and Barker reservoirs amounted to an eminent domain taking of private property and the owners are entitled to compensation from the federal government. Lawyers estimate that more than 10,000 homes and businesses were damaged by the releases and nearly four dozen lawsuits, involving 193 plaintiffs, have already been filed in U.S. Court of Federal Claims in Washington.
In such broad disputes, the cases typically get consolidated with the court appointing a few lead lawyers to represent all the property owners. Individual lawyers who have signed up clients usually get a portion, typically one-third of whatever the clients collect from a judgment or settlement. Lawyers who sued Volkswagen AG over excessive diesel emissions on behalf of nearly 600,000 car owners were awarded $300 million in legal fees earlier this year.
W. Mark Lanier, a prominent personal injury lawyer in Houston, explained that anytime a potential big-dollar case looms, lawyers tend to fall into two groups: the "chicken catchers," who are good at finding clients, and the "chicken pluckers," who specialize in preparing and presenting the cases for trial.
"It's an art to catching them," said Lanier, who has about 50 actual chickens in his backyard in Houston. "They don't just stand there. You have to chase them."
Some of the best-known trial lawyers in the state and nation are jockeying to become the lead lawyers for the bragging rights and higher fees that often come with heading up a giant case. They include John Eddie Williams Jr., who negotiated a $17.2 billion tobacco settlement on behalf of Texas in 1998 and Adam Pulaski, who represents 25,000 women in an ongoing transvaginal mesh settlement that will likely exceed $1 billion.
Jay Edelson, a class action lawyer from Chicago who specializes in high-tech privacy cases, also has traveled to Houston to get in on the rush. His firm, which last year won a $76 million settlement for consumers who received automated calls from Caribbean Cruise Line, has already signed up a few hundred victims of the reservoir-related flooding and filed one case.
Edelson, Williams and Pulaski were among the 125 lawyers who packed a courtroom in the federal courthouse in Houston recently to meet with Susan Braden, the chief judge of the U.S. Court of Federal Claims, who flew in from Washington to determine how to proceed with the 46 lawsuits that have been filed and the hundreds more likely to come. The crowd was one of the best dressed in Houston, mostly men exquisitely attired in custom-made suits, starched white cotton shirts, silk ties and shined shoes. They sat shoulder to shoulder, hanging on to every word from the judge. Very few left early.
Gary Siller, a commercial litigator best known for his work in health care and taxes, was among them. His firm, Strasburger & Price, which made its name in insurance defense, has signed about 25 clients including executives of its long-standing corporate clients whose homes flooded.
The likely consolidation would mean that each lawyer doesn't have to prove the release of water affected each client's property, unlike, say environmental cases, in which the path of contamination and the cause of illnesses are fiercely disputed. "All you need to be is a lawyer who can prove damages," said Siller.
But eminent domain experts predict it won't be that easy because the legal theories underpinning the reservoir flooding cases are still relatively untested and the government has several avenues to defend its actions, including that the broader public benefited, said Justin Hodge, a lawyer who specializes in eminent domain. "I would not call them slam dunks," he said.
Most eminent domain proceedings begin when government agencies decide they want private land for public use, whether expanding a highway or building new school. The government makes what it believes is a fair offer and if the private landowner rejects it, the government files a court claim and a panel of local landowners assess the value. Private property holders are entitled to fair compensation under the U.S. Constitution.
But when the government essentially takes property from an owner without launching a formal condemnation process -such as when water is released from a dam, flooding everything in its path - property owners may also have a claim. A U.S. Supreme Court decision from 2012 paved the way for such claims after the high court found the Army Corps of Engineers' decision to periodically flood an Arkansas state-owned timber producing forest did, in fact, constitute a government taking of property.
Judge Braden also ruled two years ago that the federal government is responsible for some of the flooding that followed Hurricane Katrina in New Orleans and that property owners are eligible for compensation. The U.S. government has appealed. The Army Corps of Engineers referred a request for comment to the U.S. Department of Justice, which declined to comment.
Mary Bessinger, 70, went to one of the seminars that have popped up in and around Houston discuss legal options for flooded property owner. She and her husband's home next to the Addicks Reservoir was inundated with 2 1/2 feet of water within about 20 minutes after the releases from the dam. "All we could do was grab the dog and take off," she said.
Bessinger wasn't familiar with the law firms, Terry W. Yates & Associates and the Woodfill Law Firm, neither of which returned calls for comment. But after the seminar, a lot of people signed a notebook to arrange for an individual meeting with one of the lawyers, said Bessinger, who didn't join the throng.
Bessinger was surprised to hear later that Terry Yates & Associates is a criminal defense firm, which, according to its website, handles white-collar crimes, sex crimes and Internet-related crimes.
"That's just crazy," said Bessinger. "I guess they just do everything."