Saturday, December 31, 2011

Is FEMA Forcing Monroe County to Pay Millions for Regulatory Takings as the Price of Maintaining Flood Insurance in the County?

On Christmas Eve 2011, the Florida Keys Keynoter published an article entitled "County to Sue FEMA Over Habitat Inspections." One wonders how Monroe County even figured out it had a problem --- even though the Florida Key Deer sued the Federal Emergency Management Agency (FEMA) in 1990. 

In that case, the Key Deer, through their human spokesman, sued to prohibit the issuance of federal flood insurance in areas where Key Deer habitat existed. A summary judgment hearing was held, in Key West, on August 25, 1994. I assume the Key West Citizen let the locals know that a bunch of deer were trying to stop development in the Florida Keys. Monroe County, on the other hand, made no effort to intervene in the lawsuit.

Following the hearing, U.S. District Judge Michael Moore entered summary judgment in favor of the Key Deer, and against FEMA, ordering FEMA to "consult with" the USFWS (U.S. Fish & Wildlife Service) within 30 days. The agencies were required to determine whether the implementation of FEMA's National Flood Insurance Program [NFIP] was "likely to jeopardize the continued existence of the endangered Key Deer." See Florida Key Deer, et al. v.Stickney, 864 F. Supp. 1222 (DC SD Fla., 1994).

Several people have asked why Monroe County did not move to intervene in the 1990 Key Deer lawsuit. There is a simple answer for this. After the huge changes in land development regulations that Monroe County went through from February 1982 through September 1986, including more than 100 public hearings (or one every two weeks for four years), Florida Keys landowners were worn out. In addition, all the 1990 Key Deer lawsuit sought to accomplish was to require FEMA to "consult" with USFWS. 

In 1990, USFWS was adamantly opposed to FEMA issuing flood insurance policies in the Florida Keys. As time went on, USFWS began to waiver, and it ultimately decided to "work with" FEMA. One could probably look at Washington, DC, politics between 1990 and 2005, and figure out who was doing what to whom, but that is a story for another day (and another blogger).

Nothing much occurred for the next 15 years, until the Key Deer plaintiffs sought, and Judge Moore granted, a permanent injunction against both FEMA and the USFWS. The injunction was to be lifted after the agencies "have complied with the [court's] order." As part of the order, the federal agencies were to provide the court with a list of all the properties in the Florida Keys that are "suitable habitat for the Listed Species." By 2005, the list had grown to eight species: the Key Largo cotton mouse, Key Deer, Key Largo woodrat, Lower Keys marsh rabbit, Schaus' swallowtail butterfly, silver rice rat, Stock Island tree snail, and Key tree cactus. See Florida Key Deer, et al, v. Brown, et al., 386 F. Supp. 2d 1281 (DC SD Fla. 2005), affirmed, 522 F. 3d 1133 (11th Cir., 2008).

Monroe County finally woke up in 2005 -- not because the County was asleep, but because the County was beginning to understand the concept of "regulatory taking" jurisprudence. It frantically sought to become a defendant in Florida Key Deer v. Brown, supra, but Judge Moore rejected the County's effort -- saying it was too little, too late, and that after waiting 15 years to intervene, the County's options had run out. In an attempt to appear meaningful, Monroe County appeared as an amicus in the 11th Circuit's appeal of Judge Moore's 2005 decision.

The future is not clear as to Monroe County. But what is this hullabaloo all about? First, we note that many parts of the United States were denied federal flood Insurance in 1989. These are coastal areas deemed "too sensitive" for development for a variety of reasons, and are in the Coastal Barrier Resource System (CBRS). No Name Key, just east of Big Pine Key, is such an area. There are several other parts of the Keys that were, or almost were, designated as CBRS zones in 1989.

The federal flood insurance program does not reach the CBRS areas, yet those areas continue to be developed, with or without some form of flood insurance. If people want to own a house on a beach, they are in an income bracket in which they can afford to purchase private flood insurance. What difference does it make whether a Federal flood insurance prohibition or a CBRS prohibition prevents private landowners from obtaining inexpensive flood insurance from the federal government? These landowners are going to build anyway.

Monroe County has had a schizophrenic County Commission since 1990 -- which happens to be when the CBRS and flood insurance fiascos started (and I started practicing law here in 1983). The County's latest threat, as County Attorney Bob Shillinger put it, is:

"We'll file suit and seek an injunction to stop [FEMA's request to Monroe County to determine which parcels are located in endangered species habitat]." Why, I am not sure. The County also puts a price tag on the issue, quoting County Administrator Roman Gastesi, stating:

  • "the real exposure comes in possible takings cases in which landowners claim they can't build on their land because the County denied use of the land through the Endangered Species Act. They could then sue the County for the value of their land."
Now, I am the first person who would sue the County under Mr. Gastesi's theory, if it made sense. But, these are federal regulations, and they don't actually deprive landowners of anything other than subsidized federal flood insurance -- which is not within the County's purview. On the other hand, I do not pretend to be a genius, and I would be willing to listen to the County's theories. The invitation is theirs to accept or reject.

On that note, I wish everyone a Happy New Year! (And it lies less than an hour away.)

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