Liability for Dam-Related Flooding Debated in 11th Circuit

ATLANTA (CN) — An attorney for a class of Florida homeowners whose properties were damaged by floodwaters after a dam breach asked an 11th Circuit panel Tuesday to order a new trial against the company that maintained the dam.

The class, which includes eight named Escambia County homeowners, sued International Paper Company for negligence in February 2015 after stormwater broke through the Kingsfield Road Dam, which was operated by International Paper, and caused flooding that damaged more than 300 homes.

The amended complaint claimed the company did not properly maintain the dam to counteract increases in rainfall and river levels, debris buildup and the impacts of continued development in the area.

According to the complaint, an April 2014 storm exacerbated the problems at the dam.

When International Paper allegedly failed to take action to safely release the accumulated stormwater, the dam was compromised and water rushed into a creek which caused the homeowners’ properties to flood.

After a five-day trial in Pensacola federal court last year, a jury returned a verdict in favor of International Paper, finding that the class failed to show that the company negligently designed and operated the Kingsfield Road Dam.

The homeowners filed a motion for a new trial in March 2018, arguing that the trial court made a mistake by admitting seven government-agency documents into evidence, including a FEMA hazard mitigation grant program application prepared by the county.

According to a memo in support of the motion for a new trial, the FEMA application discussed the demolition of 27 residential properties in the area and contained information about a buyout of homes at a cost of approximately $267,000 each.

The class argued that the document was unfairly prejudicial because “it effectively told the jury that there is no need to worry about the reasonable or unreasonable behavior of [International Paper] because plaintiffs were getting paid anyway.”

The grant application was not approved by FEMA until June 2018. The agency awarded Escambia County $2.4 million for flood protection improvements.

In a May 2018 ruling, Chief U.S. District Judge M. Casey Rodgers denied the request for a new trial, finding that the homeowners “offer virtually no authority compelling a conclusion that the seven documents were inadmissible.”

Rodgers ruled that “any error in the admission of the challenged evidence was at most harmless” and did not substantially influence the jury’s verdict.

On Tuesday, attorney Athanasios Basdekis of Bailey & Glasser urged a three-judge 11th Circuit panel to overturn the district court’s decision and order a new trial.

Basdekis argued on behalf of the class that the FEMA application had undoubtedly prejudiced the jury and may have caused them to believe that the homeowners “received government handouts and are now coming back in to take another bite at the apple.”

But according to Gibson Dunn attorney Amir Tayrani, arguing on behalf of International Paper, the class lacks grounds to overturn the jury verdict.

“No witness or counsel from either party mentioned the $200,000 figure to the jury. The jury might not even have looked at the figure,” Tayrani told the panel. “The $200,000 figure is one sentence in a 41-page document. It’s not plausible that the line affected the jury in this five-day trial.”

“There is overwhelming evidence that International Paper was not liable. The decision to enter this document was harmless,” he added.

U.S. Circuit Judge Charles Wilson appeared to favor Tayrani’s arguments.

“I think I would agree that if admission of the FEMA document was not error, then the motion for a new trial was properly denied. There are other factors that rebut plaintiffs’ theory of causation,” the judge said.

Wilson was joined on the panel by U.S. Circuit Judge Jill Pryor and Senior U.S. Circuit Judge Richard Tallman, sitting by designation from the Ninth Circuit.

The panel did not indicate when it will issue a decision in the case.

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