Water Log 29.3, November, 2009

Interesting Items

Around the Gulf…

In October, the Mississippi Supreme Court ruled in a controversial “wind vs. water” homeowners’ insurance dispute. The United Services Automobile Association Insurance Agency (USAA) had denied the Corban family coverage for their property losses following Hurricane Katrina, claiming that the damage to their property was the result of flooding, a peril excluded from their insurance policy. The Corbans filed suit, arguing that the policy’s water damage exclusion and its “anticoncurrent clause,” which barred damage caused by wind and water in combination, were ambiguous. A circuit court judge held that the storm surge was, in fact, excluded from the policy. In a 36-page unanimous ruling authored by Justice Michael Randolph, the court held that insurance companies must cover damage from hurricane winds, even if the home is later inundated by storm surge. The Corbans must now prove to a jury that the damage was caused by wind, not water. Corban v. United Servs. Auto. Ass’n, 2009 Miss. LEXIS 481 (Miss. Oct. 8, 2009).

On behalf of the Mississippi Levee Board, the Pacific Legal Foundation filed suit against the Environmental Protection Agency (EPA) in August, challenging EPA’s exercise of veto authority over the Yazoo Backwater Project. The Yazoo Project is a U.S. Army Corps of Engineers (Corps) flood control project located between the Mississippi and Yazoo Rivers. After weighing the environmental impacts of the project, EPA determined the project would adversely impact 67,000 acres of wetlands resulting in unacceptable harm to local wildlife and fisheries. The Clean Water Act (CWA) § 404(c) authorizes the EPA to prohibit discharges that will have unacceptable adverse effects on fisheries and wildlife, commonly known as EPA veto authority.
Accordingly, EPA vetoed the project in August 2008 maintaining that the improved flood control could be accomplished by less environmentally harmful methods. In the lawsuit, the Levee Board alleges the project is exempt from EPA veto pursuant to CWA § 404(r) governing congressionally authorized federal projects. Central to the dispute is whether Congress reviewed the environmental impact statement prior to authorizing or funding the project. Look for detailed coverage of this case in future Water Log editions. Board of Miss. Levee Comm’rs v. U.S. EPA, No. 4:09-cv-081 (N.D. Miss.).

In follow up to previous coverage of Hood v. Memphis, Mississippi has appealed the Fifth Circuit’s ruling to the U.S. Supreme Court maintaining that Tennessee is not a necessary party to the lawsuit and that the Fifth Circuit erroneously determined that the groundwater was subject to equitable apportionment. In addition, Mississippi has conditionally joined the State of Tennessee in its alternate motion to file an original action with the U.S. Supreme Court seeking adjudication of the dispute. Mississippi contests Memphis’s withdrawals from the Memphis Sands Aquifer, located below both states and jointly used as water supply. In June, the Fifth Circuit concluded that resolution of the dispute necessitated equitable apportionment of the interstate aquifer between Mississippi and Tennessee; the court dismissed the suit for failure to join Tennessee as a necessary party. The Supreme Court has original jurisdiction over interstate disputes. To date, the Supreme Court has not determined if it will hear the case. If it does, this will be the first time the Supreme Court considers whether aquifers are subject to the equitable apportionment doctrine. Mississippi v. City of Memphis Tenn., No. 220139.l