* Case pits Arkansas commission against U.S. Army Corps
* Dam release caused flooding in wildlife area downstream
* Commission argues it should be compensated for flooding
By Jonathan Stempel
WASHINGTON, Oct 3 (Reuters) - The U.S. Supreme Court heard oral arguments on Wednesday in a case about the degree to which the federal government must pay damages when it releases water from a dam that causes temporary flooding for a property owner downstream.
The case, involving damage to an Arkansas wildlife preserve, addressed the politically charged issue of when government activity that affects private property constitutes a "taking" that requires payment to a landowner.
Under the Fifth Amendment to the U.S. Constitution, the government must compensate owners of private property that it takes for public purposes.
Wednesday's case concerned water releases by the U.S. Army Corps of Engineers from the Clearwater Dam in Missouri that caused flooding in the Dave Donaldson Black River Wildlife Management Area, located about 115 miles (185 km) downstream.
The Arkansas Game & Fish Commission, which operates the 23,000-acre tract, claimed that releases between 1993 and 1998 led to six years of flooding, resulting in the death or weakening of nearly 18 million board feet of timber and making it harder to operate.
A federal court of claims judge awarded $5.6 million for the lost timber and $176,428 to regenerate the forestry habitat.
The U.S. Federal Circuit Court of Appeals overturned that award in March 2011, saying the flooding was only temporary and did not require compensation as a taking.
Arguing for the United States, Deputy Solicitor General Edwin Kneedler called the case "a classic example" of government balancing the "benefits and burdens" of water releases, which could be used to protect crops or avert flooding in specific areas. He also said the releases had only "incidental consequences."
It is possible that the justices might limit any decision to instances of temporary flooding.
Several justices suggested that outcomes could be influenced by whether damage was deemed incidental, foreseeable, recurring, temporary or permanent, or whether it involved a physical occupation or was targeted toward specific landowners.
"It's a different case when they go in with the chainsaw than when they go in with the water," Chief Justice John Roberts said.
James Goodhart, arguing for the Arkansas commission, said the government should be held financially responsible for activities that are a "direct physical invasion" that results in a "substantial intrusion" on protected property rights.
The commission's appeal is supported by a variety of advocates for fish, forestry and wildlife groups, as well as private property advocates.
Justice Elena Kagan recused herself from the case, leaving an eight-justice court to consider the merits. A 4-4 tie would set no precedent.
The case is Arkansas Game & Fish Commission v. U.S., U.S. Supreme Court, No. 11-597.
(Editing by Howard Goller and Claudia Parsons)
Keywords: USA COURT/FLOODING