Fernley Flood Settlement on Hold

Fernley community still struggling to recover after 2 years since the flood.
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RENO, Nev. (AP) - A Nevada irrigation district's tentative
agreement to pay $10 million to victims of a 2008 flood caused by
the failure of a century-old irrigation canal was put on hold
Tuesday when a U.S. judge reversed his earlier order that the
Justice Department join the settlement talks.

Hundreds of Fernley residents whose homes were damaged have
filed lawsuits accusing the Truckee-Carson Irrigation District and
U.S. Bureau of Reclamation of negligently causing the flood by
failing to properly maintain the earthen canal that burst on the
edge of Fernley about 30 miles east of Reno.

Lawyers for the flood victims say TCID officials abruptly backed
out of a $10 million settlement last week based in part on concerns
the Justice Department raised about property TCID effectively
wanted to put up as collateral to guarantee future payments.

Justice Department lawyers say some of the property is owned by
the federal government, not TCID, including an old power plant and
water rights at Donner Lake near Truckee, Calif.

At the request of the flood victims, U.S. Magistrate Robert
McQuaid Jr. issued an order on Monday demanding DOJ lawyers attend a settlement conference with the others on Wednesday.

But after some testy exchanges with assistant U.S. attorney Greg
Addington in court on Tuesday, Quaid overturned his order, scrapped
the hearing scheduled for Wednesday and told the parties to resume
mediation on Thursday without the presence of the Justice

"I wish they (Justice) would be more cooperative but I don't
know that I can order them to be more cooperative at this point,"
McQuaid said.

Justice has resisted such involvement in part because it is
representing the Bureau of Reclamation as a defendant in a series
of lawsuits related to the flood but the agency is being dealt with
separately in terms of claims and damages.

"This is TCID's settlement, not ours, and we want no part of it
until the time it is signed," Addington said Tuesday.

"They've had a contract with the Bureau of Reclamation since
1926. They certainly know what they own and they don't own. They
don't need a federal overseer sitting over their shoulder telling
them what they own," he said.

Unusually heavy rain preceded the canal collapse in January 2008
in an area that averages only 5 inches of precipitation annually.
Nearly 600 homes reported damage. Total damage estimates reached $4 million across the town, which was declared a federal and state disaster area.

Farmers and ranchers dependent on the water for their crops and
livestock in Nevada's high desert also suffered as a result of
disruptions in canal operations and subsequent court orders
limiting the amount of water allowed in the canals at any one time.

Michael Van Zandt, lead attorney representing TCID, told McQuaid
during a teleconference hookup on Tuesday that TCID officials
intend to continue mediation and have not ruled out signing a
settlement agreement at some future time.

Robert Maddox, a lawyer for the flood victims, disagreed with
Addington's claim the U.S. government doesn't have a dog in this
particular fight. He said any potential liability the Bureau of
Reclamation may face could be reduced depending on the amount of
money TCID pays out in damages.

"They are deeply involved in this," Maddox said, citing court
records that show the bureau warned TCID as early as March 2005
that the canal that eventually burst was at a "high hazard" level
and needed significant repairs to avoid an "impending embankment

"A year later, (TCID) said those repairs had been done, but
they were not," he said. "They chose to look the other way and
let TCID continue acting in the negligent manner that resulted in
the pain and suffering of Fernley residents."