In Biron v. City of Redding (April 30, 2014, C071094) — Cal.App. 4th —-, the Court of Appeal declined to hold the City of Redding ("City") liable for flood damages caused to private property owned by Philip Biron, et al. ("Biron"). Biron sued the City based upon inverse condemnation and dangerous condition of public property theories after an extraordinary storm caused water to back-up from the City's storm drainage system onto his property. Upon review, the court determined that any liability was governed by a "rule of reasonableness," and the City was not liable since its actions were reasonable.
Factual Background
Biron owned an apartment building in the City located approximately a block away from a natural water course. The City operated a storm drainage system intended, in part, to protect property, including Biron's property. In 1993, the City commissioned a study which concluded the current drainage system was deficient, but a remedy would cost millions of dollars. The City ultimately assigned the lowest priority to improvements of downtown area drainage facilities, including those near Biron's property, and the City did not improve any of those facilities.
In 2009, the City experienced a 100-year storm event that overwhelmed the natural watercourses and the City's drainage system. Consequently, water backed-up onto City streets and entered Biron's apartment building. Biron sought to hold the City liable by alleging inverse condemnation and dangerous condition of public property causes of action.
The trial court ruled in favor of the City on both causes of action after determining that the City's decision to defer upgrades to the storm drainage system was reasonable. Biron appealed arguing that the City should be strictly liable under the inverse condemnation cause of action, and should also be liable since it knew the storm drainage facilities were inadequate resulting in a dangerous condition of public property. On appeal, the court rejected both arguments.
Decision
The court first analyzed the City's liability under an inverse condemnation theory. Based on the Just Compensation Clause of the California Constitution, the California Supreme Court has held public entities strictly liable for "any actual physical injury to real property proximately caused by [a public] improvement as deliberately designed and constructed . . . whether foreseeable or not." The only exceptions to such strict liability are when the public entity is acting within the scope of its police power or in cases involving public flood control improvements.
In cases involving public flood control improvements, courts analyze the public entities' liability according to a "rule of reasonableness." The Supreme Court later clarified that "the rule of reasonableness applied to all cases involving unintentional water runoff, whether they involved facilities designed to keep water within its natural course or designed to divert water safely away from a potentially dangerous natural flow." Given the broad applicability of the rule of reasonableness, the court rejected Biron's argument that a strict liability standard applied to cases involving municipal storm drain improvements. The rule of reasonableness applies to all flood measures designed to protect against potential flooding.
In examining the reasonableness of the City's actions, the court found the six factors relied upon by the Supreme Court in Locklin v. City of Lafayette are most probative. These factors are: (1) the overall public purpose being served by the improvement project; (2) the degree to which the plaintiff's loss is offset by reciprocal benefits; (3) the availability to the public entity of feasible alternatives with lower risks; (4) the severity of the plaintiff's damage in relation to risk-bearing capabilities; (5) the extent to which damage of the kind the plaintiff sustained is generally considered as a normal risk of land ownership; and (6) the degree to which similar damage is distributed at large over other beneficiaries of the project or is peculiar only to the plaintiff.
Upon analysis of these factors, the court determined that substantial evidence supported the reasonableness of the City's actions. Among other things, the court found: a benefit in having a storm drainage system to prevent some flooding even if it lacked capacity to handle the flows experienced in 2009; Biron did benefit by the storm drainage system even though it was inadequate to handle the 2009 flows; the available alternative would not have prevented the flooding; Biron could have taken some steps to mitigate the risk of flooding; and there was no evidence that the City made a conscious decision to flood Biron's property in order to spare other properties.
Further, as to inverse condemnation liability, the court noted that Biron failed to establish that the storm drainage system was a substantial cause of the flooding. "[T]he system did not fail, it was simply overwhelmed by the amount of water the storm deposited into the system." The project operated according to its design and the extraordinary storm was a superseding cause that cut-off the City's liability for inverse condemnation.
The court also rejected Biron's argument that the City caused a dangerous condition of public property leading to liability under California Government Code section 835. "A public entity is not liable for damage from a dangerous condition if the act or omission that created the condition was reasonable, or if the action the entity took or failed to take to protect against the risk was reasonable." According to the court, the City's decision to defer upgrading the drainage system was reasonable. "Because there was evidence that the risk of injury was small in relation to the cost of repair, there was substantial evidence to support the trial court's conclusion that City acted reasonably in its decision not to upgrade the system." Thus, even if the drainage system was considered a dangerous condition, the City's reasonable conduct precluded liability.
What This Means To You
Even though California currently faces drought conditions, there will inevitably be floods in the future. Public entities that operate flood control systems will face scrutiny when such flooding results in damage to private property. This case exhibits the trend towards applying a "rule of reasonableness" rather than strict liability in flood damage lawsuits against public entities. Consequently, such entities should carefully document the reasonableness of their actions in regards to their flood control decisions.
Questions
If you have any questions concerning this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.
William T. Chisum or Jennifer A. Scott | 916.321.4500
Jon E. Goetz | 805.786.4302