Pollak, Vida & Barer

In City of Oroville v. Superior Court (California Joint Powers Risk Management Authority), published August 15, 2019, the California Supreme Court unanimously reversed a lower appellate court decision denying a writ of mandate seeking to overturn an interlocutory decision under Code of Civil Procedure section 1260.040 holding the city liable for inverse condemnation.  A city sewer backed up into the plaintiffs' building.  The building's owners failed to install a backwater valve, which was legally required by the plumbing code and which would have prevented or mitigated the risk of damage.  The trial court ruled that the city was liable for inverse condemnation because one of the causes of damage was root blockage of the sewer, an inherent risk of sewer operation, even if the private owner's failure to install the valve was a secondary cause.  The appellate court concluded that the trial court had correctly held the city liable, because if a public improvement fails to function as intended, and the failure is a cause of the property damage, inverse condemnation has taken place.

The Supreme Court ruled that the trial and appellate courts had applied the wrong legal standards.  a court assessing inverse condemnation liability must find more than just a causal connection between the public improvement and the damage to private property.  The damage to private property must be substantially caused by an inherent risk presented by the deliberate design, construction, or maintenance of the public improvement.  The court must consider whether the inherent dangers of the public improvement as deliberately designed, constructed, or maintained materialized and were the cause of the property damage.  Such risks may arise from a public entity's adoption of a comparatively lower cost plan to create or maintain the public improvement, because the likelihood of damage is remote, but the expense of additional protection is great.  A causal link to one of the inherent risks of the creation or maintenance is necessary, but not sufficient, for a successful inverse claim.  The injury to private property must be an inescapable or unavoidable consequence of the improvement as planned and constructed or maintained.  It is not enough that the improvement failed to function as intended; the damage must be the direct and necessary effect of the inherent risks posed by the improvement as deliberately designed, constructed, or maintained.  The court must also consider whether the damages resulted from the acts of the private property owner.  In this case, no evidence established that an inherent risk of the sewer system as designed, constructed, or maintained.  It was not the necessary or probable result of the system's operations.  Instead, it was caused by the private property owner's failure to comply with the law.  The city was therefore not liable in inverse condemnation.