Oroville’s Effect on Inverse Condemnation Claims
In City of Oroville v. Superior Court of Butte County, the California Supreme Court dealt with inverse condemnation for the first time in two decades.
Inverse Condemnation In Brief
Inverse condemnation is the process by which the government acts to take a property via their eminent domain power, but does not justly compensate the owner. The owner must then institute judicial proceedings in an attempt to be compensated for the resulting loss they incurred – hence the term “inverse,” since typical condemnation cases involve the government suing the property owner for ownership before any taking has occurred. These takings can be physical or regulatory (when the governmental regulations regarding the use of the property become so extensive that the owner is deprived of their ability to use the property in a reasonable manner).
Case Summary
In City of Oroville v. Superior Court of Butte County, a dental office sued the city for inverse condemnation for damages due to a backup that spewed raw sewage from toilets, sinks, and drains. The City’s design specifically required business owners to install backwater valves on specific properties to prevent sewage from entering building when the main line was blocked or backed up. The dental office never installed the required valve.
Justice Cuéllar held that there must be more than a causal connection between the public improvement and the damage to private property. Instead, 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.” (City of Oroville v. Superior Court (2019) 7 Cal.5th 1091) Further, since the invasion of raw sewage was not an inherent risk of the design and construction of the city’s sewer system, an inverse condemnation action couldn’t be supported (Id. at 1111).
The Court’s holding clarifies what inverse condemnation claims require. Now, it is a two-pronged test: the plaintiffs must prove that (1) an inherent risk of the design, construction, or maintenance (2) substantially caused the damage.
As to the inherent risk of the design, construction, or maintenance prong, the City argued that the dental office failed to install the backwater valve, which was an integral part of the “design and construction” of the city’s sewer system. Therefore, the risk was not due to the sewer system design, but due to the failure of the office to follow regulations to ensure that the design was properly functioning. The dental office countered by arguing that the damage occurred because of the system’s failure to function as intended, and that if the City thought the valves were of significant importance, they should have enforced that requirement before a backup occurred. The Court sided with the City’s argument; the design included backwater valves, and with those valves there would be no inherent risk of the type of damage the dental office experienced. Additionally, it was reasonable for the City to expect business owners to comply with the Uniform Plumbing Code and local ordinances, both of which required the installation of backwater valves.
As to the substantially caused prong, the dental office argued that since the City’s sewer system was a direct cause of the damage, they should be liable. The City argues that since the valve would have prevented, or at the very least mitigated, the damage, they should not be liable. The Court explained that the core test of the causation requirement (even in multiple concurrent cause cases) is that the injury to private property is an “inescapable or unavoidable consequence” of the public improvement as planned and constructed (Oroville at 1108.) Since a valve being installed would have made the damage both escapable and avoidable, the Court declined to extend liability to the City on these facts.
The dental office did not prevail on their inverse condemnation claim.
Significance
Through Oroville, California courts are encouraging property owners to evaluate their own actions and how they contributed to the damage that was caused. A record that demonstrated an inherent risk would have been invaluable evidence for the dental office in Oroville. The Court, although not explicitly saying so, blamed the dental office for not following procedures and installing a backwater valve. Thus, their own negligence in failing to install the valve prevented them from fully proving the City’s liability. The Supreme Court pointed to case precedent on the issue to show that this rule is not new; it simply reemphasizes and clarifies California jurisprudence on inverse condemnation. Oroville serves as a reminder to plaintiffs that a prima facie case for inverse condemnation still needs to be proven, and the two-pronged test provides guidance as to how that is to be done.