Opinion ID: 1161797
Heading Depth: 2
Heading Rank: 1

Heading: Inverse Condemnation Liability and Proximate Cause

Text: Article I, section 19 (formerly § 14) of the California Constitution provides: Private property may be taken or damaged for public use only when just compensation ... has first been paid.... In the landmark case of Albers v. County of Los Angeles (1965) 62 Cal.2d 250, 263-264 [42 Cal. Rptr. 89, 398 P.2d 129], we construed this provision to mean that, with two exceptions (to be discussed below), any actual physical injury to real property proximately caused by [a public] improvement as deliberately designed and constructed is compensable under article I, section 14, of our Constitution whether foreseeable or not. As we subsequently explained in Holtz v. Superior Court (1970) 3 Cal.3d 296 [90 Cal. Rptr. 345, 475 P.2d 441], Albers fully recognized the fears that an open-ended, absolute liability rule of inverse condemnation could inhibit the construction of beneficial public improvements: Thus we limited our holding of inverse condemnation liability, absent fault, to `physical injuries of real property' that were `proximately caused' by the improvement as deliberately constructed and planned. ( Id. at p. 304.) (1a) In Holtz, we also underscored the fundamental policy basis of the constitutional requirement of just compensation: `The decisive consideration is whether the owner of the damaged property if uncompensated would contribute more than his proper share to the public undertaking.' In other words, the underlying purpose of our constitutional provision in inverse  as well as ordinary  condemnation is `to distribute throughout the community the loss inflicted upon the individual....' (3 Cal.3d at p. 303.) (2a) Plaintiffs here contend that the evidence adduced at trial satisfied the Albers criteria. The undisputed evidence clearly established that plaintiffs incurred actual physical injury to real property. In addition, the trial court found that the breach was not caused by volume, speeds and heights of the water beyond the design capacity of the levees, i.e., the water flow at the time of the breach was within the range the levee was designed to handle. However, based upon the trial court's additional findings that plaintiffs' property was subject to flooding prior to construction of the levee and that the levee had not increased the risk of flooding, the Court of Appeal concluded that the element of proximate causation was missing. In so holding the Court of Appeal was mistaken. After our decision in Albers, Professor Arvo Van Alstyne authored a seminal article on inverse condemnation liability in which he observed that Albers's proximate cause requirement involves a troublesome conceptual premise. (Van Alstyne, Inverse Condemnation: Unintended Physical Damage (1969) 20 Hastings L.J. 431, 435-438.) Our decision in Albers, supra, 62 Cal.2d 250, contained the seeds of confusion through its combination of proximate cause terminology with the elimination of foreseeability as an element of inverse condemnation. Noting this paradox, Professor Van Alstyne suggested that the true measure of proximate cause should be stated in terms of a `substantial' cause-and-effect relationship which excludes the probability that other forces alone produced the injury. (Van Alstyne, supra, 20 Hastings L.J. at p. 436, italics added.) Although the issue was not raised, we subsequently acknowledged in Holtz the greater precision, as Professor Van Alstyne contends ( id. at p. 436) in restating this element of the Albers test in terms of `substantial' causation. (3 Cal.3d at p. 304, fn. 9.) Subsequent to Holtz, and in reliance thereon, several Court of Appeal decisions held that inverse condemnation liability may be established where the public improvement constitutes a substantial cause of the damage, albeit only one of several concurrent causes. (See Souza v. Silver Development Co. (1985) 164 Cal. App.3d 165, 171 [210 Cal. Rptr. 146]; Ingram v. City of Redondo Beach (1975) 45 Cal. App.3d 628, 633-634 [119 Cal. Rptr. 688]; Blau v. City of Los Angeles (1973) 32 Cal. App.3d 77, 84-85 [107 Cal. Rptr. 727].) In Ingram, for example, plaintiffs sued the defendant city for damages incurred when heavy rains caused the earthen wall of a drainage sump to collapse, allowing flood waters to inundate plaintiffs' homes. (45 Cal. App.3d at pp. 630-631.) The trial court rendered judgment for the city, finding that no damages to plaintiff occurred as a proximate result of any public improvement of defendant.... ( Id. at p. 630.) The Court of Appeal reversed. Relying on our endorsement of the substantial cause test in Holtz, the court reasoned as follows: There is no controversy over the fact that the wall of the sump gave way, releasing a flood onto plaintiffs' properties. This clearly could be a substantial factor in causing the claimed damages.... If, however, the damage is caused, solely, by an unforeseen and supervening cause, then liability will not follow. (45 Cal. App.3d at p. 633, italics added.) (3) Thus, in order to establish a causal connection between the public improvement and the plaintiff's damages, there must be a showing of `a substantial cause-and-effect relationship excluding the probability that other forces alone produced the injury.' [Citations.] ( Souza v. Silver Development Co., supra, 164 Cal. App.3d at p. 171, fn. omitted.) (4a) Where independently generated forces not induced by the public flood control improvement  such as a rainstorm  contribute to the injury, proximate cause is established where the public improvement constitutes a substantial concurring cause of the injury, i.e., where the injury occurred in substantial part because the improvement failed to function as it was intended. The public improvement would cease to be a substantial contributing factor, however, where it could be shown that the damage would have occurred even if the project had operated perfectly, i.e., where the storm exceeded the project's design capacity. In conventional terminology, such an extraordinary storm would constitute an intervening cause which supersedes the public improvement in the chain of causation. (2b) Turning to the case at bar, the record amply supports plaintiffs' claim that the levee was a substantial concurring cause of the damages to their property. Plaintiffs' evidence established, and the trial court expressly found, that the design capacity of the levee was 86,000 cfs, that the maximum flow in the channel at the time of the breach was approximately 25,000 cfs, and that the breach was not caused by volume, speeds or heights of water beyond the design capacity of the levee. Thus, notwithstanding the heavy storms which preceded the breach, plaintiffs demonstrated that the levee's failure to function as intended constituted a substantial concurring  or proximate  cause of the damages. Nevertheless, defendants contend, as the Court of Appeal expressly concluded, that the District levee was not and could not have been the proximate cause of the damages, because plaintiffs' property was subject to flooding prior to construction of the levee, and because the property would have flooded even in the absence of the levee. There is no merit to this reasoning. The fact that plaintiffs' property was subject to flooding prior to construction of the levee is not determinative of the question of whether the failure of the levee in this case caused damage to the plaintiffs. As the trial court here found, plaintiffs reasonably relied on the project levee containing the River waters within the River channel, at least to a volume capacity of 86,000 CFS, and acting on such reliance ... made substantial expenditures of moneys and other material resources. By inducing plaintiffs to make substantial improvements in reliance on its providing protection to a flow of 86,000 CFS, and then failing to provide such protection, the levee plainly constituted a substantial cause of plaintiffs' damages. ( Holtz v. Superior Court, supra, 3 Cal.3d at p. 304, fn. 9.) Nor is there merit to defendants' contention that proximate cause was not established because plaintiffs failed to demonstrate the improvement increased the risk of flooding, or diverted floodwaters that would not otherwise have crossed plaintiffs' property. (4b) Inverse condemnation liability for failure of flood control projects is not predicated upon proof that the public improvement made a preexisting hazard worse. In this respect, defendants' reliance on two Court of Appeal decisions, Tri-Chem, Inc. v. Los Angeles County Flood Control Dist. (1976) 60 Cal. App.3d 306 [132 Cal. Rptr. 142] and Shaeffer v. State of California (1972) 22 Cal. App.3d 1017 [99 Cal. Rptr. 861], to argue to the contrary is misplaced. In Tri-Chem, Inc. v. Los Angeles County Flood Control Dist., supra, 60 Cal. App.3d 306, the plaintiffs sought damages on a theory of inverse condemnation after a drainage system operated by the district overflowed and flooded their property. The jury found in favor of the plaintiffs. On appeal, the District argued that the levee failure was not a proximate cause of plaintiffs' harm ( id. at p. 310, italics added) since the drainage system had a design capacity of only 550 to 700 cfs, whereas runoff during the storm which resulted in the flood reached approximately 1,096 cfs. ( Id. at p. 309.) The Court of Appeal agreed, stating: All that the record here shows is that a more extensive flood control system might have diverted more water from its natural flow across plaintiffs' properties. There is no evidence that the system did not work as it was designed to function. ... ( Id. at pp. 311-312, italics added.) Shaeffer v. State of California, supra, 22 Cal. App.3d 1017, presents a factually distinct but analytically analogous scenario to Tri-Chem. Plaintiffs sought recovery in inverse condemnation for damages caused by a flood along the Feather River. The evidence showed that the State operated a flood control project along the river which consisted of a levee system and the Oroville Dam. At the time of the flood, however, the dam was only partially completed. Thus, certain property owners were completely protected by the partially completed dam, while others like plaintiffs would have received greater protection had the dam been completed. The trial court concluded that the plaintiffs had sustained no damages attributable to the flood control project of the State. In affirming the judgment, the Court of Appeal noted that a public entity is not liable for damages merely because its flood control improvements do not provide the same degree of protection to all property owners in the area. (22 Cal. App.3d at p. 1021.) There was no evidence, the court noted, that the flood control improvements had failed to operate as intended. The mere fact that other properties receive[d] more benefit than those of plaintiffs because of the phase and stages of the flood control project was not a sufficient basis of inverse condemnation liability. ( Ibid. ) Thus, it is readily apparent that the results in both Tri-Chem and Shaeffer are perfectly consistent with the proximate cause analysis we have outlined. In each case the court concluded that proximate cause was absent  not because the risk of floods preexisted the flood control projects, nor because the projects had failed to increase the risk or the extent of the floods  but rather because there was no evidence that the projects failed to function as intended ; in both cases the flooding occurred in spite of the flood control improvements, not because of them. (2c) Here, in contrast, plaintiffs adduced substantial evidence that the District levee failed to function within its design capacity and thus constituted a substantial concurring  or proximate  cause of the damages. The Court of Appeal's holding to the contrary was erroneous. (5a) Having thus established that the levee failed within its design capacity, and that such failure constituted a substantial cause of their damages, plaintiffs insist that they are entitled to recover as a matter of law on a theory of absolute liability under Albers, supra, 62 Cal.2d 250, without any further showing that the flooding was the result of any unreasonable act or omission attributable to defendants. As explained below, we reject this contention.