Opinion ID: 1161797
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Heading: The Requirement of Unreasonable Conduct in Flood Control Cases

Text: Prior to our decision in Albers, supra, 62 Cal.2d 250, it was standard judicial practice to analyze inverse condemnation liability by analogy to tort and property law principles. (See Mandelker, Inverse Condemnation: The Constitutional Limits of Public Responsibility (1966) Wis.L.Rev. 3, 6-9; Van Alstyne, supra, 20 Hastings L.J. at pp. 440-442.) This approach was in part predicated on the general understanding that inverse condemnation liability was limited to cases in which a private party would be held liable under like circumstances. (See, e.g., Archer v. City of Los Angeles (1941) 19 Cal.2d 19, 24 [119 P.2d 1] [If the property owner would have no cause of action were a private person to inflict the damage, he can have no claim for compensation from the state.]; Clement v. State Reclamation Board (1950) 35 Cal.2d 628, 637 [220 P.2d 897] [[P]laintiffs have no right to compensation under article I, section 14, if the injury is one that a private party would have the right to inflict without incurring liability.]; accord Youngblood v. Los Angeles County Flood Control Dist. (1961) 56 Cal.2d 603, 608 [15 Cal. Rptr. 904, 364 P.2d 840]; Bauer v. County of Ventura (1955) 45 Cal.2d 276, 282-283 [289 P.2d 1]; Granone v. County of Los Angeles (1965) 231 Cal. App.2d 629, 645 [42 Cal. Rptr. 34].) As earlier noted, however, Albers shifted the focus in inverse condemnation cases from the common law to the Constitution. As we subsequently explained in Holtz v. Superior Court, supra, 3 Cal.3d at page 302: In Albers v. County of Los Angeles ... this court explicitly rejected the notion that there need be a congruence between public and private liability in inverse condemnation actions. The critical issue, we held, was not whether the plaintiff would have a cause of action under tort or property law if the damage were inflicted by a private person, but rather whether the plaintiff should recover as a matter of interpretation and policy [under] article I, section 14, of the Constitution.... ( Albers v. County of Los Angeles, supra, 62 Cal.2d at p. 262; Holtz v. Superior Court, supra, 3 Cal.3d at p. 303.) (1b) As Holtz explained, In [inverse condemnation cases] the purposes of the constitutional clause, rather than the limits established by a rule of statutory or common law allocating rights and responsibilities between private parties, must fix the extent of a public entity's responsibility. (3 Cal.3d at p. 302.) Balancing the constitutional purposes of the taking clause with the competing considerations which caution against an open-ended, `absolute liability' rule of inverse condemnation, we held that any actual physical injury to real property proximately caused by the improvement as deliberately designed and constructed is compensable under article I, section 14, of our Constitution, whether foreseeable or not. ( Albers v. County of Los Angeles, supra, 62 Cal.2d at pp. 261-262; Holtz v. Superior Court, supra, 3 Cal.3d at pp. 302-304.) In so holding, however, we also explicitly identified two strains of decisions in which the urgency or particular importance of the governmental conduct involved was so overriding that considerations of public policy inveighed against a rule rendering the acting public entity liable absent fault. ( Holtz v. Superior Court, supra, 3 Cal.3d at pp. 304-305.) Of the two doctrinal categories expressly exempted from Albers's generalized strict liability rule, the second, or so-called Archer exception ( Archer v. City of Los Angeles, supra, 19 Cal.2d 19), encompassed those cases in which the state at common law `had the right to inflict the damage.' (6) (See fn. 3.) ( Holtz v. Superior Court, supra, 3 Cal.3d at p. 305, quoting from Albers v. County of Los Angeles, supra, 62 Cal.2d at p. 262.) (Italics in original.) [3] As we later explained in Holtz, the doctrine of the common law `right to inflict damage,' emanating from the complex and unique province of water law, has been employed in only a few restricted situations, generally for the purpose of permitting a landowner to take reasonable action to protect his own property from external hazards such as floodwaters. (3 Cal.3d at p. 306, italics added.) (7a) Frequently referred to as the common enemy doctrine, the notion is that the owner of land subject to flooding has the right to erect defensive barriers and that any injury caused thereby to lower landowners as the result of the increased discharge or velocity of water is considered damnum absque injuria. (See, e.g., Clement v. State Reclamation Board, supra, 35 Cal.2d at pp. 635-636; The Weinberg Co. v. Bixby (1921) 185 Cal. 87, 95 [196 P. 25]; McDaniel v. Cummings (1890) 83 Cal. 515, 519-521 [23 P. 795].) [4] The unique legal privilege which cloaks such protective measures undoubtedly reflects the overriding interest, in a developing economy, of making land freely available for settlement and improvement. [5] ( Holtz v. Superior Court, supra, 3 Cal.3d at p. 307, fn. 11.) Although, as noted, we expressly excepted the Archer line of decisions from Albers's rule of liability without fault, we also cautioned against the facile assumption that an activity which is privileged when performed by a private party is equally privileged when undertaken by a public entity. ( Holtz v. Superior Court, supra, 3 Cal.3d at pp. 307-308, fn. 13.) Different policy considerations, we noted, inform the public and the private spheres. While certain socially beneficial conduct may appropriately be designated `privileged' for private individuals in order that they will not be deterred from undertaking the activity, the public entity may continue to engage in this same `privileged' activity even if it must bear the loss of resulting damages. ( Ibid., italics added.) (5b) Thus, while we recognized in Albers that strict inverse condemnation liability may not be appropriate in the case of flood control improvements, we emphasized in Holtz that such improvements should not be cloaked with the same immunity as private flood control measures. The question, therefore, is what standard applies in such cases. We draw the answer from prior case law, public policy and common sense. On the one hand, a public agency that undertakes to construct or operate a flood control project clearly must not be made the absolute insurer of those lands provided protection. On the other hand, the damage potential of a defective public flood control project is clearly enormous. Therefore, as we observed in Holtz, the courts have consistently held that even when a public agency is engaged in such `privileged activity' as the construction of barriers to protect against floodwaters, it must [ at least ] act reasonably and non-negligently. [Citations.] ( Holtz v. Superior Court, supra, 3 Cal.3d at p. 307, fn. 12, italics added; see also Shaeffer v. State of California, supra, 22 Cal. App.3d at p. 1021.) Contrary to plaintiffs' position, the fact that a dam bursts or a levee fails is not sufficient, standing alone, to impose liability. However, where the public agency's design, construction or maintenance of a flood control project is shown to have posed an unreasonable risk of harm to the plaintiffs, and such unreasonable design, construction or maintenance constituted a substantial cause of the damages, plaintiffs may recover regardless of the fact that the project's purpose is to contain the common enemy of floodwaters. (See Bauer v. Ventura County, supra, 45 Cal.2d at pp. 285-286; House v. Los Angeles Flood Control Dist., supra, 25 Cal.2d at pp. 395-396; San Gabriel V.C. Club v. County of Los Angeles, supra, 182 Cal. at pp. 399-400; Granone v. County of Los Angeles, supra, 231 Cal. App.2d at p. 647.) [6] Permitting recovery where the public entity's unreasonable conduct constitutes a substantial cause of damage to property owners negates the apprehension commonly associated with a rule of absolute liability  the discouragement of beneficial flood control improvements  yet properly compensates for losses unfairly incurred. As Professor Van Alstyne observed: Mindful of the enormous damage-producing potential of defective public flood control projects, the courts have insisted that public agencies must act reasonably in the development of construction and operational plans so as to avoid unnecessary damage to private property. Reasonableness, in this context, is not entirely a matter of negligence, but represents a balancing of public need against the gravity of private harm. (Van Alstyne, supra, 20 Hastings L.J. at p. 455, fns. omitted.) The reasonableness of the public agency's conduct must be determined on the facts of each individual case, taking into consideration the public benefit and the private damages in each instance. (See Keys v. Romley (1966) 64 Cal.2d 396, 409-410 [50 Cal. Rptr. 273, 412 P.2d 529].) Inverse condemnation liability ultimately rests on the notion that the private individual should not be required to bear a disproportionate share of the costs of a public improvement. ( Holtz v. Superior Court, supra, 3 Cal.3d at p. 303.) Thus, compensation for damages incurred as the result of a flood control agency's unreasonable conduct, measured in light of this balancing test, constitutes no more than a reimbursement to the damaged property owners of their contribution of more than their proper share [to] the public undertaking. ( Ibid. ) Plaintiffs contend that recent Court of Appeal decisions appear, nevertheless, to have applied an absolute liability standard to cases involving flood damages. A review of these decisions reveals that in each case cited the public improvement resulted in a diversion of surface or flood waters from their natural channel or drainage. (See Yee v. City of Sausalito (1983) 141 Cal. App.3d 917 [190 Cal. Rptr. 595] [storm drainage system which diverted surface waters across plaintiff's property ruptured, allowing water to seep into soil adjacent to plaintiff's property, resulting in massive soil subsidence]; Marin v. City of San Rafael (1980) 111 Cal. App.3d 591 [168 Cal. Rptr. 750] [underground drainage pipe which diverted surface waters under plaintiffs' property burst, causing property damage]; Imperial Cattle Co. v. Imperial Irrigation Dist. (1985) 167 Cal. App.3d 263 [213 Cal. Rptr. 622] [irrigation system overflowed, diverting surface waters onto plaintiff's property]; McMahan's of Santa Monica v. City of Santa Monica (1983) 146 Cal. App.3d 683 [194 Cal. Rptr. 582] [water main which diverted waters under plaintiff's building ruptured, damaging the building].) As earlier noted, [7] the common enemy doctrine did not confer the right to divert or obstruct waters from their natural channels or drainages, and several pre- as well as post- Albers decisions, relying on this principle, appear to have endorsed a rule of inverse liability without fault where such diversions were present. (See, e.g., Youngblood v. Los Angeles County Flood Control Dist., supra, 56 Cal.2d at p. 607 [[W]hen waters are diverted by a public improvement from a natural watercourse onto adjoining lands the agency is liable for the damage ... even though no negligence could be attributed to the installation of the improvement.]; see also Yee v. City of Sausalito, supra, 141 Cal. App.3d at pp. 920-923.) We need not examine the validity of these decisions here, for there was no evidence presented that the District levee affirmatively diverted or burdened plaintiffs' property with floodwaters in excess of those which would have escaped in the absence of the levee. [8] It is doubtful, however, whether evidence of an unintended diversion  an elusive concept to begin with (see Van Alstyne, supra, 20 Hastings L.J. at pp. 460-461)  would elevate the test of inverse condemnation liability to absolute liability, rather than a reasonableness standard. As earlier discussed, the purposes of the Constitution, rather than the rules emanating from the complex and unique province of water law, must fix the extent of a public entity's responsibility. ( Holtz v. Superior Court, supra, 3 Cal.3d at p. 306.) It is sufficient for our purposes here to hold that when a public flood control improvement fails to function as intended, and properties historically subject to flooding are damaged as a proximate result thereof, plaintiffs' recovery in inverse condemnation requires proof that the failure was attributable to some unreasonable conduct on the part of the defendant public entities. Defendants contend that inverse condemnation damages should not be available even where the public entity's conduct is unreasonable unless plaintiffs can establish that the improvement affirmatively diverted floodwaters onto property that would not otherwise have been affected. There is no merit to this contention. As noted above, Albers explicitly rejected the notion that public and private liability principles are necessarily coextensive. ( Albers v. County of Los Angeles, supra, 62 Cal.2d at pp. 260-262.) Those historical policy considerations which conditioned private water law actions on an affirmative diversion or obstruction of stream, surface or floodwaters do not necessarily apply to claims for just compensation against the government. ( Holtz v. Superior Court, supra, 3 Cal.3d at pp. 306-307.) (7b) (See fn. 9.), (5c) When a public agency erects improvements to protect against floodwaters, it must, at a minimum, act reasonably; its liability for unreasonable acts or omissions does not require proof that the public agency affirmatively diverted waters where they would not otherwise have flowed. [9]