Court Opinion

ID: 4425950
Source: CourtListenerOpinion
Date Created: 2019-08-15 17:02:48.485684+00
Date Added: 2024-06-11T14:51:43.898777
License: Public Domain

IN THE SUPREME COURT OF
               CALIFORNIA

                CITY OF OROVILLE,
                      Petitioner,
                          v.
     THE SUPERIOR COURT OF BUTTE COUNTY,
                     Respondent;
   CALIFORNIA JOINT POWERS RISK MANAGEMENT
                 AUTHORITY et al.,
               Real Parties in Interest.

                          S243247

                   Third Appellate District
                          C077181

                Butte County Superior Court
                          152036

                       August 15, 2019

Justice Cuéllar authored the opinion of the Court, in which
Chief Justice Cantil-Sakauye and Justices Chin, Corrigan, Liu,
Kruger, and Groban concurred.
         CITY OF OROVILLE v. SUPERIOR COURT
                            S243247

              Opinion of the Court by Cuéllar, J.

      A dental practice suffered damage when raw sewage
began spewing from the toilets, sinks, and drains of its building.
The resulting damage triggered the inverse condemnation
claim — an action to recover damages for injuries to private
property caused by a public improvement –– at the heart of this
case. The dentists contend the City of Oroville (the City) is
legally responsible for the property damage, because it was
caused by the sewer system’s failure to function as intended.
According to the dentists, the failure was manifest when the
system allowed sewage to back up into their building instead of
siphoning the waste away from their private property. The City
maintains the damage occurred because the dentists failed to
install a legally-required backwater valve that would have
prevented sewage from entering their building in the event of a
sewer main backup.
      What we conclude is that the Court of Appeal erred in
finding the City liable in inverse condemnation. The appellate
court reached this decision without addressing a fundamental
question: whether the inherent risks associated with the sewer
system –– as deliberately designed, constructed, or
maintained –– were the substantial cause of the damage to the
private property.
      Public entities are not strictly or otherwise automatically
liable for any conceivable damage bearing some kind of

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              CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

connection, however remote, to a public improvement. To
succeed on an inverse condemnation action, a plaintiff must
ordinarily show — assuming the public entity made reasonable
assumptions about the public improvement in question –– that
the damage to private property was substantially caused by
inherent risks associated with the design, construction, or
maintenance of the public improvement. That’s certainly not
something the dentists were able to show in this case, where
installation of a backwater valve on their premises not only
would have prevented or drastically mitigated the risk of
damage, according to experts, but was legally required. Under
the circumstances, the City is not liable in inverse
condemnation, so we reverse the judgment of the Court of
Appeal.
                                  I.
       Raw, untreated sewage from the City of Oroville’s sewer
main backed up into a private sewer lateral in December 2009,
invading the sinks, toilets, and drains of a local office building.
Located at 3579 Oro Dam Boulevard, the building was owned by
three dentists doing business as WGS Dental Complex. The
dentists, individually and doing business as WGS Dental
Complex (collectively WGS), filed claims against their insurer,
The Dentists Insurance Company (TDIC). WGS sued the City
for inverse condemnation (Cal. Const., art. I, § 19) and nuisance
for losses it claimed were not covered by insurance. And TDIC
filed a complaint in intervention for negligence, nuisance,
trespass, and inverse condemnation. The City filed a cross
complaint against WGS for its failure to ensure a backwater
valve was properly installed on their private sewer lateral,
alleging violation of the Oroville Municipal Code, public
nuisance, strict liability, and negligence.

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             CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

      The City moved for summary judgment on WGS’s claims,
citing WGS’s failure to install the backwater valve. WGS
opposed the City’s motion, asserting it had no role in
constructing the building and was unaware of any issue with the
backwater valve until the sewage backed up into the building
and alleging the City’s intentional plan of maintenance of the
sewer main allowed a blockage to form. The trial court denied
the City’s motion, and stated, “[I]t appears that either
prevention of the blockage or installation of the backflow
prevention device could have prevented the damage. The
relative importance of these two factors in causing the damage
will be something for the trier of fact to decide.”
       WGS then sought judicial determination of the City’s
liability for inverse condemnation under Code of Civil Procedure
section 1260.040 (section 1260.040), deferring the issue of
damages.1 After WGS and the City reasserted the positions
advanced at summary judgment, the trial court took judicial
notice of most of the documents submitted in the summary
judgment proceedings. On July 25, 2014, the trial court found
the City liable in inverse condemnation.
     The City presented evidence that the sewer on Oro Dam
Boulevard was built and operates as a gravity-driven system, in

1
      In Weiss v. People ex rel. Dept. of Transportation (2018) 20
Cal.App.5th 1156, review granted June 13, 2018, S248141, we
granted review to address whether section 1260.040 may be
properly used in inverse condemnation proceedings to
determine –– in advance of a bench trial –– whether a taking or
damaging of private property has occurred. That question is not
in dispute here, so we need not decide in this case whether a
section 1260.040 motion is a proper way to seek judicial
resolution of an inverse condemnation claim.

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             CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

which sewage flows downhill to a sewage treatment plant.
Manholes provide points of access to the sewer main for
maintenance and the sewer system is designed for sewage to
escape through the manhole immediately upstream of a sewer
main line blockage. WGS’s private lateral sewage line connects
to the main sewer line between manhole numbers JJ-10 and JJ-
11. The City found evidence of a partial blockage in the sewer
line between manholes JJ-10 and JJ-11 on December 29, 2009,
the date of the sewage backup into the WGS building.
       The City also submitted evidence that it enacted Oroville
Ordinance No. 1450 in 1984, which adopted the 1982 Uniform
Plumbing Code. This ordinance required property owners to
install backwater valves on private sewer laterals where the
fixtures on the property are lower than the elevation of the next
upstream manhole of the public sewer. Backwater valves are
installed to prevent sewage from entering buildings during
sewer main line backups. WGS acquired its building when it
was under construction in 1985, after the City enacted Oroville
Ordinance No. 1450.         In 1986, the City inspected the
construction and issued a “Certificate of Occupancies” to the
dentists. At the time of the sewage backup, WGS had no
backwater valve installed on its private sewer lateral.
According to the City’s experts, the sewage that backed up in
the sewer line between manholes JJ-10 and JJ-11 would have
ordinarily spilled out of the next upstream manhole. Instead,
on December 29, 2009, the sewage exited through the sink and
toilet fixtures at WGS’s offices because WGS had no backwater
valve on its private sewer lateral.
     WGS offered its own expert testimony. Its expert
conceded that the sewage backup incident could have been
averted if a fully functional backwater valve had been installed

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             CITY OF OROVILLE v. SUPERIOR COURT
                 Opinion of the Court by Cuéllar, J.

on WGS’s building. This expert further testified that backwater
valves don’t always work to perfection, because certain
backwater valves can be inadvertently damaged during routine
sewer cleaning, diminishing the valve’s capacity.
      After considering the evidence, the trial court found that
WGS submitted sufficient evidence to establish the following
facts: there was a blockage in the City’s sewer main; the
blockage was most likely caused by roots; the blockage resulted
in sewage backup in WGS’s offices; and the backup caused
damage to WGS’s property. The trial court stated these basic
facts were not in dispute, and the only issue for determination
on the section 1260.040 motion was the legal responsibility for
the damage that resulted from the sewage backup.
      The court then concluded that an inverse condemnation
had occurred even though the City shared causal responsibility
for the damage with WGS. The “primary cause of the blockage,”
the court found, was root intrusion in the sewer main and “a
significant secondary cause of the damage” was WGS’s failure to
install a backwater valve on their private sewer lateral, “a
necessary part of the sewer design and plan.” Citing California
State Automobile Assn. v. City of Palo Alto (2006) 138
Cal.App.4th 474 (City of Palo Alto), the trial court held it was
constrained to find the City liable in inverse condemnation
because one of the causes of damage was root blockage, which
was described in City of Palo Alto as an inherent risk of sewer
operation.
      Petitioning the Court of Appeal for a peremptory writ of
mandate, the City presented three arguments. First, the
deliberate design and construction of the sewer system was not
the cause of the damages. Second, WGS’s failure to install and

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              CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

maintain the legally required backwater valve defeated the
deliberate design and construction of the sewer system. And
third, the City claimed to have acted reasonably in operating
and maintaining its sewer system.
      WGS argued that the trial court was correct in finding the
City liable in inverse condemnation. TDIC assigned its
intervention rights to the California Joint Powers Risk
Management Authority (the Authority), a risk-sharing pool
comprised of public entities, including the City of Oroville.
Appearing as a real party in interest, the Authority argued that
although recovery for inverse condemnation would be in its
financial interest in this case, it supported the City’s position
that inverse condemnation should not be available where
sewage overflows onto private property because the landowner
failed to have a backwater valve as required by law.
       The Court of Appeal concluded that the trial court had
correctly found the City liable in inverse condemnation. First,
the Court of Appeal addressed the City’s argument that the only
reason sewage spilled into WGS’s private property was WGS’s
failure to install and maintain a backwater valve, which
defeated the design of the sewer system. Relying on City of Palo
Alto, the Court of Appeal stated that in order to absolve itself of
liability, the City would have to prove that other forces alone
produced the injury. The Court of Appeal reasoned that, despite
the City’s argument to the contrary, a distinction existed
between concluding that the backwater valve had the capacity
to prevent the sewage backup from entering WGS’s private
property, and finding the absence of the backwater valve ––
alone –– produced the injury. The Court of Appeal rejected the
City’s argument that the absence of the backwater valve
assuaged or eliminated its liability, characterizing it as

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             CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

reminiscent of a “sort of contributory negligence theory from tort
law,” in which WGS’s conduct would preclude recovery from the
City — a concept the Court of Appeal noted was no longer
applicable even in tort law. Again relying on City of Palo Alto,
the Court of Appeal concluded that even where an independent
force contributes to the plaintiff’s injury, the public
infrastructure in question is a concurrent cause if the injury
occurred in substantial part because the improvement failed to
function as intended. The Court of Appeal reasoned that WGS’s
“failure to install a backup valve did not cause the blockage in
City’s sewer main.”
      Then the Court of Appeal turned to whether the sewer, as
deliberately designed, caused damage to private property. The
Court of Appeal stated that the City’s sewer system was
designed and constructed to overflow, if necessary, at the next
upstream manhole and that the City acknowledged a sewer
blockage was an inherent risk of the sewer system. But the
Court of Appeal dismissed the City’s argument that there was
no inherent risk of backup into private property if the property
owner installed a backwater valve, noting that if the backwater
valve was a necessary component of the sewer design, perhaps
the City should have ensured compliance with the law. The
Court of Appeal concluded that WGS’s failure to install the
backwater valve did not defeat the inverse condemnation claims
and affirmed the trial court’s decision.
      We granted review to address whether the City is liable in
inverse condemnation where sewage backs up onto private
property because of a blockage in the City’s sewer main and the
absence of a backwater valve that the affected property owner
was legally required to install and maintain.

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              CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

                                 II.
                                  A.
      Sometimes the well-being of the public justifies the seizure
of privately held property. But in our system of government,
such private property “condemnation” for public use can only
occur subject to certain conditions. Under article I, section 19 of
the California Constitution (article I, section 19), a public entity
must pay the owner just compensation when it takes or damages
private property for public use. (Art. I, § 19, subd. (a) [“Private
property may be taken or damaged for a public use and only
when just compensation . . . has first been paid to . . . the
owner”].) Used responsibly, the government’s capacity to
condemn private property for public use allows for a reasonable
compromise between the public good and the protection of
private citizens whose property is needed to advance that good.
(City of Oakland v. Oakland Raiders (1982) 32 Cal.3d 60, 64.)
      This “just compensation” clause in the California
Constitution applies to the state’s exercise of its eminent domain
power, constraining it by requiring that when the state takes
private property for public use, the private property owner is
justly compensated. (Customer Co. v. City of Sacramento (1995)
10 Cal.4th 368, 376-377 (Customer Co.).) Where government
does not recognize that a particular circumstance amounts
functionally to a taking for public use or otherwise fails to pay
the requisite compensation for the property in question, the
property’s owner can, as here, pursue an “inverse
condemnation” action. (See id. at p. 377; see also Locklin v. City
of Lafayette (1994) 7 Cal.4th 327, 362.) So article I, section 19
provides the basis for two kinds of actions: a conventional
eminent domain proceeding, instituted by a public entity to

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             CITY OF OROVILLE v. SUPERIOR COURT
                 Opinion of the Court by Cuéllar, J.

acquire private property for public use; and an inverse
condemnation action, initiated by a private property owner
seeking compensation for a taking or damage to his or her
property. (Customer Co., at pp. 376-377.)
       To resolve inverse condemnation claims and the causal
questions they raise, courts have garnered insights from tort
and property law doctrines relevant to analogous disputes
between private parties. (See Bunch v. Coachella Valley Water
Dist. (1997) 15 Cal.4th 432, 439 (Bunch), citing Belair v.
Riverside County Flood Control Dist. (1988) 47 Cal.3d 550, 562
(Belair).) Supporting this approach was an understanding that
inverse condemnation is not a distinct cause of action, but
instead a remedy for an already-existing cause of action. At one
point, courts had limited inverse condemnation only to
circumstances where a private party would be liable to the
property owner for the injury. (Bunch, at p. 439; Belair, at p.
562; Albers v. Los Angeles County (1965) 62 Cal.2d 250, 256
(Albers).) We subsequently clarified that ultimately, the just
compensation clause is the “distinct constitutional source” that
underlies a public entity’s responsibility to compensate owners
for those damages to private property resulting from the
construction of a public improvement. (Holtz v. Superior Court
(1970) 3 Cal.3d 296, 302 (Holtz).) Common law doctrines may
offer a useful analogy, but the roots of inverse condemnation
liability lie in constitutional terrain rather than the common
law.
      Given the constitutional roots and broad purposes
associated with inverse condemnation claims, it is no surprise
these can arise in a wide variety of contexts. A “deliberate
action” undertaken by a public entity “in furtherance of public
purposes” –– including, of course, a public improvement such as

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              CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

a water system or a flood control levee –– can conceivably trigger
an inverse condemnation action. (Clement v. State Reclamation
Board (1950) 35 Cal.2d 628, 641 (Clement).) From underground
excavation projects, to street construction, to the distinctive
realm of flood control improvements, our inverse condemnation
law covers the proverbial waterfront of public improvements.
(See Bunch, supra, 15 Cal.4th 432; Belair, supra, 47 Cal.3d 550;
Holtz, supra, 3 Cal.3d 296; Bacich v. Board of Control (1943) 23
Cal.2d 343 (Bacich).) Consistent across our assessment of these
varied public works is the expectation that if an improvement is
“inherently dangerous to private property,” the public entity —
by virtue of the constitutional provision — undertakes the
responsibility “to compensate property owners for injury to their
property arising from the inherent dangers of the public
improvement or originating ‘from the wrongful plan or character
of the work.’ ” (House v. L. A. County Flood Control Dist. (1944)
25 Cal.2d 384, 396 (House).)
      What makes it a challenge to set the precise limits of a
public entity’s responsibility in practice is that multiple
concerns, some arguably in tension with each other, are at stake
in the interpretation of article I, section 19. One is to pool the
burden to the individual property owner and distribute
throughout the community the losses resulting from the public
improvement. (Bunch, supra, 15 Cal.4th at p. 440; Holtz, supra,
3 Cal.3d at p. 303; Albers, supra, 62 Cal.2d at p. 263.) Another
is to mitigate concerns that “compensation allowed too liberally
will seriously impede, if not stop, beneficial public
improvements because of the greatly increased cost.” (Bacich,
supra, 23 Cal.2d at p. 350; see also Holtz, supra, at pp. 303-304;
Albers, supra, 62 Cal.2d at p. 263.) Indeed, the parties’ positions
in this very case aptly illustrate how these concerns diverge.

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             CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

WGS argues the City should be held liable in inverse
condemnation, which would result in the cost of WGS’s losses
being spread across the entire community. The City and the
Authority assert that the damages were caused by WGS’s failure
to install and maintain the required backwater valve. They
maintain that if courts find public entities liable for damages
resulting from private property owners’ unlawful acts or failures
to act, such entities will be discouraged from providing essential
public works projects.
      In advancing these competing positions, the parties focus
on different aspects of the inverse condemnation analysis, each
emphasizing a distinct concept drawn from our case law. We
have previously held that “any actual physical injury to real
property proximately caused by [a public] improvement as
deliberately designed and constructed is compensable under
[the California Constitution] whether foreseeable or not.”
(Albers, supra, 62 Cal.2d at pp. 263-264.)2 We later recognized
the potential confusion presented in Albers by our use of the
term “proximate cause” — which in tort law is often defined
largely in terms of foreseeability — in a case where the damage
was not foreseeable, yet we still imposed inverse condemnation

2
      The two exceptions to the “strict liability rule” recognized
in Albers were circumstances where the urgency or importance
of the government conduct was so overriding that public policy
advised against holding the government liable in inverse
condemnation absent fault. (Holtz, supra, 3 Cal.3d at pp. 304-
305; Bunch, supra, 15 Cal.4th at pp. 440-441.) The first
addressed damages inflicted in the proper exercise of the
government’s police power; the second “occurred in the ‘unique’
context of water law.” (Bunch, at p. 441, citing Archer v. City of
Los Angeles (1941) 19 Cal.2d 19, 24-25.)

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              CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

liability. (Holtz, supra, 3 Cal.3d 296, 304, fn. 9.) To mitigate
confusion, we restated this test to eschew the term “proximate.”
What we used instead was the term “ ‘ “substantial” causation.’ ”
(Belair, supra, 47 Cal.3d at p. 559, quoting Holtz, supra, 3 Cal.3d
at p. 304, fn. 9.)
       Applying this concept of “substantial causation,” we have
explained in our inverse condemnation decisions that private
landowners may establish inverse condemnation liability even
where the public improvement as deliberately designed,
constructed, and maintained was only one of several concurrent
causes –– provided the causal nexus between the risks inherent
in the public improvement and the harm in question was
sufficiently robust to create a pronounced likelihood of damage.
(Customer Co., supra, 10 Cal.4th at p. 382 [“ ‘[t]he destruction
or damaging of property is sufficiently connected with “public
use” as required by the Constitution, if the injury is a result of
dangers inherent in the construction of the public improvement
as distinguished from dangers arising from the negligent
operation of the improvement’ ” (quoting House, supra, 25 Cal.2d
at p. 396 (conc. opn. of Traynor, J.))]; Youngblood v. Los Angeles
County Flood Control Dist. (1961) 56 Cal.2d 603, 610
(Youngblood) [requiring a showing that the improvement “as
planned and installed by defendant, would necessarily or
probably” cause the property damage].) What these decisions
reflect is our concern not only with the deliberate design,
construction, or maintenance of a public improvement, but also
the nature of the causal relationship between the public work
and the damages to private property.
     The City and the Authority argue that the Court of Appeal
simply assumed that a blockage in the sewer main caused
WGS’s property damage without addressing whether the

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             CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

damages were caused by the inherent risks posed by the design,
construction, or maintenance of the sewer system or by WGS’s
failure to install and maintain the legally required backwater
valve. And they assert that the sewer system design required
WGS, like all users of the sewer system, to comply with the
Uniform Plumbing Code and local ordinances and its failure to
do so prevented the system from functioning as deliberately
designed. Because the Court of Appeal did not address whether
the extent of the causal contribution of inherent risks associated
with the sewer system’s design (or, for that matter, its
construction or maintenance) is sufficiently “substantial” to
warrant inverse condemnation liability, the City posits that
finding it liable under the circumstances would effectively
saddle it with “strict liability,” irrespective of the nature of
inherent risks posed by the sewer system as deliberately
designed, constructed, and maintained. Whether or not one
understands WGS’s argument as essentially a call for
imposition of strict liability, the heart of this dispute indeed
concerns the analysis a reviewing court must undertake to
resolve an inverse condemnation claim.
      In contrast, WGS contends the City is liable for the
resulting damages from the sewer backup. According to WGS,
a public improvement need only be a concurrent cause of
damage in order for inverse condemnation liability to
attach — so it is irrelevant to the inverse condemnation analysis
whether WGS failed to install the required backwater valve.
Although the trial court found that WGS’s failure to install and
maintain that valve was “a significant secondary cause” of the
damage (emphasis added), what matters most for WGS is that
the trial court found blockage in the sewer main to be a
concurrent cause of the damage.

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                 Opinion of the Court by Cuéllar, J.

                                 B.
       Our conclusion follows from what we explained in
Customer Co. and Holtz:          a court assessing inverse
condemnation liability must find more than just a causal
connection between the public improvement and the damage to
private property. What we hold is that 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. This approach aligns
with how we have previously analyzed inverse condemnation
liability cases. It also protects private property owners by
allocating the financial losses resulting from the public
improvement across the community and provides public entities
with an incentive to internalize the reasonable risks of their
public improvements.
      The concepts of “inherent risk” and “substantial
causation” address somewhat overlapping considerations but
play distinct roles in the analysis of inverse condemnation. And
both must be present for a public entity to be liable. We have
explained that a public entity’s construction of a public
improvement is a deliberate action made “in furtherance of
public purposes.” (Clement, supra, 35 Cal.2d at p. 641.) If
damage to private property is substantially caused by the
inherent risks of the design or construction of a public
improvement, a public entity must provide just compensation
for the damage, whether it was intentional or the result of
negligence by the public entity. (Ibid.; Bauer v. Ventura County
(1955) 45 Cal.2d 276, 284.)
     The inherent risk assessment requires a reviewing court
to consider whether the inherent dangers of the public

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improvement as deliberately designed, constructed, or
maintained materialized and were the cause of the property
damage. (Pacific Bell v. City of San Diego (2000) 81 Cal.App.4th
596, 607 (Pacific Bell), citing House, supra, 25 Cal.2d at p. 396.)
This inquiry operates as a preventive measure to ensure that
not all private property damage bearing some causal
relationship to a public improvement results in liability.
Rather, the injury to property must arise from the inherent
dangers of the public improvement as deliberately designed,
constructed, or maintained. (House, 25 Cal.2d at p. 396.) The
inherent risk assessment — in line with the policy
considerations underlying article I, section 19 — avoids open-
ended liability by protecting public entities from liability for
private property damage that is arguably connected to a public
improvement but is not the result of the improvement’s inherent
risks. (Belair, supra, 47 Cal.3d at p. 558.)
      Such risks may arise, for example, from a public entity’s
adoption of a comparatively lower cost plan to create the public
improvement. Faced with a panoply of other legitimate needs
ranging from critter control to health care, a public entity might
decide against expending additional funds or employing more
protective measures in the construction of a project, even though
the construction plan as adopted poses certain risks of damage
to private property and the additional expenditures or
protections could likely prevent that risk of damage. (See Holtz,
supra, 3 Cal.3d at p. 310.) The public entity may reach its
decision because the likelihood of damage is remote, but the
expense of additional protection is great. (Ibid.) Where the
undertaking of the project at the lower cost creates “some risk,
however slight, of damage to plaintiffs’ property, it is proper to
require the public entity to bear the loss when damage does

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occur.” (Id. at pp. 310-311.) In those circumstances, private
property owners should be compensated for the damage to their
property resulting from the inherent risks posed by the public
improvement as reasonably undertaken at the lower cost
because the public entity “ ‘is in a better position to evaluate the
nature and extent of the risks of public improvement than are
potentially affected property owners.’ ” (Id. at p. 311, quoting
Van Alstyne, Inverse Condemnation: Unintended Physical
Damage (1969) 20 Hastings L.J. 431, 495 (Van Alstyne).)
      Although evidence could conceivably arise to the contrary
that might trigger further scrutiny, we presume the public
entity acted reasonably in reaching its decision to adopt a
particular plan of design, construction, or maintenance. (See
Pacific Bell, supra, 81 Cal.App.4th at p. 608 [reasoning the city’s
decision to install a system without monitoring capability may
have been reasonable because the costs of monitoring may have
outweighed the benefits].) This presumption acknowledges that
we expect public agencies — as the public “locus of
responsibility” for balancing efficiencies and costs — to proceed
sensibly in the decision making process and avoid patently
unreasonable assumptions in the planning of public
improvements. (See Holtz, 3 Cal.3d at p. 311.) Yet it is
consistent with protection of property owners, too: where
damages are the direct consequence of the inherent risks posed
by the public improvement, responsibility for the individual
property owner’s loss is spread across the community benefiting
from the public work. (See Bunch, supra, 15 Cal.4th at p. 440.)
      But useful public improvements must eventually be
maintained and not merely designed and built. So the “inherent
risk” aspect of the inverse condemnation inquiry is not limited
to deliberate design or construction of the public improvement.

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It also encompasses risks from the maintenance or continued
upkeep of the public work. (See Bauer, supra, 45 Cal.2d at p.
285.) A public entity might construct a public improvement and
then entirely neglect any kind of preventive monitoring or
maintenance for the improvement. (See Pacific Bell, supra, 81
Cal.App.4th at pp. 599-600.) If the public entity makes a policy
choice to benefit from the cost savings from declining to pursue
a reasonable maintenance program, for instance, inverse
condemnation principles command “the corollary obligation to
pay for the damages caused when the risks attending these cost-
saving measures materialize.” (Id. at p. 608.) It may be sensible
in some sense for a public entity to forgo regular monitoring and
repair and instead adopt a “wait until it breaks” plan of
maintenance to save on the costs of imposing a monitoring
system. But the damages that result from the inherent risks
posed by the public entity’s maintenance plan should be spread
to the community that benefits from lower costs, instead of
leaving property owners adversely affected by the public entity’s
choice to shoulder the burden alone. (Ibid.)
      A link to one of the aforementioned “inherent risks” is
necessary, but not sufficient, for a successful inverse
condemnation claim.        The plaintiff must also establish
substantial causation. Together, our inverse condemnation
decisions offer a relatively clear picture of the causal
relationship that must be shown for a claim to succeed. Liability
depends on whether some element of physical, but-for causation
is present to link the public improvement and the damage. The
damage must be the “ ‘necessary or probable result’ of the
improvement, or if ‘the immediate, direct, and necessary effect’
thereof was to produce the damage.” (Van Alstyne, supra, 20
Hastings L.J at p. 436, fn. omitted, italics added.) Rather than

                                  17
              CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

training attention on the mere presence of causation, our cases
have focused instead on whether there is proof that the damages
“followed in the normal course of subsequent events” and were
“predominantly” produced by the improvement. (Ibid., citing
Youngblood, supra, 56 Cal.2d 603; Los Angeles C. Assn. v. Los
Angeles (1894) 103 Cal. 461, 470.)
       At the core of the test is the requirement that –– even in
the case of multiple concurrent causes –– the injury to private
property is an “inescapable or unavoidable consequence” of the
public improvement as planned and constructed.                 (Van
Alstyne, at p. 437, fn. 32.) As in the somewhat analogous tort
law context, this test permits courts to consider a plaintiff’s act
or omission in the chain of causation, for example, a property
owner’s own failure to follow reasonable requirements imposed
by the public entity to reduce the risk to the public
improvement. (See Rest.2d Torts, § 442; see also Van Alstyne,
at p. 437.) Accordingly, the substantial causation element of the
analysis ensures liability is imposed only in instances where
there is a sufficiently meaningful causal relationship between
the damage to private property and the inherent risks posed by
the public improvement as designed, constructed, or
maintained.        This approach avoids treating inverse
condemnation as a species of strict or “ ‘absolute liability’ ” that
would avoid the necessary analysis of inherent risks and
substantial causation, frustrating the development of public
improvements because of the increased costs to public entities.
(Holtz, supra, 3 Cal.3d at p. 304.)
      To prevail on its claim of inverse condemnation liability,
then, WGS must succeed under the correct legal analysis. It
must demonstrate that the inherent risks posed by the sewer
system as deliberately designed, constructed, or maintained

                                  18
             CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

manifested and were a substantial cause of its property damage.
WGS contends that an inherent risk of a sewer system is
blockage caused by roots or foreign objects in the sewer main.
Citing our opinion in Belair, WGS posits that the sewer system
failed to function as intended because of the blockage, and the
City should be held liable as the public improvement is
connected in some manner to the damage to private property.
Inverse condemnation liability, under WGS’s theory, attaches
irrespective of whether the property damage could have been
mitigated or extinguished if the affected property owner had
installed the legally-required backwater valve.
      Yet WGS misinterprets our precedent. Belair addressed
the unique problems of flood control litigation –– arising in a
distinctive context that bears only a limited relationship to our
analysis of public improvements in other contexts –– through an
inverse condemnation claim related to levees that failed to
protect an area historically subject to flooding. (Belair, supra,
47 Cal.3d at pp. 555-557, 560.) We concluded that despite heavy
rainstorms contributing to the flooding, the levee was still a
substantial concurring cause of the damages because “the
improvement failed to function as it was intended.” (Id. at p.
560.) This “failed to function as intended” concept was relevant
in Belair only to eliminate natural flooding as a cause of the
damage. (Id. at pp. 561-562.) Contrary to WGS’s contention,
Belair did not announce a rule triggering liability in all inverse
condemnation cases based solely on the existence of any
conceivable causal connection between a public improvement
and private property damage. WGS also relies on City of Palo
Alto, which applied Belair’s “failed to function as intended”
phrase in a sewage backup case. (City of Palo Alto, supra, 138
Cal.App.4th at pp. 476-477, 483.) Citing Belair, the City of Palo

                                  19
              CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

Alto court concluded that the purpose of the sewer was to carry
wastewater away from the residence. The sewer failed to carry
the wastewater away because of a blockage in the sewer main,
so it “failed to function as intended” and the city should be liable
in inverse condemnation. (Id. at p. 483.) WGS adopts this
argument, asserting that the City’s sewer “failed to function as
intended” because it did not carry the sewage away from the
private property.
      If we adopted the reasoning from City of Palo Alto, as WGS
urges, we would overlook a crucial aspect of the inverse
condemnation inquiry. Indeed, under WGS’s analysis, liability
for the public entity would attach whenever a public
improvement is a concurrent cause of damage to private
property, regardless of whether private property owners acted
to defeat the deliberate design or construction of the
improvement. The principles underlying article I, section 19 cut
against this conclusion. (Bacich, supra, 23 Cal.2d at p. 350
[citing concerns that “compensation allowed too liberally will
seriously impede, if not stop, beneficial public improvements
because of the greatly increased cost”].) Instead, a court
reviewing an inverse condemnation claim arising from sewage
overflow must consider whether the damages to private
property were the direct and necessary effect of the inherent
risks posed by the public improvement as deliberately designed,
constructed, or maintained. And in a case like this, a reviewing
court must also assess whether the damages were the result of
a risk created not by the public improvement, but by the acts of
the private property owner. A causal connection between the
public improvement and the property damage alone is

                                  20
             CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

insufficient to sustain a finding of inverse condemnation
liability.3
                                 III.
      The Court of Appeal cited cases clarifying that inverse
condemnation liability arises where a public improvement, as
designed and constructed, presents an inherent risk of damage
that materializes and causes damage to private property. It did
not analyze whether the City’s decision to implement a gravity
flow sewer system that relied in part on property owners
installing and maintaining backwater valves as required by law
constituted an inherent risk arising from the design,
construction, or maintenance of the public improvement, and if
so, whether WGS’s damage was substantially caused by that
inherent risk. What the Court of Appeal concluded instead is
this: to prevail, the City must prove that other forces, with no
connection to the design, construction, or maintenance of the
sewer, alone produced the injury. The Court of Appeal also
rejected the City’s argument that WGS’s failure to install and
maintain the legally required backwater valve was a sufficiently
significant intervening cause that superseded the improvement
in the chain of causation. By failing to analyze inverse
condemnation with sufficient focus on substantial causation by
inherent risks associated with the public improvement, and
presuming that the City must disprove any causal connection to
the harm, the Court of Appeal erred.

3
      To the extent it conflicts with this holding, we disapprove
California State Automobile Assn. v. City of Palo Alto, supra, 138
Cal.App.4th 474. To the extent it adopts the “failed to function
as intended” concept from Belair into the sewage overflow
context, we also disapprove.

                                  21
             CITY OF OROVILLE v. SUPERIOR COURT
                 Opinion of the Court by Cuéllar, J.

      At no point in these proceedings has WGS shown the
damage to its property was substantially caused by an inherent
risk of the City’s sewer system, as deliberately designed,
constructed, or maintained –– nor has it given us any rationale
to doubt that the City made reasonable assumptions in reaching
its decision for the design, construction, or maintenance of the
sewer system. In fact, the record supports that the City acted
reasonably in adopting the design for the sewer system, and that
the sewer was designed in accordance with the accepted
practices for designing and constructing sewer systems of that
time. The trial court had before it evidence that at the time of
the sewage backup, there was no backwater valve installed on
WGS’s private sewer lateral and if a fully functional backwater
valve or backflow prevention device had been installed on WGS’s
sewer lateral, as required by law, the sewage backup incident
could have been averted. Consider what it means to ignore the
missing backwater valve in this case. We’d be airbrushing out
of the picture not only the City’s considered judgment about
what it would take to balance safety and practical
considerations for this public improvement, but WGS’s
noncompliance with an ordinary planning code requirement
that would have eliminated or at least mitigated risks of sewage
backup damage. That is hardly different from turning inverse
condemnation into a basis for automatic imposition of liability
on the public entity if even a tenuous causal connection exists
between the public improvement and private property damage,
irrespective of whether a plaintiff’s act or omission materially
contributes to the risk. And it ignores that the City, like all
public entities in an imperfect world of scarce resources, is in
the business of weighing safety, the availability of resources,
and possible risks that may result from its public improvements.

                                 22
             CITY OF OROVILLE v. SUPERIOR COURT
                 Opinion of the Court by Cuéllar, J.

      So we cannot conclude that the invasion of raw sewage
into WGS’s private property was an inherent risk of the sewer
system as deliberately designed and constructed. Nor can we
conclude that the backup of sewage into WGS’s offices was the
necessary or probable result of the sewer system’s operations.
And the City did not act unreasonably in expecting private
property owners to comply with the law. This finding is
consistent with the policy considerations underlying article I,
section 19, because WGS, if uncompensated, will not contribute
more than its proper share to the public undertaking. The
damage to its property could have been averted had WGS
installed the backwater valve, and so the loss suffered by WGS
should not be distributed throughout the community. We find
the City is not liable in inverse condemnation for the damage to
WGS’s private property.
                                IV.
      When public improvements damage private property,
property owners not compensated earlier may seek recovery
through inverse condemnation claims. But to succeed, such
claims must demonstrate more than just a causal
link — however tenuous — between the existence of the public
improvement and the property damage. Instead, inverse
condemnation liability depends on whether the property
damage was the probable result or necessary effect of an
inherent risk associated with the design, construction, or
maintenance of the relevant public improvement.
     The damage to WGS’s property arguably bears some
connection to the design, operation, and maintenance of the
sewer system: the sewage passed through the system before
emerging in the dentist’s office, and it was perhaps possible in

                                 23
             CITY OF OROVILLE v. SUPERIOR COURT
                  Opinion of the Court by Cuéllar, J.

principle to design a sewage system that made backwater valves
entirely redundant. Yet we cannot say the damage was
substantially caused by that system when WGS failed to fulfill
a responsibility to install a backwater valve, and that
reasonable requirement would have prevented or substantially
diminished the risk of the mishap that spawned this case. The
backup of sewage into WGS’s offices was not the necessary
result or unavoidable consequence of any risk posed by the
sewer system. And the City acted reasonably in adopting the
sewer design and presuming private property owners would
comply with the law by installing and maintaining backwater
valve devices to prevent sewage backups into private property.
The City is not liable in inverse condemnation. We reverse the
judgment of the Court of Appeal and vacate its order denying
the petition for writ of mandate and direct the Court of Appeal
to remand this case to the superior court for further proceedings
consistent with this opinion.

                                                        CUÉLLAR, J.

We Concur:
CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
LIU, J.
KRUGER, J.
GROBAN, J.

                                  24
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion City of Oroville v. Superior Court
__________________________________________________________________________________

Unpublished Opinion XXX NP opn. filed 6/13/17 – 3d Dist.
Original Appeal
Original Proceeding
Review Granted
Rehearing Granted

__________________________________________________________________________________

Opinion No. S243247
Date Filed: August 15, 2019
__________________________________________________________________________________

Court: Superior
County: Butte
Judge: Sandra L. McClean

__________________________________________________________________________________

Counsel:

Peters, Habib, McKenna & Juhl-Rhodes, Mark A. Habib, Lia M. Juhl-Rhodes; Colantuono, Highsmith &
Whatley, Michael G. Colantuono, Jennifer L. Pancake; Cota Cole & Huber, Cole Huber and Scott E. Huber
for Petitioner.

Michael N. Feuer, City Attorney (Los Angeles), Blithe Smith Bock and Timothy McWilliams, Assistant
City Attorneys, for League of California Cities, California Joint Powers Insurance Authority, Public Entity
Risk Management Authority, California Special Districts Association, California Association of Joint
Powers Authorities and California Sanitation Risk Management Authority as Amici Curiae on behalf of
Petitioner.

No appearance for Respondent Superior Court.

Gibbons & Conley, A. Byrne Conley and Peter A. Urhausen for Real Party Interest California Joint Powers
Risk Management Authority.

Berding Weil, Jordan M. Rojas and James O. Devereaux for Real Parties in Interest Timothy G. Wall, Sims
W. Lowry and William A. Gilbert.

Meyers, Nave, Riback Silver & Wilson, John Bakker and Kenton L. Alm for California Association of
Sanitation Agencies as Amicus Curiae on behalf of Petitioner and Real Party in Interest.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Michael G. Colantuono
Colantuono, Highsmith & Whatley
420 Sierra College Drive, Suite 140
Grass Valley, CA 95945
(530) 432-7357

Peter A. Urhausen
Gibbons & Conley
Hookston Square
3480 Buskirk Avenue, Suite 200
Pleasant Hill, CA 94523
(925) 932-3600

James O. Devereaux
Berding Weil
2175 North California Boulevard, Suite 500
Walnut Creek, CA 94596
(925) 838-2090