As a cost-saving measure, Austin, Texas's utility department had a "wait until it breaks" power line inspection policy, and one day, the lines broke.
Unfortunately, the broken power lines caused the Steiner Ranch wildfire which destroyed 23 homes. Insurance companies and uninsured homeowners sued the city, alleging tort and inverse condemnation claims. Sound familiar?
When the trial court refused to dismiss the claims, the city sought review in the Texas Court of Appeals (Third District), which reversed. City of Austin v. Liberty Mutual Ins., No. 03-13-00551-CV (May 16, 2014). The court held that to properly plead an inverse condemnation claim in Texas, the plaintiff "it is not enough merely to allege that the act causing the damage was intentional. Rather, a party must allege that the governmental entity intended the resulting damage, or at least knew that the damage was substanitally certain to occur." Slip op. at 9. And "substantially certain" is a high bar and doesn't just mean more likely to happen, but practically guaranteed as a result of the govenrment's conduct. "Thus, for an act to give rise to a takings claim, the act must at least be one in which the inevitablity of damage is so obvious that its incurrence is deemed to be the deliberate infliction of harm for the purpose of carrying out the governmental project." Slip op. at 10.
Because the plaintiffs did not allege enough in their complaint to meet that standard, the court concluded they did not have a takings claim. Yes, the city's policy was the but-for cause of the fire (the wait-til-it-breaks policy resulted in the lines going slack, and high winds caused them to come into contact with one another, starting a sparking that ignited the very dry brush, that started a fire, that got out of control, that destroyed the homes), but this was not the "almost-certain result of the City's fiscally-driven decision to curtail inspection of its overhead power lines." Slip op. at 11. This, in the court's view, was a legal question, and it held as a matter of law that the kneebone-connected-to-the-thighbone chain of causation, while foreseeable, did not rise to the "almost-certain" level. Id. Besides, the fire wasn't a public use. Id. at 12-13 ("it is difficult to conceive how the property could be said to have been taken or damaged for public use").
But all was not lost for the plaintiffs. Like the Oregon sewer explosion decision, the court held that they adequately pleaded a tort claim, which was not barred by governmental immunity.
Hat tip to Evan Seeman at the RLUIPA Defense blog for the heads-up on this decision.
City of Austin v. Liberty Mutual Ins., No. 03-13-00551-CV (May 16, 2014)
