Eminent Domain Report

We recently reported on the California Legislature’s passage of Senate Bill 1153, noting that the Bill was waiting for Governor Newsom’s approval.  That approval has now occurred, and the Bill is official. 

This is a huge legislative victory for water suppliers in California, as the Bill clarifies that public water systems have no duty to be designed, constructed, or maintained for wildfire defense or suppression—and that the inability to maintain water supply or pressure during a wildfire is not a substantial cause of wildfire damages. Together, these authorities provide an increasingly well-defined defense to wildfire-related inverse condemnation claims against water providers.

While water suppliers still face risks of inverse condemnation lawsuits related to their facilities to the extent private property damage is substantially caused by an inherent risk in a deliberately designed, constructed, or maintained public improvement, inverse liability related to wildfire suppression is arguably off the table.  We will see if there are legal challenges to this legislation, and whether this will help reduce insurance costs for water suppliers.  Stay tuned in this ever-evolving area.