Opinion
E032176.
10-14-2003
CITY OF CORONA, Plaintiff and Appellant, v. STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION, Defendant and Respondent.
Best Best & Krieger, Arthur L. Littleworth, Jeffrey V. Dunn, Eric L. Garner and Mark D. Servino for Plaintiff and Appellant. Bruce A. Behrens, Jeffrey A. Joseph, David J. Pettigrass and Christopher J. Welsh for Defendant and Respondent.
Plaintiff and appellant City of Corona (the City) sued defendant and respondent State of California, Department of Transportation (Caltrans), for damages to the City and its citizens, services, and infrastructure, alleged to result from artificially elevated traffic congestion on State Highway 91 (Highway 91). That is, Caltrans had entered into a "noncompetition" agreement with the private operators of toll lanes comprising the median portions of Highway 91. Caltrans would not add new public lanes to the highway without the agreement of the private toll road operators. The City alleged causes of action against Caltrans for nuisance and inverse condemnation. The trial court sustained Caltranss demurrer without leave to amend.
The City argues that the trial court erred in applying Civil Code section 3482, which provides that, "[n]othing which is done or maintained under the express authority of a statute can be deemed a nuisance." The City maintains that no statute "expressly authorize[s] Caltrans to create traffic congestion and hazards for the economic benefit of a private party." The City further argues that the court erred in finding that the City had failed to plead direct, peculiar and substantial damages for purposes of the inverse condemnation cause of action. Finally, the City contends that the court abused its discretion in denying the City leave to amend its complaint.
For the reasons which follow, we shall affirm the judgment.
FACTS AND PROCEDURAL HISTORY
In 1989, the Legislature enacted Assembly Bill 680, codified as Streets and Highways Code section 143 (section 143), authorizing Caltrans to enter into agreements with private companies for four toll road demonstrations projects. The preamble to the statute recited that public revenues for transportation had not kept pace with public transportation needs. The Legislature found that "[o]ne important alternative is privately funded Build-Operate-Transfer (BOT) projects whereby private entities obtain exclusive development agreements to build, with private funds, all or a portion of public transportation projects . . . ."
Statutes 1989, chapter 107, section 2, page 1018.
Statutes 1989, supra, chapter 107, section 1(c), page 1018.
The privately financed projects were intended to:
"(1) Take advantage of private sector efficiencies in designing and building transportation projects.
"(2) Allow for the rapid formation of capital necessary for funding transportation projects.
"(3) More quickly bring reductions in congestion in existing transportation corridors.
"(4) Require continued compliance with environmental requirements and applicable state and federal laws that all publicly financed projects must address.
"(5) Offer the traveling public alternate route selections in project areas." Accordingly, section 143, as enacted, authorized Caltrans to "solicit proposals and enter into agreements with private entities . . . for the construction by, and lease to, private entities of four public transportation demonstration projects, at least one of which shall be in northern California and one in southern California." The private sector demonstration projects contemplated allowing the private developers to charge tolls for use of the roadways they constructed for the state. The state would own the roadways, but lease the operation to the private companies for a maximum of 35 years. The toll revenues would retire the costs of construction, pay for ongoing maintenance, administration and services, and provide a "reasonable rate of return" to the private investors during the lease period; excess toll revenues could be (1) used to retire the indebtedness of the private toll company more quickly, or (2) placed in the State Highway Account, or both.
Statutes 1989, supra, chapter 107, section 1(e), page 1018.
Statutes 1989, supra, chapter 107, section 2, page 1018.
Section 143, subdivision (d), in its original form, (stats. 1989, supra, ch. 107, § 2, p. 1019) provided that excess toll revenues could either be applied to the early retirement of private indebtedness, or to the State Highway Account. By Statutes 1990, chapter 1115, section 1, pages 4642-4643, section 143, subdivision (d) was amended to provide that excess funds could be applied either to indebtedness, or to the State Highway Account, or both.
One of the locations chosen for a demonstration project was along Highway 91, which conveys traffic from San Bernardino and Riverside Counties to Orange County and Los Angeles County. Highway 91 bisects the City.
In 1990, Caltrans entered into a contract (the franchise agreement) with California Private Transportation Company (the tollway operator) to construct toll lanes in the median right-of-way of Highway 91. The tollway operator was authorized by the franchise agreement to operate a four-lane private toll road on Highway 91.
Among other provisions, Caltrans granted to the tollway operator a so-called "Absolute Protection Zone," pursuant to which, it is alleged, Caltrans agreed not to make any improvements to Highway 91 within one and one-half miles on either side of the highway, between the intersection of Highway 91 with Interstate Highway 15 and the Orange County border. The "Absolute Protection Zone" includes that portion of Highway 91 which passes through the City. The City alleged that, as a result of the "Absolute Protection Zone" and similar "noncompetition" clauses of the franchise agreement, Caltrans effectively ceded to the tollway operator a veto over any improvements Caltrans might otherwise have made to Highway 91, including improvements undertaken for safety reasons.
Thus, for example, Caltrans in 1998 had planned to upgrade some freeway ramps and widen a two-mile stretch of the travel lanes on Highway 91. The tollway operator assertedly sued Caltrans to enjoin these projects, as alleged violations of the noncompetition provisions of the franchise agreement. Eventually, Caltrans settled the lawsuit with the tollway operator, and did not construct the planned improvements.
The City alleged that Caltranss refusal or inability under the franchise agreement to make improvements to relieve safety or traffic problems along Highway 91 caused damage to the City. Rather than relieving traffic congestion, the private toll road had the effect instead of maintaining traffic congestion at artificially high levels. As the City hypothesized in its complaint, "With rising tolls, fewer people can afford to use the toll lanes, so traffic increases not only on the public portion of [Highway 91], but also on the Citys streets. As a result, safety and traffic conditions worsen on [Highway 91] and upon City streets. The traffic [affects] the Citys streets and forces the City to provide additional police and fire personnel and municipal employees to protect the safety, health and welfare of the public. When conditions on [Highway 91] are congested, motorists pay high tolls to use the toll lanes. As traffic on the toll lanes increases, the toll lane operator then raises tolls to keep the toll lanes free from congestion, which again forces drivers back onto the public portion of [Highway 91] and increases congestion on the Citys streets."
The City pointed to statistics indicating that, although traffic accidents statewide had declined 2.7 percent between 1995, when the toll lanes opened, and 1998, when Caltrans planned to upgrade Highway 91, the accident rate on Highway 91 itself had increased 14.2 percent. The Citys complaint flatly accused Caltrans of deliberately creating "these unsafe and congested conditions."
The City alleged causes of action for nuisance and inverse condemnation against Caltrans, on theories that the purposely-created traffic and safety conditions cause the City to "experience[] increased street congestion and safety hazards." Traffic jams on Highway 91 led "many vehicles from outside the City [to] use City streets . . . . This is commonly known as `cut-through traffic." The City alleged that, "The City . . . suffer[s] damages because" of the cut-through traffic. "Damages to the City include . . . the increased cost of road maintenance, and fire, police and medical services. The City . . . suffer[s] from a loss of economic opportunities and an overall decline in property values, including those resulting from stigma, annoyance, inconvenience and discomfort. Additionally, citizens, businesses and property owners suffer from interference with the comfortable enjoyment of life, emotional distress, loss of time spent with family and loved ones, injuries to health, increased air and noise pollution, increased insurance costs, loss of free use and quiet enjoyment of property, reduced usefulness of property, obstruction of free passage of public parks, squares, streets and highways, increased cost of public and private facilities, including transportation facilities, and increased wear and tear on automobiles and gasoline costs."
Caltrans demurred to the Citys complaint on the following grounds: (1) the action was barred under Civil Code section 3482, inasmuch as (a) Caltrans has statutorily-granted authority to operate and maintain the states highways, and (b) the franchise agreement was expressly authorized by statute; (2) no action for nuisance or inverse condemnation will lie for traffic management or control problems; (3) another court had already upheld the franchise agreement; (4) many of the losses claimed are not compensable; (5) there were no damages accruing peculiarly to the City upon which a claim of inverse condemnation could be based; and (6) the essence of the action — using the courts to control legislative or executive decisions — violated the separation of powers doctrine. As Caltrans succinctly put it, "the City wants the State to pay for the alleged collective traffic woes of Corona inhabitants."
The trial court found no real dispute that the City had suffered "really an endless laundry list of . . . substantial negative effects" resulting from the "unfortunate circumstances" engendered by the franchise agreement. Nonetheless, the court found Friends of H Street v. City of Sacramento controlling on the question whether Civil Code section 3482 barred a nuisance claim where the acts constituting the supposed nuisance are authorized by statute. Not only did section 143 authorize entering agreements for private construction of toll roads to supplement the public roadways, but Streets and Highways Code section 90 generally provided Caltrans with authority to control the state highways.
Friends of H Street v. City of Sacramento (1993) 20 Cal.App.4th 152.
As to inverse condemnation, Friends of H Street likewise held the plaintiffs could not state such a cause of action, based on damages from increased traffic flow.
Accordingly, the court concluded that it could not "create new laws or . . . override the Legislature." It was up to the legislative and executive branches to solve the problems created by the legislation, and to provide funding for corrective measures to alleviate the Citys plight. The court therefore sustained the demurrer without leave to amend.
The City appeals from the judgment of dismissal entered after the court sustained the demurrer without leave to amend.
ANALYSIS
I. Standard of Review
"`A demurrer tests the legal sufficiency of the complaint, and the granting of leave to amend involves the trial courts discretion. Therefore, an appellate court employs two separate standards of review on appeal." That is, first "`[t]he complaint is reviewed de novo to determine whether it contains sufficient facts to state a cause of action," taking into consideration the material factual allegations of the complaint and any facts which may be judicially noticed. Second, where a demurrer is sustained without leave to amend, the appellate court must determine whether the trial court abused its discretion in denying leave to amend. The court abuses its discretion if there is a reasonable possibility that any defect in the complaint can be cured by amendment; the plaintiff bears the burden, however, of demonstrating how the complaint may be amended.
Lee v. Los Angeles County Metropolitan Transportation Authority (2003) 107 Cal.App.4th 848, 853, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318, and Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879.
Lee v. Los Angeles County Metropolitan Transportation Authority, supra, 107 Cal.App.4th 848, 853.
Lee v. Los Angeles County Metropolitan Transportation Authority, supra, 107 Cal.App.4th 848, 853.
Lee v. Los Angeles County Metropolitan Transportation Authority, supra, 107 Cal.App.4th 848, 853, citing Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.
Lee v. Los Angeles County Metropolitan Transportation Authority, supra, 107 Cal.App.4th 848, 853; Blank v. Kirwan, supra, 39 Cal.3d 311, 318. See also Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 321-322.
We turn now to these questions.
II. The Citys Complaint Failed to State a Cause of Action for Either Nuisance or Inverse Condemnation
A. Contentions of the Parties
The City focuses its attack on three main points:
First, the City maintains that Civil Code section 3482, providing that "[n]othing that is done or maintained under the express authority of a statute can be deemed a nuisance," must be narrowly construed and, as so construed, is inapplicable here. As the City characterizes it, none of the operative statutes "expressly authorizes" Caltrans to intentionally create traffic congestion within the City. Thus, the demurrer to the nuisance cause of action could not properly be sustained based on the immunity provided in Civil Code section 3482.
Second, the noncompetition clauses of the franchise agreement are an illegal delegation of Caltranss authority to regulate the highways. The defense based on Civil Code section 3482, that Caltranss actions were authorized by statute and could not therefore constitute a nuisance, is unavailing if the authorizing statutory provision is itself unlawful.
Third, the inverse condemnation cause of action was sufficiently pled, despite the Citys failure to demonstrate that it had suffered any damage peculiar to itself (as opposed both to damages suffered by individually affected propertyholders within the City, and to damages which generally affect all property owners). The City argues that the California Supreme Court has abandoned the former distinction, made in severance damage cases, between "special" (or "peculiar") damages applicable to an individual landholder, on the one hand, and "general" damages affecting other properties in the vicinity.
Citing Los Angeles County Metropolitan Transportation Authority v. Continental Development Corp. (1997) 16 Cal.4th 694, 708.
In response, Caltrans asserts, as it did below, that the franchise agreement, and all its necessary implications, were authorized by section 143. Therefore, Civil Code section 3482 bars the nuisance cause of action.
As to the nuisance cause of action, Caltrans also points to later developments that obviate the problems: the tollway operators interest under the franchise agreement has been assigned to the Orange County Transportation Authority, and, with the assignment of the toll lanes to a governmental entity, the noncompetition clauses of the franchise agreement have been eliminated.
As to inverse condemnation, Caltrans maintains that the City has failed to , and cannot, allege any specific damage to its property, as opposed to the property of others; to the extent that the City property has suffered damages, those damages are no different from damages suffered by all the property owners in the area, generally.
B. The Franchise Agreement Was Expressly Authorized by Section 143; Its Necessary Consequences Cannot Constitute a Nuisance
Civil Code section 3482 provides: "Nothing which is done or maintained under the express authority of a statute can be deemed a nuisance." The trial court determined that this provision barred the nuisance cause of action here.
The City argues that Civil Code section 3482 cannot apply, because there was no "express authorization" in any statute for Caltrans to "create traffic and safety problems" on Highway 91, or to "damage the City and its citizens as alleged" in the complaint.
1. The Hassell Test for Actions "Authorized by Statute" Includes "Express" Authorization or Acts Necessarily "Within the Contemplation" of the Legislature
The Citys contention, as phrased, is patently absurd. We do not presume the Legislature intentionally enacts pernicious, discriminatory legislation. Express statutory authorization to "intentionally create traffic and safety problems" is not the appropriate criterion. No statute would ever purport to do so. The real question is whether section 143 provides authorization for the toll lane franchise agreements, with their attendant consequences. Manifestly, whether expressly (as to the authorization for toll lane projects) or by necessary implication (as to the effects of the program), section 143 does provide such authorization. On this point, as the trial court also found, Friends of H Street is controlling.
Friends of H Street v. City of Sacramento, supra, 20 Cal.App.4th 152.
In Friends of H Street, residents of Sacramento whose homes abutted an arterial street sued to force the city to reduce the traffic speed and volume on the street, on the ground that the condition of the street constituted a nuisance. The trial court sustained a demurrer without leave to amend, finding that Civil Code section 3482 barred the action.
The court looked to Hassell v. San Francisco That case set forth the proper test for determining statutory authorization for acts which might otherwise be considered a nuisance: "`A statutory sanction cannot be pleaded in justification of acts which by the general rules of law constitute a nuisance, unless the acts complained of are authorized by the express terms of the statute under which the justification is made, or by the plainest and most necessary implication from the powers expressly conferred, so that it can be fairly stated that the legislature contemplated the doing of the very act which occasions the injury."
Hassell v. San Francisco (1938) 11 Cal.2d 168, 171.
Hassell v. San Francisco, supra, 11 Cal.2d 168, 171, italics added.
2. The Conclusions in Non-Streets and Highways Cases Are Not Applicable in the Streets and Highways Context
The Friends of H Street court explained that the Hassell test may yield different results in different contexts: "The Hassell test of statutory authorization `requires a particularized assessment of each authorizing statute in relation to the act which constitutes the nuisance. [Citation.] Thus, generalizations drawn from statutes authorizing one type of public act may not apply to statutes authorizing other types of public acts. [Citations.]"
Friends of H Street v. City of Sacramento, supra, 20 Cal.App.4th 152, 160-161.
In the context of streets and highways, numerous laws grant governmental entities broad discretion in managing, constructing, operating, maintaining and regulating streets and highways. Consequently, nuisances allegedly arising from activities such as managing, operating, and maintaining streets and highways, have "consistently [been] held . . . to be within the protection of section 3482."
Friends of H Street v. City of Sacramento, supra, 20 Cal.App.4th 152, 162, and cases there cited.
Attempting to avoid the import of this rule here, the City points to, e.g., Greater Westchester Homeowners Assn. v. City of Los Angeles, and Jones v. Union Pacific Railroad Co., as examples of statutory schemes which were held not to "expressly authorize" airport noise or unnecessary railroad engine noise, respectively. Despite general statutory empowerment to governmental entities to manage airports or railyards, the plaintiffs in those cases were nonetheless permitted to bring nuisance claims.
Greater Westchester Homeowners Assn. v. City of Los Angeles (1979) 26 Cal.3d 86.
Jones v. Union Pacific Railroad Co. (2000) 79 Cal.App.4th 1053.
a. Greater Westchester
In Greater Westchester, the plaintiff homeowners obtained a judgment against the City of Los Angeles, the operator of Los Angeles International Airport (LAX), for nuisance based upon airport noise. The city contended that, "LAX cannot be liable for nuisance because the noise generating activity complained of is specifically sanctioned by statutes, federal and state," and particularly relied on Civil Code section 3482.
The California Supreme Court invoked the Hassell test for determining whether conduct which would otherwise be a nuisance is authorized by other legislation. Under Hassell, the complained-of conduct must be either "authorized by the express terms of the statute," or necessarily implicated by the powers conferred under the enabling statute, such that "it can be fairly stated that the legislature contemplated the doing of the very act which occasions the injury." The court also noted that, "`. . . although an activity authorized by statute cannot be a nuisance, the manner in which the activity is performed may constitute a nuisance."
Greater Westchester Homeowners Assn. v City of Los Angeles, supra, 26 Cal.3d 86, 101, quoting Hassell v. San Francisco, supra, 11 Cal.2d 168, 171.
Greater Westchester Homeowners Assn. v City of Los Angeles, supra, 26 Cal.3d 86, 101, italics original, quoting Venuto v. Owens-Corning Fiberglas Corp. (1971) 22 Cal.App.3d 116, 129.
Against the argument that airplanes and airports are inseparable from noise, the court placed other "vigorous[]" governmental efforts "to abate aircraft and airport noise." Among other things, "the California Legislature has granted airports express and expanded condemnation and compensation authority to reduce and minimize the effects of noise on the private use and enjoyment of neighboring land. [Citations.] Reasonably construed, the foregoing legislation preserves both the authority and responsibility of an airport proprietor to acquire adequate noise easements and to institute reasonable noise abatement procedures which do not conflict with federal law." From these provisions, and other efforts to abate the effects of airplane noise, the court could not discern a "legislative intention to sanction [the] nuisance" of airport noise.
Greater Westchester Homeowners Assn. v City of Los Angeles, supra, 26 Cal.3d 86, 101
Greater Westchester Homeowners Assn. v City of Los Angeles, supra, 26 Cal.3d 86, 101-102.
Greater Westchester Homeowners Assn. v City of Los Angeles, supra, 26 Cal.3d 86, 102.
b. Jones
In Jones, the plaintiffs lived adjacent to a railyard. They alleged that the railroad company parked trains on the tracks in front of the plaintiffs home and left the engines idling, for no purpose, for hours, and even days, at a time. They also alleged that the engine horns sounded needlessly. When the plaintiffs began to complain about the noise and fumes, the company eventually issued orders prohibiting parking unattended engines in front of the plaintiffs home for more than one hour (unless the engines were turned off), but employees routinely ignored the order. The plaintiffs alleged that parking the engines in front of their home and sounding the horns at all hours of the day and night were undertaken for purposes of harassment. The railroad companys employees were also verbally abusive toward the plaintiffs.
Jones v. Union Pacific Railroad Co., supra, 79 Cal.App.4th 1053.
Jones v. Union Pacific Railroad Co., supra, 79 Cal.App.4th 1053, 1057-1058.
The trial court had granted the railroad companys motion for summary judgment against the plaintiffs on their nuisance cause of action. This court reversed summary judgment on the nuisance cause of action, holding there were triable issues of fact whether the cause of action was preempted by federal railroad legislation. Federal legislation granting general authority to regulate railroads did not preempt local police power regulations concerning health and safety issues. For example, federal regulations prescribing the specifications for train safety horns did not preclude state restrictions on when the horns could be sounded. Similarly, the plaintiffs presented evidence that the engines were left running in front of their home for "`days and even weeks at a time," that, after the plaintiffs began complaining, railroad employees would often sound the engine horns when passing in front of the plaintiffs home, for no apparent safety reason, and no reason except to harass plaintiffs. The railroad company employees largely ignored company orders to shut off idling engines to save fuel, and not to park idling engines in front of the plaintiffs home. The plaintiffs evidence was sufficient to raise a triable issue of fact "as to whether Union Pacifics activities were committed solely to harass plaintiffs, and were not safety related or in furtherance of Union Pacifics railroad operations."
Jones v. Union Pacific Railroad Co., supra, 79 Cal.App.4th 1053, 1065.
Jones v. Union Pacific Railroad Co., supra, 79 Cal.App.4th 1053, 1061.
We allowed the plaintiffs action for nuisance to proceed; the crux was the intent with which the acts were done. If the engines were placed in front of the plaintiffs home, and if the train horns were sounded, for no reason other than harassment, then the statutory authorization to the railroad company to conduct railroad operations would not, under federal railroad laws, preempt the plaintiffs nuisance cause of action. Likewise, to the extent that federal regulation did not authorize the activity in question, or the manner in which the activity was performed, Civil Code section 3482 did not bar the plaintiffs action.
Jones v. Union Pacific Railroad Co., supra, 79 Cal.App.4th 1053, 1060
c. Greater Westchester and Jones Are Distinguishable
The Citys reliance on Greater Westchester, Jones, and other similar cases, is, however, misplaced.
In Greater Westchester, the court emphasized special powers granted by statute to the airport authority to abate and reduce airport noise, including specially provided condemnation powers to create noise buffer zones, and the like. Thus, it could not be said that the Legislature had considered and "contemplated the doing of the very act" — i.e., doing nothing to relieve intolerable airplane engine noise — "which occasions the injury."
Hassell v. San Francisco, supra, 11 Cal.2d 168, 171.
Similarly, in Jones, the existence of safety regulations did not demonstrate that the legislative body contemplated that railroad employees would purposely sound the engine horns, not for safety reasons, but to engage in a personal vendetta against complaining neighbors. The authority to conduct railyard operations did not demonstrate that Congress sanctioned unnecessary personal attacks on the peace and quiet of neighboring property owners.
Here, by contrast, the increase in traffic flow through the City was a necessary consequence of the franchise agreement program, administered as intended. The extent or depth of the effects of the program had perhaps not been immediately apparent, but there is no suggestion, as in Jones, that personal animosity had anything to do with how Caltrans and the private toll road company operated or managed their respective roadways and other facilities.
It might be argued that, as in Greater Westchester, the overriding purpose of section 143 and the toll road franchise program was to reduce traffic congestion; thus, the Legislature could not have intended to sanction greater traffic congestion. Nevertheless, section 143 did expressly provide for contracting with private entities to operate toll roads adjacent to, in the right-of-way of, or supplemental to public highways. The program was intended to determine the feasibility of such programs in relieving traffic congestion.
More specifically, the statute expressly contemplated using toll revenues to recoup the capital outlay expended by the private builder-operators. It would defeat the purpose of the project if Caltrans acted to deprive the private parties of the ability to recoup those costs. Caltrans could not, therefore, simply open multiple new public lanes in the same corridor as the toll lanes. The necessity to maintain toll revenues at a reasonable level for the private operators dictated that demand for the toll lanes must also be maintained. "Demand" for the toll lanes inevitably translates into congestion on the public lanes.
This is perhaps an instance of the so-called "law of unintended consequences" — effects that were not specifically anticipated in the rosy predictions that, e.g., the construction of additional, private toll lanes would relieve congestion on both the toll lanes and the public lanes. The projected scenario apparently failed to take full account of the economic reality of "perverse incentives." Both experience and a more complete analysis, however, reveal the flaw in the original vision. Reality is nonetheless precisely what the "demonstration project" was designed to "demonstrate." All of the traffic woes of which the City complains were a natural consequence of the experiment, and were thus necessarily implicit in the toll road franchise concept. The "legislative purpose" of section 143, therefore, is more properly characterized as experimentation with toll lanes than strictly as traffic congestion reduction. In this way, section 143 is entirely distinguishable from, e.g., Greater Westchester, in which the statutory goal of airport noise reduction was definite, rather than contingent or uncertain.
Friends of H Street engaged in a similar analysis in rejecting Greater Westchester and other, similar, cases. It began its discussion with one of the earlier streets and highways cases, Harding v. State of California ex rel. Dept. of Transportation:
Harding v. State of California ex rel. Dept. of Transportation (1984) 159 Cal.App.3d 359.
"In Harding, as in the case before us, plaintiffs cited Varjabedian v. City of Madera [(1977)] 20 Cal.3d 285 [involving noxious odors from a sewage treatment facility] and Greater Westchester Homeowners Assn. v. City of Los Angeles, supra, 26 Cal.3d 86, [allowing a nuisance suit for airport noise] in support of their argument section 3482 did not bar the nuisance claim. The Harding court rejected both cases, stating: `Varjabedian held that although a city was authorized by statute to construct sewage plants, the statute did not expressly authorize the odors emanating from the plant and thus it constituted a nuisance. Presumably, because dust and debris are not expressly authorized by the Streets and Highways Code, plaintiffs would have us find that they constitute a nuisance. Although Varjabedian distinguished Lombardy [Lombardy v. Peter Kiewit Sons Co. (1968) 266 Cal.App.2d 599, involving emotional distress and other damages from construction and operation of a freeway near the plaintiffs home], it did so on the basis of the Hassel[l] test which requires particularized inquiry into each statute to determine whether the Legislature intended to sanction the nuisance and found that the Lombardy analysis of the highway construction statute was not applicable to municipal water treatment operations. (Varjabedian, supra, at p. 291, italics in original, fn. omitted; accord, [Greater Westchester, supra,] 26 Cal.3d [at p.] 102 . . . [Lombardy analysis not applied in airport noise context].) (Harding, supra, 159 Cal.App.3d at p. 363.)"
Friends of H Street v. City of Sacramento, supra, 20 Cal.App.4th 152, 163.
As we have done, the Friends of H Street court distinguished Varjabedian and Greater Westchester in terms of their particularized statutory purposes: "The court in Varjabedian applied the Hassell test [i.e., inquiry into the statutory scheme, and particularly whether it can be inferred that the legislative body `intended to sanction the nuisance], and determined none of the Government Code statutes under which the city claimed to act mentioned the possibility of noxious emanations from the sewage treatment plant. More importantly, the court observed that one object of sewage plant construction was `to remove harmful and obnoxious effluents from the environment. (Varjabedian v. City of Madera, supra, 20 Cal.3d at p. 292, italics in original.)"
Friends of H Street v. City of Sacramento, supra, 20 Cal.App.4th 152, 163-164.
"Similarly, in Greater Westchester, the court rejected defendants argument governmental approval and encouragement of aviation implied legislative approval of aviation noise, stating both federal and state authorities had attempted vigorously to abate aircraft and airport noise. `[T]he California Legislature has granted airports express and expanded condemnation and compensation authority to reduce and minimize the effects of noise on the private use and enjoyment of neighboring land. [Citations.] Reasonably construed, the foregoing legislation preserves both the authority and responsibility of an airport proprietor to acquire adequate noise easements and to institute reasonable noise abatement procedures which do not conflict with federal law. (Greater Westchester Homeowners Assn. v. City of Los Angeles, supra, 26 Cal.3d at pp. 101-102.)" The Friends of H Street court found it significant that, "[s]uch alternative measures are not available to cities to reduce the effects of traffic noise." The court concluded, therefore, that Greater Westchester was inapplicable to cases of street and highway management.
Friends of H Street v. City of Sacramento, supra, 20 Cal.App.4th 152, 164.
Friends of H Street v. City of Sacramento (1993) 20 Cal.App.4th 152, 164.
3. In Enacting Section 143, the Legislature Necessarily Contemplated the Effects of the Toll Lane Experiment
The Friends of H Street court rejected Varjabedian and Greater Westchester on the even more fundamental basis, however, of necessary implication from the powers granted: "The Vehicle Code and Streets and Highways Code authorize the City to regulate traffic within its jurisdictions, and, in its discretion, expend funds to generally manage and control its streets. (Veh. Code, § 21101; Sts. & Hy. Code, § 27.) Although the relevant statutes do not expressly authorize the City to operate its streets in a manner which generates traffic, noise, fumes, litter, and headlight glare, as stated in Lombardy, such loss of peace and quiet is a fact of urban life which must be endured by all who live in the vicinity of freeways, highways, and city streets."
Friends of H Street v. City of Sacramento, supra, 20 Cal.App.4th 152, 163.
We join the Friends of H Street court in rejecting Varjabedian, Jones and Greater Westchester. Clearly, the Legislature in enacting section 143 took account of the very consequences which the City alleges constitute the "nuisance" in this case. Indeed, the toll road projects were undertaken expressly as experiments, to determine the feasibility of such projects in reducing overall traffic congestion. Necessarily, experimental or demonstration projects do not guarantee only successful outcomes; they contemplate the possibility of varying results.
4. The Franchise Agreements Are Constitutional
The propriety of the franchise agreement was also considered and upheld in Professional Engineers v. Department of Transportation. There, the court explained, "Under section 143 and the [franchise] agreements, the state is embarking on a new experimental program enlisting private financing, design, construction and operation of transportation facilities to solve state transportation needs that cannot be met with available public revenue. We agree with the trial court that the constitution does not discourage this experimentation. Indeed, to strike down these efforts would denigrate a key purpose of the civil service mandate — to promote efficiency and economy in state government. Of course, these efficiencies and economies remain to be proven, but the very purpose of the demonstration projects is to explore the feasibility of the private financing/management approach."
Professional Engineers v. Department of Transportation (1993) 13 Cal.App.4th 585.
Professional Engineers v. Department of Transportation, supra, 13 Cal.App.4th 585, 593-594, footnote omitted.
The powers granted by the Legislature under section 143 are very broad: "`[Caltrans] may exercise any power possessed by it with respect to the development and construction of state transportation projects pursuant to this section. [Citation.] Of significance are (1) the broad reservation of incidental powers retained by [Caltrans] under the code: `The department may do any act necessary, convenient or proper for the construction, improvement, maintenance or use of all highways which are under its jurisdiction [citation]; (2) the broad grant of statutory authority to `make and enter contracts `as required for the performance of its duties [citation]; and (3) the charge to develop `in cooperation with local and regional transportation entities, the full potential of all resources and opportunities which are now, and may become, available to the state and to regional and local agencies for meeting Californias transportation needs. [Citation.]"
Professional Engineers v. Department of Transportation, supra, 13 Cal.App.4th 585, 597.
The Professional Engineers court specifically upheld the noncompetition clauses of the franchise agreements: "The agreements here do not expressly bargain away the states police power to legislate for the welfare and safety of its people. Instead, Caltrans has granted real parties in interest certain exclusive development rights within certain franchise zones. We will not read into the contracts an abrogation of the potential future exercise of sovereign police power. However, we emphasize, as the trial court did below, that the reservation of this power is implicit in all government contracts and private parties take their rights subject to it. Thus, within the constitutional boundaries of procedural due process, just compensation for the taking of private property and the like, all private contractual rights must give way to a compelling state necessity. For instance, were a legitimate, compelling public need to arise for a transportation facility within a franchise zone that would compete with one of the demonstration projects, the Legislature, acting to attain this public welfare object, could use its power of eminent domain to condemn the franchise. [Citations.] The trial court recognized this, as do real parties in interest. The agreements do not attempt to abrogate the police power."
Professional Engineers v. Department of Transportation, supra, 13 Cal.App.4th 585, 591-592.
For the purposes of this case, we take this lesson from Professional Engineers: the Citys argument that Caltrans has contracted away its state power and given the private toll road operator a veto over improvements necessary for public safety is without merit. The franchise agreements, like any other contracts with the state, are subject to the states power to condemn the franchise, if necessary for a compelling public interest.
When and if such a compelling interest has arisen are, of course, matters confided to the discretion of the legislative and executive branches. The City has not demonstrated the existence of any abuse of legislative or executive discretion. Indeed, as Caltrans has argued in its brief, to the extent any public necessity has been determined to exist, the state has exercised its police power precisely as contemplated in Professional Engineers. The state has laid the groundwork for buying out the private franchise interest along Highway 91.
5. Conclusion — The "Damages" Arising From the Toll Road Franchise Agreements Were Necessarily Contemplated, and Thus "Authorized" by Section 143
The "damages" asserted by the City are, as we have explained, a necessary adjunct of the toll lane franchise experiment. Consequently, the "damages" alleged by the City to constitute the nuisance were the very acts the statute intended to authorize, even if indirectly. As in the other streets and highways cases, therefore, the states management of the toll lane franchise agreement falls squarely within the protection of Civil Code section 3482. Accordingly, none of the effects of which the City complains can be considered a nuisance; the trial court properly sustained the demurrer to the nuisance cause of action.
C. The City Has Failed to Properly Plead a Cause of Action in Inverse Condemnation
"[A]n action in inverse condemnation has its basis in the California Constitution, article I, section 19, which requires payment of just compensation when private property is taken or damaged for public use." A mere decline in value of property is not a "taking or damaging" of property; rather, such a decline in value is part of the measure of "just compensation" awarded, once a taking or damaging of the property has otherwise been proven.
Harding v. State of California ex rel. Dept. of Transportation, supra, 159 Cal.App.3d 359, 364, italics omitted.
San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 942.
"Accordingly, `"in an inverse condemnation action, the property owner must first clear the hurdle of establishing that the public entity has, in fact, taken [or damaged] his or her property before he or she can reach the issue of `just compensation."" Proof of "taking or damaging," in turn, requires a showing that, "(1) the property has been physically invaded in a tangible manner; (2) no physical invasion has occurred, but the property has been physically damaged; or (3) an intangible intrusion onto the property has occurred which has caused no damage to the property but places a burden on the property that is direct, substantial, and peculiar to the property itself."
Oliver v. AT&T Wireless Services (1999) 76 Cal.App.4th 521, 529-530, quoting San Diego Gas & Electric Co. v. Superior Court, supra, 13 Cal.4th 893, 940.
Oliver v. AT&T Wireless Services, supra, 76 Cal.App.4th 521, 530, citing San Diego Gas & Electric Co. v. Superior Court, supra, 13 Cal.4th 893, 940.
The City complains that the trial court erred in requiring its inverse condemnation claim to meet the requirement that the City allege that its property has been "singled out" to suffer "unique, special or peculiar" damage, not common to all other property in the neighborhood. The City relies on Los Angeles Metropolitan Transportation Authority v. Continental Development Corp., and Bacich v. Board of Control, for the proposition that the California Supreme Court has abandoned any requirement to show "special" or "peculiar" damage not common to other properties in the neighborhood.
Los Angeles Metropolitan Transportation Authority v. Continental Development Corp., supra, 16 Cal.4th 694.
Bacich v. Board of Control (1943) 23 Cal.2d 343.
The Citys reliance on these cases is misplaced.
Continental Development arose in a different context — severance damages. When part of a property is taken for a public work, compensation may be due to the owner not only to pay for the part taken, but also for damage to the remainder parcel, or severance damages. The question at issue was whether the severance damages, for harm done by the public work to the remainder parcel, could be offset by the benefits inuring to the remainder parcel from the existence of the new public facility. Whereas former law had made a distinction between "general benefits" accruing to all properties in the area — which could not be offset — and "specific benefits" applying only to the remainder parcel — which could be offset — the California Supreme Court found the distinction between general benefits and special benefits to be ambiguous, and difficult to apply. How widely, for example, should the "community" be defined when deciding whether the benefits to a particular parcel are different from those applicable to other properties in the "community"?
Continental Development involved offsetting the "benefit" accruing to a remainder parcel from its proximity to a light-rail station, for which a part of the property had been condemned. As the Supreme Court noted, "if the relevant community is defined as those properties within walking distance of the Douglas Street Station, then the benefit of proximity is universally shared within the community and is thus self-evidently general. If, on the other hand, we define the relevant community as the greater Los Angeles metropolitan area (as we might do if our conception of community includes all those whose taxes presumably help pay for the transit system and all who might be expected to use it), then the benefit of proximity begins to appear much more peculiar to properties, such as Continentals, that are within walking distance of the Douglas Street Station."
Los Angeles Metropolitan Transportation Authority v. Continental Development Corp., supra, 16 Cal.4th 694, 708.
In part because the courts had proven incapable of developing a workable distinction between "general" and "special" benefits to a property, the California Supreme Court determined that offset was permissible in case of a quantifiable benefit of either kind.
Whether "benefits" to a property resulting from the construction of a public work are capable of being divided into "general" and "special" classes of benefits, for purposes of determining whether the value of those benefits should offset severance damages, is a somewhat different question from the fundamental one in eminent domain and inverse condemnation actions: to wit, has the owners property been damaged in some definable way by the public work? This question necessarily requires some kind of definable injury to some specific property.
Here, the City has not pointed to any particular property of its own which has been invaded by the public work. Rather, the gist of its claim is that all the properties of all the owners within the entire City — indiscriminately — have been affected by the existence of traffic on Highway 91. Two problems appear. First, these other owners, not the City, are the proper claimants for inverse condemnation damages. Second, the wholly indiscriminate nature of the "damages" claimed betrays the essence of the claim as increased traffic flow; numerous cases have uniformly held that increased traffic flow past a property or properties is not compensable in inverse condemnation.
See, e.g., City of Berkeley v. Von Adelung (1963) 214 Cal.App.2d 791, 793 ["At most, defendants offered proof would show only that the project as a whole would increase traffic flow past his lot"]; cf. Rose v. State of California (1942) 19 Cal.2d 713, 737-742 [no compensation for diversion of traffic, as distinct from impairment of access to adjacent thoroughfare, because landowner has no legal right that is infringed by changing the flow of traffic past his or her property]; Friends of H Street v. City of Sacramento, supra, 20 Cal.App.4th 152, 166-167.
Because the City has failed to allege any "damage" tied by any rational principle to any particular property, it has failed to state a claim for a "taking" of its property without just compensation. Accordingly, the trial court properly sustained the demurrer to the inverse condemnation cause of action.
III. The Trial Court Did Not Abuse Its Discretion in Denying Leave to Amend the Complaint
The City proffers a proposed amendment to its complaint to specify, with respect to the inverse condemnation cause of action, that the relevant "community" is that which "is served by [Highway 91] within the Absolute Protection Zone," and "consists of the counties of Los Angeles, Orange, Riverside and San Bernardino." It also proposes to add an allegation to the effect that, "relative to the respective `communities served by the toll lanes and the non-compet[ition] clause," the City "has suffered direct, peculiar and substantial damages."
The proposed amendments are intended to address the inverse condemnation cause of action, but are insufficient to remedy the patent deficiency of the complaint: the lack of any damage identifiable to a particular parcel of property which the state may be said to have constructively "condemned." The gravamen of the complaint remains the generalized effects of traffic flows.
The constitutional requirement that "just compensation" be paid when property is taken or damaged for a public purpose is intended to make property owners whole for genuine injury, and no more. The "just compensation" clause is not an insurance against all and sundry general ill effects resulting from public projects. "The United States Supreme Court has written to the same effect in Bauman v. Ross, supra, [(1897)] 167 U.S. [548] at page 574 , stating, `The just compensation required by the Constitution to be made to the owner is to be measured by the loss caused to him by the appropriation. He is entitled to receive the value of what he has been deprived of, and no more. To award him less would be unjust to him; to award him more would be unjust to the public." The constitutional mandate thus strikes a necessary balance; that is, the "taxpayers should not be required to pay more than reasonably necessary for public works projects. Stated another way, compensation for taking or damage to property must be just to the public as well as to the landowner." The Citys theory of its case would create an open-ended, virtually unlimited "just compensation" liability which would undoubtedly have a deleterious effect on a public entitys decision to undertake any public work. The notion that "compensation, allowed too liberally, will seriously impede, if not stop, beneficial public improvements because of the greatly increased cost," has always tempered what has been determined to be "just compensation." Thus, "inverse condemnation liability, absent fault," is limited "to `physical injuries of real property that were `proximately caused by the improvement as deliberately constructed and planned." The Citys complaint does not purport to allege any real, physical injury to particular property, but instead represents an assessment that the detriments engendered by the public work effectively outweighed the benefits; i.e., the project was not truly in the "public interest." This is a political statement, which the courts are incapable of addressing. The Citys proposed amendments do not alter the nature of its so-called "inverse condemnation" claim.
S. F., A. & S. R. R. Co. v. Caldwell (1866) 31 Cal. 367, 374 ["Just compensation requires a full indemnity and nothing more"]; see also Cal. P.R.R. Co. v. Armstrong (1873) 46 Cal. 85, 90 ["Neither the Constitution nor the statute contemplates that a person, whose land is taken in the exercise of the right of eminent domain, shall be entitled to anything beyond a `just compensation. He is to be paid the damage he actually suffers, and nothing more"].
Los Angeles Metropolitan Transportation Authority v. Continental Development Corp., supra, 16 Cal.4th 694, 715.
Los Angeles Metropolitan Transportation Authority v. Continental Development Corp., supra, 16 Cal.4th 694, 716.
Bacich v. Board of Control, supra, 23 Cal.2d 343, 350.
Holtz v. Superior Court (1970) 3 Cal.3d 296, 304.
In order to sustain an inverse condemnation claim, the City, as a neighboring landowner, must be prepared to show "that the consequences of the project are `not far removed from a direct physical intrusion or amount to a nuisance." The City cannot make this showing here. All properties within the City may be located near a busy freeway, but this is not akin to a "direct physical intrusion" on such properties.
Los Angeles Metropolitan Transportation Authority v. Continental Development Corp., supra, 16 Cal.4th 694, 713.
Neither can the City show that the existence of the freeway in its present condition amounts to a nuisance: the Citys complaint alleges that all the effects of which it complains are the result of the toll lane franchise program — otherwise the state would not be liable for them. But the toll lane franchise program, including all its necessary effects, was specifically authorized by statute. Under Civil Code section 3482, therefore, these effects cannot constitute a nuisance.
Because the City is unable, as a matter of law, to allege any cause of action either for nuisance or for inverse condemnation, the trial court properly sustained the demurrer without leave to amend.
DISPOSITION
The judgment is affirmed.
We concur: McKinster, Acting P.J. and Richli, J.