Court Rules on State’s Liability for Flooding Damages from Construction Activities

September 6, 2010 | Erin Herbold

Iowa has specific rules governing the drainage of surface water. But, is the state subject to those same rules? That question was addressed in this case. In the Spring of 1999, a rural community in north central Iowa experienced heavy rainfall (nearly 7 inches in two days) resulting in flooding which damaged several properties. Several years later, the Iowa Department of Transportation (IDOT) constructed a four-lane, divided-highway bypassing the town. The bypass crossed a stream and the bridge installed over the stream was designed to withstand a fifty-year flood. 

The landowners whose property was damaged by the flood sued IDOT, claiming that the bypass design prevented water from escaping under the highway as it did before the construction. The landowners also claimed that the design did not comply with engineering standards, the construction resulted in an “unnatural” amount of water flowing through the creek, and that the bypass acted as a dam which changed the natural course of water flow. The trial court dismissed the landowners’ claims, on the basis that the state has immunity from permanent damages for devaluation of property caused by design and construction. 

The landowners appealed and the Iowa Court of Appeals focused on whether the State had the discretion to make decisions regarding the bypass and, if so, whether the state had the ability to exercise the discretion. The court reasoned that the state could exercise their judgment or discretion in the design and construction of the bypass. During the design and construction phase, the DOT asked for and received public comment.  The court concluded that the state, in their discretion, engaged in considerable planning and consideration of several issues in the design and construction of the bypass, not just flooding. Therefore, the court concluded that this case was properly dismissed because the state was protected by “discretionary function immunity.”

On further review, the Iowa Supreme Court reversed.  The Court held that the state could not rely on the defense of immunity for discretionary functions based on the particular facts of the case.  The Court noted that Iowa law (and associated regulations) clearly prevent the creation of floodway encroachments that cause increased risk of loss to upstream properties in the event of a 100-year flood.  As such, the State’s employees could not simply ignore the prohibitions and could not choose to design and build encroaching, non-compliant structures in the floodway.  Because no choice was present, the employees who designed and built the bridge did not perform discretionary functions for which state law (Iowa Code §669.14(1)) would immunize them.  But, the Court did affirm the part of the lower court’s ruling that the State had successfully established an immunity defense under Iowa Code §669.14(8) against the “permanent devaluation” damage claims of the plaintiffs who did not sell their properties before the construction of the bypass bridge.  But, it will have to be determined at trial whether the original bridge design and construction violated prevailing engineering standards at the time of the original design and construction of the project.  Schneider, et al. v. State, 789 N.W.2d 138 (Iowa Sup. Ct. 2010), vacating, Schneider v. State of Iowa, 759 N.W.2d 2 (Iowa Ct. App. 2008).