The concept of sovereign immunity is based on the idea that certain essential, fundamental activities of government must remain immune from tort liability so that our government can govern. In other words, if municipalities were liable for every policy decision made and every ordinance passed, officials would spend so much time and money defending and settling lawsuits that they would have time for little else. However, this immunity is not limitless. Since 1974, New Hampshire municipalities have been immune from liability only for acts and omissions that are (a) the exercise of a legislative or judicial function, and (b) the exercise of an executive or planning function involving the making of a basic policy decision characterized by the exercise of a high degree of official judgment or discretion. See Merrill v. City of Manchester, 114 N.H. 722 (1974). This opinion confirms and clarifies the limits of municipal immunity.
The plaintiff owns an apartment building in Concord. A brook flows under and through the property by a channel and exits through a culvert. The City operates a water treatment facility on a nearby lake, including a dam, a reservoir and an emergency overflow spillway which flows into the brook. The City followed a reservoir management plan to maintain a proper level of water in the lake. In late 2005, water levels rose due to unusually heavy rainfalls. The City consulted an expert for advice on its options to address a potentially large runoff event. The City considered this advice, developed a plan and acted accordingly. In May 2006, record rainfall caused the lake to overflow into the emergency spillway and into the brook, resulting in severe water damage to the plaintiff’s property. The plaintiff sued the City for three counts of negligence, as well as trespass and nuisance.
The plaintiff claimed the City negligently designed the dam and managed the water level in the reservoir. Since 1974, several opinions have addressed the scope of municipal immunity, finding that decisions which represent the exercise of a “discretionary function” are protected by municipal immunity. While the Court has refused to adopt a bright line rule to determine whether conduct constitutes discretionary planning (for which immunity exists) or merely the ministerial implementation of a plan (for which there is no immunity), it found that the discretionary nature of these particular decisions was clear. The City had to weigh competing economic and social factors, including the potential cost of pumping in additional water if rainfall fell below average and the cost to protect downstream property owners from overflow. Policy decisions of this nature, which involve the consideration of competing economic, social and political factors, are precisely the type of municipal planning that discretionary function immunity seeks to protect.
However, the Court also confirmed several limitations on municipal immunity. Once a municipality has exercised discretion and developed a plan or policy to handle an issue, there is no immunity from liability for a negligent failure to implement the plan or policy. The Court in this case also held that there may be no immunity if the municipality fails to establish the plan or policy in the first place. The third negligence count involved the City’s failure to clean out debris in the brook and the culverts, obstructing the water flow and causing damage to the plaintiff’s property. Unlike the City’s actions regarding the lake and the dam, the Court found that the City did not have a plan or policy concerning the maintenance of the drainage systems, and therefore no immunity existed.
In addition, immunity does not protect a municipality from liability for the creation of a nuisance or actual trespass. These claims involve the invasion of private property. The New Hampshire Constitution protects property owners by prohibiting the government from unreasonably depriving them of a vested right to use their property. See N.H. Const. pt. I, arts. 2, 12. When the government does unreasonably deprive an owner of a vested right, we say that a “taking” has occurred, and the Constitution requires the government to compensate the property owner reasonably for that loss. In this case, the plaintiff alleged that the City created a private nuisance and intentionally trespassed upon the property in a way that amounted to a physical taking of the property. The Court noted that nuisance involving an invasion of private property resembles an unconstitutional taking, and that creating a state of affairs dangerous to life and limb goes significantly beyond mere negligence. As a result, municipal immunity could not protect the City from these claims.
Interestingly, the Court also emphasized that the legislature has the authority to define the limits of municipal immunity, as the legislatures of many other states have done. The Court went on to say that “our legislature is free to adopt a more comprehensive scheme delineating the boundaries of municipal liability.”