Professor Shelley Saxer, “Paying for Disasters” — Kansas Law Review (forthcoming)

October 2, 2019 | Professor Shelley Ross Saxer‘s article, “Paying for Disasters” (SSRN), will be published in the Kansas Law Review (forthcoming 2019). The article examines the equitable distribution of the benefits and burdens of public needs following natural disasters.

Abstract of “Paying for Disasters”

In June and July, 2019, record flooding inundated towns and agricultural land throughout the Mississippi basin, surpassing the Great Flood of 1927, one of the worst disasters in U.S. history. In November, 2019, the Camp Fire in Northern California decimated the town of Paradise and became the deadliest and most destructive wildfire in California history. As climate change increases the severity of droughts, wildfires, flooding, hurricanes and other extreme weather, property damages will escalate and individuals, companies, and governments will seek cost reimbursement from others. Ultimately, we must all pay the economic costs of climate change that we cannot avoid through prevention, disaster response, and retreat. All of us contribute to climate change but the costs of climate-related harms are not fairly distributed across our communities. This Article examines the ways we are currently paying for disasters. Those seeking recovery for property damage from disasters have increasingly turned to state inverse condemnation and damagings claims. These claims offer an alternative to tort liability and align government incentives to act for the public benefit while taking into account those individuals and entities who suffer greater burdens. The author proposes that inverse condemnation and damagings claims in all states and the federal government should apply a strict liability standard, which would compensate those people damaged by activities designed to benefit the public as a whole. Approaching takings claims as a mechanism for risk spreading would also allow takings claims for government inaction when there is a duty to act for the public benefit. Tort doctrines such as negligence, nuisance, reasonableness, and intent should not be applicable to the takings analysis, which focuses on equitably spreading the benefits and burdens of acts taken for a public benefit. Insurance is also a mechanism for spreading the risk, but insurers must price their policies to incentivize property owners in disaster-prone areas to explore development alternatives, take special precautions in building, and think hard about rebuilding after a disaster. In certain situations, the government may assist landowners to voluntarily relocate by using eminent domain to buy-out risky properties. Finally, public or private entities held strictly liable for disaster damages from flooding or wildfire should be able to pass these costs on to those who have received the benefit of their actions. That is, unless the entities have been negligent in fulfilling their duties to the public. Ratepayers and taxpayers will need to bear much of the cost for receiving public benefits and utility rates and taxes should reflect the increased risk of living in disaster-prone areas. Paying for disasters in the future will not be easy, but we must face these challenges together and ensure that we are distributing the benefits and burdens of our public needs as equitably as possible.