Professional Liability

Key Points:

• To constitute a taking, purposeful and deliberate action is required.
• A corrective action plan with the aim of reducing inflow and infiltration in a sanitary sewer system is evidence against the finding of a taking with respect to overflows.
• The failure to replace piping in an aging sanitary sewer system due to the lack of sufficient public funding does not constitute deliberate and purposeful action.

In Matter of Franklin Township Sewage Authority, 233 A.3d 1014 (Pa. Cmwlth. 2020), the Commonwealth Court clarified the standard to distinguish whether a landowner damaged by repeated sanitary sewer overflows may claim that his property has been “taken” in the context of an inverse condemnation under the Pennsylvania Eminent Domain Code or whether the landowner is limited to a common law tort claim. Often this issue presents a dilemma to attorneys on both sides of the “v” in determining the legal theory applicable to the prosecution or defense of a case. Given the aging sanitary sewer infrastructure in most urban and suburban areas of Pennsylvania, coupled with the lack of sufficient public funding, this problem frequently presents itself in civil actions when damages are alleged that, if proved, might amount to the full-value level of a “taking,” although a common law tort theory such as negligence has been pleaded.

In Franklin Township, the landowner commenced an inverse condemnation action by filing a petition for the appointment of a board of viewers against the Franklin Township Municipal Sanitary Authority (Authority), contending that a de facto taking of his property had resulted from repeated sanitary sewer overflows that occurred in November 2003, August 2007, and October 2012. The Authority filed preliminary objections, asserting that the petition was barred because the landowner’s proper redress was by way of a tort action. After an evidentiary hearing in the trial court, the preliminary objections were sustained, and an appeal to the Commonwealth Court followed.

It was agreed that the sanitary sewer overflows onto the landowner’s property were caused by significant rainfalls that resulted in inflow and infiltration into the aging sanitary sewer system, which primarily consisted of terra cotta piping. Because the Authority attempted to reduce inflow and infiltration through a corrective action plan that involved inspections and repairs that did not intend to allow inflow and infiltration into its system, it was determined that the Authority had made a good faith attempt to fix the problem. The evidence also demonstrated that the problem could not have been eliminated unless the Authority had spent approximately $245 million to replace over 245 miles of piping. However, as with most local agencies owning aging infrastructure, the Authority did not have sufficient funding to upgrade its system.

The court noted the following standard to prove a de facto taking:

(1) [the] condemnor has the power to condemn the land under eminent domain procedures; (2) exceptional circumstances have substantially deprived the [landowner] of the use and enjoyment of the property; and (3) the damages sustained were the immediate, necessary, and unavoidable consequences of the exercise of the power of eminent domain.

Franklin Township, 233 A.3d at 1021 (citation omitted). The court also stated that a “de facto taking must result from the governmental body’s actual exercise of the power of eminent domain.” Critical to whether a taking occurs, the court also stated, “[t]he injury complained of [must] [be] a direct result of intentional action by an entity incidental to its exercise of its eminent domain power.”

In affirming the trial court, the court in Franklin Township indicated that the facts were more akin to those considered in the Commonwealth Court’s unreported opinion of In re Condemnation by the Youngwood Borough Authority, 2014 WL 10298904 (Pa. Cmwlth. Dec. 5, 2014) rather than those found in the case of In re Mountaintop Area Joint Sanitary Authority, 166 A.3d 553 (Pa. Cmwlth. 2017). The latter case, cited by the landowner, was found to involve a taking, primarily because the authority chose to operate its system in a manner that would result in sanitary sewer overflows due to the design of its system. Therefore, the overflows resulted from a purposeful and deliberate drainage plan.

However, the court in Franklin Township essentially adopted the holding in the unreported Youngwood Borough Authority opinion, in essence making it precedential based on similar facts. The original sewer system of the Authority operated as intended when it was first constructed in 1968-69, utilizing terra cotta pipes. Since 2003, the landowner’s property had flooded as a result of inflow from illegally connected downspouts and infiltration due to cracks, breaks and separations that are natural to aging terra cotta pipes. The Authority had not intended to have inflow and infiltration in its system and had a corrective action plan that included a lateral inspection program to identify and repair problems. Furthermore, the Authority had even installed a check valve on the landowner’s property that stopped basement flooding, although sewage still flowed into a retention pond on the property a few times a year. Therefore, the court held that a de facto taking had not occurred because the landowner’s injury had not resulted from a purposeful or deliberate action by the Authority with respect to the manner in which it chose to operate its system.

Of particular significance with respect to Pennsylvania’s aging sanitary sewer infrastructure was the court’s consideration of the evidence related to the cost to remediate the Authority’s terra cotta pipe sewage system. The trial court addressed this issue through the landowner’s argument that the Authority’s failure to replace the terra cotta piping was a deliberate and purposeful action amounting to a de facto taking. The court disagreed with the landowner, holding that, because of the lack of adequate funding, the choice to replace the entire system was not even on the table to consider. The choice would only have been available if the funding existed, and, only then, could the court have potentially found that the failure to replace the system was deliberate and purposeful so as to constitute a de facto taking.

 *Christian is a shareholder and works in our Pittsburgh, Pennsylvania office. He can be reached at 412.803.1142 or cdmarquis@mdwcg.com.

_{Defense Digest, Vol. 27, No. 2, March 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}