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Pennsylvania Commonwealth Court Affirms that De Facto Takings Must be Shown to Have Been Result of Deliberate and Purposeful Action

This Post was authored by Lisa Maeyer, a MGKF summer associate. 

On June 8, 2020, the Commonwealth Court of Pennsylvania affirmed a trial court’s holding that flooding from sewage overflows not resulting from intentional activity on the part of a sanitary authority did not constitute a de facto taking of a landowner’s affected property. In the Matter of: Condemnation by the Franklin Twp. Sewage Auth., No. 1237 C.D. 2019, 2020 WL 3039070 (Pa. Cmwlth. June 8, 2020). In particular, the Court held that because the sewage overflows resulted from the age of the system and infiltration and inflows not caused by any actions of the Franklin Township Municipal Sanitary Authority (the “Authority”), the lower court properly sustained preliminary objections to Plaintiff William Ott’s petition seeking compensation for a de facto taking of his property.

At issue in the case was a commercial rental property owned by Ott that was connected to the Authority’s sewage system. The system had been built in 1968 using terra cotta/clay pipes which can and did, over time, crack and break, and their joints separated and dislodged resulting in stormwater infiltration. In addition, other property owners had, without the consent of the Authority, tapped into the system by means of French drains and similar stormwater collection and diversion measures. This resulted in the system being overwhelmed during heavy rains. While the Authority had a process in place to inspect and address, as best as it could, those excess water sources, replacement of the entire system was impossible due to a lack of the $245 million in funding needed to do so.

Ott first experienced sewage problems in 2003, then again in 2007 and 2012, and in each instance Ott had to significantly remediate sewage and sludge flows into the property and rebuild the basement. The Authority installed a check valve after the 2007 flooding, which was intended to resolve the problem, and then a heavier duty valve after the 2012 flooding. After the installation of the heavier valve, sewage overflows continued but were limited to a retention pond on the property and occurred approximately four times per year.   In 2017, Ott brought an action in the form of a Petition against the Authority under the Eminent Domain Code alleging that the flooding on the property from overflowing sewage lines resulted in a de facto taking by the Authority. In response, the Authority filed Preliminary Objections and, after finding that Ott’s action was timely, the trial court held an evidentiary hearing on the merits.

The standard in Pennsylvania for a landowner asserting that a de facto taking has occurred requires proof of the following elements: 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. The trial court held that because the Authority did not design or sanction the new inflows or deliberately take any actions to increase the water flow in the sewage lines that resulted in the flooding, the last element had not been met and the Authority was not liable for a taking. On appeal, Ott argued that the overflows were deliberate and avoidable because the Authority could have halted the inflows and replaced the system with upgraded lines to avoid the infiltration, albeit at a high cost. Indeed, Ott argued that the court should not even have taken into consideration the cost of resolving the system’s problems.

Initially, the Commonwealth Court noted that the burden on the petitioner in such cases is high, and mere negligence does not give rise to a de facto taking, although it may be sufficient for an action in trespass. Relying on long-standing precedent, the Commonwealth Court held that here this burden had not been met and the trial court correctly determined that the Authority’s actions did not constitute a de facto taking. The Court reasoned that the Authority did not intend to allow storm water to enter its sewage system and instead had developed a program to address as much of the inflow and infiltration as reasonably possible and made good faith efforts to correct the storm water and sewage overload on Ott’s property. The Court also held that the cost of replacing the system was a relevant factor in determining the deliberateness of the Authority’s decision-making, especially when compared to the Authority’s ability to pay for such replacement.

Both the trial court and the Commonwealth Court relied on In re Condemnation by the Youngwood Borough Authority, No. 203 C.D. 2014, 2014 WL 10298904 (Pa. Cmwlth. Dec. 5, 2014), and distinguished In re Mountaintop Area Joint Sanitary Auth., 166 A.3d 553 (Pa. Cmwlth. 2017) in their reasoning. In Youngwood, the Commonwealth Court rejected a condemnation claim where continuous property flooding was caused by inflow and infiltration and the local authority had attempted to fix the problem. Conversely, in Mountaintop, the court concluded that a de facto taking had occurred because the authority had made specific decisions that caused the flooding, including designing its system so that multiple sewage lines entered onto the property, and the authority was aware of the adverse consequences.

As mentioned above, the opinion in this case notes that Ott might retain a cause of action against the Authority for trespass under common law. While there is no discussion in the opinion as to why Ott chose to seek damages for a taking, it is notable that an action in trespass has a two year statute of limitations while one under the Eminent Domain Code has a six year statute. Moreover, it is questionable as to whether a trespass claim in these circumstances would fall within the exceptions to sovereign immunity set forth in Pennsylvania’s Sovereign Immunity Act. However, this case stands for the proposition that the road to proving a de facto taking is not an easy one and emphasizes the significance of an entity’s intention being the point of scrutiny, not merely how indirect consequences result in injury to property. Although the flooding caused damage to the property, this case is not one of de facto taking because the Authority did not purposely alter its system so as to create the opportunity for flooding.