READING AREA WATER AUTHORITY v. Thе SCHUYLKILL RIVER GREENWAY ASSOCIATION
Supreme Court of Pennsylvania.
Sept. 24, 2014.
100 A.3d 572
Bern Township, Intervenor. Appeal of the Schuylkill River Greenway Association and Bern Township. Argued March 12, 2014.
Josele Cleary, Lancaster, Esq., Morgan, Hallgren, Croswell & Kane, P.C., for Bern Township.
Nicole L. Plank, Esq., Wyomissing, Matthew Michael Setley, Esq., Michael A. Setley, Esq., Wyomissing, Georgeadis Setley, for Reading Area Water Authority.
OPINION
Justice SAYLOR.
The primary question raised is whether a municipal authority may exercise its eminent domain powers to condemn an easement over privately-owned land, where the sole purpose of the easement is to supply a private developer with land to install sewer drainage facilities needed for a proposed private residential subdivision.
The Schuylkill River Greenway Association (the Greenway), a non-profit corporation, owns a strip of land along the west bank of the Schuylkill River in Bern Township, several miles north of the City of Reading. The Greenway and the Township intend to build a public walking/recreational trail on this property as a segment of the larger Schuylkill River Trail. Situated immediately to the west of the Greenway Property is a 58-acre tract owned by Fortune Development, L.P. (Developer), a private developer. Developer seeks to construct a 219-unit adult residential subdivision, known as Water‘s Edge Village, on this tract.
Water‘s Edge Village would require access to a clean water supply as well as sanitary sewer and stormwater sewer facilities. As for clean water, a water main passing through Ontelaunee (a municipality on the east side of the Schuylkill River) can potentially connect, underneath the Schuylkill River, with a proposed water main on the west side of the river, and then continue west to Water‘s Edge Village. For this to occur, however, the west-side main would have to run through the Greenway‘s property. A similar situation exists with regard to sanitary sewer and stormwater sewer outfall, albeit the water would flow in the opposite direction. In particular, treated sewage would combine with stormwater runoff and flow eastward through the Grеenway‘s property, ultimately discharging into the Schuylkill River. The conduits for the clean water and the sewer outfall could be laid side-by-side
The Reading Area Water Authority (RAWA), a municipal authority created by the City of Reading, supported Developer‘s planned development and, to that end, tried to purchase an easement across the Greenway Property so that it could supply water to the proposed development. After negotiations with the Greenway failed to produce an agreement, RAWA adopted a resolution in February 2009, authorizing the use of its eminent-domain powers to condemn a utility easement across the Greenway Property connecting Developer‘s land with the Schuylkill River. The resolution reflected that the easement was to be condemned at Developer‘s request and that it would be used for water, sewer, and stormwater purposes specifically to enable Developer to build Water‘s Edge Village. The resolution also stated that Developer would be responsible for initiating eminent domain proceedings in conjunction with RAWA‘s solicitor, and would be required to pay all costs associated with such proceedings, including just compensation to the Greenway. The City of Reading then passed a resolution approving the RAWA resolution.1
In light of the City‘s approval, in May 2010 RAWA filеd a Declaration of Taking Complaint in the Berks County common pleas court, naming the Greenway as the sole defendant and attaching an appraisal, a bond, and a description of the property to be taken. The Complaint requested a decree condemning a 50-foot-wide easement across the Greenway Property, “to construct, maintain, [and] operate utility lines and appurtenance of a water main to be placed under the
The Greenway filed preliminary objections, alleging that: the taking was invalid under Pennsylvania‘s Property Rights Protection Act (PRPA),4 because it was being accomplished solely for the benefit of private enterprise, see
In August 2010, the common pleas court, per President Judge Schmehl, held an evidentiary hearing at which the only witness was the Township‘s manager. According to his testimony, although all of the conduits—whether for water, sanitary sewer, or stormwater—would lie underground, the overall easement subsumed the surface ground as well. He observed that the development plans, and in particular the drainage portion of the easement, could interfere with the proposed trail in several ways. He testified, for example, that swales and other facilities might be created at the surface for stormwater management, and pipes would have to be excavated from time to time for repairs or replacement. Also, vegetation would need to be removed to install the headwall, grading, and riprap for the sewer discharge pipe, and especially in the summer months odors from the sewage treatment plant and sewer discharge operations would likely persist along parts of the recreational trail. Furthermore, safety fencing around the headwall could interfere with the path of the trail. See N.T., Aug. 31, 2010, at 8, 15, 19-26.6
The Commonwealth Court reversed in a published decision, focusing on RAWA‘s stated purpose—the installation of a water main and utility lines—for which it may exercise eminent domain. See
We allowed appeal to consider whether RAWA‘s actions were legally permissible, particularly in light of recent legislative restrictions on the use of eminent domain to benefit private enterprise. Our review “in an eminent domain case is limited to a determination of whether the trial court abused its discretion or committed an error of law, and whether the findings of fact are supported by substantial evidence.” Denes v. Pa. Tpk. Comm‘n, 547 Pa. 152, 156, 689 A.2d 219, 222 (1997). Thus, we consider factual findings deferentially and resolve legal issues de novo. See Pocono Manor Investors v. Gaming Control Bd., 592 Pa. 625, 637, 927 A.2d 209, 216 (2007).
Appellants (the Greenway and the Township) argue generally that the power of eminent domain may only be exercised for a public purpose. They do not challenge the water easement, opting to focus their advocacy on the drainage easement. Appellants observe that this portion of the condemned land exceeds that which is necessary for RAWA‘s proposed water-supply line. In this respect, they note that RAWA only operates a water-supply system, whereas it condemned an easement large enough to include extensive wastewater outflow facilities—including a pipe, a headwall, grading, and riprap—connected to a private sewage treatment plant and stormwater retention basin on Developer‘s land. They contеnd, more particularly, that RAWA may not condemn more land than it needs for water supply solely to enable a private developer to discharge its private sewage and stormwater runoff through a privately built and maintained facility over the land of another. Thus Appellants adopt the position that the drainage easement is being taken for the private use of
Appellants acknowledge that a “taking does not lose its public character merely because there may exist in the operation some feature of private gain.” Appeal of Washington Park, Inc., 425 Pa. 349, 353, 229 A.2d 1, 3 (1967). They proffer, however, that, for the taking to be valid, the public must be the primary and paramount beneficiary, and the public entity involved must assume ownership and maintenance of the condemned lands and any improvements installed thereon. See Ormsby Land Co. v. City of Pittsburgh, 276 Pa. 68, 70, 119 A. 730, 730 (Pa.1923) (holding that land dedicated for a public street may not be leased to a private entity for private use). Appellants assert that RAWA will not assume ownership and maintenance of the drainage easement or its improvements because any such dedication of these facilities to RAWA would exceed RAWA‘s articles of incorporation and the City‘s authorizing resolution. Appellants argue, therefore, that that Developer will own and operate the sewer facilities, and state that this conclusion is supported by: (a) the limited nature of the City‘s resolution, in which the City authorized RAWA to condemn an easement large enough merely to “accommodate” sewage and stormwater facilities owned by others (in addition to RAWA-owned water lines), City Resolution at 1, reprinted in R.R. 35a, but not to construct, operate, or maintain such facilities; (b) RAWA‘s own resolution, which expresses an intention “to provide a utility easement to [Developer],” RAWA Resolution at 1, reprinted in R.R. 15a; (c) RAWA‘s failure to present any evidence to the contrary before the common pleas court; and (d) the fact that under Pennsylvania‘s Storm Water Management Act,
For its part, RAWA also references the principle, recited in Washington Park and elsewhere, that an incidental benefit to a private party does not in itself undermine the public character of a taking. RAWA observes that, in Washington Park, the government condemned land for a highway exit ramp which would benefit a shopping center and that such private benefit was not deemed tо have undermined the validity of the taking. RAWA additionally references Appeal of Heim, 151 Pa.Cmwlth. 438, 617 A.2d 74 (1992), in which the intermediate court held that, even where a developer pays for the condemnation, including associated legal fees, the ancillary benefit realized by the developer does not vitiate the public nature of the condemnation so long as the condemnation is accomplished for a public purpose (in Heim, the construction of a road to a subdivision). To the contrary, RAWA emphasizes, this arrangement was expressly approved in Heim because it saved taxpayer money by shifting costs onto the developer. See id. at 447, 617 A.2d at 79. RAWA states that, as in Washington Park and Heim, the benefit conferred upon Developer in this case is ancillary and cannot taint the inherently рublic nature of the proposed project and corresponding condemnation—and that, as in Heim, any payment by Developer of the costs of the taking, including legal fees as well as compensation to the landowner, does not alter this conclusion since, again, it simply saves taxpayer funds.
More generally, RAWA proffers that there is a public interest in ensuring that homes have running water and access to a sewer line, and that the taking advances this interest regardless of whether Developer will benefit from the availability of such services through its ability to build and sell fully-functioning homes. So long as there is no evidence of corruption, fraud, or malfeasance by the condemnor, RAWA argues, a condemnation for a public purpose should be upheld. Further, anticipating the counter-point that there is no present need for water and sewer services because the homes do
Eminent domain is a power vested in the Commonwealth to take private property for public use upon payment of just compensation. See Phila. Clay Co. v. York Clay Co., 241 Pa. 305, 310, 88 A. 487, 488 (1913). See generally Lance‘s Appeal, 55 Pa. (5 Smith) 16, 25, 1867 WL 7489, *7 (1867) (“[A] public interest must lie at the basis of the exercise, or it would be confiscation and usurpation to exercise it.“). Lаnd may be taken only to the extent reasonably required by the public purpose for which the power is exercised, else it will be overturned as excessive. See Belovsky v. Redev. Auth. of City of Phila., 357 Pa. 329, 341, 54 A.2d 277, 283 (1947); Middletown Twp. v. Lands of Stone, 595 Pa. 607, 618, 939 A.2d 331, 338 (2007); Winger v. Aires, 371 Pa. 242, 247-48, 89 A.2d 521, 523-24 (1952) (invalidating a taking of land for a public school where the number of acres condemned substantially exceeded what was needed). Although the power is an inherent attribute of sovereignty, see Phila. Clay, 241 Pa. at 309, 88 A. at 487, it is regulated by constitutional and statutory law, see Keys v. Uniontown Radial St. Ry. Co., 236 Pa. 611, 615, 84 A. 1109, 1110 (1912); Jacobs v. Clearview Water Supply Co., 220 Pa. 388, 393, 69 A. 870, 871 (1908); Appeal of Interstate Cemetery Co., 422 Pa. 594, 596, 222 A.2d 906, 908 (1966),9 and
RAWA is authorized, as a municipal authority, to exercise the power of eminent domain, see
Our resolution of this appeal will ultimately be based on PRPA. See Wertz v. Chapman Twp., 559 Pa. 630, 633, 741 A.2d 1272, 1274 (1999) (observing it is preferable to resolve disputes on a non-constitutional basis if reasonably possible). However, a review of salient constitutional principles as they apply here is helpful to provide context, particularly in terms of whether the taking is for a public use. The public-use issue is especially relevant because it dovetails to some extent with whether the taking is being accomplished for private enterprise as prohibited by PRPA—although, as will be seen, the correspondence is not exact.
Under the Constitution, land may only be taken without the owner‘s consent if it is taken for a public use. The question of what constitutes a public use is highly fact-dependent. See Dornan v. Phila. Hous. Auth., 331 Pa. 209, 221, 200 A. 834, 840 (1938); Phila. Clay Co., 241 Pa. at 311, 88 A. at 488. Although RAWA relies heavily on Washington Park, we do not find that decision to be particularly helpful to its position. In Washington Park, a private shopping center known as Southgate stood to benefit from the proposed highway exit ramp, and thus, was willing to pay the сosts of condemnation. Still, there was no suggestion that the ramp was intended to be owned, co-owned, occupied, or maintained by Southgate, or that its sole purpose was to provide access to Southgate. See Washington Park, 425 Pa. at 354 n. 6, 229 A.2d at 4 n. 6 (reciting other public benefits of the exit ramp,
Nevertheless, the present case has added complexion because the drainage easement is to be located side-by-side with the water easement, giving the appearance that the two work in tandem. There is also a natural tendency to regard the two functions as intertwined, at least insofar as the sanitary sewer outfall is concerned, since most of the water that enters a residence ultimately leaves the home through its sewer connection. This lends a certain appeal to the concept that the drainage easement is for a public use—particularly as municipal sewer and drainage systems generally constitute a public use. Furthermore, the drainage easement would, according to Developer‘s plans, ultimately serve 219 homes in an adult-community residential development. This factor also tends to support the view that the drainage easement is intended for at least a limited public use vis-à-vis the prospective purchasers of the residences, regardless of the identity of the party that constructs, owns, and operates the sewer discharge facilities.
The main difficulty, however, is that there is also a significant private overlay to the tаking of the drainage easement: it is, as noted, to be acquired at Developer‘s behest for the sole use of Developer, and at Developer‘s sole cost. As well, there is no suggestion that the drainage easement is meant to be used for any purpose broader than servicing the subdivision to be built by Developer. Overall, then, the case involves a mix
At issue in Kelo was the taking of private property for economic development and use, inter alia, by private commercial interests. The controversy dealt with a city‘s wide-ranging development prоject intended “to revitalize the local economy by creating temporary and permanent jobs, generating a significant increase in tax revenue, encouraging spin-off economic activities and maximizing public access to the waterfront[.]” Id. at 478 n. 6, 125 S.Ct. at 2661 n. 6 (internal quotation marks and citation omitted). Kelo was a 5-4 decision in which the majority found that economic development can qualify as a public use for Fifth Amendment purposes even where private enterprise is the engine of such development, and accorded deference to the city‘s governing body‘s determination that, although the properties to be taken were not blighted, they were sufficiently distressed that economic rejuvenation of the overall area was in the public interest. See Kelo, 545 U.S. at 483, 125 S.Ct. at 2664-65.
In dissent, Justice O‘Connor criticized this level of deference and admonished that, “were the political branches the sole arbiters of the public-private distinction, the Public Use Clause would amount to little more than hortatory fluff.” Id. at 497, 125 S.Ct. at 2673 (O‘Connor J., dissenting). She also expressed that the decision would have a disproportionate impact on the poor, as its beneficiaries would be citizens with substantial influence in the political process, including large corporations and development firms. See id. at 505, 125 S.Ct. at 2677.11
On the other hand, the scope of the challenged taking is comparatively narrow and, as noted, involves sewer services, which is a more traditional category of public use than the multifaceted, large-scale economic development project at issue in Kelo. See Matter of Twp. of Upper St. Clair, 138 Pa.Cmwlth. 321, 323-24, 587 A.2d 907, 908–09 (1991) (observing that sewer service is generally a public use); Town of Steilacoom v. Thompson, 69 Wash.2d 705, 419 P.2d 989, 992 (1966) (same). See generally Washington Park, 425 Pa. at 353, 229 A.2d at 3 (noting that a taking does not lose its public character merely because of an incidental private benefit, so long as the public good is enhanced). It can reasonably be argued, then, that whether the taking presently in issue is “primarily” for a public use or a private benefit is a matter of
Ultimately, however, we need not decide the constitutional issue because, even if we assume the condemnation can pass Fifth-Amendment scrutiny,12 to be valid it must also be statutorily permissible. In this regard, it may be observed that, in the wake of Kelo, the General Assembly enacted PRPA, which contains a salient, affirmative prohibition on the taking of private property “in order to use it for private enterprise.”
It is possible that a condemnation which satisfies the Constitution‘s Public Use Clause may also be accomplished so that the property can be used for private enterprise. Kelo provides a ready example, as in that case the Supreme Court determined that the taking was for a public use although much
Notably, PRPA was passed as a direct reaction to Kelo to curb what legislators perceived as eminent domain abuse, and with the goal of striking a reasonable balance between (a) the neеd to defend private property rights from takings accomplished for economic development purposes, and (b) the legitimate needs of urban centers to rehabilitate blighted areas imposing substantial, concrete harm upon the public. See, e.g., House Legislative Journal, Nov. 1, 2005, at 2169-72; Senate Legislative Journal, April 25, 2006, at 1552. Whether or not the Constitution viewed as merely “ancillary” the benefits to private enterprise ensuing from a plan to use eminent domain to assist in economic development, in the wake of Kelo the Legislature began to view such benefits as central and wanted to curtail the ability of condemnors to take others’ property for such purposes. Against this backdrop, the legislative body elected to phrase the central prohibition broadly in terms of whether the subject property is being condemned “to use it for private enterprise,”
This observation has particular relevance to the present matter because, in spite of the drainage easement‘s colorable public-use facet as outlined above, RAWA condemned it, in effect, to allow Developer to occupy and use it for private
While this determination may seem to interfere with the ability of municipal water and/or sewer authorities to expand their operations under circumstances where, as here, there is an overarching nexus between the taking and private development, it is not this Court‘s function to ameliorate such difficulties by departing from the statutory text. In fact, it appears that the Legislature was well aware of such a possible outcome because it expressly carved out from Section 204(a)‘s ambit an exception for takings by regulated public utilities as defined in the Public Utility Code, see
Accordingly, the order of the Commonwealth Court is reversed, and the matter is remanded to the common pleas court for reinstatement of its order sustaining the preliminary objections and dismissing the Complaint. Although the water easement has not been challenged, the size of the condemned property—the overall utility easement—is in excess of that which is needed for water supply. Hence, RAWA is not entitled to the relief sought in its Complaint. See Winger, 371 Pa. at 248, 89 A.2d at 524 (enjoining a condemnation accomplished for a public use where the size of the condemned property exceeded what was reasonably necessary for such use).
Chief Justice CASTILLE and Justices EAKIN, BAER, TODD, McCAFFERY and STEVENS join the opinion.