Oral Arguments

Does ownership or use indicate whether a facility is for public benefit?

That was the line of questioning the state Supreme Court justices pursued at the oral argument session March 12 in the Reading Area Water Authority v. Schuylkill River Greenway Association case, which involves a municipal power authority that condemned private land under eminent domain for an easement to enable a private company to develop the land. The defendants in the case have argued that the condemnation violated Section 204(a) of the Private Property Protection Act, which prohibits taking private property for the use of private enterprise.

“The issue is whether a public entity can condemn land to allow a private entity to install private facilities within the condemned land that the private entity will own and operate,” said Josele Cleary of Morgan, Hallgren, Crosswell & Kane, who represented Bern Township, one of the defendant petitioners in the case.

“So if the condemning body kept it, it would be OK?” Justice J. Michael Eakin asked.

“If [the Reading Area Water Authority] owned the sewer system, which they don’t, then they could condemn it,” Cleary said.

According to court papers, in February 2009, the Reading Area Water Authority adopted a resolution allowing it to condemn a utility easement across land in Bern Township, Berks County, that was owned by the Schuylkill River Greenway Association. The land is adjacent to property owned by Fortune Development, which is the developer of a proposed 219-unit residential subdivision. The resolution said the easement would be used for water, sewer and stormwater purposes, and provided that Fortune Development would be responsible for all costs associated with the proceeding.

The Reading City Council authorized the water authority to acquire an easement large enough to accommodate “certain sanitary sewer facilities and certain stormwater facilities, in addition to water lines of the [water authority],” court papers said. The water authority condemned a permanent 50-by-133-foot easement across Greenway’s land “to construct, maintain [and] operate utility lines and appurtenance of a water main to be placed under the Schuylkill River for water, sewer and stormwater purposes,” court papers said.

Nicole L. Plank of Georgeadis Setley, who represented the Reading Area Water Authority before the high court, argued that because sewer services are for the public benefit, the use proved that the project was for public benefit.

However, Eakin wanted to know if the public needed the utilities, or if the utilities would be unnecessary absent the private project.

“If you don’t condemn it for stormwater, does it get developed?” he asked.

“No,” Plank replied.

“Then the rest is peripheral,” Eakin said. “So then why is the condemnation separate, or fulfilling some duties somehow unconnected to the private development?”

Plank contended that the high court had previously addressed this “chicken or the egg” argument and found that land could be condemned to facilitate future projects.

According to court papers, the trial court agreed with the Greenway Association’s objections to the condemnation, saying the authority was taking private property to serve a private enterprise, and that the size of the proposed easement was not related to the authority’s only public purpose, which is providing water. The trial court concluded that the primary beneficiary was Fortune Development, and the easement was excessive, as half of the land would be used for private sewage and stormwater facilities.

The Commonwealth Court, however, reversed the trial court, and determined that the authority’s stated purpose is within the scope of the project outlined in the declaration of taking and that condemning land for construction of stormwater and sewer lines is within the water authority’s power.

Chief Justice Ronald D. Castille asked Cleary where she thought the Commonwealth Court went wrong in its holding.

Cleary said the Commonwealth Court’s reasoning that because sewers and sanitation benefit the public, projects involving sewers are objectively for the public good was problematic. She said that reasoning would allow the water authority to condemn land to create a landfill, because landfills are often for the public good.

“That principle, taken to its logical conclusion, is going to be ridiculous,” Cleary said.

Plank, however, agreed with the intermediate court’s holding.

“[The Reading Area Water Authority] went through the proper channels and got the proper authority necessary,” Plank said. “It is well settled that public water is a public purpose.”

Max Mitchell can be contacted at 215-557-2354 or mmitchell@alm.com. Follow him on Twitter @MMitchellTLI. •