Here's a very important case from the Pennsylvania Supreme Court (Middle District). The question before the court in Reading Area Water Auth. v. Schuylkill River Greenway Ass'n , No. J-13-2014 (Sep. 24, 2014) was this:
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.
Slip op. at 1.
Short answer: no.
The Schuylkill River Greenway Association, true to its name, intends to build a public walking and recreational trail on land it owns along the bank of the river in conjunction with Bern Township. Unfortunately (for the Association), the property next to their is slated for development into an "adult residential subdivision," and it needed access to the river's water. We say "unfortunately," because access meant a water main and a sewage line "would have to run through the Greenway's property."
The Water Authority tried to buy an easement, but when negotiations didn't come to fruition, it condemned the land needed, and estimated just compensation for the value of the easement at $3,500: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.
Slip op. at 2-3. Say, that sounds ... familiar.
The owner objected, asserting that the attempted taking was illegal under the Pennsylvania Property Rights Protection Act, because it was for solely for the benefit of private enterprise. It also asserted the amount of land was in excess of what was needed, and thus the Authority lacked the authority to take the extra. After hearing testimony, the trial court agreed, and sustained the owner's objections, holding that "the condemnation was effectuated solely to benefit a private commercial developer who had been unable to acquire an easement through private measures." Slip op. at 5. The court held the stated public use was a pretext to private benefit. Id. at 5-6 ("Under the guise of expanding their customer base and providing water to the public, [the Authority] is attempting to achieve its true goal and take land from one private owner and give it to another."). The court concluded that the facilities to be built would be owned by the developer, "and that the primary beneficiary of the condemnation would be Developer, and not the general public." Id. at 6. Plus, the facilities would interfere with the greenway, a trail proposed for public use.
On appeal, the Commonwealth Court reversed. It concluded that "although the availability of the utilities would make Developer's homes more valuable, this alone would not negate the project's public purpose of providing water, sewer, and stormwater services." Id.
The Supreme Court reversed, distinguising Kelo on the basis that the benefit was conferred on an identifyable private party, and there was no evidence of some larger plan which the taking fit into. See slip op. at 15-16. Moreover, the taking here fit into the "classic" or "traditional" public use (utilities), and not the redevelopment scheme at issue in Kelo. "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 perspective." Id. at. 16. "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." Id. at 17.
But the court avoided basing its decision on the constitution. It held that although an exercise of eminent domain may result in some private benefit, the PPRA, and not the constitutional public use limitation, was the controlling law, and the decisive factor. The Act prohibits takings "solely for private enterprise," and the court focused on the word "solely" --in spite of the drainage easement’s colorable public-use facet as outlined above, [the Authority] condemned it, in effect, to allow Developer to occupy and use it for private enterprise – namely, to develop a residential subdivision.Slip op. at 18. Case remanded.
A couple of thoughts. First, what if the Authority, now that the taking has been invalidated, tries again, but this time drafts the resolution so that it includes all of the supposed public uses that were not present in the first draft? Will that save it from another challenge on the same grounds? We wouldn't think so, because the trial court didn't just base its decision on the text of the resolution, and concluded that the stated use was pretextual. We'd think that the Authority would have to prove new conditions at a minimum. Second, this decision is a good one even for those of us in jurisdictions without a statute similar PPRA, as it shows how a trial court should treat cases where a taking is challenged as pretextual, even where the challenge is constitutionally-based. For another example, see County of Hawaii v. C&J Coupe Family Ltd. Partnership,198 P.3d 615 (Haw. 2008) (Kelo allows inquiry into actual reasons for taking).