Many states provide governmental entities immunity from tort liability under certain circumstances. The Indiana Court of Appeals recently issued a decision instructive on when such immunity may exist in the context of negligence claims against municipal and sanitary sewer districts.
In Town of Highland v. Lieberman, 2011 WL 797485, homeowners filed a class action complaint against the Town of Highland and the Highland Sanitary District (collectively, “Highland”) alleging they negligently operated and maintained the sewer system resulting in sewage entering into their homes. Highland’s sewer system was designed to consist of a separate storm sewer system and a sanitary sewer system, so that storm water would not enter into the sanitary sewer system. In 2006, Highland experienced a sustained heavy rain. One pump station recorded nearly eight inches of rain over a twenty-four hour period – a once in 600-years event. The rain overwhelmed the storm sewers, and storm water infiltrated the sanitary sewer system resulting in the backups. Highland moved for summary judgment arguing that it was entitled to immunity under the Indiana Tort Claims Act because it had a storm water sewer plan in place that had been developed by engineers and it was engaging in acts in furtherance of the plan when the backups occurred. If Highland was successful, the litigation would have ended without the need for a trial. Instead, the trial court denied Highland’s motion and the Indiana Court of Appeals affirmed the trial court’s decision, leaving the ultimate issue of whether Highland was negligent for trial.
By way of background, the Indiana Tort Claims Act provides that “A governmental entity … is not liable if a loss results from … the performance of a discretionary function.” Indiana Code § 34-13-3-3. Under the discretionary function test, protected activities include government decisions that form policy. Such decisions typically involve the assessment of competing priorities, the weighing of budgetary considerations, and the allocation of scarce resources. Courts construe the Tort Claims Act narrowly and decline to find immunity when possible.
The Court of Appeals looked to two cases as guideposts in forming its decision. In Beck v. City of Evansville, 842 N.E.2d 856 (Ind. Ct. App. 2006), the Court of Appeals affirmed a trial court’s decision that Evansville was immune from liability to homeowners for sewer backups under the discretionary function test because Evansville, through its officials and boards, weighed competing interests when it set priorities under its storm water master plan and it was implementing the plan at the time of flooding that damaged the homeowners’ property.
“Because Evansville had a comprehensive plan of maintenance and service for its sewers, and it regularly maintained and cleaned the storm water sewers in accordance with that plan, we held Evansville immune from damages.”
In contrast, in City of Bloomington Utilities Dept. v. Walter, 904 N.E.2d 346 (Ind. Ct. App. 2009), the Court of Appeals affirmed a trial court’s decision that government immunity was properly denied. There, homeowners alleged that Bloomington failed to clear severe root invasion into sewer pipes, allowing the lines to be blocked and causing sewage to back up into homes.
“We held Bloomington engaged in policy-oriented decision-making when it determined which part of the system it would maintain and that it would not use chemicals for root control. But failure to clean the sewer, unlike a policy decision, ‘may be evaluated under traditional tort standards of reasonableness,’ … and did not involve the formulation of policy that would entitle Bloomington to immunity.”
In Town of Highland, the evidence showed that Highland’s storm water plan only addressed the separate storm sewer system and not the sanitary sewer system. And, Highland never formally adopted the finalized plan, but merely began to implement some of the proposed solutions on an ad hoc basis, so that its actions and maintenance program did not reflect policy-oriented decision-making. Finally, the homeowners alleged that while Highland’s sanitary and storm water systems were intended to operate separately, they in fact acted like a combined sewer during peak flow conditions because of system-wide defects and a failure to fully separate the systems. Because the sewer plan did not address the sanitary sewer system, the Court of Appeals affirmed the trial court’s denial of Highland’s motion to invoke government immunity.
After deciding that Highland failed to prove it was entitled to immunity under the Tort Claims Act, the Court of Appeals decided that the issue of whether Highland was negligent should be determined at trial because the homeowners “provided ample evidence to avoid summary judgment.” That is, the homeowners presented several reports suggesting that Highland had known for years that the sanitary sewer system was not operating properly, including reports detailing cross connections between the sanitary and storm water sewers and sanitary sewer surcharges following rain storms.
In addition, the homeowners’ expert witness opined that Highland was negligent because:
- it failed to have a documented preventive maintenance cleaning program in place, which allowed debris to accumulate over time severely reducing the capacity of both sewer systems and contributing to flooding and backups;
- it operated the sewer system below industry standards of care since it failed to have a system in place for judging or predicting runoff from rainfalls;
- it failed to timely mobilize manpower in response to emergency conditions;
- it failed to engage in bypass pumping until after the sanitary sewer backups; and,
- it failed to have its employees responding to the emergency conditions rather than performing routine scheduled duties.
It will be interesting to see how these issues are decided at trial.
The lessons from Town of Highland include that if you want government immunity for discretionary acts, you have to make sure you have experienced counsel involved to properly document the weighing of priorities and consideration of budgetary constraints and allocation of scarce resources. Those decisions have to be described in the plan. And, just as important, if you establish operating and maintenance plans, you have to follow them or have documented reasons for not following them. If Highland had properly documented its reasons for adopting only certain parts of the plan and not others, it may have been able to win its motion for summary judgment and end the lawsuit. Instead, the case is now set for trial.
For more information on the steps needed to properly document actions to achieve immunity under the Indiana Tort Claims Act, please contact Bill Wagner or any member of Taft’s Environmental Practice Group.