COA: Suit against sewer district isn’t a public lawsuit

The Spencer Circuit Court erred in finding a lawsuit filed by property owners challenging the requirement they connect to a new sewer system is a public lawsuit and the property owners must pay $9 million in bond to proceed with the suit, the Indiana Court of Appeals ruled Tuesday.

In Steven Buse, et al. v. Trustees of the Luce Township Regional Sewer District, No. 74A05-1009-PL-590, Steven Buse and other property owners brought an interlocutory appeal of the trial court’s holding that four counts of the owners’ complaint constitute a public lawsuit against Luce Township Regional Sewer District under Indiana Code 34-6-2-124. The property owners filed the suit, claiming the sewer district was installing a new sewer near their properties and required the property owners to tie into the line at their own expense. The property owners all had functioning septic tank soil absorption systems. The property owners also alleged that they would have to pay more than the homeowners who did grant the sewer system easements over their property.

The trial court relied on I.C. 34-6-2-124 to find the lawsuit was a public lawsuit and ordered the property owners post a $9 million in bond within 10 days of the order.

But the trial court didn’t determine whether the property owners were pursuing the lawsuit as citizens or as taxpayers. This is an important distinction that needs to be made by the court, as spelled out by the Indiana Supreme Court in Dible v. City of Lafayette, 713 N.E.2d 269 (Ind. 1999). The justices held that an action by an individual landowner seeking to protect his or her private interest in property doesn’t constitute the basis for a public lawsuit.

The plain language of the complaint shows that the property owners didn’t bring the suit in their capacity as taxpayers, wrote Judge Edward Najam, so the trial court’s findings don’t support its conclusions that the complaint is a public lawsuit.

“We also hold that the trial court’s order that the Property Owners’ claims are within the ambit of the public lawsuit statute misapplies the statute,” he wrote. “… the trial court focused only on the language of the statute. But, as summarized in Dible, the controlling factor is whether the Property Owners seek to protect public or private interests.”

The appellate judges also rejected the sewer district’s claim that the private interests of the property owners are so commingled with the public interests that the public lawsuit aspect of the counts should trump the private interests. The convergence of private interests with public interests isn’t enough in itself to convert an action that doesn’t otherwise qualify into a public lawsuit, wrote Judge Najam.

The COA reversed and remanded for further proceedings on the claims, noting that nothing in the opinion shall be taken as comment on the merit of those claims.