Legal Lode: A Sewer Thing

Subsidiary private benefit can't defeat property condemnation.

Any problem if private interests incidentally benefit from a public works project aided and abetted by a condemnation? No, says a North Carolina appeals court.

In 1997, North Carolina environmental officials gave operators of municipal solid waste landfills a choice: either connect leachate collection systems to a public sewer where available or, as a temporary solution, pump and haul leachate to a state-permitted-and-certified wastewater treatment facility.

Blackburn Landfill, owned and operated by Catawba County, was situated in an area then without sewer service. With no time or money to plan and build an extended public sewer system, the county obtained permits from the state to construct leachate storage tanks. The county pumped leachate from the landfill to the tanks. From there, the leachate was transported to a wastewater treatment plant owned by the city of Hickory.

Some time later, the county developed a solid waste master plan, which, among other initiatives, called for connecting the leachate collection pipes to a sewer system and exploring connection options with nearby municipalities. Around the same time, the local economic development agency proposed to the county's Board of Commissioners that a lumber facility be located on the landfill property. Doing so, the agency said, would create 125 new jobs and enable the county to seek state and federal economic grants that would fund a portion of the sewer project.

The county eventually signed a contract with Gregory Wood Products (GWP) calling for GWP to build and operate a lumber processing facility and for the county to transfer title to county property near the landfill to GWP. To sweeten the deal, the county agreed to extend water and sewer service to the site and improve access roads.

In 2004, the county contracted with the city of Newton to dispose of leachate at the city's treatment plant. The county took responsibility for all design and construction work and for obtaining the easements necessary to connect the landfill area to the city sewer system.

To help finance this infrastructure, the county applied for and received federal and state economic development grants. The applications stated that the sewer line would serve GWP.

As the county figured it, the landfill would use about 90 percent of the sewer capacity. The remaining 10 percent would be allocated among GWP and other users — public and private entities as well as local residents — who had committed to connecting to the new line. Another 28 property owners also were eligible to connect.

Before constructing the sewer line, the county obtained voluntary easements from many owners abutting the sewer project route. When the remaining owners, including some who would not have access to the sewer line, refused to grant easements, the county filed condemnation proceedings.

The property owners challenged the county's authority to condemn property for private interests. They argued that the public notices for the grant applications referred to GWP as the only entity to be served by the proposed sewer, making the purpose of the sewer line entirely private. The trial judge, however, ruled that the county's taking of the easements served a public purpose under state law.

On appeal, a three-judge panel upheld the lower court. “[T]he purpose of connecting Blackburn Landfill to the public sewer system was primary and paramount, and that purpose is not defeated by the fact that GWP will also use or benefit from the sewer line,” the opinion stated. “Construction of the sewer line was necessary for [the county] to adequately treat leachate and to [comply] with state regulation, which … benefits the public generally.”

[Catawba County v. Wyant, No. COA08-1159 (N.C.App. June 16, 2009)]

Barry Shanoff is a Rockville, Md., attorney and general counsel of the Solid Waste Association of North America.

The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].

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