Sunflower Spa LLC et al v City of Appleton

Filing 18

ORDER signed by Chief Judge William C Griesbach on 7-14-15 granting 10 Motion for Summary Judgment. (cc: all counsel) (Griesbach, William)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
SUNFLOWER SPA LLC and
LULU ENTERPRISES LLC,
Plaintiffs,
v.

Case No. 14-C-861

CITY OF APPLETON,
Defendant.

DECISION AND ORDER

In this action the Plaintiffs, Sunflower Spa LLC and Lulu Enterprises LLC, allege that on
May 23, 2013, the City of Appleton’s water main erupted and spewed some 360,000 gallons of
water on the Plaintiffs’ property, causing significant damage. Plaintiffs allege that this event
constituted a taking, without just compensation, in violation of the state and federal constitutions.
They also allege state law claims based on condemnation and nuisance. The Defendant has moved
for summary judgment. For the reasons given below, the motion will be granted. The federal
constitutional claim will be dismissed with prejudice, and the remaining state law claims will be
dismissed without prejudice.
I. Analysis
The Defendants’ motion is premised largely on the fact that it did not intend to have the
water main break on the Plaintiffs’ property. When governmental action accidentally results in
damage to a citizen’s property, it is not a “taking” under the Fifth Amendment. “Accidental injuries

are not takings.” Lucien v. Johnson, 61 F.3d 573, 576 (7th Cir. 1995).
Plaintiffs counter that there were some 650 water main breaks over an eight-year period,
demonstrating the city’s apparent policy of not maintaining its pipes. In essence, the city “allowed”
its water main to burst, which suffices to constitute a taking.
Plaintiffs rely largely on Arkansas Game & Fish Comm'n v. United States, 133 S. Ct. 511,
515, (2012), which made clear that a takings claim could be viable even if the property damage was
only temporary. It’s true that Arkansas Game did not place a categorical bar on such claims, which
means there is nothing dispositive about the fact that the water main break was an isolated
occurrence. But that case said nothing about the key question at issue here, which is whether the
government’s action was the product of intent, or whether it was merely a run-of-the-mill accident.
In Arkansas Game, it was undisputed that the U.S. Army Corps of Engineers “authorized flooding
that extended into the peak growing season for timber on forest land owned and managed by
petitioner, Arkansas Game and Fish Commission.” Id. (italics added). Similarly, one of the cases
the court relied upon involved a claim where “the Wisconsin Legislature had authorized the
defendant to build a dam which led to the creation of a lake, permanently submerging the plaintiff's
land.” Pumpelly v. Green Bay Co., 13 Wall. 166, 20 L.Ed. 557 (1872). These are clearly acts of
intent and authorization. The Defendant’s position in this case is that the water main break was a
simple accident. The City certainly did not “authorize” the break or direct that it occur in any way.
As such, Arkansas Game does not help the Plaintiffs on that score.
The question is whether government inaction—e.g., deferred maintenance—can rise to the
level of intent required to constitute a taking. Following Hurricane Katrina, New Orleans property
owners sued the United States alleging that the flood control system was improperly designed and
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ineffectively maintained, resulting in damage to the plaintiffs’ properties. Nicholson v. United
States, 77 Fed. Cl. 605, 611 (2007). “According to the Plaintiffs, the Corps not only built an
ineffective system but also knew or should have known of the system's defects and of the probable
disaster in the event of a hurricane.” Id. The Court of Claims found no taking. “Among the
hallmarks of a Fifth Amendment taking is that the governmental conduct forming the basis of the
taking is authorized and legitimate. . . . Unauthorized or tortious conduct is not compensable under
the Fifth Amendment. ” Id. at 614.
Addressing the claim at great length, the Nicholson court found many reasons the takings
claim must fail. Among these were the absence of any affirmative act on the government’s part.
The Plaintiffs alleged that “the decision not to rebuild and/or replace the levee system to withstand
a Category 5 hurricane” gave rise to their Constitutional claim. Id. at 619. “This particular
allegation . . . still does not allege an action on part of the Government capable of taking property.
In no case that we know of has a governmental agency's failure to act or to perform its duties
correctly been ruled a taking.” Id. at 620. “Under the decisions controlling this Court, omissions
or claims that the Government should have done more to protect the public do not form the basis
of a valid takings claim. This is so even if, as the Plaintiffs suggest, the Government suspected that
the floodwall system might not withstand the storm surge associated with a hurricane of equal
magnitude to Katrina.” Id. at 621.
Here, the allegation is nearly identical. The Plaintiffs allege that the City of Appleton failed
to replace the water main in order to withstand normal water pressure, and its failure to do so
constituted the taking. But failing to replace or repair water mains is not government action. The
Wisconsin Court of Appeals addressed a similar claim arising out of the flooding of Lake Delton.
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The Plaintiff alleged that the “Village learned well in advance of the flooding event that the lowest
point on the dam was at a higher elevation than [his] property; [and] the Village ‘acted’ by deciding
not to take steps or by avoiding necessary steps to prevent the flooding event based on its
knowledge of this difference in elevation.” Fromm v. Vill. of Lake Delton, 2014 WI App 47, ¶ 21,
354 Wis. 2d 30, 42, 847 N.W.2d 845, 851 (Wis. Ct. App. 2014). In essence, the argument was that
the Village “acted” by choosing not to take additional steps to prevent damage. The court rejected
this argument, finding that government action was required in any takings claim: “We are not free
to disregard this plainly stated rule and search for inaction that might be considered to be the
functional equivalent of action, as might be at issue for example in the negligence context.” Id. at
¶ 32, 354 Wis. 2d at 47, 847 N.W.2d at 853.
At its core the Plaintiff’s allegations suggest the City was simply negligent in failing to
properly maintain its water mains. Taking their allegations as true, one would conclude that the
damage they sustained was a foreseeable consequence of the City’s inaction. But foreseeability—
a classic negligence standard—is a far cry from intent or authorization. In 2013, it must be noted,
the vast majority of water mains in Appleton did not break and cause damage. Instead, what
happened to the Plaintiffs was an unlucky (if foreseeable), but it was an event far from a certainty.
“The fact that something could or might happen never ipso facto rises to the level of conduct
compensable under the Fifth Amendment.” Jed Michael Silversmith, Takings, Torts & Turmoil:
Reviewing the Authority Requirement of the Just Compensation Clause, 19 UCLA J. Envtl. L. &
Pol'y 359, 383 (2002). Events that the government might have prevented, but did not, do not
constitute compensable takings under the Fifth Amendment. Accordingly, the federal constitutional
claim will be dismissed. The Seventh Circuit has instructed that “it is the well-established law of
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this circuit that the usual practice is to dismiss without prejudice state supplemental claims
whenever all federal claims have been dismissed prior to trial.” Groce v. Eli Lilly & Co., 193 F.3d
496, 501 (7th Cir. 1999). This is perhaps particularly true when the issues involve local governance,
as they do here. Accordingly, the supplemental state law claims will be dismissed without
prejudice.
II. Conclusion
For the reasons given above, the motion for summary judgment is GRANTED. The federal
takings claim is DISMISSED with prejudice. The remaining claims are dismissed without
prejudice.

SO ORDERED this14th day of July, 2015.

/s William C. Griesbach
William C. Griesbach
United States District Judge

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