The case involves Ray D. Edwards, Sr. et al. versus Hallsdale-Powell Utility District, stemming from two incidents in 1999 where raw sewage flooded the plaintiffs' homes due to a clogged public sewer line. The plaintiffs alleged nuisance and inverse condemnation, claiming their properties suffered a permanent loss of market value. The trial court initially granted partial summary judgment to Hallsdale-Powell, ruling no taking had occurred. However, the Court of Appeals reversed this decision, stating that the plaintiffs presented enough evidence to suggest their homes’ market value had been permanently diminished. The Supreme Court of Tennessee determined that for a taking to be recognized, a governmental entity must perform a purposeful or intentional act. Since no such act was demonstrated in this case, the Supreme Court reversed the Court of Appeals’ judgment and remanded the case for further proceedings in line with this opinion. The court emphasized that the plaintiffs’ claims for inverse condemnation did not meet the necessary legal standard.
On August 15, 2000, and January 24, 2001, plaintiffs reported incidents where raw sewage odors permeated their homes following sewer line cleaning by HPUD. Under Tennessee’s inverse condemnation statute, property owners can seek compensation through a jury if their land is occupied for public improvement without formal condemnation (Tenn. Code Ann. 29-16-123). The Court of Appeals vacated a trial court’s partial summary judgment, determining that plaintiffs had sufficient evidence of a permanent loss in market value from sewage backups.
The summary judgment standard dictates that judgment is appropriate only when no genuine material fact disputes exist, with the reviewing court examining evidence favorably for the nonmoving party (Tenn. R. Civ. P. 56.04). The Tennessee Constitution prohibits property taking without compensation and allows for eminent domain only for public use, as supported by statutory provisions (Tenn. Code Ann. 29-16-101 to 29-16-127).
Inverse condemnation allows property owners to claim compensation for property values taken without formal condemnation. A "taking" occurs when governmental actions significantly disrupt property use, though not all property damages constitute a taking. Tennessee courts recognize two types of takings: physical occupation and nuisance-type takings, with physical occupation involving ongoing invasions or destruction of property rights. The construction of improvements causing flooding is cited as an example of a physical invasion.
Direct and physical invasions of property by the government constitute a taking when there is either actual appropriation or when the property's common and necessary use is severely disrupted. This includes scenarios where a governmental action destroys property rights, such as closing a street that affects access to a home. Tennessee courts also recognize nuisance-type takings, which occur when government actions interfere with a landowner’s use and enjoyment of their property, as seen in cases where airport operations cause noise and pollution.
To establish a nuisance-type taking, the plaintiff must demonstrate a direct and substantial interference that is repeated, uniquely affects their property compared to the public at large, and results in a loss of market value. In the current case, the plaintiffs claim their homes were invaded by raw sewage, referencing precedents like Barron and Moriarity, while the defendant argues the Jackson test should apply, classifying sewage discharges as nuisances.
For a taking to occur, some action by the governmental entity is required. Historical cases have shown that intentional government actions for public benefit, such as constructing runways or modifying drainage systems, can lead to takings. The only Tennessee case suggesting that intentionality may not be required is Betty v. Metro. Gov’t of Nashville, where negligence in maintaining a sewage main led to property damage, resulting in a jury finding of a taking.
The city contended on appeal that the plaintiffs did not establish a claim for inverse condemnation because they failed to demonstrate that the damages were permanent and stemmed from an intentional act. The Court of Appeals clarified that the nature of the taking—whether intentional, unintentional, or negligent—was irrelevant if a taking had occurred. However, this interpretation was based solely on California precedents that include a “damaging” clause in their constitution, which Tennessee's constitution lacks. The court emphasized that in Tennessee, a governmental entity must act purposefully or intentionally for a taking to be recognized. The ruling overruled a previous case (Betty) that implied otherwise.
Further, case law from other jurisdictions supports the requirement of intentional action by the government for a valid taking. In the plaintiffs' case, the damage to their property was caused by a sewer line clog likely due to tree roots, rather than any intentional action by the governmental entity (HPUD). The plaintiffs' claim of inverse condemnation failed because they did not allege any purposeful act by HPUD, and any negligence in maintaining the sewer system would not constitute a taking.
The Court of Appeals’ decision, suggesting that permanent damage alone could constitute a taking, was incorrect. The court held that an inverse condemnation claim necessitates proof of an intentional act leading to property damage. Consequently, the court reversed the Court of Appeals’ judgment, reinstated the trial court’s summary judgment in favor of HPUD, and remanded the case for further proceedings on the plaintiffs’ other claims under the Governmental Tort Liability Act. Costs of the appeal were assigned to the plaintiffs.
