Indiana Municipal Law – Clarification on the Requirements of a Public Lawsuit By: Jeremy L. Fetty

The Indiana Court of Appeals clarified the requirements necessary for a lawsuit to be considered a public lawsuit in Buse v. Trustees of the Luce Township Regional Sewer District, 953 N.E.2d 519 (Ind. Ct. App. 2011). In this case, a group of property owners filed suit against the Spencer County Sewer District to block it from laying a sewer line adjacent to the plaintiffs’ properties, which already had functioning septic tanks. The Sewer District argued that this lawsuit should be considered a public lawsuit under Indiana Code § 34-6-2-124. This statute was designed to end costly serial litigation against municipalities that could threaten to block nearly every proposed action of a municipality. The trial court found the plaintiffs’ lawsuit to be a public lawsuit since the allegations in the complaint directly or indirectly questioned the validity and construction of public improvements. This finding would have required the plaintiffs to post a surety bond in the amount of $9,000,000 (the amount of a grant the county received to defray construction costs) within ten days or the trial court’s order or the case would be dismissed.

In reversing the trial court’s order, the Indiana Court of Appeals determined this action to be a private lawsuit. The court looked to a similar Indiana Supreme Court case, Dible v. City of Lafayette, which stated, “the [landowners] have not brought suit in their capacity as taxpayers (requirement for public lawsuit).” 713 N.E.2d 269, 247-75 (Ind. 1999). The Indiana Supreme Court also stated that “an action by an individual landowner seeking to protect his or her private interest in property does not constitute the basis for a public lawsuit.” The court of appeals thought the critical factor between a public and private lawsuit is whether the property owners seek to protect public or private interests. In finding this lawsuit to be private, it found the trial court did not conclude the plaintiffs filed their suit under their capacity as citizens or taxpayers. In addition to the plaintiffs not suing in their capacity as taxpayers, the plaintiffs’ allegations sought to invalidate the Sewer District’s plans as applied specifically to them, not as applied to the public in general. The court felt the convergence of private and public interests was not enough, by itself, to convert an otherwise private action to a public lawsuit. Implications of public importance in a lawsuit are not enough to satisfy the statutory requirement.

Jeremy Fetty is a partner in the law firm of Parr Richey Obremskey Frandsen & Patterson with offices in Lebanon and Indianapolis. He often advises businesses and utilities (for profit, non-profit and cooperative) on organizational, human resources, and transactional matters and drafts and reviews commercial contracts.

The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.