Water Polo III, LP v. Susquehanna Twp. Auth. & Capital Region Water Auth. ( 2022 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Water Polo III, LP, :
Appellant :
:
v. : No. 1116 C.D. 2021
: Submitted: August 5, 2022
Susquehanna Township Authority :
and Capital Region Water Authority :
BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE STACY WALLACE, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WALLACE FILED: December 1, 2022
Water Polo III, LP (Water Polo) appeals from the September 17, 2021 opinion
and order1 of the Court of Common Pleas of Dauphin County (the trial court), which:
(a) determined the Susquehanna Township Authority (Authority) properly classified
1
On November 1, 2021, Water Polo filed a motion for stay in this matter, which we granted,
wherein Water Polo asserted it filed a motion for post-trial relief with the trial court on September
27, 2021. Since the trial court did not schedule a hearing on that motion until January 2022, Water
Polo further asserted it filed its notice of appeal on October 7, 2021, to ensure compliance with the
Rules of Appellate Procedure should the trial court ultimately deny its motion for post-trial relief.
The trial court did deny Water Polo’s motion for post-trial relief by order filed January 6, 2022,
and we lifted the stay in this matter by order dated February 2, 2022. Water Polo now asserts that
it is appealing from both the trial court’s September 17, 2021 and January 6, 2022 orders. Since
the trial court’s January 6, 2022 order did not confirm or effectuate re-entry of its September 17,
2021 judgment, Water Polo’s appeal properly lies only from the trial court’s September 17, 2021
order. See Vance v. 46 & 2, Inc., 920 A.2d 202, 205 n.2 (Pa. Super. 2007). Accordingly, we
review this matter as Water Polo’s timely appeal of the trial court’s September 17, 2021 order.
and billed Water Polo for sewer services, (b) denied Water Polo’s claims for relief,
and (c) entered judgment against Water Polo. On appeal, Water Polo presents a
variety of claims, including unjust enrichment and violations of its statutory and
constitutional rights. Upon review, we affirm.
I. Background
Authority is an independent municipal authority and the sole provider of
sanitary sewer and stormwater services in Susquehanna Township, Dauphin County,
Pennsylvania (Township). Trial Ct. Op., 9/20/21, at 1. Authority does not have its
own sewer treatment facilities. Id. Instead, Authority maintains a collection and
transmission system in Township and contracts with Capital Region Water Authority
(CRW) for wholesale sewage treatment. Id. Authority charges residential customers
a flat rate and commercial customers a usage rate, which is based off of metered
water consumption. Id.Authority’s regulations2 define a “Commercial Establishment” as
any room, group of rooms, building or enclosure used or intended for
use in the operation of one business enterprise for the sale and
distribution of any product, commodity, article or service or used or
intended for use for any social, amusement, religious, educational,
charitable or public purpose and containing plumbing. ‘Commercial
Establishment:[’] includes, but is not limited to, institutional
dormitories, hotels and motels, and permanent care facilities licensed
by the State (e.g. personal care facilities.).
Reproduced Record (R.R.) at 601a. Authority’s regulations define a “Hotel” or
“Motel” as
a building or other enclosure having two (2) or more separate living
units, with each unit usually consisting only of a furnished bathroom
2
Authority’s regulations were admitted without objection at the trial court’s hearing in this matter.
Reproduced Record (R.R.) at 30a, 151a.
2
and bedroom, including linens and television, generally having daily
maid service, generally having a daily and weekly rate schedule, and
generally occupied temporarily by persons having another more
permanent place of residence.
Id. at 602a. Authority’s regulations define a “Residential Unit” as
any room, group of rooms, building or other enclosure occupied or
intended for occupancy as separate and individual living quarters by a
family or other group of persons living together, or by a Person living
alone, but excluding institutional dormitories, hotels, motels or
commercial establishments, as defined, but to include, but not limited
to, apartments and form[s] of multi-family dwellings not otherwise
defined, and retirement facilities, or such some similar facility or
facilities, including but not limited to personal care boarding homes
licensed by the Commonwealth.
Id. at 603a. Authority’s regulations further specify “[d]welling units . . . shall be
considered as separate units regardless of whether each has or requires a separate or
common connection.” Id. at 621a.
Authority, by Resolution No. 2020-01,3 established that its current “sewer
rental rate for all residential users of the system, regardless of location within the
Township, shall be $123.00 per quarter . . . .” R.R. at 647a-48a. For commercial
users, “[t]he minimum sewer rental . . . shall be in the amount of $130.00 per quarter
for the first 16,000 gallons of use and $8.13 per 1,000 gallons used for all
commercial users of the system in excess of 16,000, regardless of location within
the Township . . . .” Id. at 648a.
Water Polo is the owner of an apartment complex in Township known as the
Reserve at Paxton Creek (Property). Trial Ct. Op., 9/20/21, at 1. Property has 160
apartment units and a clubhouse which are connected to Authority’s sanitary sewer
3
On Water Polo’s motion, which was not opposed by Authority, the trial court admitted
Resolution No. 2020-01. R.R. at 27a, 151a.
3
system. Id. Water Polo’s water provider sends Water Polo one bill, which is based
upon consumption data from a single water meter. Id. Authority, however, charges
Water Polo separately for 161 residential units. Id.Water Polo filed a complaint with the trial court to challenge Authority’s rate
structure. The trial court conducted a non-jury trial on July 9, 2021. Water Polo
presented the testimony of its apartment manager and the testimony and report of its
expert, a Professional Civil Engineer. R.R. at 74a. Water Polo’s apartment manager
testified regarding the amenities offered at Property. Id. at 55a-57a. She also
contacted a hotel which was less than a mile from Property and determined its
amenities were similar to the amenities at Property. Id. at 65a-68a. Despite the
similarities, Water Polo’s apartment manager admitted Water Polo’s minimum
rental period at Property was one year, and Water Polo did not serve “transient
automobile travelers” or short-term renters. Id. at 72a-73a. Water Polo did not
present any evidence to establish average or estimated sewer flows for hotels.
Nonetheless, Water Polo’s apartment manager stated that Property was “the same or
similar” to a hotel. Id. at 68a.
Water Polo’s expert explained that Authority submitted a variety of sewer
planning documents to the Pennsylvania Department of Environmental Protection
(DEP) in which Authority used an approved sewage flow rate of 88.75 gallons per
day for Water Polo’s units. Id. at 229a. This is far below what Authority’s
regulations define as an Equivalent Dwelling Unit (EDU), which is “synonymous
with” a residential establishment and is “assumed to be 180 gallons per day.” Id.Water Polo’s expert also conducted an analysis of Water Polo’s sewer charges over
the prior seven quarters. R.R. at 236a. In that time, Authority charged Water Polo
a total of $138,621.00 for sewer services. Id. If Authority charged Water Polo on a
4
water consumption basis (as a commercial customer), however, Authority would
have only charged Water Polo $64,153.70. Id.Water Polo’s expert then opined: (a) apartment units use significantly less
water than other residential units (single-family residences and townhomes), (b)
apartment units are more like some of the excepted users (institutional dormitories,
extended stay motels, and permanent care facilities) than other residential units, (c)
the Authority has the ability to charge Water Polo on a metered water consumption
basis like commercial users, (d) charging apartments on a metered water
consumption basis would encourage conservation and identification of leaks, and (e)
apartment complexes financially subsidize other customers under Authority’s flat
fee billing structure. R.R. at 237a.
Authority presented the testimony of its consulting engineer and Township’s
manager (Township manager). Township manager explained there are no
restrictions on how much sewage a user can discharge into the system and Authority
does not reserve system capacity for users. R.R. at 174a, 32a. The flow rates
approved by DEP were, therefore, only used for sewer planning purposes. Id. at 32a,
35a. Similarly, Authority’s consulting engineer explained that the sanitary system
is a “ready-for-service” system, as “when you flush, it goes.” R.R. at 196a.
Authority’s consulting engineer agreed there is no limit to how much sewage the
system will accept from any user, and all sewage flow estimates presented to DEP
were for sewage planning purposes only. Id. at 192a-97a.
Township manager explained there are 2,569 apartment units in Township,
and Authority charges each of those units as a residential customer, without
exception. R.R. at 172a. He further explained that it takes one Township employee
approximately two weeks to convert and enter water usage data each quarter for
5
Authority’s roughly 500 commercial accounts. Id. at 175a. If Authority began
charging apartment users on a consumption basis, it would add significant time and
expense to Authority’s billing process. Id.Authority’s consulting engineer opined that billing based upon water usage is
“not the best way.” Id. at 198a. One reason for this is that Authority provides sewer
services to some users for whom water usage data is not available, as they have their
own water wells. A second reason is that Authority must manage and account for
surface and subsurface water that enters the system. Id. at 199a. This water would
be unaccounted for if all bills were based on water consumption. Id. Conversely,
not all water which customers use ends up in the sanitary sewer system. Id.Authority’s consulting engineer explained that Authority begins its annual
rate setting process by projecting its costs for the upcoming year. R.R. at 164a.
Authority’s costs fall into three general categories: (1) maintenance, which includes
system maintenance and treatment costs paid to CRW, (2) administration, which
includes staffing costs and engineering services, and (3) bonds, which includes
repayment for financing of long-term improvement projects for the sewage system.
Id. 164a-68a. After projecting its costs, Authority projects its revenue for the
upcoming year by multiplying the number of residential users by the flat rate fee and
estimating consumption for commercial users. Id. at 168a, 201a-02a. Finally,
Authority determines what rates would make Authority’s revenue projections meet
or exceed its expense projections for the upcoming year and enacts a rate resolution
with those rates. Id.II. Trial Court’s Factual Findings and Conclusions of Law
The trial court found Authority sets its rates based upon two classifications:
residential units and commercial units. Trial Ct. Op., 9/20/21, at 3. The trial court
6
also found Authority’s regulations define apartments as residential units rather than
commercial units, and Authority charges residential customers a flat fee and
commercial customers based upon water consumption. Id. at 4. The trial court found
Authority’s sewer rates are based upon the annual expenses of maintaining the
sewage system, not the number of gallons of sewer waste generated by each user.
Id. The trial court also found all of Water Polo’s units “obtain a benefit” from being
hooked up to Authority’s sewage system. Id. at 5. As a result, the trial court found
“it is reasonable for all residential units, including the ones contained in [Water
Polo’s] Property, to pay a quarterly fee towards the costs associated with maintaining
the system.” Id.
The trial court concluded Authority’s rate structure was reasonable and
permitted under the Municipality Authorities Act4 (MAA). Trial Ct. Op., 9/20/21,
at 6. Accordingly, the trial court denied Water Polo’s claims for relief and entered
judgment in favor of Authority. Water Polo filed a motion for post-trial relief, which
the trial court denied. Water Polo’s timely appeal followed.
III. Analysis
On appeal, Water Polo argues the trial court erred by not concluding: (a)
Authority’s rate structure violated the MAA, (b) Authority’s regulations violated
Water Polo’s equal protection rights, (c) Water Polo unjustly enriched Authority, (d)
Authority’s consent order agreement with DEP created a different rate classification
for apartments, (e) Authority’s regulations violated Water Polo’s procedural due
process rights, and (f) Authority improperly taxed Water Polo.5
4
Municipality Authorities Act, 53 Pa.C.S. §§ 5601-5623.
5
For purposes of clarity, we have reordered and reframed Water Polo’s issues raised on appeal.
7
“This Court’s scope of review of a judgment following a non-jury trial is to
determine whether the findings of the trial court are supported by competent
evidence, and whether the court committed error in the application of law.” Com. v.
Hoffman, 938 A.2d 1157, 1160 n.10 (Pa. Cmwlth. 2007) (citation omitted). “[T]his
Court may not reweigh the evidence and substitute our judgment for that of the fact-
finder.” Id. “Furthermore, the fact-finder is free to believe all, part or none of the
evidence presented.” Id.A. Municipality Authorities Act
Since Water Polo’s claims are all, in a broad sense, attacks on Authority’s rate
structure, we begin our analysis by addressing whether Authority’s rate structure
violates the MAA. The MAA authorizes municipal authorities:
To fix, alter, charge and collect rates and other charges in the area
served by its facilities at reasonable and uniform rates to be
determined exclusively by it for the purpose of providing for the
payment of the expenses of the authority, the construction,
improvement, repair, maintenance and operation of its facilities and
properties . . . .
53 Pa.C.S. § 5607(d)(9) (emphasis added). “The MAA provides municipal
authorities with significant discretion to impose fees and charges.” J. Buchanan
Assoc., LLC v. Univ. Area Joint Auth., 231 A.3d 1089, 1104 (Pa. Cmwlth. 2020)
(citation omitted). A municipal authority’s rates must, however, be “reasonably
proportional to the value of the service rendered.” W. Clinton Cnty. Mun. Auth. v.
Rosamilia, 826 A.2d 52, 57 (Pa. Cmwlth. 2003).
In deciding whether a rate is reasonable, the trial court’s scope of
review is limited to determining whether there has been a manifest and
flagrant abuse of discretion or an arbitrary establishment of the rate
system. The party challenging the validity of the rate has the burden of
proving that it is unreasonable. Whether a rate is reasonable is
dependent upon whether it is reasonably proportional to the value of the
8
service rendered. ‘That the court might have a different opinion or
judgment in regard to the action of the agency is not a sufficient ground
for interference; judicial discretion may not be substituted for
administrative discretion.’
Allegheny Ludlum Corp. v. Mun. Auth. of Westmoreland Cnty., 659 A.2d 20, 26 (Pa.
Cmwlth. 2005) (citations omitted). “[S]ewage rates need not be proportioned with
exactness to the use made or the cost to the individual customer, so long as [they
are] reasonably related to the cost of maintaining the service for all the customers,
and the customers challenging the rates receive ‘some’ benefit from the system.”
Ack v. Carrol Twp. Auth., 661 A.2d 514, 518 (Pa. Cmwlth. 1995) (citation omitted).
Our Court has previously upheld rate structures that are similar to Authority’s
rate structure. See Chicora Commons Ltd. P’ship, LLP v. Chicora Borough Sewer
Auth., 922 A.2d 986 (Pa. Cmwlth. 2007). In Chicora, Chicora Borough Sewer
Authority’s (CBSA) rates were based upon three classifications: residential,
commercial, and industrial. Id. at 987. Chicora Commons Limited Partnership, LLP
(Chicora Commons), which owned a 27-unit apartment complex, paid for water
based upon consumption data from a single water meter. Id. at 987-88. CBSA,
however, charged Chicora Commons for sewer services at a residential flat rate for
each of its 27 apartment units. Id. CBSA charged commercial and industrial
customers on a water consumption basis. Id. Chicora Commons challenged CBSA’s
rates by presenting arguments that are similar to those presented by Water Polo in
this matter. See id. at 988-89. Of particular similarity, Chicora Commons asserted
CBSA’s flat rate system did not bear “a reasonable relationship to the services
actually consumed because it paid for services at a rate at least three times greater
than the amount actually consumed.” Id. at 992. In denying Chicora Commons’
claims, our Court noted CBSA’s rate structure was “‘not arbitrary or unreasonably
related to the value of services rendered either as actually consumed, or readily
9
available for use. All apartments are treated uniformly[,] and each is billed as one
equivalent dwelling unit. Flat rate structures are permitted under Pennsylvania
law.’” Id. at 995 (citation omitted).
We discern no significant distinctions between Authority’s rate structure in
this matter and CBSA’s rate structure in Chicora. The trial court’s finding that
Water Polo obtains a benefit from Authority’s sewage system was supported by
competent evidence in this matter. The trial court’s finding that Authority’s rates
are tied to the annual expenses of maintaining the sewage system was also supported
by competent evidence. Thus, like in Chicora, Authority’s rate structure is “not
arbitrary or unreasonably related to the value of services rendered either as actually
consumed, or readily available for use.” See Chicora, 922 A.2d at 995.
Accordingly, we conclude the trial court did not commit an error of law when it
determined Authority’s rate structure does not violate the MAA.
B. Equal Protection
Water Polo’s second argument on appeal is Authority’s rate classifications
violate its equal protection rights, as Authority arbitrarily treats Water Polo’s rental
units differently than similar uses. The Equal Protection Clause of the Fourteenth
Amendment to the United States Constitution provides no State shall “deny to any
person[6] within its jurisdiction the equal protection of the laws.” U.S. CONST.
amend. XIV, §1. Similarly, article 1, section 26 of the Pennsylvania Constitution
provides “[n]either the Commonwealth nor any political subdivision thereof shall
6
“Under the designation of ‘person’ there is no doubt that a private corporation is included. Such
corporations are merely associations of individuals united for a special purpose, and permitted to
do business under a particular name, and have a succession of members without dissolution.”
Pembina Consol. Silver Mining & Milling Co. v. Com. of Pa., 125 U.S. 181, 189 (1888).
10
deny to any person the enjoyment of any civil right, nor discriminate against any
person in the exercise of any civil right.” PA. CONST. art. I, § 26.
“In its most simplistic formulation, equal protection ‘demands that uniform
treatment be given to similarly situated parties.’” Lohr v. Saratoga Partners, L.P.,
238 A.3d 1198, 1209-10 (Pa. 2020) (quoting Zauflik v. Pennsbury Sch. Dist., 104
A.3d 1096, 1117 (Pa. 2014)). “The prohibition against treating people differently
under the law does not preclude the Commonwealth from resorting to legislative
classifications, . . . provided that those classifications are reasonable rather than
arbitrary and bear a reasonable relationship to the object of the legislation.” Curtis
v. Kline, 666 A.2d 265, 268 (Pa. 1995) (citations omitted). “In other words, a
classification must rest upon some ground of difference which justifies the
classification and has a fair and substantial relationship to the object of the
legislation.” Id. The justification required for a classification “depends ‘upon which
of three types a classification belongs to, what the governmental interest is in
promulgating the classification, and the relationship of that interest to the
classification itself.’” Lohr, 238 A.3d at 1210 (citation omitted). “Fundamental
rights and suspect classifications trigger strict scrutiny, whereas important rights and
sensitive classifications require intermediate scrutiny.” Id. “All other legislative
classifications are subject to rational basis review.” Id.
Although sewer services relate to a person’s property rights, there is no
fundamental or important right to receive public sewer services. As a result,
Authority’s classification system is subject to a rational basis review. “[T]he rational
basis test affords substantial deference to legislative policy making. The review
includes two steps: ‘First we must determine whether the challenged statute seeks to
promote any legitimate state interest or public value. If so, we must next determine
11
whether the classification adopted in the legislation is reasonably related to
accomplishing that articulated state interest or interests.’” Lohr, 238 A.3d at 1211
(quoting Curtis, 666 A.2d at 269). “Under rational basis review, the relationship
between the classification and the legitimate state interest need not be set forth
expressly by the Legislature.” Curtis, 666 A.2d at 267 (citation omitted).
“Moreover, courts have recognized that legislative classifications are enacted to
address complex issues that may not have clear cut solutions. Accordingly, courts
have opined that ‘[a] classification does not fail rational-basis review because it is
not made with mathematical nicety or because in practice it results in some
inequality.’” Lohr, 238 A.3d at 1211 (citation omitted).
We begin our rational basis review by evaluating whether Authority’s
regulations, specifically regarding rates, seek to promote a legitimate state interest
or public value. The rates Authority charges its customers are designed each year to
generate enough revenue to cover Authority’s operating expenses, thereby allowing
Authority to provide sewer services to Township’s residents. There is certainly
public value in having a sanitary sewer system. Township and Authority also have
legitimate interests (sanitation, environmental, etc.) in providing sewer services to
Township’s residents. Therefore, we conclude Authority’s regulations, specifically
regarding rates, do seek to promote a legitimate state interest and public value.
We continue our rational basis review by evaluating whether Authority’s rate
classifications are reasonably related to Authority’s provision of sanitary sewer
services to Township’s residents. The difference between Authority’s two rate
classifications (residential and commercial) is essentially based upon whether a
person or persons occupy the premises as a residence or use the premises as part of
a commercial enterprise. Water Polo has not alleged the two classifications lack a
12
difference that justifies differential treatment. Instead, Water Polo asserts it should
be treated as a commercial user because apartment units are more like some
commercial uses (hotels) than other residential uses (single-family homes and
townhomes). Thus, Water Polo is not challenging the classification system itself,
but the line between the two classifications.
As our Supreme Court outlined in Lohr, however, “‘[a] classification does not
fail rational-basis review because it is not made with mathematical nicety or because
in practice it results in some inequality.’” Lohr, 238 A.3d at 1211 (citation omitted).
We agree with the trial court that apartments, like homes and townhomes, are places
one considers as their permanent residence, whereas hotels and motels are not. The
trial court did not commit an error of law when it concluded that Water Polo did not
present evidence to show this distinction was unreasonable or arbitrary. Although
Water Polo presented evidence regarding its water consumption, Water Polo did not
present any evidence regarding water consumption for the uses it alleges are similar
to its use (hotels and motels). The presence of similar amenities (which is also true
for apartments, townhomes, and some single-family residences) is not the same as
similar sewer usage. As a result, Water Polo did not establish that it is similar, in
terms of sewer usage, to a hotel or motel. Thus, despite some perceived inequality
and a lack of mathematical nicety, Authority’s classifications do not fail rational
basis review, and the trial court did not commit an error of law in determining
Authority’s rate classifications do not violate Water Polo’s equal protection rights.
C. Unjust Enrichment
Water Polo’s third argument on appeal is that its payments for sewer services
unjustly enriched Authority. Water Polo asserts Authority charges it for an amount
that exceeds (a) its certified amount of water usage, and (b) the actual capacity
13
available to, and approved for, Property. To prove unjust enrichment, Water Polo
must establish: (1) it conferred benefits on Authority, (2) Authority appreciated those
benefits, and (3) Authority accepted and retained those benefits “‘under such
circumstances that it would be inequitable for defendant to retain the benefit without
payment of value.’” Filippi v. City of Erie, 968 A.2d 239, 242 (Pa. Cmwlth. 2009)
(citation omitted). “In determining if the doctrine [of unjust enrichment] applies,
our focus is not on the intention of the parties, but rather on whether the defendant
has been unjustly enriched.” Id.The trial court determined Water Polo did not prove its unjust enrichment
claim, as Water Polo failed to show Authority accepted and retained its sewer
payments under inequitable circumstances. As outlined above, Authority’s
classification of Water Polo’s apartment units as separate residential units is
reasonable and permitted under the MAA. Water Polo’s water consumption and the
sewage flow estimates Authority provided to DEP in sewer planning are not relevant
to how Authority classifies Water Polo for sewer rates. In addition, the trial court
did not accept Water Polo’s assertion that Authority limited its sewer capacity. As
a result, we conclude the trial court’s findings are supported by competent evidence,
and the trial court did not commit legal error in determining Water Polo failed to
prove its unjust enrichment claim.
D. DEP Consent Order Agreement
Water Polo’s fourth argument on appeal is that the trial court failed to address
whether a consent order agreement between DEP and Authority mandates that
Authority treat apartment complexes separately and distinctly from residential
customers. The MAA specifically authorizes municipal authorities to set rates for
their services. See 53 Pa.C.S. § 5607(d)(9). Water Polo did not provide any
14
authority, nor are we aware any exists, to support its assertion that DEP could require
a municipal authority to set rates in a specific way. Additionally, upon review of the
record in this matter, we do not identify any voluntary agreement by Authority to
modify its rate structure and treat apartment complexes separately and distinctly
from residential customers for purposes of sewer rates. Despite Water Polo’s
attempts to show Authority was required to have additional rate classifications, the
trial court found Authority’s rates were based upon two classifications and
Authority’s rate structure was reasonable. Since we conclude these findings were
based upon competent evidence, Water Polo’s argument lacks merit.
E. Procedural Due Process
Water Polo’s fifth argument on appeal is that Authority violated its procedural
due process rights by not having an administrative process in place for Water Polo
to challenge its sewer rates. “The fundamental components of procedural due
process are notice and opportunity to be heard.” In re McGlynn, 974 A.2d 525, 531
(Pa. Cmwlth. 2009) (citation omitted). Procedural due process is a flexible concept
that “imposes only such procedural safeguards as the situation warrants.” Id.The seminal case addressing due process is Mathews v. Eldridge, 424
U.S. 319 . . . (1976). Factually, Mathews concerned the Social Security
Administration’s decision to discontinue cash benefits without
affording the recipient a pre-decisional hearing. The United States
Supreme Court rejected the recipient’s claim that due process required
the agency to hold a hearing prior to terminating benefits. In doing so,
the Court considered what process is due an individual before a
property interest may be affected by government action. It identified
three factors that must be considered in formulating the process due:
the private interest affected by the government action; the risk of
erroneous deprivation of such interest through the procedures used and
the probable value, if any, of additional or substitute procedural
safeguards; and finally, the government’s interest, including the
function involved and the administrative burdens that additional or
substitute procedural requirements would entail.
15
Id. at 532 (citation and footnote omitted).
Authority admits it does not have an administrative procedure for a customer
to challenge its rate classification. The Authority, however, notes that the MAA
provides:
“[a]ny person questioning the reasonableness or uniformity of a rate
fixed by an authority or the adequacy, safety and reasonableness of the
authority’s services, including extensions thereof, may bring suit
against the authority in the court of common pleas of the county where
the project is located or, if the project is located in more than one
county, in the court of common pleas of the county where the principal
office of the project is located.
53 Pa.C.S. § 5607(d)(9). Since Water Polo has a statutorily guaranteed procedure
for challenging Authority’s rates in the court of common pleas, Authority asserts
Water Polo has adequate procedural due process.
We agree the MAA provides adequate procedural due process for Water Polo
to challenge Authority’s rates. The MAA permits users to file suit in the court of
common pleas after a rate is “fixed” by an authority. 53 Pa.C.S. § 5607(d)(9).
Accordingly, not only does the MAA provide Authority’s customers with the full
panoply of procedural rights in the court of common pleas (for which Water Polo
has availed itself in this matter), it also provides Authority’s customers with the
ability to seek pre-enforcement review. Under these circumstances, the trial court
did not commit legal error in determining Water Polo’s procedural due process rights
were not violated.
F. Improper Tax
Water Polo’s sixth argument on appeal is that Authority’s charges are
improper taxes which have unjustly enriched Authority. We have already
determined Water Polo has not unjustly enriched Authority in this matter. Water
16
Polo’s only legal authority for the assertion that Authority’s charges are an improper
tax is Borough of North East v. A Piece of Land Fronting on West Side of South Lake
Street, 159 A.2d 528 (Pa. Super. 1960). In Borough of North East, our Superior
Court acknowledged sewer rental fees are not typically taxes. Id. at 531. Despite
this general rule, our Superior Court determined that when the Borough of North
East prohibited a complainant from using the disposal system for 95% of its sewage,
yet based its sewer rental fee on 20% of its water use, the customer was being
charged an improper tax. Id. at 531-32. This matter is readily distinguishable from
Borough of North East, because the trial court found Authority charges Water Polo
on a flat fee basis, not a water consumption basis, and the trial court did not accept
Water Polo’s assertion that its use of Authority’s system was restricted. Upon
review, we conclude the trial court’s findings are supported by competent evidence
and the trial court did not commit an error of law when it determined that Authority’s
sewer rental fees were not taxes.
IV. Conclusion
For the reasons outlined above, we affirm the trial court’s judgment in this
matter.
______________________________
STACY WALLACE, Judge
17
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Water Polo III, LP, :
Appellant :
:
v. : No. 1116 C.D. 2021
:
Susquehanna Township Authority :
and Capital Region Water Authority :
ORDER
AND NOW, this 1st day of December, 2022, the September 17, 2021
Judgment that the Court of Common Pleas of Dauphin County entered in this matter
is hereby AFFIRMED.
______________________________
STACY WALLACE, Judge