## Facts

- The Town of Monroe built a municipal sewer system in 1932 serving roughly fifty village-area properties.
- The system discharged untreated sewage into the Connecticut River under permits that were set to expire on July 1, 1988 and would not be renewed.
- The Town created a capital reserve fund (1971) for sewage disposal and intermittently funded it, and twice retained engineers to study disposal options.
- Facing permit nonrenewal and the cost of a treatment facility, town voters chose to discontinue the sewer system rather than construct a centralized wastewater treatment plant.
- The Town also authorized construction of individual septic systems, including for town-owned buildings.
- Property owners who had been served by the sewer alleged they had a vested right to continued service and claimed the discontinuance was an inverse condemnation requiring just compensation.

## Issues

1. Whether the Town’s discontinuance of its municipal sewer system constituted inverse condemnation requiring just compensation.
2. Whether long-term sewer users possessed a vested property right in continued operation of the municipal sewer system.
3. Whether the selectmen had authority to use capital reserve funds to construct septic systems for town-owned buildings.
4. Whether either party was entitled to attorney’s fees.

## Decision

- The Supreme Court of New Hampshire reversed the trial court’s determination that discontinuance of the sewer system was an inverse condemnation.
- The court held the plaintiffs lacked a vested property right in the continued existence and operation of the municipal sewer system; therefore, no compensable taking occurred.
- The court affirmed that the Town could lawfully discontinue the sewer system rather than be required to build a wastewater treatment plant.
- The court affirmed that the selectmen could use a portion of the capital reserve fund to construct septic systems for town-owned buildings.
- The court affirmed the denial of attorney’s fees.

## Legal Principles

- A municipal sewer system constructed and operated by a municipality is municipal property; the municipality retains authority to regulate and control its use, including (under most circumstances) discontinuing the service.
- Continued receipt of a municipal service, even over many years and with user payments, does not by itself create a vested private property right to perpetual continuation of that service.
- Inverse condemnation requires governmental appropriation or destruction of a recognized property right; lawful termination of a municipal service, absent a specific legal obligation to maintain it, is not a taking.
- Municipal decisions responding to legal constraints (such as environmental permitting changes) are generally matters of local discretion unless a statute, contract, or other binding commitment requires continued operation.
- Attorney’s fees are unavailable absent statutory authorization, contractual provision, or a recognized equitable exception; ordinary municipal decision-making and litigation positions do not justify fees.

## Conclusion

The court held that Monroe’s decision to end its municipal sewer service, prompted by expiring nonrenewable discharge permits, did not infringe any vested property right and therefore did not amount to inverse condemnation; the Town could choose discontinuance over building a treatment plant, could fund septic systems for town buildings from the reserve fund, and neither side was entitled to attorney’s fees.


Adams v. Bradshaw, 135 N.H. 7, 599 A.2d 481 (N.H. 1991)