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Thursday, February 06, 2014

Ind. Decisions - Supreme Court decides one today

In Veolia Water Indianapolis, LLC, City of Indianapolis, Department of Waterworks, and City of Indianapolis v. National Trust Insurance Company and FCCI Insurance Company a/s/o Ultra Steak, Inc., et al, a 17-page, 5-0 opinion, Justice David writes [ILB emphasis added]:

In this case, appellants Veolia Water Indianapolis, LLC (“Veolia”); the City of Indianapolis, Department of Waterworks (the “Department”); and the City of Indianapolis (collectively with the Department, the “City”) claim sovereign immunity from liability for damages resulting from a fire that destroyed a Texas Roadhouse restaurant insured by appellees National Trust Insurance Company and FCCI Insurance Company a/s/o Ultra Steak, Inc. d/b/a Texas Roadhouse (the “Insurers”). This case is before us on appeal of the trial court’s denial of Veolia’s motion for judgment on the pleadings and the City’s motion to dismiss. Finding that the trial court was correct in holding that Veolia cannot claim common law sovereign immunity and that the City cannot claim statutory sovereign immunity, we affirm the trial court in these regards but reverse the trial court’s holding that the City is not entitled to common law sovereign immunity. * * *

As Judge Posner stated in Takle v. Univ. of Wisconsin Hosp. and Clinics Auth., privatization of a governmental service is not “a farce in which the privatized entity enjoys the benefits both of not being the state and so being freed from the regulations that constrain state agencies, and of being the state and so being immune from suit.” 402 F.3d 768, 770–71 (7th Cir. 2005). Because Veolia is a private entity that contracted with the City to provide a governmental service, it is not entitled to common law sovereign immunity on claims regarding the adequacy of the hydrants’ water supply.

We emphasize that our holding today does not in any way usurp the discretion and authority of the legislature. Since common law sovereign immunity is judge-made in nature, judges are responsible for its incremental development. “In the absence of a statutory directive or controlling case law, our decision rests heavily on the sort of policy considerations that have always been a part of the development of common law.” Mendenhall v. Skinner and Broadbent Co., Inc., 728 N.E.2d 140, 143 (Ind. 2000). Among other factors, our consideration of Veolia’s profit motive and status as an autonomous entity has led us to conclude that Veolia is not entitled to common law sovereign immunity from liability for damages resulting from the hydrants’ inadequate water supply.

Conclusion. We hold that a private, for-profit company under the circumstances of this case is not entitled to common law sovereign immunity from liability for damages resulting from a fire that destroyed a Texas Roadhouse restaurant. Accordingly, we affirm the trial court’s rulings that Veolia is not entitled to common law sovereign immunity and that the City is not entitled to statutory sovereign immunity from liability for damages resulting from an inadequate water supply in the hydrants near the restaurant. Only the City is entitled to common law sovereign immunity; thus, we reverse the trial court’s ruling to the contrary.

Posted by Marcia Oddi on February 6, 2014 11:12 AM
Posted to Ind. Sup.Ct. Decisions