The Commonwealth Court of Pennsylvania, in Wyeth Pharmaceuticals v. W. Chester Boro.,et al, 2116 CD 2014 (Cmwlth. Ct. November 5, 2015), recently reversed and remanded a Chester County Court of Common Pleas’ decision ordering Wyeth Pharmaceuticals Inc. to pay the Borough of West Chester $1.7 million for breach of its sewer agreement with the Borough.

Importantly, the Commonwealth Court also found that Wyeth may have been overcharged for years by the Borough pursuant to the sewer agreement and that the Court of Common Pleas of Chester County erred in the manner in which it ruled on the overcharges at trial.

Before the trial court, Wyeth established that many of the bills it had received from the Borough included charges that were wholly unrelated to the operation and maintenance of the sewage treatment plant. Specifically, the Borough used funds Wyeth paid for sewer to fund fire protection to Borough residents, gasoline for police cruisers, the Borough’s information technology director’s salary, and replacement of the HVAC system in the Borough’s municipal building. Wyeth also had been billed for personnel costs associated with maintaining four wastewater pumping stations located throughout Borough—even though those stations had never served Wyeth’s waste stream.

While the Court of Common Pleas recognized that Wyeth may have been overcharged by the Borough, the Court held that Wyeth was not entitled to recovery for the majority of the overcharges because Wyeth had voluntarily paid the money during the years in question. The Commonwealth Court disagreed.  It held that the voluntary payment doctrine was not a defense because, among other things, Wyeth did not learn about the nature of the expenses included in the Borough’s invoices until the discovery phase of the litigation.

On a separate issue, the Commonwealth Court found that the wastewater treatment plant agreement in question was not, as the Borough had contended, a contract of “indefinite duration” but rather terminated in 2011, when Wyeth notified the Borough of its intent to terminate.

The case has been remanded to the trial court for a hearing and determination of the overcharges.

Maureen McBride, a partner at Lamb McErlane PC, was co-counsel for Wyeth on the appeal to the Commonwealth Court.