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SCOTUS takes Indianapolis sewer payment case

November 14, 2011

The Supreme Court of the United States has granted certiorari in a case that questions whether the city of Indianapolis violated the federal Constitution in how it handled refunds for residents who paid assessments on local sewer projects.

In an order list released Monday, the SCOTUS took Christine Armour, et al. v. City of Indianapolis, et al., No. 11-161, which led to a divided Indiana Supreme Court decision in May.

The case involves 45 homeowners in an Indianapolis subdivision who sued the city when they didn’t receive refunds of sewer assessments they paid. The assessments were part of a sanitary sewer project funded under the Barrett Law, Indiana Code 36-9-39, and the homeowners were able to either pay the full amount or make partial payments each month. The city later switched its funding procedures for the projects and those who’d been paying monthly installments were no longer responsible for anything that had been unpaid. Homeowners who paid the nearly $10,000 assessments in one lump sum prior to Nov. 1, 2005, were denied any refund.

In a 3-2 decision by the Indiana Supreme Court, the majority reversed the trial court judgment against Indianapolis – which held the city violated the Equal Protection Clause – and found no constitutional violation under the 14th Amendment had occurred. Justice Frank Sullivan wrote the majority opinion and was joined by Chief Justice Randall T. Shepard and Justice Steven David, while Justices Robert Rucker and Brent Dickson dissented.

The majority found that the city’s rationale was that low- and middle-class families were more likely to have been paying gradually and those who paid in full up front were likely higher income, meaning the rationale was reasonable and coincided with the government’s interest in moving away from the Barrett Law system because of the financial burdens it created. Justices Rucker and Dickson disagreed, finding the city’s “rational basis” wasn’t sufficient and was used as more a blanket reason without any practical justification of the rationale actually doing what it claimed to do.

The SCOTUS hasn't specifically addressed whether a municipality contravenes the Equal Protection Clause when it forgives an outstanding assessment owed by some property owners while, at the same time, it refuses to refund an equivalent amount to similarly situated property owners who have already paid the same assessment in full.

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