The Supreme Court of the United States ruled Monday that the city of Indianapolis did not violate the Federal Equal Protection Clause when it refused to refund money to residents who paid the in-full assessment up front for sewer work.
Justice Stephen G. Breyer wrote the 13-page opinion for the majority, which held Indianapolis had a rational basis for distinguishing past payments from future payments by homeowners.
The lawsuit, Christine Armour, et al., petitioners v. City of Indianapolis, et al., No. 11-161, which originated in Marion County, was brought by 31 homeowners who paid a lump sum to the city for sewer improvements. The city used Indiana’s Barrett Law for the project – the costs of the project would be apportioned equally among all abutting lots. Residents had the option to pay the assessment in a lump sum or over time in installments. When the city abandoned the Barrett Law financing system a year after completing the assessments, the Board of Public Works forgave all assessment amounts still owed under the old financing system. Those who paid up front received no refund, and those who still owed money no longer had to make payments.
The trial court ruled in favor of the homeowners and the Indiana Court of Appeals affirmed, but a divided Indiana Supreme Court reversed. The Indiana majority ruled that the city didn’t violate the constitution by refusing to grant the refunds because the distinction between those who had paid up front and those who hadn’t was rationally related to the city’s legitimate interest in reducing administrative costs. The city wanted to provide financial hardship relief to homeowners by transitioning away from the Barrett Law system and preserve its limited resources.
“The City’s classification does not involve a fundamental right or suspect classification. Its subject matter is local, economic, social and commercial,” wrote Breyer. “It is a tax classification. And no one claims that the City had discriminated against out-of-state commerce or new residents. Hence, the City’s distinction does not violate the Equal Protection Clause as long as ‘there is any reasonably conceivable state of facts that could provide a rational basis for the classification.’”
The majority also held that administrative concerns can often justify a tax-related distinction and Indianapolis’ decision to stop collecting outstanding Barrett Law debts finds rational support in the city’s administrative concerns.
Chief Justice John G. Roberts Jr. and Justices Antonin Scalia and Samuel A. Alito dissented, relying on Allegheny Pittsburgh Coal Co. v. Commission of Webster Cty., 488 U.S. 336 (1989). They noted how Indiana’s tax scheme explicitly provides that costs will “be primarily apportioned equally among all abutting lands or lots.”
“We have never before held that administrative burdens justify grossly disparate tax treatment of those the State has provided should be treated alike,” wrote Roberts. “… The Equal Protection Clause does not provide that no State shall ‘deny to any person within its jurisdiction the equal protection of the laws, unless it’s too much of a bother.’”