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Does something stink in Supreme Court sewer ruling?

June 4, 2012 by NCC Staff


The Supreme Court ruled on Monday that 31 homeowners weren’t entitled to $8,000 sewer hookup refunds when their neighbors only paid $1,000 for the same service.

The ruling in Armour v. Indianapolis was a little more complicated than that, but the financial imbalance angered Chief Justice John Roberts, who dissented in the 6-3 vote and had some choice words in his dissenting opinion.

Click Here for the Full Opinion

The case involving 38 Indianapolis residents who paid approximately $9,000 each upfront to get their homes hooked up to a sewer system. About 142 other neighbors chose an installment plan, paying an annual 3.5 percent interest rate and spreading the payments out over decades.

But in 2005, Indianapolis decided to scrap the payment system after three years, fund the construction with bonds, and then charge each customer a flat rate of $2,500, and to also charge all taxpayers a maintenance fee.

The people in the installment plan were told to stop making payments--their debt was forgiven from the old plan.

The taxpayers who shelled out the $9,000 were told there wouldn’t be refunds for them. In a lawsuit, 31 people sued to get approximately $8,000 each returned as a tax refund.

The city of Indianapolis said it had the right to keep the money because it had to make rational administrative decisions in the best interest of taxpayers, and it would be too complicated to administer refunds for a variety of potential claimants.

On Monday, the Supreme Court sided with the city.

“We hold that the City had a rational basis for distinguishing between those lot owners who had already paid their share of project costs and those who had not.  And we conclude that there is no equal protection violation,” the court said.

“The Constitution does not require the city to draw the perfect line nor even to draw a line superior to some other line it might have drawn,” Justice Stephen Breyer said. “It requires only that the line actually drawn be a rational line.

Chief Justice Roberts was one of three justices who dissented, and he was clearly in the camp of the people who lost the $8,000 refund.

“And what did the City believe was sufficient to justify a system that would effectively charge petitioners 30 times more than their neighbors for the same service—when  state law promised equal treatment?” asked Roberts.

"The City then ended up charging some homeowners 30 times what it charged their neighbors for the same hook-ups.  The equal protection violation is plain,” Roberts said.

The Equal Protection Clause is part of the 14th Amendment to the United States Constitution.

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