Raleigh appeals water, sewer fee rulings at NC’s top two courts

Raleigh is battling a $16 million court ruling against the capital city for water and sewer fees charged to developers between 2016 and 2018. City lawyers filed paperwork Monday at both of North Carolina’s statewide appellate courts.

Plaintiffs Wardson Construction and Homequest Builders challenged the $18,000 they paid to connect six homes to the city’s water and sewer system. Both plaintiffs sought refunds in 2019 and filed suit after the city rejected those requests.

Wardson and Homequest eventually sought class-action status that could affect 735 potential plaintiffs.

The state Supreme Court is considering Raleigh’s appeal of a lower court order certifying the class.

“This appeal solely concerns whether a trial court can certify a class of plaintiffs who — even if the named plaintiffs were correct about their damages theory — would not share a common injury,” Raleigh’s lawyers wrote in a Supreme Court brief. “The ruling below distorted longstanding restrictions on when a class can be certified in North Carolina.”

“It awarded a double recovery to plaintiffs who have suffered no damages and ignored this Court’s warnings against conflicts of interest and inefficiencies,” the Supreme Court brief continued. “If the class certification ruling were allowed to stand, it would allow opportunistic litigators who have identified a potential claim to easily obtain class certification without demonstrating that the members of the class would actually warrant recovery should the potential claim prove valid.”

“n the class as certified, there are 735 payors, but the record contains no information at all about whether 732 of those payors conducted their businesses in a way that could entitle them to any monetary relief,” Raleigh’s lawyers explained.

While challenging the class certification at the state Supreme Court, Raleigh also filed a brief Monday at the state Court of Appeals. That document challenged a trial judge’s ruling against Raleigh’s challenged fees.

“The City of Raleigh, our State’s capital, is unique in many respects,” the city’s lawyers wrote. “As relevant here, Raleigh’s Charter specifically authorizes the City to charge fees for the operation and enlargement of its water and sewer systems. In accordance with its Charter, Raleigh has enacted ordinances that assess fees whenever a new development connects to Raleigh’s water and sewer systems for the first time. Unlike some other municipalities, Raleigh uses these fees to pay for existing infrastructure and debts that have already been incurred.”

“This appeal involves a challenge to Capital Facilities Fees (or ‘CFFs’) that Raleigh charged to new users for connecting their property to Raleigh’s water and sewer systems. In spite of the plain language of the Charter and the ordinances, the trial court below held that Raleigh could not charge those fees. In doing so, the trial court awarded two home builders a multi-million-dollar class action judgment — apparently based on those builders’ assumption that Raleigh is the same as other municipalities with different charters and ordinances. The controlling law and undisputed facts, however, establish that is not so,” Raleigh’s brief continued.

The state Appeals Court rejected the city’s request to take up the dispute in 2022. At that point, Raleigh was asking the state’s second-highest court to reverse a trial judge and have the case dismissed.

The post Raleigh appeals water, sewer fee rulings at NC’s top two courts first appeared on Carolina Journal.

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