Raleigh asks Court of Appeals to review lawsuit challenging water and sewer charges

Raleigh is asking the North Carolina Court of Appeals to hear a case from developers challenging municipal fees charged to new water and sewer users. Millions of dollars are at stake.

Lawyers for the capital file submitted Thursday with the second highest court in the state. They’re asking this court to review a trial judge’s April 12 decision against Raleigh. The trial judge denied the city’s motion to have the case dismissed.

“This case … is a putative class action lawsuit in which developers challenged the fees a city charged new users of its water and sewer services,” according to Raleigh’s brief. “The two plaintiffs here are promoters seeking to represent a class of hundreds of putative band members who claim the city of Raleigh lacked legal authority for these charges.”

“After paying these fees years ago, the plaintiffs are now asking for a refund, plus interest,” the brief adds. “The plaintiffs’ claims, however, are based on faulty legal theory: they assert that when Raleigh charged the charges at issue, ‘Raleigh had no…charter provision…to impose [fees] …for the future expansion of its water and sewer systems. In law, however, this assertion is incorrect.

Raleigh maintains that it has had legislative authority since 1949 to “impose ‘charges’ for the ‘extension’ and ‘widening’ of its water and sewer system,” according to the brief. Capital urges the Court of Appeal to follow the same procedure it used to hear a similar case from Charlotte.

The plaintiffs, Wardson Construction and Homequest Builders, charged dispute fees from February 2016 through January 2018. During that time, the city charged fees based on municipal ordinances that are no longer in effect. As of July 2018, the city charges a fee based on the General Assembly’s Public Water and Sewer Development Fees Act of 2017.

“[T]his case is a putative class-action lawsuit challenging fees charged by North Carolina’s second-largest city,” according to Raleigh’s brief. “According to the plaintiffs’ own allegations, there are ‘at least hundreds’ of putative members of the group, … and the stakes here are exceptionally high. … [T]The plaintiffs here alleged they were entitled to millions of dollars from the city of Raleigh — in fact, they’re asking for $16 million for 2017 alone.

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