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May 26, 2015

Utility Charge Challenges

CaseAmerican Heritage Apartments, Inc. v. The Hamilton County Water and Wastewater Treatment Authority, Hamilton County, Tennessee

Issue:  Is local Water Authority subject to private cause of action for allegedly unjust charges?

Facts:  Plaintiff Apartment Complex sued Defendant Water Authority over the amount of a monthly flat charge for sewer service. Apartment contended that Defendant exceeded its authority by imposing an unjust charge. The trial court granted summary judgment in favor of Defendant upon finding that the Utility District Law of 1937 required Apartment to pursue an administrative remedy prior to a private action.

Appellate Decision:  The intermediate court determined that the trial court erred by applying the Utility District Law because Defendant did not undergo the statutorily prescribed process of becoming a utility district pursuant to the UDL. See TCA §§ 7-82-201, 202. Moreover, the Tennessee Water and Wastewater Treatment Authority Act provides a private cause of action under these circumstances.

Review Granted:  May 13, 2015.

Prediction:  Ben thinks the Supreme Court will affirm the intermediate court’s holding that Apartment may pursue a private right of action.