RESPONDENT: City of Indianapolis
LOCATION: Northern Estates
DOCKET NO.: 11-161
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: Supreme Court of Indiana
CITATION: 566 US (2012)
GRANTED: Nov 14, 2011
ARGUED: Feb 29, 2012
DECIDED: Jun 04, 2012
Mark T. Stancil - for the petitioners
Mark T. Stancil - on behalf of the petitioners
Paul D. Clement - for the respondents
Facts of the case
In April of 2001, the City of Indianapolis ("the city") sent a letter to property owners in the Northern Estates neighborhood informing them that their properties were part of the Brisbane/Manning Barrett Law Sanitary Sewers Project ("the project"). The project was designed to connect properties to the city sewer system, reducing or eliminating the use of septic tanks.
In July of 2004, the Indianapolis Board of Public Works ("the board") levied an assessment of $9,278 against each property subject to the project. Indianapolis offered each property owner the option of paying the assessment in its entirety or of paying in monthly installments, subject to an annual interest rate. The petitioners, Christine Armour and 30 other property owners ("property owners"), chose to pay the assessment in its entirety.
In 2005, the city abandoned the Barrett Law method of assessing owners' contributions in favor of the Septic Tank Elimination Program ("STEP"). As part of the transition to STEP, the board passed a measure forgiving all outstanding Barrett Law assessment balances owed as of November 1, 2005, including those assessed for the project. As a result, owners who chose to pay their assessment in monthly installments were forgiven from future payment. Owners who chose to pay their assessments in their entirety were given no reimbursement. The property owners requested compensation from the board in February of 2006 and were denied.
The property owners filed complaint against the city in July of 2007, alleging violation of due process and equal protection under the Fourteenth Amendment. All parties filed for summary judgment; the trial court granted the property owners' motion, and entered judgment against the city. On appeal, the property owners abandoned their due process claim, arguing that the city violated equal protection. The Indiana Court of Appeals affirmed, holding that the city did not have a rational basis for only forgiving the debt of owners who chose to pay in installments. The Indiana Supreme Court granted the city's motion to transfer the case, vacating the decision of the Court of Appeals.
Justice Frank Sullivan, writing for a unanimous court, held that the city's tax policy survives rational basis review and does not violate equal protection. The city legitimately believed that 1) owners who fully paid their assessments were in a better financial position than those making monthly installments, 2) the benefits of simplifying funding for the sewer system outweighed the effort of continuing the previous taxation system and 3) the new taxation system would preserve city resources. He rejected the property owners' argument that they were a "class of one" --requiring heightened scrutiny of the city's action-- because the property owners were not singled out for discriminatory treatment.
Did the City of Indianapolis violate equal protection by forgiving only outstanding Barrett Law assessment balances, and not those of property owners who paid in full?
Media for Armour v. City of IndianapolisAudio Transcription for Oral Argument - February 29, 2012 in Armour v. City of Indianapolis
Audio Transcription for Opinion Announcement - June 04, 2012 in Armour v. City of Indianapolis
John G. Roberts, Jr.:
Justice Breyer has our opinion this morning in Case 11-161, Armour versus City of Indianapolis.
Stephen G. Breyer:
The case concerns payments for sewers.
Before 2005, the City of Indianapolis typically and in this particular case paid for new sewer lines by assessing the cost against the individual property owner whom the new lines benefited.
Some paid the entire assessment upfront, others paid in installments.
Soon after completing the project now before us, the City changed its sewer financing system to one based on bonds, a change that spread the responsibility to pay for individual projects more widely throughout the City.
In the process, the City forgave all those old system sewer assessment debts that had not yet been paid, including all the installments not yet due, but the City did not refund any money to those who would already paid their assessments.
The petitioners in the present case are homeowners who had paid their sewer project assessments in full.
They point out that the City's forgiveness decision means that each of them will have paid about $9000 for a new sewer connection while identical homeowners, who chose installment plan payments, would have paid close to nothing.
This, they say, is basically unfair to the point where it violates a Federal Constitution's promise of equal protection of the laws.
We don't agree with that point.
In cases such as this one, essentially involving tax classifications, the Equal Protection Clause grants States broad leeway to draw lines that make distinctions.
The line satisfies the Clause as long as there is “any reasonably conceivable state of facts that could provide a rational basis for the classification”.
And there is such a reasonably conceivable state of facts here.
The City has created a kind of amnesty program.
Any such amnesty program requires line drawing among roughly similar groups of individuals.
And the City says that the line it has drawn in part reflects administrative considerations.
The line reflects the fact that after the financing system switch, it would be too expensive to maintain an administrative system for collecting and processing old debts not still outstanding while it cost nothing at all simply to keep the funds already paid, i.e., not grant a refund.
Indeed, to administer a refund program would simply increase administrative cost.
The weight to give these reasonably conceivable facts is a matter primarily for the City to determine.
We, in this Court, need only decide whether the resulting determination is rational and we find that line drawing, based upon these administrative considerations, is rational here.
Basically, for these reasons, as elaborated in our opinion and for others that we set forth, we conclude that the City's forgiveness program does not violate the Federal Equal Protection Clause and we affirm the similar conclusion of the Supreme Court of Indiana.
The Chief Justice has filed a dissenting opinion, in which he is joined by Justices Scalia and Alito.