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New litigation against ReBuild Houston

To be expected at this point.

A class action lawsuit has been filed against the city, seeking to reimburse residents who pay the drainage fee that helps fund ReBuild Houston, the multibillion-dollar streets and drainage improvement program that voters narrowly approved in 2010.

The lawsuit comes on the heels of a Texas Supreme Court ruling issued Friday that found that the ReBuild ballot measure failed to disclose the cost of the drainage fee to the public. The case has been sent back to trial court, where plaintiffs expect a swift victory and legal experts said it’s likely a judge will honor the Supreme Court ruling.

Andy Taylor, attorney for the plaintiffs in that case, is also behind Wednesday’s class action suit. The named plaintiff, or class representative, is resident Elizabeth Perez, one of the plaintiffs in the original ReBuild suit.

In order for the class action suit to move forward, a judge must agree that there is a group of similarly disadvantaged people, constituting a “class.” Taylor is attempting to include all residents who receive a water bill to which the drainage fee is tacked on every month. His argument hinges on the idea that property owners were “under duress” when they paid the drainage fee because they could have their water shut off if they failed to do so.

See here for the background. Is there a form I can fill out to attest that I’d sooner have an arm gnawed off by wombats than consent to be legally represented by Andy Taylor? Because while I have no doubt that there are many homeowners who would like to get a refund on their drainage fees, there are plenty – like me and the commenter on this Chronicle story – who are happy to have paid a few extra bucks each month to help fund infrastructure improvements, however imperfectly they were done. If Andy Taylor tries to claim that all homeowners were coerced into paying the fee, then he deserves to lose, because he sure as hell doesn’t speak for me.

A later version of the story suggests Taylor’s actions are indeed odd.

In order for the class-action suit to move forward, a judge must agree that there is a group of similarly disadvantaged people, constituting a “class.” Taylor is attempting to include all residents who receive a water bill, to which the drainage fee is tacked on every month. His argument hinges on the idea that property owners were “under duress” when they paid drainage fees because they could have their water shut off if they failed to do so.

City Attorney Donna Edmundson called the class action lawsuit “very premature” because the trial court case over the legality of the ReBuild ballot measure hasn’t been resolved. Without establishing that the fee is illegal, Taylor’s class action suit would be moot.

“This presupposes we’ve lost,” Edmundson said. “We haven’t lost on remand yet. We still get our day in court. The charter amendment has not been struck.”

Stanford law professor Deborah Hensler said Taylor’s case is ambitious because he is not only seeking to halt the fee, but also to reimburse residents going back five years. The sheer logistics involved in repaying residents and the financial hardship to the city could factor into a judge’s decision even if the legal case is sound, Hensler said.

“Most judges are sensitive to the size of the damages,” Hensler said.

Well, no one has ever said Andy Taylor doesn’t reach for the stars. He seldom gets there, but he does reach. We’ll see what a judge makes of it.

On a related note, I went and checked the Facebook pages and Twitter feeds of each of the five candidates for Mayor who had not made a statement about the Supreme Court ruling as of my previous post. Here’s Sylvester Turner’s statement, posted on June 15 at 11:44 AM. The other four – Chris Bell, Adrian Garcia, Marty McVey, and most puzzling to me Steve Costello still had nothing to say on the subject as of last night. I will ask again: What are you waiting for?

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12 Comments

  1. Jules says:

    Charles, who is ultimately responsible for the ballot wording? The mayor?

  2. Jules – Yes, the Mayor, with Council approval. This is true of all city ballot referendums. The district court and appeals court both basically said that what had been on the ballot was good enough. The Supreme Court disagreed. And so here we are.

  3. Jules says:

    Thanks, Charles.

    It is beyond me why they didn’t mention that it would be a tax (I know you prefer “fee” but I think by all definitions it is a tax, not a fee) in the ballot language.

    Proper wording would have saved the tax payers a lot of money and aggravation. Shame on the Mayor and Council.

  4. Noel Freeman says:

    It’s not a tax, no matter how many times people say it is. It is a user fee, which are distinctly different funding mechanisms for public programs. I did a lot of research on user fees, including 163 jurisdictions that have drainage fees, and the only time it was ever derided as a “tax” was when it was enacted by Democratic or liberal governments. I always found that odd because user fees are a particularly conservative construct for funding government programs. When Republican or conservative governments enacted drainage fees, they were derided by Democrats/liberals for being a regressive funding mechanism.

  5. Jules says:

    I’m pretty much a democrat, and how is it a user fee?

    When I pay for my alarm permit, that is a fee because I can choose to pay it or not. I get something tangible and personal for it – if my alarm goes off, the cops will come to my house. If someone does not pay the fee, no cops.

    The fact that 163 jurisdictions have passed off a tax as a fee does not surprise me or sway me.

    What tangible personal thing have I gotten for the rain tax? How is the rain tax voluntary?

    I agree it’s a regressive funding mechanism.

  6. Steven Houston says:

    Jules, he can list the formal definition but it remains a fee. Otherwise, if you refuse to buy an alarm permit, the police may still come out; either at the request of your neighbors for the noise or if you hit the panic button which will cost an arm & a leg if it was not a true emergency. You cannot cancel a panic alarm, permit or not, per their policy. Fee versus tax does not hinge on your choice (if you build a building in the city limits, you may have to get an occupancy permit, if you sell at street festivals you need a vendors permit, etc).

  7. Jules says:

    It’s a tax. Google tax vs fee and the whole first page of responses is my argument.

    From the first one: https://www.washingtonpolicy.org/blog/post/it-tax-or-fee

    One court has described a classic tax as one satisfying a three-part inquiry—an assessment that (1) is imposed by a legislature upon many, or all, citizens, and (2) raises money that (3) is spent for the benefit of the entire community.

    From this one: http://smallbusiness.chron.com/differences-between-taxes-fees-17959.html

    Sometimes, a tax will be incorrectly labeled as a fee, often for political reasons. For example, if a politician wishes to keep a promise that he will not raise taxes, but still wishes to increase government revenue, he may push for an increase in certain kinds of taxes that can be labeled as fees. This is because, for voters, a “fee” does not always have the same loaded political connotations that taxes do.

    From this one: http://www.taxanalysts.com/www/features.nsf/Articles/27F622B404B089F68525793E00536946

    In general a fee is a voluntarily incurred governmental charge in exchange for a benefit conferred on the payer, which fee should somehow reasonably approximate the payer’s fair share of the costs incurred by the government in providing the benefit.

    and etc….

  8. Jules says:

    All semantics aside, if they had mentioned a fee in the ballot language, I would have been ok with that. However, they said neither tax nor fee. I agree with the Texas Supreme Court.

  9. joshua ben bullard says:

    my heart kind of goes out to the stephen costello campaign , omg , this could not have come at a worse time for his mayoral bid,my initial thoughts is this will knock stephen costellos campiagn from any chance of being in a run off.i would not be giving any monies to his camp at this time =indefinatly.

    tis the season ,joshua bullard

  10. Paul Kubosh says:

    I have always thought that drawing a distinction between fee and tax was disingenuous. I am very sure that everyone who voted knew that they were voting to pay more of their money to the government. The public voted. I don’t believe they were confused. Also I do not believe in over turning elections.

    Finally, I find it funny to see Andy Taylor winning this at the Supreme Court. All of you guys were so proud of him when he was fighting for the Red Light Cameras. All of you were happy when Judge Hughes through out that election.

    Bottom line trust the people. If they want to pay the money. Let them pay it.

  11. Jules says:

    The Mayor, Costello, the rest of Council did us no favors by not including either “fee” or “tax” in the ballot language (even though it is clearly a tax 🙂 ).

    “Dedicated funding source” and “dedicated pay-as-you-go fund” isn’t good enough for the Texas Supreme Court and whoever advised them the language was good enough should be fired, if they haven’t already quit.

    I’m embarrassed for the City government. And I’m happy the red light cameras are gone.

  12. […] here and here for the background. I don’t think it’s unreasonable to call for a revote, but […]

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