The City of Carolina Beach recently agreed to settle a lawsuit against it on allegations that it illegally levied facility fees from developers between August 2016 and June 2018. As part of the deal, the city will also pay $ 850,000, despite denying any wrongdoing and liability. A notice from the North Carolina General Court of Justice stated:
In the case, it is alleged that the city illegally levied facility fees on or between August 9, 2016 and June 30, 2018. “Facility Fee” means any fee that the City charges a Claimant or Plaintiff as a mandatory condition for the City to provide a new fee or from August 9, 2016 to June 30, 2018 for an improved water and / or water connection City sewer system. “
Hammer; Image from Rawpixel via Unsplash.com.
Why was the lawsuit filed in the first place? The dispute that led to the lawsuit began after “Stier Construction Company, Inc alleged the city wrongly charged developers for the effects of new developments on water and sewer systems.” The lawsuit turned into a class action “because more than one company or person could be affected by the charges”. The court announcement further states:
“In a class action lawsuit, one or more persons known as ‘Class Representatives’ (in this case, Stier Construction Company, Inc. and Bryan Humphrey Design Build, Inc) are suing on behalf of persons who have similar claims. Collectively, all of these people with similar entitlements (with the exception of those who are self-excluded) are members of the settlement class. “
However, this is not the first suit of its kind. Back in 2016, a Supreme Court case “how local governments can collect development fees” had priority. According to the North Carolina School of Government:
“In 2016, the North Carolina Supreme Court ruled that communities (and by analogy with counties) lacks the legal authority to collect certain up-front fees for water and sanitation services. Upfront fees are fees charged for new or existing developments before a property is actually connected (or under contract) to a local government’s water or sewer system. “
In 2017, the North Carolina legislature passed Article 8 of Section 162A. In the article “Guidelines for municipalities and how they can collect and calculate fees for system development” were laid down.
The latest deal was approved by both parties, although it will cost the city a lot of money. The city and plaintiffs hope the settlement will put a stop to further legal action. The court notice states:
“The parties have agreed on a settlement in order to avoid the costs and risks of further litigation and to offer advantages to the members of the comparison class. The class representative and the attorneys representing him (referred to as the “class advisor”) believe that the comparison is in the best interests of all members of the comparison class. “
Carolina Beach agrees to settle $ 850,000 in a class action lawsuit for unlawful setup fees
The City of Leland plans to approve a combined US $ 500,000 settlement and final verdict for alleged “unlawful charges”.