Rr Village Association, Inc., Jay Stanleigh and Authur L. Penzel, Plaintiffs v. Denver Sewer Corporation and Town of Roxbury (New York)

826 F.2d 1197, 8 Fed. R. Serv. 3d 1056, 1987 U.S. App. LEXIS 11626
CourtCourt of Appeals for the Second Circuit
DecidedAugust 26, 1987
Docket803, Docket 86-7978
StatusPublished
Cited by95 cases

This text of 826 F.2d 1197 (Rr Village Association, Inc., Jay Stanleigh and Authur L. Penzel, Plaintiffs v. Denver Sewer Corporation and Town of Roxbury (New York)) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rr Village Association, Inc., Jay Stanleigh and Authur L. Penzel, Plaintiffs v. Denver Sewer Corporation and Town of Roxbury (New York), 826 F.2d 1197, 8 Fed. R. Serv. 3d 1056, 1987 U.S. App. LEXIS 11626 (2d Cir. 1987).

Opinions

KEARSE, Circuit Judge:

Defendants Denver Sewer Corporation (“Denver Sewer”) and Town of Roxbury (New York) (the “Town”) appeal from a judgment of the United States District Court for the Northern District of New York, Howard G. Munson, Chief Judge, entered in favor of plaintiffs RR Village Association (“RR Village” or the “Association”), et al., declaring void for lack of due process the Town’s action in approving prospective and retroactive increases in the rates charged by Denver Sewer to members of the Association without affording the Association or its members notice or a hearing. On appeal, defendants contend principally that the district court should have dismissed the complaint on the grounds that (1) plaintiffs had no property interest in the existing sewer rates, and (2) even if plaintiffs had a property interest, due process was satisfied by the availability to plaintiffs of judicial review of the Town’s actions. Finding merit only in the contention that plaintiffs had no property interest with respect to rates for future services, we reverse so much of the judgment of the district court as declared void the Town’s approval of prospective rate increases, and in all other respects we affirm.

I. BACKGROUND

The sequence of pertinent events is not in dispute.

A. The Parties and the Events

RR Village is a membership corporation whose members own townhouse units in a development known within the Town as Roxbury Run. Denver Sewer provides sewage disposal service to all individually owned units in Roxbury Run. The Town, acting through its governing body (“Town Board”), has responsibility under N.Y.Transp.Corp.Law § 121 (McKinney Supp. 1987), either to provide sewage disposal services for its inhabitants or to contract with a private corporation for provision of these services.

Prior to October 8, 1984, the Town had contracted for Denver Sewer to provide sewage disposal services in Roxbury Run, setting the rates that Denver Sewer could charge at $13 for the first 9,000 gallons of sewage and $1.05 for each additional 1,000 gallons. On October 3, 1984, Denver Sewer petitioned the Town for rate increases to $62.50 for the first 9,000 gallons of sewage and $5.07 for each additional 1,000 gallons. It requested that the increases be made retroactive to January 1, 1983. In support of these requests, Denver Sewer submitted figures to show that from 1980 to 1983 it had operated at a loss and that the then-current rates did not generate income sufficient to meet current expenses and provide a return to stockholders.

On October 8, 1984, the Town Board met and, after hearing from Denver Sewer, passed a resolution granting the requested increases and making the new rates retroactive to January 1, 1983. Neither the Association nor any Roxbury Run homeowner had received notice of Denver Sewer’s petition or of the Town’s intent to consider such a petition at the October 8 meeting; neither the Association nor any member was present to be heard in opposition.

Plaintiffs learned of the rate increases through newspaper reports and promptly wrote the Town Board (1) stating that the homeowners had not received prior notice of Denver Sewer’s petition, (2) questioning the figures presented by Denver Sewer, and (3) stating that the rate increase breached undertakings made to the home[1200]*1200owners by Roxbury Run’s developer, which was Denver Sewer’s parent, that in return for reductions in other maintenance payments owed by the developer, the developer would operate the water and sewage facilities, even if at a financial loss. Plaintiffs’ letter urged the Town Board to undo, if possible, its approval of the rate increases. The Town did not reopen the matter and took no further action.

Roxbury Run homeowners soon began to receive bills reflecting the increased rates. They apparently continued to pay at the pre-October 8, 1984 rates and refused to pay amounts charged in excess of those rates.

B. The District Court’s Decisions

In January 1985, plaintiffs commenced the present action under 42 U.S.C. § 1983 (1982), contending that the Town’s approval of rate increases, prospective and retrospective, without affording the Association or its members an advance hearing deprived plaintiffs of their property without due process. The complaint sought, inter alia, a judgment declaring that the new rates were void. Both sides moved for summary judgment.

In a Memorandum-Decision and Order filed April 28, 1986 (“First Decision”), the court at first granted summary judgment in favor of defendants. Finding that there had been no cessation of sewer service to plaintiffs but only increases in the rates, the court held that N.Y.Transp.Corp.Law § 121 did not give ratepayers a property interest in previously fixed sewer rates, and hence plaintiffs had not shown any deprivation of their property. The court also ruled that the Town’s approval of rate increases was legislative action for which due process did not require an advance hearing. Accordingly, a judgment was entered dismissing the complaint.

Plaintiffs timely moved for reconsideration, and, in a Memorandum-Decision and Order filed October 6, 1986 (“Second Decision”), the court vacated the prior judgment and granted summary judgment in favor of plaintiffs, voiding the Board’s October 8, 1984 approval of rate increases. In the Second Decision, the court held that ratepayers have a property interest in the continuation of existing rates until new proposed rates are found to be fair and reasonable. It held that the Town’s rate determination was not legislative action and that due process required public notice and a hearing prior to the deprivation of the ratepayers’ property interest.

A formal judgment was entered in favor of plaintiffs on October 23, 1986. On November 17, 1986, defendants appealed.

II. APPELLATE JURISDICTION

At oral argument of this appeal, we called to counsel’s attention the fact that the Second Decision of the district court, granting plaintiffs’ timely motion to vacate the judgment that had been entered on the First Decision, was filed on October 6, 1986, more than 30 days, see Fed.R.App.P. 4(a)(1), prior to the filing of defendants’ November 17 notice of appeal. Noting that the Federal Rules of Appellate Procedure provide that where a timely motion has been made under Fed.R.Civ.P. 59 to alter or amend the judgment, “the time for appeal for all parties shall run from the entry of the order ... granting or denying ... such motion,” Fed.R.App.P. 4(a)(4), we inquired whether defendants’ notice of appeal was timely. We conclude that, in light of the combined effect of Fed.R.App.P. 4(a)(6) and Rules 54 and 58 of the Federal Rules of Civil Procedure

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826 F.2d 1197, 8 Fed. R. Serv. 3d 1056, 1987 U.S. App. LEXIS 11626, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rr-village-association-inc-jay-stanleigh-and-authur-l-penzel-ca2-1987.