Armour v. Indianapolis

Whether the City of Indianapolis violated the 14th Amendment by forgiving outstanding assessments for some property owners while not offering refunds for others who had paid in full.

Indiana’s Barrett Law permits municipalities to fund public improvements by levying special assessments against the benefiting properties. In 2004, the Indianapolis Board of Public Works (“Board”) levied a per-property special assessment of $9,278 against approximately 180 parcels in the Northern Estates neighborhood. The assessment was the result of a public works project that connected those properties to the city sewer system, eliminating the need for septic tanks. Property owners were given the option of paying the assessment in a single lump sum or in monthly installments for a period of years. The monthly installment was subject to a 3.5% annual interest rate and a statutory lien placed on the property. In 2005, the City-County Council of Indianapolis-Marion County adopted the Septic Tank Elimination Program (STEP) to finance sewer projects and eliminated the use of the Barrett Law financing method. The Board then passed a resolution forgiving all outstanding assessment balances on Barrett Law projects owing as of November 1, 2005. As a result, the 142 parcel owners in the Northern Estates neighborhood who had opted to pay in monthly installments were discharged from their outstanding debts. However, the remaining parcel owners who had paid the assessment in full did not receive any refund. In early 2006, the property owners who had paid in full petitioned the Board for a refund equivalent to that received by the other 142 property owners. The Board denied the petition.

Thirty one of the parcel owners who paid the assessment in full filed a complaint against the City of Indianapolis in July of 2007, alleging the city violated their Fourteenth Amendment rights to due process and equal protection, and seeking a Barrett Law assessment refund. The trial court granted Petitioner’s motion for summary judgment and entered judgment against Respondents. Respondents appealed. On appeal Petitioners dropped the due process claim, and proceeded only on equal protection grounds. The Court of Appeals affirmed the judgment of the trial court and Respondents sought and were granted transfer to the Indiana Supreme Court. The Indiana Supreme Court held that assessment balance forgiveness was rationally related to a legitimate government interest, and therefore Respondents had not violated the Equal Protection Clause of the Fourteenth Amendment.