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Detroit May Continue Denying Water to Residents after Sixth Circuit Ruling

Nov 28 | 2016  by

By Beth Florkowski of Fausone & Grysko, PLC posted in News and Press on Monday, November 28, 2016.

Jim Fausone, Esq.

According to the Sixth Circuit, there is no fundamental right to affordable water. Specifically for the City of Detroit, this means that the City can continue to shut off water services to residents that are unable to pay their bills.

Detroit residents asked for a permanent injunction that outlawed the City from turning off their water based on an asserted “right to water service at a price they can afford to pay.” A federal judge dismissed this suit, and the Sixth Circuit confirmed the ruling saying, “A right of this nature is not rooted in our nation’s traditions or implicit in the concept of ordered liberty.”

In July 2013, after Detroit filed for Chapter 9 bankruptcy protection, the City began turning off water for citizens who failed to pay their bills. This included more than 20,000 homes in 2015, depriving many low-income families of running water. But, as stated in the case, due process only requires that the water rates reasonably reflect the cost of providing the service, not reflective of the customer’s ability to pay.

The Bankruptcy Code, specifically Section 904, bars the court from interfering with a municipality’s exercise of governmental power. The three-judge panel identified the need to preserve the delicate balance of state-federal sovereignty by ensuring bankruptcy power could not be used to indirectly dictate how debtor cities should be ruled.