Chapter 17

Challenge to Municipal Water Shutoff of Tenants Where Only Notice Went to Landlord (OH)

Edward A. Icove is a principal in the firm of Smith and Condeni LLP, Cleveland, Ohio. Mr. Icove was a VISTA attorney and legal services attorney with the Cincinnati Legal Aid Society and Southeastern Ohio Legal Services. He is as a Board Member (and former and VicePresident) of the Cleveland Legal Aid Society. He has handled numerous individual and class consumer cases in both state and federal courts. See, e.g., Barney v. Holzer Clinic, Inc., 110 F.3d 1207 (6th Cir. 1997) (ECOA); Smith v. Transworld Systems, Inc., 952 F.2d 1025 (6th Cir. 1992) (FDCPA, adopting the least sophisticated consumer standard in the Sixth Circuit); Shorts v. Palmer, 155 F.R.D. 172 (S.D. Ohio 1994) (FDCPA); Lewis v. Marlin, Clearinghouse No. 53021 (S.D. Ohio 1999) (FDCPA); and Pyles v. Johnson, 143 Ohio App.3d 720 (4th Dist. 2001) (CSPA, RISA, and fraud); and Edwards v. McCormick, 136 F.Supp.2d 795 (S.D. Ohio 2001) (FDCPA and CSPA). A Cleveland collection attorney complained that Ed was a champion of the poor. Kimberly M. Skaggs is the Executive Director of the Equal Justice Foundation, a nonprofit organization that provides civil legal services in the form of class-action litigation to indigent, minority or disabled individuals. Ms. Skaggs is a former Assistant Federal Public Defender and a former law clerk to the Honorable R. Guy Cole, Jr., United States Court of Appeals for the Sixth Circuit and to the Honorable John D. Holschuh, United States District Court for the Southern District of Ohio. She is a past president of the Columbus Chapter of the Federal Bar Association and the 2003-04 recipient of The Ohio State University Moritz College of Law Alumni Society Public Service Award. In addition to her administrative duties, Ms. Skaggs actively litigates consumer class-action cases. See, e.g., Matthews v. New Century Mortgage, 185 F. Supp.2d 874 (S.D. Ohio 2002) (predatory lending); Mick v. Level Propane Gases, Inc., 168 F. Supp.2d 804 (S.D. Ohio 2001) (grant of preliminary injunction in consumer class action); Mick v. Level Propane Gases, Inc., 203 F.R.D. 324 (S.D. Ohio 2001) (certification of 23(b)(3) class in consumer class action); Turner v. City of Chillicothe, Case No. C2-00-980 (S.D. Ohio 2000) (class-action utilities termination case). Section 17.1 is a proposed second amended class complaint by tenants against water authorities for shutting off the water service to their apartment.1 The tenants argue that termination of their water service with notice only to the landlord violated due process,2 equal protection, and the federal Equal Credit Opportunity Act. The complaint seeks injunctive and declaratory relief and also actual and punitive damages and attorney fees. Section 17.2 is an appellate brief and 17.3 is a reply appellate brief in support of the claims.

1 2

See National Consumer Law Center, Access to Utility Service 11.5.3 (2d ed. 2001 and Supp.). See National Consumer Law Center, Access to Utility Service 12.2 (2d ed. 2001 and Supp.).

17.1 Complaint
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION [CONSUMER 1] and [CONSUMER 2], Plaintiffs, v. ADAMS COUNTY REGIONAL WATER DISTRICT, and BRIAN AST, and WILLIAM ALBRECHT and PHYLLIS ALBRECHT, Defendants. Case No.

PLAINTIFFS PROPOSED SECOND AMENDED CLASS ACTION COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF, DAMAGES AND ATTORNEY FEES PRELIMINARY STATEMENT 1. Plaintiffs are residential consumers of water service who challenge defendants practice of terminating water service in violation of due process and equal protection clauses of the Fourteenth Amendment to the United States Constitution, the Equal Credit Opportunity Act (hereafter ECOA), 15 U.S.C. 1691 et seq., Ohios Landlords Tenant Act and Ohio Rev. Code 5321.01 et seq. of Ohio law. Plaintiffs seek primarily class declaratory and injunctive relief, and make individual requests for damages. JURISDICTION 2. This Court has jurisdiction over plaintiffs claims under 28 U.S.C. 1331, 1343(a)(4), 2201, 2202 and 1367(a). VENUE 3. Venue is appropriate in the Southern District of Ohio pursuant to 28 U.S.C. 1391(b) because defendants reside in the Southern District and the events giving rise to the claims occurred there.

PARTIES 4. Named plaintiffs, [Consumer 1] and [Consumer 2] (hereinafter plaintiffs), are natural persons who, at all times mentioned herein, resided in a residential home they rented in the Town of Peebles, County of Adams, State of Ohio at [Address] (hereinafter premises). Plaintiffs were the ultimate users of water utility services exclusively supplied to their residence by defendant Adams County Regional Water District (hereinafter Water District). Plaintiffs are tenants as defined in Ohio Revised Code 5321.01(A). Plaintiffs are applicants as defined by 15 U.S.C 1691a(b) and 12 C.F.R. 202.2(e). 5. Defendant Water District provided water services to the residences of Adams County, Ohio. At all times mentioned herein, Defendant Water District was acting under color of state law within the meaning of 28 U.S.C 1983. Defendant Water District is a creditor as defined by 15 U.S.C 1691a(e) and 12 C.F.R. 202.2(l). 6. Defendant John Ast (hereinafter Ast) is the director of defendant Water District. He has decision-making authority for defendant Water District regarding the termination of water service. He knew, or should have known, the Sixth Circuit law and all other applicable law required named defendants to provide adequate notice and appeal procedures, both before and after termination of services, and forbade termination or denial of water service based on the fact that customers do not own real estate where they are attempting to establish separate and independent water accounts. (Defendants Ast and Water District collectively referred hereinafter as Water Defendants.). At all times mentioned herein, Defendant Ast was acting under color of state law within the meaning of 28 U.S.C 1983. Defendant Ast is a creditor as defined by 15 U.S.C 1691a(e), and 12 C.F.R. 202.2(l). 7. Water Defendants were landlords, within the meaning of Ohio Rev. Code 5321.01(B), because they were acting as agents for Defendants, William and Phyllis Albrecht (hereinafter Albrechts). 8. Defendants Albrechts are the owners of the property located at the premises, which was serviced by the Water Defendants. Defendant Albrechts are landlords as defined by Ohio Revised Code 5321.01(B). Defendant Albrechts were acting under color of state law within the meaning of 28 U.S.C 1983, because there is a sufficiently close nexus between the Water Defendants and their conduct so that the conduct may be fairly attributed to the Water Defendants. CLASS ACTION ALLEGATIONS 9. Plaintiffs bring this Complaint as a class action under Rule 23 of the Federal Rules of Civil Procedure. Plaintiffs seek to represent, for declaratory and injunctive relief and restitution pursuant to Rule 23(b)(2). The case is defined as all similarly situated individuals who have suffered, or who will suffer in the future, from defendants practice of: a. Terminating water service without sufficient prior notice, without the opportunity for a hearing, or without an effective post termination hearing process, in violation of the due process and/or equal protection clauses of the Fourteenth Amendment to the United States Constitution; and b. Terminating or refusing to establish water service because applicants do not own the real estate where they are attempting to establish water accounts and/or

continued service; and/or failing to provide a written ECOA notice of adverse action. 10. All of the prerequisites to a class action in Rule 23(a) are satisfied by the class: a. Numerous individuals have suffered deprivation of their rights pursuant to defendants unlawful practices and numerous individuals will suffer in the future. Therefore, the class is so numerous that joinder of all members is impracticable. b. There are questions of law and fact common to the plaintiffs class. The common questions include, among other things (1) whether the Water Defendants practices of terminating water service without prior notice, any hearing, nor any post termination remedy, violate the Fourteenth Amendment; and/or (2) whether terminating or refusing to continue water service because plaintiffs do not own the real estate where they are attempting to establish water accounts and/or requested continued service, and/or failing to provide written ECOA notice of adverse action violated the ECOA. c. The claims of the plaintiffs are typical of the claims of the class. Pursuant to the practices challenged here, the plaintiffs were terminated from water services, with insufficient notice, no hearing, and no post termination process, as were members of the class. Also, pursuant to the practices challenged here, the Water Defendants terminated or refused to continue water service for plaintiffs and the plaintiff class because they do not own the real estate where they are attempting to establish water accounts and/or continued service; and/or the Water Defendants failed to provide them with written ECOA notice of adverse action. d. The plaintiffs will fairly and adequately represent the interests of the class. The plaintiffs have no interests antagonistic to the class, they seek declaratory and injunctive relief and money damages on behalf of the entire class and such relief will benefit all members of the class, and they are represented by counsel who are competent and experienced in consumer and civil rights class action litigation. 11. The class satisfies Rule 23(B)(2) because the Water Defendants have engaged in a course of conduct common to all members of the class, and final declaratory and injunctive relief in favor of the plaintiff class is therefore appropriate. FIRST CLAIM FOR RELIEF: CLASS DECLARATORY AND INJUNCTIVE RELIEF AGAINST WATER DEFENDANTS ONLY 12. Water Defendants are the exclusive supplier of water service to residents of Adams County, Ohio, including plaintiffs. 13. Water service to private residences is the most basic and essential utility service, and is necessary for the health and safety of the residents. 14. On August 7, 2001, plaintiffs leased the premises from the Albrechts which premises were exclusively served by the Water Defendants. 15. Plaintiffs, in accordance with the terms of their lease, were responsible for paying the water bill that was sent each month by the Water Defendants to the landlords who would then present the bill each month to the plaintiffs for payment. 16. According to Albrechts, plaintiffs owed rent for the month of November 2002. If plaintiffs owed rent it was only because Albrechts recently demanded and extorted payment from

them for the repair of the hot water heater and other repairs for which the landlords were legally required to pay and should have paid. 17. Albrechts, rather than initiate lawful proceedings to evict and/or collect rent, chose the route of an unlawful eviction by going to the business office of the Water Defendants on November 26, 2002 to request that the water service be terminated and the account for the premises be closed. 18. Water Defendants immediately, on November 26, 2002, eagerly obliged the landlords request and turned-off the water service at plaintiffs residence without a pretermination notice, due process and/or without the slightest concern or human regard as to whether or not the premises were occupied. 19. Plaintiffs, and the class they seek to represent, have a property interest in water services under: Ohio Revised Code 5321.04(C)(6) and 5321.15(C); defendant Water Districts rules and regulations (Rules II.A. and IX.A., Exhibit A attached hereto); third party beneficiary contract law; and/or as constitutional right without reference to state law or any other independent source. 20. On November 26, 2002 both plaintiffs contacted the Water Defendants and requested that they be able to establish an account with Defendant Water District in their own names independent of that of the landlords. 21. On November 27, 2002 plaintiff, [Consumer 1], renewed his request. 22. Plaintiffs were informed each time by Colleen and others that were employed by the Water Defendants that they could not establish an account in their own names unless they were able to produce a deed to the premises or words to that effect. Further, plaintiffs were informed that it was the official policy, practice and procedure of the Water Defendants not to permit anyone other than the owner of the property to establish an account. Service Application Rule II.B, Exhibit A at 1. 23. On November 27, 2002, an unknown individual, purporting to represent the Water Defendants, called plaintiffs counsel. She left a voicemail message. She stated that she was the office manager of the Adams County Regional Water District who was aware of the situation and that there was nothing she could do because she was merely following company rules. 24. Water Defendants were actually aware, or should have been aware, that the premises were occupied when they terminated the service of the plaintiffs. Water Defendants were actually aware or should have been aware that Service Application Rule II.A, Exhibit A at 1, provides plaintiffs with a right to have continued water service in their name, and that the rules did not provide for any pre-termination notice and due process. 25. Without affording plaintiffs pre-termination notice and due process of law, Water Defendants turned-off the water service to the premises on November 26, 2002 and have refused numerous requests made thereafter to restore service as of the filing of this action. Likewise, the rules provide no post-deprivation process for plaintiffs. 26. At all times mentioned herein, Water Defendants conduct in refusing to permit the establishment of water accounts by tenants in their own names, or to continue service to a person, without first showing a deed or other proof of ownership, from the tenant was in violation of the due process and/or equal protection clauses of the Constitution of the United States. 27. The express policy, practice and procedure of the Water Defendants in denying plaintiffs and other tenants the right to establish water service independently of that of the owner

of the real estate is ongoing and in direct contradiction to the due process and/or equal protection clauses of the Constitution of the United States. 28. Plaintiffs and the class of persons they seek to represent herein have suffered irreparable injury and harm and have no adequate remedy at law. Thus, the availability of a monetary remedy is not adequate. Also, there is no state remedy that comports with procedural due process. The Water Departments Rules and Regulations do not provide an adequate remedy. The Rules and Regulations do not comport with procedural due process. Notice and pretermination process is not impractical, and no post-deprivation remedies are available. Likewise, Ohio Rev. Code 5321.15(C) does not provide an adequate remedy. 29. As such plaintiffs and the class of persons they seek to represent are entitled to an order permanently enjoining and prohibiting Water Defendants from engaging in unconstitutional practices, and they are entitled to restitution. 30. Defendants, acting under color of state law and through official acts, and acting pursuant to established official customs and policies complained of herein, violated plaintiffs rights under the Fourteenth Amendment to the United States Constitution by terminating plaintiffs water service without required notice and opportunity for a hearing, enforceable through 42 U.S.C. 1983. SECOND CLAIM FOR RELIEF: INDIVIDUAL RELIEF AGAINST ALL DEFENDANTS 31. Plaintiffs incorporate by reference each and every allegation contained in the First Claim for Relief as if fully rewritten herein. 32. Plaintiffs consist of a family of six persons, with four children ranging in age from three to seven years of age. Plaintiff, [Consumer 2], is pregnant and is experiencing complications due to diabetes. 33. Albrechts, acted in concert with the Water Defendants. All defendants were expressly aware of plaintiffs dire circumstances. Likewise, Water Defendants were made aware of the plaintiffs circumstances and exhibited not the slightest concern or human compassion toward the plaintiffs. 34. Plaintiffs were without water from November 26, 2002 until December 17, 2002, almost three weeks, before they were ultimately forced to leave the premises. 35. During this three-week period plaintiffs had to cancel their plans for Thanksgiving dinner, which they had planned to provide for their family. 36. During this three- week period plaintiffs were, on occasion, forced to drive forty-five minutes to their nearest relative or friend in order to freely have access to water. 37. During this three-week time period plaintiffs, for several days, were prevented by snow and ice from getting out of their driveway to even have the ability to drive forty-five minutes to their nearest relative or friend in order to freely have access to water. 38. Furthermore, on or about December 2, 2002, Water Defendants claim to have allegedly restored water services to the premises. However, on that same date defendant landlord William Albrecht trespassed onto the premises and maliciously turned-off the water without the knowledge and authority of the plaintiffs. Defendant William Albrecht then telephoned the Water Defendants and informed them of this fact who did absolutely nothing to restore the service upon learning of this information.

39. Albrechts, at all times mentioned herein, acted in concert with and with the full knowledge and cooperation of the Water Defendants to deprive the plaintiffs of their constitutional rights. 40. All defendants conduct toward the plaintiffs was arbitrary and capricious and discriminatory in violation of the due process and/or equal protection clauses of the Fourteenth Amendment to the Constitution of the United States. 41. At all times mentioned hereto, all the defendants conduct toward the plaintiffs was intentional, malicious, wanton and/or with reckless disregard for plaintiffs constitutional rights. 42. Defendants, under color of state law and through official acts, and acting pursuant to established official customs and policies complained of herein, violated plaintiffs right to due process and/or equal protection under the Fourteenth Amendment to the United States Constitution in violation of 42 U.S.C. 1983. THIRD CLAIM FOR RELIEF: CLASS AND INDIVIDUAL EQUAL CREDIT OPPORTUNITY ACT RELIEF AGAINST WATER DEFENDANTS ONLY 43. The dealings between the Water Defendants and the plaintiffs and members of the plaintiffs class are credit transactions as those terms are defined in 15 U.S.C. 1691, et seq. and Regulation B, 12 C.F.R. 202.02(m). 44. Plaintiff [Consumer 3] is a married woman, and a member of a protected class. She and her husband applied for credit from the Water Defendant. She/he was qualified for the credit; and her/his credit application was denied despite her/his qualifications because she/he did not own property where she requested continued water services. 45. The Water Defendants established policies and customs and/or patterns and practices of requiring plaintiffs and other consumers of, and applicants for, water service to comply with conditions different from similarly situated customers in order to restore water service, including but not limited to refusing to provide water service accounts to applicants who are not landowners, violate the ECOA and Regulation B in various respects, including: a. They result in a disparately high rejection of applications from women and minority applicants. See, 15 U.S.C. 1691(a)(1), FRB Official Staff Commentary, ECO-1, 202.6(a)(2) and 12 C.F.R. 202.6 and/or b. No ECOA notice of adverse action was provided to consumers of and/or applicants for water services. See 12 C.F.R. 202.09. 46. As a result of Water Defendants violation of the ECOA, Water Defendants are liable pursuant to 15 U.S.C. 1691e(b). FOURTH CLAIM FOR RELIEF: INDIVIDUAL RELIEF AGAINST ALL DEFENDANTS 47. This ancillary state claim for relief is brought pursuant to Ohios Landlord Tenant Act, Ohio Rev. Code 5321.01, et seq. 48. Plaintiffs hereby incorporate each and every allegation contained in the First, Second and Third Claims for Relief as if fully rewritten herein. 49. Albrechts were required by law to make repairs to the premises and to keep it in fit and habitable condition for the comfort and enjoyment of plaintiffs. 50. Prior to November 2002, the hot water heater in the premises malfunctioned.

51. Albrechts refused to repair it and required the plaintiffs to spend in excess of $300.00 to replace it. 52. Albrechts required plaintiffs to pay for additional repairs they should have made through the terms of their tenancy. 53. Pursuant to Ohio Rev. Code 5321.04(C)(6), Albrechts shallsupply plaintiffs with running water and reasonable amounts of hot water. 54. Pursuant to Ohio Rev. Code 5321.15(A), Albrechts and their agents are not permitted to initiate any act, including termination of water services, in order to recover possession of the premise, other than is provided by pursuing an eviction action in a court of competent jurisdiction. 55. In November 2002, because Albrechts forced them to replace the hot water heater, plaintiffs were unable to promptly pay their rent. 56. Albrechts, instead of utilizing lawful civil proceedings to evict plaintiffs, went to the offices of the defendant Water District on November 26, 2002 and closed the water account at the premises, resulting in the termination of water utility service to the premises occupied by the plaintiffs. Water Defendants refused to restore water service when requested by plaintiffs to establish an account independently. 57. Pursuant to Albrechts request to terminate water service, Water Defendants were agents as defined by Ohio Rev. Code 5321.04(B), and therefore, subject to the mandatory prohibition found in Ohio Rev. Code 5321.15(A). 58. According to Defendant Water District, water service was restored to the premises on or about December 2, 2002. Upon learning that water had been restored, defendant William Albrecht trespassed on the premises occupied by the plaintiffs and personally disconnected the water service in violation of Ohio Rev. Code 5321.15(C). 59. Additionally, prior to the time plaintiffs right to possession had terminated, Albrechts entered the premises and seized personal property belonging to plaintiffs to hold in lieu of rent without having any Court order to do so, in violation of Ohio Rev. Code 5321.15(B). PRAYER FOR RELIEF WHEREFORE, plaintiffs seek judgment against defendants as follows: 1. That the Court declare defendants practices violate due process, equal protection, the ECOA and/or state law; 2. That the Court enter an order permanently enjoining the Water Defendants, their employees, agents and successors, and all other personnel in active concert or participation with any of them from: a. Terminating water service without prior notice and a meaningful opportunity to contest termination; and/or b. Terminating or refusing to continue water service because consumers do not own real estate where they are attempting to establish a water account and/or continued service; and/or in failing to provide a written ECOA notice of adverse action; 3. That the Court enter an order granting relief against the Water Defendants pursuant to 15 U.S.C. 1691e(b); 4. That the Court award plaintiffs and members of plaintiffs class restitution against the Water Defendants;

5. That the Court award plaintiffs actual and punitive damages on their individual claims against defendants, jointly and severally; 6. That plaintiffs award the plaintiffs and members of the plaintiff class their reasonable attorney fees, costs and expenses; and/or 7. That the Court grant such additional relief as the interests of justice may require.

Respectfully submitted,

__________________________________ Attorneys for Plaintiffs

17.2 Consumers Appellate Brief

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION [CONSUMER 1] and [CONSUMER 2], Plaintiffs, v. ADAMS COUNTY REGIONAL WATER DISTRICT, and BRIAN AST, and WILLIAM ALBRECHT and PHYLLIS ALBRECHT, Defendants. Case No.

STATEMENT IN SUPPORT OF ORAL ARGUMENT This civil rights and consumer class action presents important questions of law regarding the application of the Due Process and Equal Protection clauses of the Fourteenth Amendment to the United States Constitution, as well as the application of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691 et seq. The lower court, without analysis, dismissed this case at the pleading stage (R. 28 Order, Joint Appendix [hereinafter referred to as APX __], based upon a Report and Recommendation (R&R) of the Magistrate Judge (R 20, APX ___), which misapplied well-established law. JURSIDICTIONAL STATEMENT The District Court had jurisdiction over this action pursuant to 28 U.S.C. 1331, 1343(a)(4), 2201, 2202, and 1367(a). This Court has jurisdiction over this appeal pursuant to 28 U.S.C. 1291. STATEMENT OF THE ISSUES I. II. Whether the trial court erred as a matter of law by dismissing [Consumers] Section 1983 Due Process claims. Whether the trial court erred as a matter of law by dismissing [Consumers] Section 1983 Equal Protection claims.

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III. IV. V. VI.

Whether the trial court erred as a matter of law by finding that defendant Ast is entitled to qualified immunity. Whether the trial court erred as a matter of law by dismissing [Consumers] claims under the Equal Credit Opportunity Act. Whether the trial court erred by denying [Consumers] leave to file the proposed second amended complaint. Whether he trial court erred as a matter of law by finding that the doctrine established in Parratt v. Taylor applied in this case. STATEMENT OF THE CASE

On November 29, 2002, plaintiffs-appellants, [Consumer 1] and [Consumer 2] ([Consumers]), filed this class action against defendants-appellees Adams County Regional Water District (Water District) and defendant-appellant Brian Ast (Ast), Director of Water District (collectively Water Defendants) for permanent, injunctive and declaratory relief under Rule 23(b)(2) insofar as the policies, practice and procedures of those named entities bar consumers from continuing or establishing water services and/or water accounts in his/her own name solely because the they do not own real estate where they are attempting separate and independent water accounts and/or services in violation of the due process and equal protection clauses of the Fourteenth Amendment. In addition, [Consumers] challenged the policies, practices and procedures of all defendants-appellees whereby water services were terminated without proper notice in violation of the Due Process Clause of the Fourteenth Amendment to the United States Constitution. (R. 1, APX __). The Complaint was amended prior to service to add claims against [Consumers] landlords, William and Phyllis Albrecht (Albrechts). (R. 2, APX __). The Water defendants and the Albrechts filed motions to dismiss. (R. 5 and 7, APX. __ and ___). The Water defendants did not rely upon any evidence, although the Albrechts filed an affidavit with a copy of the written lease attached. [Consumers] filed memoranda in opposition to the motions to dismiss (R. 14 and 15, APX. __ and ___), and a motion for leave to file a proposed amended complaint (R. 13, APX. __). The District Court stayed class certification until ruling on the motions to dismiss. (R. 9, APX __). On September 2, 2003, the Magistrate Judge issued the Report and Recommendation (R&R) granting the Water defendants motion to dismiss; declining to exercise jurisdiction over [Consumers] state law claims; denying as moot the motion to dismiss filed by the Albrechts; and denying [Consumers] motion for leave to file the proposed amended complaint. (R. 20, APX __). [Consumers] timely filed objections. (R. 23, APX __). The District Court, without discussion, affirmed the magistrate judges R&R, and dismissed this case. (R. 28, APX __). The clerk entered the judgment. (R. 29, APX __). [Consumers] timely filed their notice of appeal. (R. 30, APX ___). STATEMENT OF FACTS The following facts are taken from the proposed amended complaint. (R.13, APX. __). On August 7, 2001, [Consumers] leased a residential home located in the Town of Peoples, County of Adams, State of Ohio at [Address] (premises) from the Albrechts. [Consumers] have four children, ranging from three to seven years old. [Consumer 2] was pregnant and

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experiencing complications due to diabetes. [Consumers] and their family were the ultimate user of water utility services exclusively supplied to the residence by defendant Adams County Regional Water District (Water District), who are the exclusive suppliers of water services to residents of Adams County, Ohio. Defendant John William Ast (Ast) is the director of defendant Water District. In accordance with the terms of their lease, [Consumers] were responsible for paying the water bill that was sent each month by the Water defendants to the Albrechts, who would then present the bill each month to [Consumers] for payment. In November 2002, the Albrechts claimed that [Consumers] owed rent for the month. Rather than initiate lawful proceedings to evict and/or collect rent, the Albrechts chose to engage in unlawful self-help eviction. They went to the Water defendants business office on November 26, 2002, and requested that the water service be terminated at the premises, and the account for the premises be closed. On November 26, 2002, the Water defendants immediately obliged the Albrechts request and turned-off the water service at the premises without pre-termination notice, due process and/or without the slightest concern as to whether the premises were occupied. On November 26, 2002, [Consumers] contacted the Water defendants and requested that each be able to establish an account in his/her name. On November 27, 2002, [Consumer 1], renewed his request. [Consumers] were informed each time by Colleen and other Water defendants employees that neither could establish an account in his/her name unless he/she were able to produce a deed to the premises, or words to that effect. Further, [Consumers] were informed that it was the Water defendants official policy, practice and procedure was to not permit anyone other than the owner of the property to establish an account. On November 27, 2002, an unknown individual, purporting to represent the Water defendants, called [Consumers] counsel, Steven Shane. She left a voicemail message, stating that: she was the office manager of the Adams County Regional Water District who was aware of the situation and that there was nothing she could do because she was merely following company rules. The Water defendants were actually aware, or should have been aware, that [Consumers] occupied the premises when they terminated the service. The Water defendants were actually aware or should have been aware that its rules and regulations.3 They provide [Consumers] with a right to have continued water service in their name because they were holding property and in need of service; but did not provide for any pre-termination notice and due process, including no post-deprivation process for [Consumers].4 Also, the Water defendants failed to provide an ECOA notice of adverse action against either [Consumer], as applicants for water services.5 Without affording [Consumers] pre-termination notice or any other due process rights, the Water defendants, acting as agents for the Albrechts, turned-off the water service to the premises on November 26, 2002, and refused numerous requests to restore service. The Albrechts acted in concert with and with the full knowledge and cooperation of the Water defendants. All defendants were expressly aware of [Consumers] dire circumstances. When specifically made aware of [Consumers] circumstances, the Water defendants exhibited not the slightest concern towards them. [Consumers] were without water from November 26, 2002 until December 17, 2002,
3 4

(R. 13, APX___ at __), Service Application Rule II.A. See Service Application Rule II.A (R. 13, APX___ at __). 5 See 12 C.F.R. 202.09.

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before they were ultimately forced to leave the premises. During this almost three-week period, they had to cancel their plans for Thanksgiving dinner, which they were hosting for their family. Also during this period, [Consumers] were forced to drive forty-five minutes to their nearest relative or friend in order to freely have access to water. On or about December 2, 2002, the Water defendants claim to have allegedly restored water services to the premises. However, on that same day William Albrecht trespassed onto the premises, and personally turned-off the water, without [Consumers] knowledge or permission. Mr. Albrecht then telephoned the Water defendants and informed them of his actions. The Water defendants did not restore the water service. SUMMARY OF ARGUMENT [Consumers] state a due process claim for relief under 42 U.S.C. 1983 against all defendants-appellees. The Water defendants6 and the Albrechts7 were acting under color of state law. [Consumers] have rights that emanate from several independent sources of law within the meaning of the Fourteenth Amendment and, therefore, are entitled to due process of law.8 [Consumers] were denied the basic safeguards of due process and, as a result, their constitutional rights were violated. Further, [Consumers] state an equal protection claim for relief against the Water defendants.9 Moreover, because the law was clearly established at the time, Ast is not entitled to qualified immunity for [Consumers] Section 1983 claims. [Consumers] also state an ECOA claim against the Water defendants because the Water defendants policies and practices result in a disparately high rejection of applications from women and minority applicants10 and/or no ECOA notice of adverse action was provided to consumers of and/or applicants for water services.11 Finally, the proposed amended complaint sets forth a valid pendant state claim for relief under Ohios Landlord Tenant Act. STANDARD OF REVIEW
The decision to dismiss an action under Rule 12(b)(6) is a question of law, which requires 12 a de novo review by this Court. It is axiomatic that in dismissing a Complaint, a Court must construe the complaint in the light most favorable to [[Consumers]], accept all the factual allegations as true, and determine whether [[Consumers]] can prove a set of facts in support of 13 its claims that would entitle [them] to relief. The issue is not whether [Consumers] will

ultimately prevail, but whether they are entitled to offer evidence to support their claims.14 ARGUMENT
See O.R.C. Chapter 6119. Chapman v. Higbee Co., 319 F.3d 825, 834-835 (6th Cir. 2003) (en banc). 8 See Memphis Light, Gas & Water Div. v. Craft, 534 F.2d 684 (6th Cir. 1976), affd, 436 U.S. 1 (1978). 9 See Davis v. Weir, 497 F.2d 139 (5th Cir. 1974). Cf. ONeal v. City of Seattle, 66 F.3d 1064 (9th Cir. 1995) (prior customers delinquency); Ransom v. Marrazzo, 848 F.2d 398 (3d Cir. 1988) (same).
7 6

See 15 U.S.C. 1691(a)(1), FRB Official Staff Commentary, ECO-1, 202.6(a)(2) and 12 C.F.R. 202.6. See 12 C.F.R. 202.09; Mays v. Buckeye Rural Elec., 277 F.3d 873, 880 (6th Cir. 2002). 12 Bovee v. Coopers & Lybrand CPA, 272 F.3d 356, 360-61 (6th Cir.2001); Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002). 13 Conley, 355 U.S. at 45-46. 14 Swierkiewicz, 534 U.S. at 511 (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
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I. THE TRIAL COURT ERRED AS A MATTER OF LAW BY DISMISSING [CONSUMERS] SECTION 1983 DUE PROCESS CLAIMS A. [Consumers] have a property interest in continued water service Contrary to the finding of the Magistrate Judge, [Consumers] have a property interest within the Fourteenth Amendment entitled to the protections of due process. [Consumers] must only allege a property interest in continued utility service to defeat Defendants motion to dismiss. In Craft, the Supreme Court held that a customer has a property interest in continued service from a municipal utility and that some procedure for resolving billing disputes is required prior to termination.15 The property interest in Craft was based upon an independent law source.16 For non-billed users such as [Consumers], a property right can be found in state law, promulgated rules and regulations, contract law, or any other independent law source. 1. Ohios Landlord Tenant Act is one such independent source of property rights [Consumers] submit that Ohios Landlord Tenant Act (LTA) provides an independent source of law creating a property right. The Magistrate Judge refers to this argument, but fails to analyze it. (R. 20, APX. at 3.). Instead, he subjectively relegates this argument to be a state law claim, not worthy of constitutional consideration. (R. 20, APX. at 8.) By so doing, the Magistrate Judge ignores the weight of authority that supports [Consumers].17 In Craft, the Court recognized that a protected property right exists when state law confers such an interest.18 Two provisions of the LTA confer [Consumers] a property interest. O.R.C. 5321.04(A)(6) requires landlords to supply running water and reasonable amounts of hot water. O.R.C. 5321.15(A) provides that:
No landlord of residential premises shall initiate any act, including termination of utilities or services, exclusion from the premises, or threat of any unlawful act, against a tenant, or a tenant whose right to possession has terminated, for the purpose of recovering possession of residential premises, other than as provided in Chapters 1923., 5303., and 5321., of the Revised Code. (Emphasis added.)

In this case, the Albrechts admit that they are landlords as defined by O.R.C. 5321.01(B). They terminated [Consumers] water services in violation of O.R.C. 5321.04(A)(6). Further, neither the Albrechts nor their agents are permitted to initiate any act, including termination of water services, in order to recover possession of the premises, other than provided by pursuing an eviction action. O.R.C. 5321.15(A). Thus, this statute gives a right to continued water service to [Consumers].
15 16

Craft, 436 U.S. at 15. Craft, 436 U.S. at 9. 17 See, e.g., Memphis Light, Gas & Water Div. v. Craft, 534 F.2d 684 (6th Cir. 1976), affd, 436 U.S. 1 (1978); Myers v. Alcoa, 752 F.2d 196 (6th Cir. 1985); Davis v. Weir, 497 F.2d 139 (5th Cir. 1974); Turpen v. Corvallis, 26 F.3d 978 (9th Cir. 1994); DiMassimo v. Clearwater, 805 F.2d 1536 (11th Cir. 1986); Sterling v. Maywood, 579 F.2d 1350 (7th Cir. 1978); Koger v. Guarino, 412 F. Supp. 1375 (E.D. Pa. 1976), affd, 549 F.2d 795 (3d Cir. 1977). 18 Craft, 436 U.S. at 9.

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O.R.C. 5321.01(B) defines a landlord to include an agent. The Magistrate Judge refused to address whether the Water defendants were agents for the Albrechts within the purview of O.R.C. 5321.01(B). The Magistrate Judge further disregarded the proposed second amended complaint that alleges that: [Consumers] were tenants and the Water defendants were landlords, within the meaning of O.R.C. 5321.01(A) and (B), respectively; and that the Water defendants and the Albrechts violated O.R.C. 5321.15(A). (R. 13, APX ___, at __ 4, 7, 17-19, 47-57). Because these facts must be taken as true in a motion to dismiss the district court, as a matter of law, should have accepted these facts. The plain wording of O.R.C. 5321.01(B) supports [Consumers] position. The existence of an agency is a question of fact, rather than law.19 An agency relationship is created not by the manifest intent of the parties but rather by the conduct and relationship between the parties. Evidence of past or prior dealings, therefore, is relevant to the determination of whether an agency relationship exists.20 In addition, its existence must be traceable to the principal, because an agency relationship is created by the actions of the principal, not the agent.21 In this case, [Consumers] allege that the Albrechts directed the Water defendants to terminate service to their residence; and the Water defendants executed this directive knowing that [Consumers] resided therein, and without any inquiry as to the occupancy status of that residence.22 Thus, the Water defendants acted on behalf of the Albrechts as an agent to terminate [Consumers] water service. In sum, the LTA provides an independent source of state law creating a property right in continued water service to [Consumers]. The LTA was an attempt to balance the competing interest of landlord and tenants.23 To achieve this balance, the LTA was an attempt to clarify and broaden tenants rights.24 The argument that the Water defendants are not agents of the Albrechts is not a liberal interpretation of the law, and would frustrate the purpose of the LTA. To accept this argument would condone a landlords self-help eviction by delegating the unlawful act to a third party, who would not be held responsible for the unlawful act, even though the party knew the consequence of his actions. For all these reasons, this Court should reverse the decision of the District Court and find that the LTA creates a property right in continued water service for [Consumers]. 2. The Water defendants rules and regulations are another independent source of property rights Another source for [Consumers] property rights emanate from the Water Districts Rules, promulgated pursuant to O.R.C. 6119.06(N). These rules have the force and effect of law, which under Craft may be considered an independent law source. The Magistrate Judges reading and interpretation of these Rules is contrary to law. The cardinal purpose for judicial examination of any written instrument is to ascertain and give effect to the intent of the parties.25 In so accomplishing this purpose, Courts should
19 20

Chevrolet v. Calhoun, 2004 Ohio 1006, at *P8 (Ohio Ct. App. March 4, 2004). Majesky v. Ballmer, No. 67624, 1995 Ohio App. LEXIS 144, at *14 (Ohio Ct. App. Jan. 19, 1995). 21 Restatement (Second) of Agency 27 comment b (1957). 22 R. 13, APX ___ at 17-19. 23 Shroades v. Rental Homes, Inc., 68 Ohio St.2d 20, 25 (1981). 24 Brady v. Koehnke, 1994 WL 155719, at *5 (Hamilton Cty. 1994)(APX__). 25 Foster Wheeler Envir., Inc. v. Franklin Cty. Convn Fac. Auth., (1997) 78 Ohio St.3d 353, 362 (citing Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St. 3d 51 (1989)); see also Vencor, Inc. v. Std. Life & Accident Ins.

15

read the entire document in order to gather intent from the consolidation of the whole.26 Further, [c]ommon words appearing in a written instrument will be given their ordinary meaning unless manifest absurdity results.27 Here, the Rules state in part as follows:
II. SERVICE APPLICATION Any owner of a single family dwelling, auto court, duplex, or multiple dwelling building, a person holding property having reasonable accessibility to the source of, and who is in need of having water supplied to this property, may be a customer of the District. Persons who receive the approval of the Board of Trustees may be a customer of the District by paying the current service tap-in fee along with the signing of a water users agreement and an acknowledgment and/or casement as provided and required by the District, provided that no person otherwise eligible shall be permitted to obtain water service from the District if the capacity of the water system is exhausted by the needs of its existing customers. (Emphasis added). *** IX. CHANGE OF OCCUPANCY A. Not less than one weeks notice must be given personally to the District to discontinue service or to change occupancy. A.

Thus, in this case, Water Districts Service Application Rule II.A defines [Consumers], as persons who may be customers of the District who have had reasonable accessibility to the source of water services, and they are in need of having water supplied to the [premises]. Holding property should be read as commonly used. Thus, [Consumers] are those who are holding property as tenants.28 Thus, the Rules provide an independent law source under Craft. Likewise, Change of Occupancy Rule IX.A. indicates that not less than one weeks notice can be given to the Water defendants to discontinue service. This lag time provides time to notify tenants of the termination. Thus, this Rule creates an independent law source for [Consumers] to be given at least one week of continued service, after the Albrechts initiated termination. The trial court erred by not finding a property right in the Water Districts own Rules. 3. Ohio contract law is an independent source of property rights A third party beneficiary may enforce the rights and obligations of a contract that confers an intended benefit to a contemplated party. An intended third party beneficiary contract was created in this case because the Water defendants had knowledge, via the contract for services and their own conditional regulations, that [Consumers], who pay for these services indirectly,
Co., 317 F.3d 629, 635 (6th Cir. 2002) (The language of [a] contract should be understood in its plain and ordinary meaning). 26 Id. 27 Id. 28 Hold: to have and keep as ones own; have the duties, privileges, etc. of; own, possess; occupy. Websters New World Dictionary (1989) pages 642-43.

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occupied the premises and were for whom the intended benefit of the contractual promises had been made.29 Thus, contrary to the R&R, under the Rules, [Consumers] can enforce the contract entered into between the Albrechts and the Water defendants. Service Application Rule II.A recognizes that [Consumers] and other non-billed tenants have a substantial interest in continued service, and that the utility owes them a duty, especially when the landlord requests termination of service. Furthermore, Rule II.C contemplates an intended beneficiary by explicitly stating [b]ills will be sent solely to the owner/owners, rather than sending the bills to the deeded property and place of service. Thus this rule addresses situations where the place of service is not the locus of the owner, but that of a party intended to receive the benefits of service. The reading of Rule II.C in this manner is especially true when read in conjunction with Rule II.A since it is the only other place in the regulations where any references are made providing for the needs of a person holding property, rather than just owners, thereby creating an intended third party beneficiary relationship between [Consumers] and the Water defendants. Thus, although [Consumers] are not a named party to the service contract, since they are not owners, they may enforce the promises made intended for their benefit. The trial courts decision must be reversed. 4. Substantive due process creates an independent law source Substantive due process serves as a vehicle to limit various aspects of potentially oppressive government action.30 Substantive due process claims may be loosely divided into two categories: (1) deprivations of a particular constitutional guarantee; and (2) actions that shock the conscience.31 [Consumers] complain that both categories apply in this case. First, [Consumers] have alleged a particular constitutional guarantee. Although the Supreme Court has not decided whether continued receipt of utility services is a right of constitutional status, other federal courts have found such a property right in the Constitution, without reference to state or municipal law. The rationale underlying these cases is that a consumers reliance upon continued service amounts to a protected property right.32 In fact, the Sixth Circuit has described continued utility service as much more important than other interests recognized by the Supreme Court as meriting due process protection.33 In Palmer, the Court held shutting off utility service inflicts hardship upon a consumer that goes far beyond such deprivation that a loss of driving privileges,34 delay in paying unemployment benefits,35 or the denial of direct welfare payments.36 The Palmer court affirmed the District Courts ruling that continued utility service was a property right protected by the Constitution.37 Craft mandates that services can only be
Seifer v. Phe, 196 F.Supp.2d 622, 633 (S.D. Ohio 2002) (citation omitted). Howard v. Grinage, 82 F.3d 1343, 1349 (6th Cir. 1996). 31 Pusey v. City of Youngstown, 11 F.3d 652, 656 (6th Cir.1993), cert. denied, 512 U.S. 1237 (1994);Mansfield Apt. Owners Assn v. City of Mansfield, 988 F.2d 1469 (6th Cir. 1993). 32 See, Davis; Koger; Condosta v. Vermont Elec. Coop., Inc., 400 F.Supp. 358 (D.Vt. 1974); Donnelly v. City of Eureka, 399 F.Supp. 64 (D. Kan. 1974) (Donnelly); Bronson v. Con. Ed. of N.Y., 350 F.Supp. 443 (S.D.N.Y. 1972); Hattell v. Pub. Serv. Co. of Colo., 350 F. Supp. 240 (D. Colo 1972); Stanford v. Gas Serv. Co., 346 F.Supp. 717 (D. Kan. 1972); Lamb v. Hamblin, 57 F.R.D. 58 (D. Minn. 1972). 33 Palmer v. Columbia Gas Co., 479 F.2d 153 (6th Cir. 1973). 34 Bell v. Burson, 402 U.S. 535 (1971). 35 Sherbert v. Werner, 374 U.S. 398 (1963). 36 Goldberg v. Kelley, 397 U.S. 254 (1970). 37 See, Donnelly; Davis; Koger; Stanford.
30 29

17

terminated after providing an opportunity for due process. Although [Consumers], like other non-billed tenants, may not be named on their water bills, they are nonetheless the actual users of the service and the individuals who need the protection of Due Process procedures. The fact that services are essential and that the utility is a monopoly does not change regardless of who must pay for it. Constitutionally, [Consumers] interests in continued service are clearly greater than that of the Albrechts, who do not reside in the premises. The constitutional protection arises because continued utility services, once provided, are at least as important, if not more important, than other constitutionally protected rights. Thus, [Consumers] have stated a substantive due process claim. Second, the Magistrate Judges claim that [Consumers] position is impractical and silly must be rejected for various reasons. This case was referred to the magistrate to resolve the pending motions, not to try the case without evidence. The correct analysis is to review the facts in [Consumers] favor, and apply Ohio law to determine whether the conduct shocks the conscience. The magistrate did neither. Ohio law clearly establishes that defendants-appellees took the law in [their] own hands.38 It is difficult to imagine a more volative situation from which extreme violence could be reasonably anticipated than the surreptitious [termination of water services without due process].39 Since the proposed complaint alleges facts that shock the conscience, [Consumers] state a substantive due process claim. The decision must be reversed. B. [Consumers] state a due process claim for relief against the Albrechts In order to assert a 42 U.S.C. 1983 civil rights claim, a plaintiff must allege and prove that a person acting under color of state law deprived him/her of a right secured by the Federal Constitution or laws of the United States.40 The protection afforded to citizens by the Fourteenth Amendment applies to state or governmental action as well.41 In this case, the proposed complaint presents a due process claim against the Albrechts as well as the Water defendants. The Albrechts actions were taken under color of state law. There is a sufficiently close nexus between the Water defendants and the Albrechts conduct so that the Albrechts conduct may be fairly attributed to the Water defendants.42 Since there is not dispute that the LTA applies to the Albrechts, [Consumers] independent law source is O.R.C. 5321.01(B) and/or 5321.15(A). Thus, [Consumers] state a due process claim against the Albrechts for terminating their water services without pre-termination notice and due process. The trial courts decision must be reversed. II. THE TRIAL COURT ERRED AS A MATTER OF LAW BY DISMISSING [CONSUMERS] SECTION 1983 EQUAL PROTECTION CLAIMS In the context of utility shut-off cases, the Equal Protection analysis focuses on predetermination procedures that affect the customer after termination.43 [Consumers] claim that
38 39

Coward v. Fleming, 89 Ohio App. 485, 493 (Hamilton Cty. 1951). Edwards v. C.N. Investments, 27 Ohio Misc. 57, 61 (Muni. Shaker 1971) (J. Rocker). 40 Christy v. Randlett, 932 F.2d 502, 504 (6th Cir.1991). 41 Mays, 277 F.3d at 880. 42 Chapman, 319 F.3d at 834-835. 43 See, e.g., Davis; Koger.

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the Water defendants classification scheme cannot meet the rational basis test. Under traditional Equal Protection analysis, a classification must be sustained if the classification itself is rationally related to legitimate governmental interests.44 The Magistrate found that the policies are related to two legitimate governmental interests; ease of collection of accounts and the conservation of water. (R. 20, APX __ at __). This analysis is defective for five reasons. First, the ease of bill collection does not provide a sufficient basis for the refusal to continue services in [Consumers] name and/or to open a new account under their name, social security numbers and additional identifiable information.45 Second, there is not a scintilla of evidence that depriving [Consumers] of the necessity of water is a legitimate or rational means of conservation of the environment and the prevention of water depletion in the Ohio River Valley. Such a finding violates the standard for review in this case. Third, the Water defendants do not have a legitimate interest in participating in the Albrechts self-help eviction of [Consumers].46 Fourth, [Consumers] are person[s]holding property reasonable accessibility to the source of, and who [are] in need of having water supplied to the [premises], and therefore, may be customers of the district. [Consumers] have a right to be considered customers of the Water defendants. Last, as a condition of obtaining service, providing a deed to the property or proof of ownership is arbitrary and capricious. [Consumers] sufficiently alleged that their treatment under the rules is arbitrary and disparate.47 The trial courts decision must be reversed. III. THE TRIAL COURT ERRED AS A MATTER OF LAW BY FINDING THAT DEFENDANT AST IS ENTITLED TO QUALIFIED IMMUNITY The Magistrate Judge recommended that defendant Ast is entitled to qualified immunity because [Consumers] have not established that there is a constitutional violation. This finding is without merit. As previously discussed, the constitutional claims against Ast are based upon clearly established law in the Sixth Circuit, of which a reasonable person should know. This determination is based on the allegations contained in the amended complaint and in the Water defendants Rules. Thus, Ast violated clearly established law. Further, Ast knew the Rules, and knew or should have known of the potential constitutional and/or ECOA violations. Where an official could be expected to know that his conduct would violate statutory or constitutional rights, he should be made to hesitate.48 This standard makes Ast on occasion to have to pause to consider whether a proposed course of action can be squared with the Constitution and laws of the United States.49 Thus, Ast is not entitled to qualified immunity. The trial courts decision must be reversed.

United States Dept. of Agriculture v. Moreno, 413 U.S. 528 (1973). Freeman v. City of Minneapolis, 635 F.Supp. 178, 184 (D. Minn. 1986); Davis, 497 F.2d at 144. 46 See Davis, 497 F.2d at 144-145; Allegheny Pitts. Coal v. Webster County, 488 U.S. 336 (1989) (discussing no legitimate interest grounds of the equal protection aand substantive due process doctrines). 47 See Bush v. Gore, 531 U.S. 98, 104-05 (2000). 48 Harlow v. Fitzgerald, 457 U.S. 800, 819 (1982); Davis v. Mansfield Metropolitan Housing Authority, 751 F.2d 180, 186 (6th Cir. 1984). 49 Mitchell v. Forsyth, 472 U.S. 511, 524 (1980).
45

44

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IV. THE TRIAL COURT ERRED AS A MATTER OF LAW BY DISMISSING [CONSUMERS] EQUAL CREDIT OPPORTUNITY ACT CLAIMS The trial court adopted the Magistrate Judges position that [Consumers] do not state a claim for relief under the ECOA. The R&R states that [Consumer 1] and [Consumer 2] (a married female) were denied credit but that the complaint does not either alleged that either [Consumer 2]s sex or marital status was the reason for the denial. The R&R further states that Mays v. Buckeye Rural Electric Cooperative,50 should not be applied to determine whether [Consumers] received a ECOA notice for new water services in violation of 12 C.F.R. 202.09. (R. 20, APX __ at __). The trial courts decision must be reversed, because the amended complaint alleges a prima facie case, and Mays is controlling. The ECOA prohibits creditors from discriminating against any credit applicant with respect to any aspect of a credit transaction on the basis of race, color, religion, national origin, sex, or marital status. 15 U.S.C. 1691(a)(1). As an entity granting members the ability to defer payment of a debt or to incur debts and defer its payment or to purchase property or services and defer payments thereof, Water defendants are creditors within the meaning of the ECOA. 15 U.S.C. 1691a(d).51 One of the purposes of the ECOA is to eradicate credit discrimination waged against women, especially married women whom creditors traditionally refuse to consider for individual credit.52 ECOA claims of discrimination are evaluated using the same framework that is applied to Title VII cases.53 The Water defendants policy of providing water service accounts only to landlords violates the ECOA because the policy results in a disparately high rejection of applications from women and minority applicants.54 (See proposed second amended complaint 45).55 Thus, [Consumers] seek to establish a claim under a disparate impact theory, which is actionable under the ECOA. See 15 U.S.C. 1691(a)(1), FRD Official Staff Commentary, EEO-1 202.6(a)(2), and 12 C.F.R. 202.06 and Mara v. Columbus, Case No. C2-01-710 at 14 (S.D. Ohio 2002) (R. 13, APX __ at __ to ___).56 Additionally, [Consumers] claim that no ECOA notice was provided to them and/or other applicants for continued or new water services in violation of 12 C.F.R. 202.09. The notification provisions of 202.09 apply unless Water defendants extension of credit constitutes
277 F.3d 873 (6th Cir. 2002). Barney v. Holzer Clinic, Ltd., 110 F.3d 1207, 1209 (6th Cir. 1997) (quoting statutory definition of credit). 52 Mays, 277 F.3d 873 at 876 (citations omitted). 53 Lewis v. ACB Business Services, Inc., 135 F.3d 389, 406 (6th Cir. 1998). 54 [Consumers] have third-party standing to challenge whether the policy discriminates against minorities. See Barrows v. Jackson, 346 U.S. 249 (1953) (Equal Protection). 55 45. Water defendants established policies and customs and/or patterns and practices of requiring Plaintiffs and other consumers of, and applicants for, water service to comply with conditions different from similarly situated customers in order to restore water service, including, but not limited to, refusing to provide water service accounts to applicants who are not landowners, violate the ECOA and Regulation B in various respects, including: a. They result in a disparately high rejection of applications from women and minority applicants. See 15 U.S.C. 1691(a)(1), FRB Official Staff Commentary, ECO-1, 202.6(a)(2) and 12 C.F.R. 202.6 and/or b. No ECOA notice of adverse action was provided to consumers of and/or applicants for water services. See 12 C.F.R. 202.09. 56 An appeal of that case is pending before this Court. See Golden v. City of Columbus, Case No. 03-4252.
51 50

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incidental credit.57 The exemptions for incidental credit do not apply in this case. Therefore, the Water defendants are required to comply with 202.09. Extensions of incidental credit are extensions other than for public utilities credit and/or securities credit and are: (1) not made pursuant to a credit card; (2) not subject to a finance charge as defined in 12 C.F.R. 226.4; and (3) not payable in more than four installments by agreement. See 12 C.F.R. 202.3(c)(2). In this case, the Water District rules establish that the incidental credit exemption does not apply in this case. Rule III.A provides that the customer makes payments in more than four installments by agreement. Also, III.E and F provide for service charges as defined by 12 C.F.R. 226.4. Likewise, the 10% penalty constitutes a service charge as defined by 226.4. Thus, the incidental credit exemption does not apply in this case. Accordingly, the Water defendants are required to comply with the notification provisions contained in the ECOA. [Consumers] allege that they did not receive an ECOA notice. Therefore, the proposed complaint states a claim upon which relief can be granted. The Magistrates R&R should be rejected. V. THE TRIAL COURT ERRED AS A MATTER OF LAW BY DENYING [CONSUMERS] LEAVE TO FILE THEIR PROPOSED SECOND AMENDED COMPLAINT The trial court adopted the Magistrate Judges position that [Consumers] motion for leave to file a second amended complaint should be denied. This decision is contrary to law. First, as explained above, [Consumers] state due process and equal protection claims for relief against the Water defendants under 1983, and claims under the ECOA. Likewise, the proposed second complaint states a due process claim against the Albrechts. Second, assuming, arguendo, that [Consumer 2] does not have standing58 to establish an ECOA claim under the disparate impact theory (i.e., the policy results in a disparately high rejection of applicants for women and minority applicant), then this Court should permit amendment by intervention under Rule 23(d). The Magistrate failed to report that this case is a class action brought pursuant to Rule 23(b)(2) for declaratory and injunctive relief, and what effect this status has on standing. In class actions, permissive intervention under Rule 23(d) is liberally permitted to strengthen the adequacy of class representative. In some cases, it may be essential in order for the named plaintiffs to meet the Rule 23(a) requirements for the classes defined in the proposed complaint. In such cases, the class representative should not be disqualified or found to be inadequate.59 Instead, courts have routinely encouraged intervention by a class member for the purpose of substitution when the other class action requirements are satisfied.60 Accordingly, in this case, should [Consumer 2] be disqualified or found to be inadequate to represent the ECOA class, then the trial court should encourage intervention, and set a time for the motion and proposed intervention complaint to be filed. For these reasons, the trial courts decision must be reversed.
See Mays, 277 F.3d at 878-79. Class membership prerequisite requires that the representative have proper standing. In order to have standing to sue as a class representative, the plaintiff must possess the same interest and suffer the same injury shared by all members of the class that he or she seeks to represent. 5 Moores Federal Practice (3 Ed.1997) 23-57, 23.21[1]; Pyles v. Johnson, 143 Ohio App.3d 720 (4th Dist. 2002). 59 See Newberg and Conte on Class Actions (3rd Ed. 1992) 1609 at 54. 60 Simmons v. Brown, 611 F.2d 65 (4th Cir. 1979).
58 57

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VI. THE TRIAL COURT ERRED AS A MATTER OF LAW BY FINDING THAT THE DOCTRINE ESTABLISHED IN PARRATT V. TAYLOR APPLIED IN THIS CASE The trial court adopted the magistrates position that the doctrine established in Parratt v. Taylor,61 and followed in Cadle v. City of Newton Falls,62 mandates that this entire case be dismissed because the LTA provide a state remedy that comports with procedural due process63 in which the agency relationship and LTA claims can be litigated.64 This decision is without merit. In Parratt, the Supreme Court limited the use of 1983 cases in federal court when a damage award is adequate, pre-deprivation process is impractical, and adequate postdeprivation remedies are available. Reliance on this doctrine in the present case is misplaced for various reasons. Parratt was an individual damages action. The case is a civil rights and consumer class action that requests primarily declaratory or injunctive relief. Thus, unlike Parratt, an individual damages award is inadequate for [Consumers] and the putative class. Second, providing [Consumers] and other class members pre-termination notices and other due process rights are not impossible, as was the case in Parratt.65 The Water defendants termination of the water service was not a random and unauthorized act. Rather, the Water defendants actions were based upon an established [administrative] procedure.66 Moreover, the Water defendants have not promulgated rules for plaintiffs to receive notice of termination, or for them to dispute the termination. The only provision, Complaints-Adjustments (proposed complaint, Exhibit 1, page 12 of attachment, APX.___ ), applies only to the Albrechts. Therefore, plaintiffs cannot administratively contest being denied continued water service. No other post-deprivation administrative remedies are available to plaintiffs.67 Plaintiffs state a claim for relief against the Water defendants under Ohio 5321.15(C). However, state law does not provide pre-termination notice of the shut-off. Also, unlike Section 1983, 5321.15(C) does not provide adequate relief. By its terms, it can only compensate plaintiffs for actual damages and attorneys fees. Thus, 5321.15(C) does not provide for injunctive relief and/or for punitive damages, rendering the post-deprivation remedy inadequate. Parratt is not controlling. CONCLUSION For the foregoing reasons, [Consumers] respectfully request that this Court: sustain the above arguments; overrule the granting of the two motions to dismiss; grant their motion for leave to file the proposed complaint (or a motion to intervene with proposed intervention
Parratt v. Taylor, 531 U.S. 527 (1981) (statutory damage action sufficient to satisfy due process for prisoner). Cadle v. City of Newton Falls, 961 F.2d 1576 (6th Cir. 1992) (unpublished) (no property interest). 63 Parratt, 531 U.S. at 541. 64 R. 20, APX __ at 5, 8-9. 65 Pre-termination notice was provided to the tenant and landlord in Mansfield Apartment Owners Association v. City of Mansfield, 988 F.2d 1469 (6th Cir 1993) (Mansfield Apartments) (no property right to continued service where applicant did not comply with reasonable administrative procedures). By contrast, the Water defendants rules do not provide for pre-termination notice to plaintiffs. 66 Logan v. Zimmerman Brush Co., 455 U.S. 422, 436 (1981) and Turpen, 26 F.3d at 979-80. 67 By contrast, post deprivation rights were afforded to tenants in Mansfield Apartments, 988 F.2d at 1475-76 (Water Divisions Regulations provide plaintiffs with the right to a hearing regarding their objections).
62 61

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complaint); and order any other relief that is just and necessary.

_________________________ [Attorneys for Plaintiffs]

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17.3 Consumers Appellate Reply Brief

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION [CONSUMER 1] and [CONSUMER 2], Plaintiffs, v. ADAMS COUNTY REGIONAL WATER DISTRICT, and BRIAN AST, and WILLIAM ALBRECHT and PHYLLIS ALBRECHT, Defendants. Case No.

ARGUMENT I. [CONSUMERS] STATE VALID DUE PROCESS CLAIMS A. The Water defendants mischaracterize [Consumers] arguments regarding their property interest in continued water service 1. Ohios Landlord Tenant Act is a source of property rights in continued water service In Craft, the United States Supreme Court recognized that a protected property right exists when state law confers such an interest. See Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 9 (1978). [Consumers] submit that Ohios Landlord Tenant Act (LTA), Ohio Revised Code 5321.01 et seq., provides an independent source of law creating a property right. The Water defendants disagree, essentially arguing that: 1) they have no obligation to supply water to anybody; 2) they had no contractual relationship with [Consumers]; and 3) relying upon Ohio Revised Code 6119.09, they are not subject to supervision and regulation by any authority. The Water defendants are completely missing the point on all counts. The issue here is not what the Water defendants must or must not do, but whether Ohios LTA, as an independent source of state law, creates a property interest in continued water service for tenants such as [Consumers]. This statute requires landlords to supply habitable premises for tenants in general, see R.C. 5321.04(A)(1) & (2), keep the plumbing in working order, see R.C. 5321.04(A)(4), and requires landlords to supply running water, and reasonable amounts of hot water. R.C. 5321.04(A)(6). Moreover, R.C. 5321.15 prevents a landlord from shutting

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off water as a means of evicting tenants outside the judicial process. All of these Ohio laws give tenants a legitimate claim of entitlement to water services and, therefore, a property right in continued water services. Craft, 436 U.S. at 9; cf. Thomas v. Cohen, 304 F.3d 563, 576 (6th Cir. 2002) (finding a property interest in tenants rights to possession under Kentuckys LTA). The Water defendants further misinterpret [Consumers] argument that, for purposes of liability, they were acting as agents of the landlords under the LTA. The Water defendants claim that [Consumers] are attempting to make the broad argument that the Water defendants become the agents of a landlord simply by virtue of a water contract between the Water defendants and a landlord. That is not the argument [Consumers] are advancing at all. Under the LTA, the definition of a landlord includes an agent of the owner. R.C. 5321.01(B). The LTA further states that [n]o landlord shall initiate any act, including termination of utilities or services . . . for the purpose of recovering possession of residential premises, other than [by judicial means]. R.C. 5321.15(A). In the unlawful termination of [Consumers] service, it was necessary for their landlords to enlist the assistance of the Water defendants. Thus, for purposes of the LTA, the Water defendants acted as an agent of the owner falling under the definition of landlord as set forth in R.C. 5321.01(B). Thus, the Water defendants can be liable to tenants as a landlord for purposes of the LTA. 2. The Water defendants Rules and Regulations are contradictory [Consumers] claim that the Water defendants Rules and Regulations also give tenants a property right in continued water service because the rules specifically refer to a person holding property having reasonable accessibility to the source of, and who is in need of having water supplied to this property. The Water defendants counter that later portions of the Rules and Regulations require legal title to property to become a customer of the Water defendants. [Consumers] submit that this language creates an ambiguity at best and a contradiction at worst in the Water defendants Rules and Regulations. The Magistrate Judge erred by failing to construe the Complaint in the light most favorable to [Consumers] and by dismissing this argument as a source of a potential property right in continued water service. 3. [Consumers] were third party beneficiaries of the contract between the Water defendants and their landlords entitling them to the resulting property interests A third party beneficiary may enforce the rights and obligations of a contract that confers an intended benefit to a contemplated party. See Seifer v. Phe, 196 F. Supp.2d 622, 633 (S.D. Ohio 2002). An intended beneficiary, versus an incidental beneficiary, is one in which the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. Hill v. Sonitrol, 36 Ohio St. 3d 521 (1988). The Water defendants ignore [Consumers] arguments regarding intended beneficiary status and state that their third party beneficiary theory is based upon telephone calls from [Consumers]. This is not an accurate statement. The Water defendants own contract for services and their conditional regulations that allow tenants to occupy the premises and make contractual promises are clearly intended to benefit tenants. Service Application Rule II.A recognizes that [Consumers] and other non-billed tenants have a substantial interest in continued service and that the utility owes them a duty, especially when the landlord requests termination of service. Further, Rule II.C contemplates

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tenants as intended beneficiaries by explicitly stating [b]ills will be sent solely to the owner/owners, rather than sending the bills to the deeded property and place of service. This rule therefore addresses situations where the place of service is not the locus of the owner, but that of a party intended to receive the benefits of service. As such, the Water defendants policies recognize that tenants are the intended beneficiaries of contracts with property owners and therefore serve as a source of property rights. 4. Substantive Due Process creates an independent law source because the Cadle case is distinguishable [Consumers] rely upon substantive due process as an alternative independent law source. The Water defendants counter that Cadle v. City of Newton Falls, Ohio, 961 F.2d 1576 (table), 1992 WL 88904 (6th Cir. 1992), stands for the proposition that a substantive due process interest does not exist in the present case. The Cadle case is easily distinguishable from the present case. In Cadle, the plaintiff was not a tenant but a property owner contracting with a City water company and receiving water service. See 1992 WL 88904 at *1. His service was terminated because he violated city and state ordinances by furnishing water to a neighbor via a hose attached to a spigot on his house, possibly contaminating the City water supply. See id. The City, after warning Cadle and filing misdemeanor charges against him, terminated his water service. See id. at *3. Cadle filed substantive and procedural due process claims against the City. See id. This Court, in an unreported opinion, found Cadle was owed no obligation or remedies for receipt of water services in Ohio. See id. at *4. However, Mr. Cadle was blatantly violating Ohio law and City ordinances in his receipt of water services despite repeated warnings. This is a far different situation than the present case and provides no persuasive authority whatsoever. Based on case law such as Craft, [Consumers] claim that substantive due process serves as an alternative source of law creating a property interest in continued water service. B. In their Proposed Amended Complaint, [Consumers] state a Due Process claim for relief against the Albrechts In a separate Letter Brief [Consumers] landlords, the Albrechts, adopt the arguments of the Water defendants and further argue that they are not state actors for purposes of 42 U.S.C. 1983 and [Consumers] cannot assert their Due Process claims against them. [Consumers] reiterate that the Albrechts actions were taken under color of state law based upon the close nexus between the Water defendants actions and the Albrechts conduct. See Chapman v. Higbee Co., 319 F.3d 825, 834-35 (6th Cir. 2003) (en banc) (holding that genuine issue of fact existed as to whether sufficiently close factual nexus existed between government and private actor such that private actor liable under section 1983). II. [CONSUMERS] HAVE STATED VALID SECTION 1983 CLAIMS BECAUSE THERE ARE NO ADEQUATE STATE LAW REMEDIES A. Parratt applies only to random, unauthorized acts The Water defendants argue that [Consumers] fail to state a Section 1983 claim because

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there are adequate, available state law remedies, relying upon the doctrine of Parratt v. Taylor, 531 U.S. 527 (1981) and citing the Sixth Circuit cases of Jefferson v. Jefferson County Public Sch. Sys., 360 F.3d 583 (6th Cir. 2004) and Cadle v. City of Newton Falls, Ohio, 961 F.2d 1576 (table), 1992 WL 88904 (6th Cir. 2002) (citing Vicory v. Walton, 721 F.2d 1062 (6th Cir. 1983) for the proposition that a Section 1983 claim is inappropriate when there are adequate state remedies). Both of these cases are easily distinguishable from the present case. Moreover and more important, the Water defendants ignore the most recent Sixth Circuit pronouncement in this area of the law. In Mitchell v. Fankhauser, 2004 Fed. Appx. 0225P (6th Cir. July 14, 2004), this Court had the opportunity to discuss the Parratt doctrine in detail, specifically referring to Jefferson v. Jefferson County Public School System and Vicory v. Walton, 721 F.2d 1062 (6th Cir. 1983).68 This Court explained that Parratt stands for the proposition that a plaintiff claiming a Section 1983 violation is generally required to show that available state procedures were inadequate to compensate him for the deprivation of property. Id. at **8.69 This Court went on to discuss the evolution of the Parratt doctrine in the United States Supreme Court and the Sixth Circuits application of the doctrine. The Mitchell court noted a significant distinction in cases in which Parratt should be followed unfortunately not []consistently applied in our circuits caselaw: those cases arising out of the alleged misconduct of state officials (in which Parratt should be applied) versus those cases arising out of a challenge to an established state procedure (in which Parratt should not be applied). Id. at *9*10. This Court, specifically citing to Jefferson, stated, Despite the Supreme Courts and this courts pronouncements that Parratt applies only to random, unauthorized deprivations of property, this court has occasionally applied Parratts requirement of pleading the inadequacy of state-court remedies more broadly. Id. at *11. The Mitchell court then proceeded to hold that the correct line of authority was that Parratt only applies to random, unauthorized deprivations of property. Id. at *12. In the present case, [Consumers] are not claiming a random, unauthorized deprivation of property. Instead, [Consumers] claim is quite the opposite: a class-wide claim that the Water defendants established, administrative policies deprive all tenants of due process of law. B. Even if Parratt had broad application, [Consumers] have pled the inadequacy of state remedies Despite the Water defendants assertions to the contrary, [Consumers] have pled that the available state procedures are inadequate remedies both in their Proposed Amended Complaint at 28 (R. 13, APX__) and in their Objections to the Magistrate Judges R&R (R. 24, p. 25-26, APX__). The available state law remedies in this case set forth in the LTA pursuant to R.C. 5321.15(C) (actual damages and attorneys fees) are not adequate because: 1) this is not an individual damages case; this is a civil rights consumer class action that, in addition to damages, seeks declaratory and injunctive relief; 2) this case seeks adequate pre-termination procedures,
Jefferson involved a broad application of the Parratt doctrine (teacher challenged school district policies after suspension and constructive discharge) while Vicory involved a narrow application of Parratt (challenge to a forcible entry and detainer action involving wrongful seizure of a mobile home). 69 In Parratt, the United States Supreme Court found that a prisoner who claimed that prison officials deprived him of due process by negligently losing his mail order hobby supplies did not state a due process claim because of the available state tort law remedies. The Court noted that the loss of property did not occur as a result of some established state procedure. Parratt, 451 U.S. at 543.
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which are not impracticable in this case; and 3) the available post-deprivation remedies are limited. As such, even if this Court read Parratt broadly, that doctrine would not be applicable to this case. III. [CONSUMERS] HAVE STATED VALID EQUAL CREDIT OPPORTUNITY ACT CLAIMS The Water defendants dispute [Consumers] Equal Credit Opportunity Act (ECOA) claims against them, first arguing that they do not supply credit as defined by the ECOA. The Water defendants state that [i]f a supplier of services such as the Water District is considered to be extending credit because it bills its customers only once a month, such a supplier could only avoid the reach of the statute by reading the meter on a round the clock basis and submitting bills continuously. . . . This clearly is an absurd result not intended by the statute. Appellees Brief, p. 34-35. It is no wonder that the Water defendants are violating the ECOA because it is clear that they have no idea of the meaning of the statute. There is no question that utility service involves credit for purposes of the ECOA. See National Consumer Law Center, Credit Discrimination (3d ed. 2002) at 2.2.2.3. A utility company is a creditor when it supplies utility service and bills the user after the service has been provided. Official Staff Commentary, 12 C.F.R. 202.3(a)-2. In the present case, the Water defendants most assuredly extend credit for purposes of the ECOA. The Water defendants further argue that they fall into the exception for incidental credit pursuant to 12 C.F.R. 202.3(c)(1) and Mays v. Buckeye Rural Elec. Coop., 277 F.3d 873 (6th Cir. 2002). Assuming arguendo that is the case,70 the Water defendants are nonetheless subject to the general ECOA prohibition against discrimination. See Official Commentary, 12 C.F.R. 202.3-1. The ECOA argument set forth by [Consumers] is a disparate impact argument: the Water defendants refusal to contract or extend credit to tenants has a disparate impact on women and minorities who make up a larger percentage of the tenant population. The Water defendants statements regarding the so-called effects test have nothing to do with [Consumers] discrimination claims. See Lewis v. ABC Business Servs., 135 F.3d 389, 406 (6th Cir. 1998) (stating that ECOA claims of discrimination are evaluated using the same framework as applied to Title VII cases). CONCLUSION For the foregoing reasons, [Consumers] respectfully request that this Court: sustain the above arguments; overrule the granting of the two motions to dismiss; grant their motion for leave to file the proposed complaint (or a motion to intervene with proposed intervention complaint); and order any other relief that is just and necessary. Respectfully submitted, _________________________ [Attorneys for Plaintiffs]

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The incidental credit exemption allows a creditor to avoid compliance with only certain aspects of the ECOA, including the notice provisions of 12 C.F.R. 209.9.

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