Municipalities Selling Water Have No Obligation to Charge Reasonable Rates

By: Mark I. Wallach

A recent decision by the Ninth District Court of Appeals has held that Ohio municipalities selling water to non-residents have no obligation to charge reasonable rates. In City of Hudson v. City of Akron, C.A. No. 28011, the Court held that a surcharge imposed by Akron on Hudson customers was not subject to a reasonableness standard, even though Hudson contended that it had been imposed “to leverage Hudson into entering into an unfavorable contract for water utility services.”

Relying on the Ohio Supreme Court’s decision in Fairway Manor, Inc. v. Board of Com’rs of Summit Co., 36 Ohio St. 3d 85 (1988), which had held that municipally-owned public utilities “have no duty to sell their products, including water, to extraterritorial purchasers absent a contractual obligation”, the Court of Appeals that, if Akron has no obligation to provide water services to customers in Hudson, those customers have “no right to demand reasonable water rates from Akron.” The Court also rejected Hudson’s contention that all utility customers in Ohio should have a mechanism for challenging their water rates.

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this web site or any of the links contained within the site do not create an attorney-client relationship between Thacker Robinson Zinz LPA and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

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Municipalities Selling Water Have No Obligation to Charge Reasonable Rates

By: Mark I. Wallach

A recent decision by the Ninth District Court of Appeals has held that Ohio municipalities selling water to non-residents have no obligation to charge reasonable rates. In City of Hudson v. City of Akron, C.A. No. 28011, the Court held that a surcharge imposed by Akron on Hudson customers was not subject to a reasonableness standard, even though Hudson contended that it had been imposed “to leverage Hudson into entering into an unfavorable contract for water utility services.”

Relying on the Ohio Supreme Court’s decision in Fairway Manor, Inc. v. Board of Com’rs of Summit Co., 36 Ohio St. 3d 85 (1988), which had held that municipally-owned public utilities “have no duty to sell their products, including water, to extraterritorial purchasers absent a contractual obligation”, the Court of Appeals that, if Akron has no obligation to provide water services to customers in Hudson, those customers have “no right to demand reasonable water rates from Akron.” The Court also rejected Hudson’s contention that all utility customers in Ohio should have a mechanism for challenging their water rates.

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this web site or any of the links contained within the site do not create an attorney-client relationship between Thacker Robinson Zinz LPA and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

Back to posts
Print article

Municipalities Selling Water Have No Obligation to Charge Reasonable Rates

By: Mark I. Wallach

A recent decision by the Ninth District Court of Appeals has held that Ohio municipalities selling water to non-residents have no obligation to charge reasonable rates. In City of Hudson v. City of Akron, C.A. No. 28011, the Court held that a surcharge imposed by Akron on Hudson customers was not subject to a reasonableness standard, even though Hudson contended that it had been imposed “to leverage Hudson into entering into an unfavorable contract for water utility services.”

Relying on the Ohio Supreme Court’s decision in Fairway Manor, Inc. v. Board of Com’rs of Summit Co., 36 Ohio St. 3d 85 (1988), which had held that municipally-owned public utilities “have no duty to sell their products, including water, to extraterritorial purchasers absent a contractual obligation”, the Court of Appeals that, if Akron has no obligation to provide water services to customers in Hudson, those customers have “no right to demand reasonable water rates from Akron.” The Court also rejected Hudson’s contention that all utility customers in Ohio should have a mechanism for challenging their water rates.

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this web site or any of the links contained within the site do not create an attorney-client relationship between Thacker Robinson Zinz LPA and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

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Print article

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