Judgment Against City of Raleigh in Capacity Facilities Fees Class Action Lawsuit

Wake County, NC – A judgment has been entered in Wake County Superior Court requiring the City of Raleigh to refund over $16 million in water and sewer capital facilities fees (“CFFs”) charged by the City without lawful authority. Jim DeMay and Hunter Bryson of Milberg represent Plaintiffs and the Class in the case.

The class action lawsuit – originally brought by Raleigh-based homebuilders Wardson Construction, Inc. and HomeQuest Builders, Inc. in January 2019 – alleges that the City of Raleigh charged CFFs in violation of North Carolina law as a mandatory condition of issuing certain permits and supplying water and sewer service to properties.

According to the Plaintiffs, the City “did not adopt a CFF pursuant to any lawful authority” until July of 2018. Plaintiffs requested the City refund all collected CFFs during the three-year statute of limitations period and prior to July of 2018, asserting all fees charged between January 12, 2016 through June 30, 2018, “violated Defendant’s lawful authority granted by the General Assembly.”

The principal amount of CFFs charged and collected by Raleigh during the January 12, 2016 through June 30, 2018 period was $16,484,400. The judgment requires the City to refund this amount to Plaintiffs and other parties who paid the CFFs, “plus pre-judgment interest at the rate of six percent per annum from the date of each payment” through the date of the Order (September 16, 2024) and with post-judgment interest at the legal rate thereafter.

With interest, the total amount of the judgment is currently over $23 million, and further interest is accruing at the rate of $2,709 per day until the judgment is paid by the City.

We are very pleased, but not surprised, that our clients and the class are one step closer to being refunded these fees that they never should have been charged, as the Court’s decision is in line with all the prior judicial precedent on this issue.

-Jim DeMay, attorney for the Class

The judgment and an accompanying order certifying the case as a class action are subject to appeal by the City.

The judgment follows from other similar cases where courts have required North Carolina cities to refund water and sewer impact fees charged without lawful authority. Charlotte and Greensboro, for example, have previously been required by courts to refund millions of dollars in similar fees.

We look forward to our clients and the class finally being refunded these illegal fees they were charged years ago, and hope that will happen soon without the City allowing additional interest to accrue on the judgment, which will come at the expense of the citizens.

-Hunter Bryson, attorney for the Class

About Milberg Coleman Bryson Phillips Grossman, PLLC

For over 50 years, Milberg and its affiliates have been fighting to protect victims’ rights and have recovered over $50 billion for clients. A pioneer in class action litigation, Milberg is widely recognized as a leader in defending the rights of victims of corporate wrongdoing.

Milberg’s North Carolina office is in Raleigh, North Carolina.