Opinion
No. 2022-C-00111
03-15-2022
Philmer JOHNSON, Jr., et al. v. CITY OF WESTLAKE
Writ application denied.
Genovese, J., would grant and assigns reasons.
Genovese, J., would grant this writ for the following reasons:
This case concerns three utility rate ordinances passed by the City of Westlake ("City"). Plaintiffs in these consolidated cases filed suit against the City, challenging the constitutionality of these ordinances, contending these ordinances (which deal with gas, water, and sewage rates) constitute an illegal tax, are discriminatory, and not reasonable.
These ordinances increased the rate for each utility service by 50%, with an automatic and indefinite additional 4% increase at the expiration of each following year. Louisiana Constitution Article 6, § 37 authorizes a political subdivision to legally raise revenue for its general funds from revenue-producing public utilities; however, none of the rate increases herein were submitted to the public for a vote of approval, as is required for municipal tax increases.
In Audubon Insurance Co. v. Bernard , 434 So.2d 1072, 1074 (La.1983), the court found that "if revenue is the primary purpose for an assessment and regulation is merely incidental, or if the imposition clearly and materially exceeds the cost of regulation or conferring special benefits upon those assessed, the imposition is a tax." Nothing presented herein establishes a correlation between the 50% rate increase and the cost incurred in supplying these utilities, not to mention the 4% annual rate assessment—for what, and for how long? There being no explanation as to why an immediate 50% increase was chosen or why an annual 4% increase was necessary, these rate increases solely serve the purpose of generating revenues for the City, which makes it a tax.
There being a lack of proof by the City as to its justification for the exercise of its police power in implementing said rate increases, it becomes apparent that the City's primary purpose in these rate increases was to generate revenue and was not incidental to regulation; therefore, in my view, it is a tax without the vote of the people of the City of Westlake, and is therefore unconstitutional.
I would reverse the court of appeal and find the ordinances creating these utility rate increases unconstitutional, after which the City may pass an ordinance specifically addressing a utility rate increase with a specific designation as to the amount needed, why it is needed, and the duration therefor.