Sewer District Sues Indiana Cities for Alleged Breach of Contract

On Wednesday, the Scott County Regional Sewer District filed a complaint in the Southern District of Indiana against the cities of Scottsburg and Austin, Indiana for allegedly violating a federal contract in order to take control of wastewater management from the plaintiffs.

The complaint recounted that in 1973, the Scott County Regional Sewer District was created under Indiana law, and “its service area was defined as all of Scott County, Indiana, except the incorporated areas of Scottsburg and Austin.” Then, in 1988, Scottsburg and the District entered into a wastewater service agreement where Scottsburg would treat “.0378 million gallons of sewage per day on average for the District, but Scottsburg reserved up to .075 million gallons per day of capacity for the District.” They later amended their agreement in 1995, and agreed that the initial federal contract would be in effect until 2028. Austin and the District signed an identical agreement.

Since then, Scottsburg allegedly annexed territory past its western boundary of Interstate 65, and offered to provide wastewater services to the “Disputed Property,” telling the District that the “developer will not proceed if the proposed subdivision is not on the City system.” According to the complaint, Scottsburg proposed to “take ownership” of the Disputed Property from the District, which was not accepted. In order to gain control of servicing this area, Scottsburg and Austin allegedly asked the Indiana Utility Regulatory Commission to grant them the rights to service this land instead of the District.

As a result, the District is suing Scottsburg and Austin on the counts of declaratory judgment that prohibits Scottsburg from serving the Disputed Property and that the cities are in violation of 7 USC Section 1926(b), injunctive relief, civil rights violation and breach of contract.

The District is seeking declaratory and injunctive relief enjoining Scottsburg and Austin, attorney’s fees and costs, and other relief.

The plaintiff is represented by Bose McKinney & Evans LLP.