Epstein on SCOTUS Decision in Armour v. Indianapolis

Intellectual Laziness on the Supreme Court
Richard A. Epstein
Defining Ideas
June 12, 2012

In the run up to the Supreme Court’s decision on health care, few people will pay any attention to the Court’s most recent constitutional failure of intellectual nerve in Armour v. Indianapolis. But they should. This instructive case encapsulates what goes wrong when the Supreme Court abandons its constitutional obligation to prevent the nonstop shenanigans of local governments.

Armour deals with the special real estate assessments that have long been used to fund real estate improvements. In 2001, Indianapolis elected to fund its Sanitary Sewers Project for a subdivision with 180 homes by levying a $9,000 per unit assessment. Homeowners could pay that figure in a lump sum or in installments over a period of 10, 20, or 30 years, with a 3.5 percent interest rate on the unpaid balances. Most homeowners chose an installment option, but 38 of these homeowners made the front-end lump sum payment.

Several years later, Indianapolis introduced its new and better Septic Tank Elimination Program that it chose to fund by annual charges of $2,500 per home. That welcome technological improvement was paired with a novel financial plan. Indianapolis forgave all unpaid assessments against the homeowners who participated in the installment plan. But the city refused to refund any money to the homeowners who had paid the full amount in one lump sum payment. These 38 lump sum payers promptly sued to recover an amount equal to the smallest amount of debt that the city gave to any homeowner (roughly $8,000 each). Their basic claim was that Indianapolis violated their Fourteenth Amendment guarantee of “the equal protection of the laws.”

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