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Published on 7/21/2014 in the Prospect News Distressed Debt Daily.

Detroit residents file suit to fight water and sewer service shutoffs

By Caroline Salls

Pittsburgh, July 21 – Several City of Detroit residential water and sewer customers filed a lawsuit Monday, claiming the city is violating its common law duties in adopting and implementing a policy to shut off access to drinking water and sewerage service at 30,000 households of low-income persons and persons living in poverty by the end of August.

According to the suit filed with the U.S. Bankruptcy Court for the Eastern District of Michigan, the plaintiffs did not receive required final notices of the shut offs.

The plaintiffs said Detroit launched a new policy in April that calls for mass water shutoffs for any residential customer who is more than 60 days delinquent, or with an arrearage exceeding $150.00.

“The individual plaintiffs and thousands of other similarly situated residential customers were subjected to water shut offs without adequate notice or an opportunity to be heard,” the suit said.

“These shut offs were conducted in violation of defendant’s written collection policies.”

According to the complaint, city bond offerings and failure to recoup illegal termination fees prompted Detroit to implement rate increases and changes in collection policies and practices “leading to the immediate shut-off of low-income residents for water bill delinquencies.”

Detroit filed bankruptcy on July 18, 2013 under Chapter 9 case number 13-53846.


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