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Chapter 17 Challenge to Municipal Water Shutoff of Tenants

Where Only Notice Went to Landlord (OH)

Edward A. Icove is a principal in the firm of Smith and Condeni LLP, Cleveland, Ohio.Mr. Icove was a VISTA attorney and legal services attorney with the Cincinnati Legal AidSociety and Southeastern Ohio Legal Services. He is as a Board Member (and former and Vice-President) of the Cleveland Legal Aid Society. He has handled numerous individual and classconsumer cases in both state and federal courts. See, e.g.,Barney v. Holzer Clinic, Inc., 110 F.3d1207 (6th Cir. 1997) (ECOA); Smith v. Transworld Systems, Inc., 952 F.2d 1025 (6th Cir. 1992)(FDCPA, adopting the least sophisticated consumer standard in the Sixth Circuit); Shorts v.Palmer, 155 F.R.D. 172 (S.D. Ohio 1994) (FDCPA);Lewis v. Marlin, Clearinghouse No. 53021(S.D. Ohio 1999) (FDCPA); and Pyles v. Johnson, 143 Ohio App.3d 720 (4th Dist. 2001)(CSPA, RISA, and fraud); andEdwards v. McCormick, 136 F.Supp.2d 795 (S.D. Ohio 2001)(FDCPA and CSPA). A Cleveland collection attorney complained that Ed was a champion ofthe poor.

Kimberly M. Skaggs is the Executive Director of the Equal Justice Foundation, anonprofit organization that provides civil legal services in the form of class-action litigation toindigent, minority or disabled individuals. Ms. Skaggs is a former Assistant Federal PublicDefender and a former law clerk to the Honorable R. Guy Cole, Jr., United States Court ofAppeals for the Sixth Circuit and to the Honorable John D. Holschuh, United States DistrictCourt for the Southern District of Ohio. She is a past president of the Columbus Chapter of theFederal Bar Association and the 2003-04 recipient of The Ohio State University Moritz Collegeof Law Alumni Society Public Service Award. In addition to her administrative duties, Ms.Skaggs actively litigates consumer class-action cases. See, e.g.,Matthews v. New CenturyMortgage, 185 F. Supp.2d 874 (S.D. Ohio 2002) (predatory lending);Mick v. Level PropaneGases, Inc., 168 F. Supp.2d 804 (S.D. Ohio 2001) (grant of preliminary injunction in consumer

class action);Mick v. Level Propane Gases, Inc., 203 F.R.D. 324 (S.D. Ohio 2001) (certificationof 23(b)(3) class in consumer class action); Turner v. City of Chillicothe, Case No. C2-00-980(S.D. Ohio 2000) (class-action utilities termination case).

Section 17.1 is a proposed second amended class complaint by tenants against waterauthorities for shutting off the water service to their apartment.1 The tenants argue thattermination of their water service with notice only to the landlord violated due process,2 equalprotection, and the federal Equal Credit Opportunity Act. The complaint seeks injunctive anddeclaratory relief and also actual and punitive damages and attorney fees. Section 17.2 is anappellate brief and 17.3 is a reply appellate brief in support of the claims.

1 See National Consumer Law Center, Access to Utility Service 11.5.3 (2d ed. 2001 and Supp.).2 See National Consumer Law Center, Access to Utility Service 12.2 (2d ed. 2001 and Supp.).

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17.1 Complaint

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

[CONSUMER 1] and [CONSUMER 2],Plaintiffs,

v.

ADAMS COUNTY REGIONAL WATER DISTRICT,andBRIAN AST,and

WILLIAM ALBRECHT andPHYLLIS ALBRECHT,Defendants.

Case No.

PLAINTIFFS PROPOSED SECOND AMENDED CLASS ACTION COMPLAINT FOR

DECLARATORY AND INJUNCTIVE RELIEF, DAMAGES AND ATTORNEY FEES

PRELIMINARY STATEMENT

1. Plaintiffs are residential consumers of water service who challenge defendantspractice of terminating water service in violation of due process and equal protection clauses ofthe Fourteenth Amendment to the United States Constitution, the Equal Credit Opportunity Act(hereafter ECOA), 15 U.S.C. 1691 et seq., Ohios Landlords Tenant Act and Ohio Rev.Code 5321.01 et seq. of Ohio law. Plaintiffs seek primarily class declaratory and injunctiverelief, and make individual requests for damages.

JURISDICTION

2. This Court has jurisdiction over plaintiffs claims under 28 U.S.C. 1331,

1343(a)(4), 2201, 2202 and 1367(a).

VENUE

3. Venue is appropriate in the Southern District of Ohio pursuant to 28 U.S.C. 1391(b)because defendants reside in the Southern District and the events giving rise to the claimsoccurred there.

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PARTIES

4. Named plaintiffs, [Consumer 1] and [Consumer 2] (hereinafter plaintiffs), arenatural persons who, at all times mentioned herein, resided in a residential home they rented inthe Town of Peebles, County of Adams, State of Ohio at [Address] (hereinafter premises).

Plaintiffs were the ultimate users of water utility services exclusively supplied to their residenceby defendant Adams County Regional Water District (hereinafter Water District). Plaintiffsare tenants as defined in Ohio Revised Code 5321.01(A). Plaintiffs are applicants as definedby 15 U.S.C 1691a(b) and 12 C.F.R. 202.2(e).

5. Defendant Water District provided water services to the residences of Adams County,Ohio. At all times mentioned herein, Defendant Water District was acting under color of statelaw within the meaning of 28 U.S.C 1983. Defendant Water District is a creditor as defined by15 U.S.C 1691a(e) and 12 C.F.R. 202.2(l).

6. Defendant John Ast (hereinafter Ast) is the director of defendant Water District. Hehas decision-making authority for defendant Water District regarding the termination of waterservice. He knew, or should have known, the Sixth Circuit law and all other applicable law

required named defendants to provide adequate notice and appeal procedures, both before andafter termination of services, and forbade termination or denial of water service based on the factthat customers do not own real estate where they are attempting to establish separate andindependent water accounts. (Defendants Ast and Water District collectively referred hereinafteras Water Defendants.). At all times mentioned herein, Defendant Ast was acting under colorof state law within the meaning of 28 U.S.C 1983. Defendant Ast is a creditor as defined by 15U.S.C 1691a(e), and 12 C.F.R. 202.2(l).

7. Water Defendants were landlords, within the meaning of Ohio Rev. Code 5321.01(B), because they were acting as agents for Defendants, William and Phyllis Albrecht(hereinafter Albrechts).

8. Defendants Albrechts are the owners of the property located at the premises, whichwas serviced by the Water Defendants. Defendant Albrechts are landlords as defined by OhioRevised Code 5321.01(B). Defendant Albrechts were acting under color of state law withinthe meaning of 28 U.S.C 1983, because there is a sufficiently close nexus between the WaterDefendants and their conduct so that the conduct may be fairly attributed to the WaterDefendants.

CLASS ACTION ALLEGATIONS

9. Plaintiffs bring this Complaint as a class action under Rule 23 of the Federal Rules ofCivil Procedure. Plaintiffs seek to represent, for declaratory and injunctive relief and restitutionpursuant to Rule 23(b)(2). The case is defined as all similarly situated individuals who havesuffered, or who will suffer in the future, from defendants practice of:

a. Terminating water service without sufficient prior notice, without the opportunityfor a hearing, or without an effective post termination hearing process, inviolation of the due process and/or equal protection clauses of the FourteenthAmendment to the United States Constitution; and

b. Terminating or refusing to establish water service because applicants do not ownthe real estate where they are attempting to establish water accounts and/or

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continued service; and/or failing to provide a written ECOA notice of adverseaction.

10. All of the prerequisites to a class action in Rule 23(a) are satisfied by the class:a. Numerous individuals have suffered deprivation of their rights pursuant to

defendants unlawful practices and numerous individuals will suffer in the future.

Therefore, the class is so numerous that joinder of all members is impracticable.b. There are questions of law and fact common to the plaintiffs class. The commonquestions include, among other things (1) whether the Water Defendantspractices of terminating water service without prior notice, any hearing, nor anypost termination remedy, violate the Fourteenth Amendment; and/or (2) whetherterminating or refusing to continue water service because plaintiffs do not own thereal estate where they are attempting to establish water accounts and/or requestedcontinued service, and/or failing to provide written ECOA notice of adverseaction violated the ECOA.

c. The claims of the plaintiffs are typical of the claims of the class. Pursuant to thepractices challenged here, the plaintiffs were terminated from water services, with

insufficient notice, no hearing, and no post termination process, as were membersof the class. Also, pursuant to the practices challenged here, the WaterDefendants terminated or refused to continue water service for plaintiffs and theplaintiff class because they do not own the real estate where they are attempting toestablish water accounts and/or continued service; and/or the Water Defendantsfailed to provide them with written ECOA notice of adverse action.

d. The plaintiffs will fairly and adequately represent the interests of the class. Theplaintiffs have no interests antagonistic to the class, they seek declaratory andinjunctive relief and money damages on behalf of the entire class and such reliefwill benefit all members of the class, and they are represented by counsel who arecompetent and experienced in consumer and civil rights class action litigation.

11. The class satisfies Rule 23(B)(2) because the Water Defendants have engaged in acourse of conduct common to all members of the class, and final declaratory and injunctive reliefin favor of the plaintiff class is therefore appropriate.

FIRST CLAIM FOR RELIEF: CLASS DECLARATORY AND INJUNCTIVE RELIEF

AGAINST WATER DEFENDANTS ONLY

12. Water Defendants are the exclusive supplier of water service to residents of AdamsCounty, Ohio, including plaintiffs.

13. Water service to private residences is the most basic and essential utility service, andis necessary for the health and safety of the residents.

14. On August 7, 2001, plaintiffs leased the premises from the Albrechts which premiseswere exclusively served by the Water Defendants.

15. Plaintiffs, in accordance with the terms of their lease, were responsible for paying thewater bill that was sent each month by the Water Defendants to the landlords who would thenpresent the bill each month to the plaintiffs for payment.

16. According to Albrechts, plaintiffs owed rent for the month of November 2002. Ifplaintiffs owed rent it was only because Albrechts recently demanded and extorted payment from

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them for the repair of the hot water heater and other repairs for which the landlords were legallyrequired to pay and should have paid.

17. Albrechts, rather than initiate lawful proceedings to evict and/or collect rent, chosethe route of an unlawful eviction by going to the business office of the Water Defendants onNovember 26, 2002 to request that the water service be terminated and the account for the

premises be closed.18. Water Defendants immediately, on November 26, 2002, eagerly obliged thelandlords request and turned-off the water service at plaintiffs residence without a pre-termination notice, due process and/or without the slightest concern or human regard as towhether or not the premises were occupied.

19. Plaintiffs, and the class they seek to represent, have a property interest in waterservices under: Ohio Revised Code 5321.04(C)(6) and 5321.15(C); defendant WaterDistricts rules and regulations (Rules II.A. and IX.A., Exhibit A attached hereto); third partybeneficiary contract law; and/or as constitutional right without reference to state law or any otherindependent source.

20. On November 26, 2002 both plaintiffs contacted the Water Defendants and requested

that they be able to establish an account with Defendant Water District in their own namesindependent of that of the landlords.21. On November 27, 2002 plaintiff, [Consumer 1], renewed his request.22. Plaintiffs were informed each time by Colleen and others that were employed by

the Water Defendants that they could not establish an account in their own names unless theywere able to produce a deed to the premises or words to that effect. Further, plaintiffs wereinformed that it was the official policy, practice and procedure of the Water Defendants not topermit anyone other than the owner of the property to establish an account. Service ApplicationRule II.B, Exhibit A at 1.

23. On November 27, 2002, an unknown individual, purporting to represent the WaterDefendants, called plaintiffs counsel. She left a voicemail message. She stated that she wasthe office manager of the Adams County Regional Water District who was aware of the situationand that there was nothing she could do because she was merely following company rules.

24. Water Defendants were actually aware, or should have been aware, that the premiseswere occupied when they terminated the service of the plaintiffs. Water Defendants wereactually aware or should have been aware that Service Application Rule II.A, Exhibit A at 1,provides plaintiffs with a right to have continued water service in their name, and that the rulesdid not provide for any pre-termination notice and due process.

25. Without affording plaintiffs pre-termination notice and due process of law, WaterDefendants turned-off the water service to the premises on November 26, 2002 and have refusednumerous requests made thereafter to restore service as of the filing of this action. Likewise, therules provide no post-deprivation process for plaintiffs.

26. At all times mentioned herein, Water Defendants conduct in refusing to permit theestablishment of water accounts by tenants in their own names, or to continue service to aperson, without first showing a deed or other proof of ownership, from the tenant was inviolation of the due process and/or equal protection clauses of the Constitution of the UnitedStates.

27. The express policy, practice and procedure of the Water Defendants in denyingplaintiffs and other tenants the right to establish water service independently of that of the owner

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of the real estate is ongoing and in direct contradiction to the due process and/or equal protectionclauses of the Constitution of the United States.

28. Plaintiffs and the class of persons they seek to represent herein have sufferedirreparable injury and harm and have no adequate remedy at law. Thus, the availability of amonetary remedy is not adequate. Also, there is no state remedy that comports with procedural

due process. The Water Departments Rules and Regulations do not provide an adequate remedy.The Rules and Regulations do not comport with procedural due process. Notice and pre-termination process is not impractical, and no post-deprivation remedies are available. Likewise,Ohio Rev. Code 5321.15(C) does not provide an adequate remedy.

29. As such plaintiffs and the class of persons they seek to represent are entitled to anorder permanently enjoining and prohibiting Water Defendants from engaging inunconstitutional practices, and they are entitled to restitution.

30. Defendants, acting under color of state law and through official acts, and actingpursuant to established official customs and policies complained of herein, violated plaintiffsrights under the Fourteenth Amendment to the United States Constitution by terminatingplaintiffs water service without required notice and opportunity for a hearing, enforceable

through 42 U.S.C. 1983.

SECOND CLAIM FOR RELIEF: INDIVIDUAL RELIEF AGAINST ALL

DEFENDANTS

31. Plaintiffs incorporate by reference each and every allegation contained in the FirstClaim for Relief as if fully rewritten herein.

32. Plaintiffs consist of a family of six persons, with four children ranging in age fromthree to seven years of age. Plaintiff, [Consumer 2], is pregnant and is experiencingcomplications due to diabetes.

33. Albrechts, acted in concert with the Water Defendants. All defendants wereexpressly aware of plaintiffs dire circumstances. Likewise, Water Defendants were made awareof the plaintiffs circumstances and exhibited not the slightest concern or human compassiontoward the plaintiffs.

34. Plaintiffs were without water from November 26, 2002 until December 17, 2002,almost three weeks, before they were ultimately forced to leave the premises.

35. During this three-week period plaintiffs had to cancel their plans for Thanksgivingdinner, which they had planned to provide for their family.

36. During this three- week period plaintiffs were, on occasion, forced to drive forty-fiveminutes to their nearest relative or friend in order to freely have access to water.

37. During this three-week time period plaintiffs, for several days, were prevented bysnow and ice from getting out of their driveway to even have the ability to drive forty-fiveminutes to their nearest relative or friend in order to freely have access to water.

38. Furthermore, on or about December 2, 2002, Water Defendants claim to haveallegedly restored water services to the premises. However, on that same date defendantlandlord William Albrecht trespassed onto the premises and maliciously turned-off the waterwithout the knowledge and authority of the plaintiffs. Defendant William Albrecht thentelephoned the Water Defendants and informed them of this fact who did absolutely nothing torestore the service upon learning of this information.

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39. Albrechts, at all times mentioned herein, acted in concert with and with the fullknowledge and cooperation of the Water Defendants to deprive the plaintiffs of theirconstitutional rights.

40. All defendants conduct toward the plaintiffs was arbitrary and capricious anddiscriminatory in violation of the due process and/or equal protection clauses of the Fourteenth

Amendment to the Constitution of the United States.41. At all times mentioned hereto, all the defendants conduct toward the plaintiffs wasintentional, malicious, wanton and/or with reckless disregard for plaintiffs constitutional rights.

42. Defendants, under color of state law and through official acts, and acting pursuant toestablished official customs and policies complained of herein, violated plaintiffs right to dueprocess and/or equal protection under the Fourteenth Amendment to the United StatesConstitution in violation of 42 U.S.C. 1983.

THIRD CLAIM FOR RELIEF: CLASS AND INDIVIDUAL EQUAL CREDIT

OPPORTUNITY ACT RELIEF AGAINST WATER DEFENDANTS ONLY

43. The dealings between the Water Defendants and the plaintiffs and members of theplaintiffs class are credit transactions as those terms are defined in 15 U.S.C. 1691, et seq.and Regulation B, 12 C.F.R. 202.02(m).

44. Plaintiff [Consumer 3] is a married woman, and a member of a protected class. Sheand her husband applied for credit from the Water Defendant. She/he was qualified for thecredit; and her/his credit application was denied despite her/his qualifications because she/he didnot own property where she requested continued water services.

45. The Water Defendants established policies and customs and/or patterns andpractices of requiring plaintiffs and other consumers of, and applicants for, water service tocomply with conditions different from similarly situated customers in order to restore waterservice, including but not limited to refusing to provide water service accounts to applicants whoare not landowners, violate the ECOA and Regulation B in various respects, including:

a. They result in a disparately high rejection of applications from women andminority applicants. See, 15 U.S.C. 1691(a)(1), FRB Official StaffCommentary, ECO-1, 202.6(a)(2) and 12 C.F.R. 202.6 and/or

b. No ECOA notice of adverse action was provided to consumers of and/orapplicants for water services. See 12 C.F.R. 202.09.

46. As a result of Water Defendants violation of the ECOA, Water Defendants are liablepursuant to 15 U.S.C. 1691e(b).

FOURTH CLAIM FOR RELIEF: INDIVIDUAL RELIEF AGAINST ALL

DEFENDANTS

47. This ancillary state claim for relief is brought pursuant to Ohios Landlord TenantAct, Ohio Rev. Code 5321.01, et seq.

48. Plaintiffs hereby incorporate each and every allegation contained in the First, Secondand Third Claims for Relief as if fully rewritten herein.

49. Albrechts were required by law to make repairs to the premises and to keep it in fitand habitable condition for the comfort and enjoyment of plaintiffs.

50. Prior to November 2002, the hot water heater in the premises malfunctioned.

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51. Albrechts refused to repair it and required the plaintiffs to spend in excess of $300.00to replace it.

52. Albrechts required plaintiffs to pay for additional repairs they should have madethrough the terms of their tenancy.

53. Pursuant to Ohio Rev. Code 5321.04(C)(6), Albrechts shallsupply plaintiffs

with running water and reasonable amounts of hot water.54. Pursuant to Ohio Rev. Code 5321.15(A), Albrechts and their agents are notpermitted to initiate any act, including termination of water services, in order to recoverpossession of the premise, other than is provided by pursuing an eviction action in a court ofcompetent jurisdiction.

55. In November 2002, because Albrechts forced them to replace the hot water heater,plaintiffs were unable to promptly pay their rent.

56. Albrechts, instead of utilizing lawful civil proceedings to evict plaintiffs, went to theoffices of the defendant Water District on November 26, 2002 and closed the water account atthe premises, resulting in the termination of water utility service to the premises occupied by theplaintiffs. Water Defendants refused to restore water service when requested by plaintiffs to

establish an account independently.57. Pursuant to Albrechts request to terminate water service, Water Defendants wereagents as defined by Ohio Rev. Code 5321.04(B), and therefore, subject to the mandatoryprohibition found in Ohio Rev. Code 5321.15(A).

58. According to Defendant Water District, water service was restored to the premises onor about December 2, 2002. Upon learning that water had been restored, defendant WilliamAlbrecht trespassed on the premises occupied by the plaintiffs and personally disconnected thewater service in violation of Ohio Rev. Code 5321.15(C).

59. Additionally, prior to the time plaintiffs right to possession had terminated,Albrechts entered the premises and seized personal property belonging to plaintiffs to hold inlieu of rent without having any Court order to do so, in violation of Ohio Rev. Code 5321.15(B).

PRAYER FOR RELIEF

WHEREFORE, plaintiffs seek judgment against defendants as follows:1. That the Court declare defendants practices violate due process, equal protection, the

ECOA and/or state law;2. That the Court enter an order permanently enjoining the Water Defendants, their

employees, agents and successors, and all other personnel in active concert or participation withany of them from:

a. Terminating water service without prior notice and a meaningful opportunity tocontest termination; and/or

b. Terminating or refusing to continue water service because consumers do not ownreal estate where they are attempting to establish a water account and/or continuedservice; and/or in failing to provide a written ECOA notice of adverse action;

3. That the Court enter an order granting relief against the Water Defendants pursuant to15 U.S.C. 1691e(b);

4. That the Court award plaintiffs and members of plaintiffs class restitution against theWater Defendants;

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5. That the Court award plaintiffs actual and punitive damages on their individual claimsagainst defendants, jointly and severally;

6. That plaintiffs award the plaintiffs and members of the plaintiff class their reasonableattorney fees, costs and expenses; and/or

7. That the Court grant such additional relief as the interests of justice may require.

Respectfully submitted,

__________________________________Attorneys for Plaintiffs

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17.2 Consumers Appellate Brief

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

[CONSUMER 1] and [CONSUMER 2],Plaintiffs,

v.

ADAMS COUNTY REGIONAL WATER DISTRICT,andBRIAN AST,and

WILLIAM ALBRECHT andPHYLLIS ALBRECHT,Defendants.

Case No.

STATEMENT IN SUPPORT OF ORAL ARGUMENT

This civil rights and consumer class action presents important questions of law regardingthe application of the Due Process and Equal Protection clauses of the Fourteenth Amendment to

the United States Constitution, as well as the application of the Equal Credit Opportunity Act(ECOA), 15 U.S.C. 1691 et seq. The lower court, without analysis, dismissed this case at thepleading stage (R. 28 Order, Joint Appendix [hereinafter referred to as APX __], based upon aReport and Recommendation (R&R) of the Magistrate Judge (R 20, APX ___), whichmisapplied well-established law.

JURSIDICTIONAL STATEMENT

The District Court had jurisdiction over this action pursuant to 28 U.S.C. 1331,1343(a)(4), 2201, 2202, and 1367(a). This Court has jurisdiction over this appeal pursuant to 28U.S.C. 1291.

STATEMENT OF THE ISSUES

I. Whether the trial court erred as a matter of law by dismissing[Consumers] Section 1983 Due Process claims.

II. Whether the trial court erred as a matter of law by dismissing[Consumers] Section 1983 Equal Protection claims.

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III. Whether the trial court erred as a matter of law by finding that defendantAst is entitled to qualified immunity.

IV. Whether the trial court erred as a matter of law by dismissing [Consumers]claims under the Equal Credit Opportunity Act.

V. Whether the trial court erred by denying [Consumers] leave to file the proposed

second amended complaint.VI. Whether he trial court erred as a matter of law by finding that the doctrineestablished in Parratt v. Taylorapplied in this case.

STATEMENT OF THE CASE

On November 29, 2002, plaintiffs-appellants, [Consumer 1] and [Consumer 2]([Consumers]), filed this class action against defendants-appellees Adams County RegionalWater District (Water District) and defendant-appellant Brian Ast (Ast), Director of WaterDistrict (collectively Water Defendants) for permanent, injunctive and declaratory relief underRule 23(b)(2) insofar as the policies, practice and procedures of those named entities bar

consumers from continuing or establishing water services and/or water accounts in his/her ownname solely because the they do not own real estate where they are attempting separate andindependent water accounts and/or services in violation of the due process and equal protectionclauses of the Fourteenth Amendment. In addition, [Consumers] challenged the policies,practices and procedures of all defendants-appellees whereby water services were terminatedwithout proper notice in violation of the Due Process Clause of the Fourteenth Amendment tothe United States Constitution. (R. 1, APX __). The Complaint was amended prior to service toadd claims against [Consumers] landlords, William and Phyllis Albrecht (Albrechts). (R. 2,APX __).

The Water defendants and the Albrechts filed motions to dismiss. (R. 5 and 7, APX. __and ___). The Water defendants did not rely upon any evidence, although the Albrechts filed anaffidavit with a copy of the written lease attached. [Consumers] filed memoranda in oppositionto the motions to dismiss (R. 14 and 15, APX. __ and ___), and a motion for leave to file aproposed amended complaint (R. 13, APX. __).

The District Court stayed class certification until ruling on the motions to dismiss. (R. 9,APX __). On September 2, 2003, the Magistrate Judge issued the Report and Recommendation(R&R) granting the Water defendants motion to dismiss; declining to exercise jurisdictionover [Consumers] state law claims; denying as moot the motion to dismiss filed by theAlbrechts; and denying [Consumers] motion for leave to file the proposed amended complaint.(R. 20, APX __). [Consumers] timely filed objections. (R. 23, APX __). The District Court,without discussion, affirmed the magistrate judges R&R, and dismissed this case. (R. 28, APX__). The clerk entered the judgment. (R. 29, APX __). [Consumers] timely filed their notice ofappeal. (R. 30, APX ___).

STATEMENT OF FACTS

The following facts are taken from the proposed amended complaint. (R.13, APX. __).On August 7, 2001, [Consumers] leased a residential home located in the Town of Peoples,County of Adams, State of Ohio at [Address] (premises) from the Albrechts. [Consumers]have four children, ranging from three to seven years old. [Consumer 2] was pregnant and

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experiencing complications due to diabetes.[Consumers] and their family were the ultimate user of water utility services exclusively

supplied to the residence by defendant Adams County Regional Water District (WaterDistrict), who are the exclusive suppliers of water services to residents of Adams County, Ohio.Defendant John William Ast (Ast) is the director of defendant Water District.

In accordance with the terms of their lease, [Consumers] were responsible for paying thewater bill that was sent each month by the Water defendants to the Albrechts, who would thenpresent the bill each month to [Consumers] for payment. In November 2002, the Albrechtsclaimed that [Consumers] owed rent for the month. Rather than initiate lawful proceedings toevict and/or collect rent, the Albrechts chose to engage in unlawful self-help eviction. Theywent to the Water defendants business office on November 26, 2002, and requested that thewater service be terminated at the premises, and the account for the premises be closed.

On November 26, 2002, the Water defendants immediately obliged the Albrechtsrequest and turned-off the water service at the premises without pre-termination notice, dueprocess and/or without the slightest concern as to whether the premises were occupied.

On November 26, 2002, [Consumers] contacted the Water defendants and requested that

each be able to establish an account in his/her name. On November 27, 2002, [Consumer 1],renewed his request.[Consumers] were informed each time by Colleen and other Water defendants

employees that neither could establish an account in his/her name unless he/she were able toproduce a deed to the premises, or words to that effect. Further, [Consumers] were informedthat it was the Water defendants official policy, practice and procedure was to notpermitanyone other than the owner of the property to establish an account.

On November 27, 2002, an unknown individual, purporting to represent the Waterdefendants, called [Consumers] counsel, Steven Shane. She left a voicemail message, statingthat: she was the office manager of the Adams County Regional Water District who was awareof the situation and that there was nothing she could do because she was merely followingcompany rules.

The Water defendants were actually aware, or should have been aware, that [Consumers]occupied the premises when they terminated the service. The Water defendants were actuallyaware or should have been aware that its rules and regulations.

3They provide [Consumers] with

a right to have continued water service in their name because they were holding property andin need of service; but did not provide for any pre-termination notice and due process, includingno post-deprivation process for [Consumers].4 Also, the Water defendants failed to provide anECOA notice of adverse action against either [Consumer], as applicants for water services.5

Without affording [Consumers] pre-termination notice or any other due process rights,the Water defendants, acting as agents for the Albrechts, turned-off the water service to thepremises on November 26, 2002, and refused numerous requests to restore service.

The Albrechts acted in concert with and with the full knowledge and cooperation of theWater defendants. All defendants were expressly aware of [Consumers] dire circumstances.When specifically made aware of [Consumers] circumstances, the Water defendants exhibitednot the slightest concern towards them.

[Consumers] were without water from November 26, 2002 until December 17, 2002,

3 (R. 13, APX___ at __), Service Application Rule II.A.4See Service Application Rule II.A (R. 13, APX___ at __).5 See 12 C.F.R. 202.09.

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before they were ultimately forced to leave the premises. During this almost three-week period,they had to cancel their plans for Thanksgiving dinner, which they were hosting for their family.Also during this period, [Consumers] were forced to drive forty-five minutes to their nearestrelative or friend in order to freely have access to water.

On or about December 2, 2002, the Water defendants claim to have allegedly restored

water services to the premises. However, on that same day William Albrecht trespassed onto thepremises, and personally turned-off the water, without [Consumers] knowledge or permission.Mr. Albrecht then telephoned the Water defendants and informed them of his actions. TheWater defendants did not restore the water service.

SUMMARY OF ARGUMENT

[Consumers] state a due process claim for relief under 42 U.S.C. 1983 against alldefendants-appellees. The Water defendants6 and the Albrechts7 were acting under color of statelaw. [Consumers] have rights that emanate from several independent sources of law within themeaning of the Fourteenth Amendment and, therefore, are entitled to due process of law.

8

[Consumers] were denied the basic safeguards of due process and, as a result, their constitutionalrights were violated. Further, [Consumers] state an equal protection claim for relief against theWater defendants.9 Moreover, because the law was clearly established at the time, Ast is notentitled to qualified immunity for [Consumers] Section 1983 claims.

[Consumers] also state an ECOA claim against the Water defendants because the Waterdefendants policies and practices result in a disparately high rejection of applications fromwomen and minority applicants10 and/or no ECOA notice of adverse action was provided toconsumers of and/or applicants for water services.11 Finally, the proposed amended complaintsets forth a valid pendant state claim for relief under Ohios Landlord Tenant Act.

STANDARD OF REVIEW

The decision to dismiss an action under Rule 12(b)(6) is a question of law, which requires

a de novo review by this Court.12

It is axiomatic that in dismissing a Complaint, a Court must

construe the complaint in the light most favorable to [[Consumers]], accept all the factual

allegations as true, and determine whether [[Consumers]] can prove a set of facts in support of

its claims that would entitle [them] to relief.13 The issue is notwhether [Consumers] will

ultimately prevail, but whether they are entitled to offer evidence to support their claims.14

ARGUMENT

6 See O.R.C. Chapter 6119.7

Chapman v. Higbee Co., 319 F.3d 825, 834-835 (6th Cir. 2003) (en banc).8

See Memphis Light, Gas & Water Div. v. Craft, 534 F.2d 684 (6th

Cir. 1976), affd, 436 U.S. 1 (1978).9 See Davis v. Weir, 497 F.2d 139 (5th Cir. 1974). Cf.ONeal v. City of Seattle, 66 F.3d 1064 (9th Cir. 1995) (priorcustomers delinquency);Ransom v. Marrazzo, 848 F.2d 398 (3d Cir. 1988) (same).

10See 15 U.S.C. 1691(a)(1), FRB Official Staff Commentary, ECO-1, 202.6(a)(2) and 12 C.F.R. 202.6.

11 See 12 C.F.R. 202.09;Mays v. Buckeye Rural Elec., 277 F.3d 873, 880 (6th Cir. 2002).12

Bovee v. Coopers & Lybrand CPA, 272 F.3d 356, 360-61 (6th Cir.2001); Conley v. Gibson, 355U.S. 41, 45-46 (1957); Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002).13Conley, 355 U.S. at 45-46.14 Swierkiewicz, 534 U.S. at 511 (citingScheuer v. Rhodes,416 U.S. 232, 236 (1974)).

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I. THE TRIAL COURT ERRED AS A MATTER OF LAW BY DISMISSING

[CONSUMERS] SECTION 1983 DUE PROCESS CLAIMS

A. [Consumers] have a property interest in continued water service

Contrary to the finding of the Magistrate Judge, [Consumers] have a property interestwithin the Fourteenth Amendment entitled to the protections of due process. [Consumers] mustonly allege a property interest in continued utility service to defeat Defendants motion todismiss. In Craft, the Supreme Court held that a customer has a property interest in continuedservice from a municipal utility and that some procedure for resolving billing disputes is requiredprior to termination.15 The property interest in Craftwas based upon an independent lawsource.

16For non-billed users such as [Consumers], a property right can be found in state

law, promulgated rules and regulations, contract law, or any other independent law source.

1. Ohios Landlord Tenant Act is one such independent source of property rights

[Consumers] submit that Ohios Landlord Tenant Act (LTA) provides an independentsource of law creating a property right. The Magistrate Judge refers to this argument, but fails toanalyze it. (R. 20, APX. at 3.). Instead, he subjectively relegates this argument to be a state lawclaim, not worthy of constitutional consideration. (R. 20, APX. at8.) By so doing, theMagistrate Judge ignores the weight of authority that supports [Consumers].17

In Craft, the Court recognized that a protected property right exists when state lawconfers such an interest.18 Two provisions of the LTA confer [Consumers] a property interest.O.R.C. 5321.04(A)(6) requires landlords to supply running water and reasonable amountsof hot water. O.R.C. 5321.15(A) provides that:

No landlord of residential premises shall initiate any act,includingtermination of utilities or services, exclusion from the premises, or threatof any unlawful act, against a tenant, or a tenant whose right topossession has terminated, for the purpose of recovering possession ofresidential premises, other than as provided in Chapters 1923., 5303.,and 5321., of the Revised Code. (Emphasis added.)

In this case, the Albrechts admit that they are landlords as defined by O.R.C. 5321.01(B). They terminated [Consumers] water services in violation of O.R.C. 5321.04(A)(6). Further, neither the Albrechts nor their agents are permitted to initiate any act,including termination of water services, in order to recover possession of the premises, other thanprovided by pursuing an eviction action. O.R.C. 5321.15(A). Thus, this statute gives a right

to continued water service to [Consumers].

15Craft, 436 U.S. at 15.16 Craft, 436 U.S. at 9.17 See, e.g., Memphis Light, Gas & Water Div. v. Craft, 534 F.2d 684 (6th Cir. 1976), affd, 436 U.S. 1 (1978);Myersv. Alcoa, 752 F.2d 196 (6th Cir. 1985);Davis v. Weir, 497 F.2d 139 (5th Cir. 1974); Turpen v. Corvallis, 26 F.3d 978(9th Cir. 1994);DiMassimo v. Clearwater, 805 F.2d 1536 (11th Cir. 1986); Sterling v. Maywood, 579 F.2d 1350 (7thCir. 1978); Koger v. Guarino, 412 F. Supp. 1375 (E.D. Pa. 1976), affd, 549 F.2d 795 (3d Cir. 1977).18Craft, 436 U.S. at 9.

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O.R.C. 5321.01(B) defines a landlord to include an agent. The Magistrate Judgerefused to address whether the Water defendants were agents for the Albrechts within thepurview of O.R.C. 5321.01(B). The Magistrate Judge further disregarded the proposed secondamended complaint that alleges that: [Consumers] were tenants and the Water defendants werelandlords, within the meaning of O.R.C. 5321.01(A) and (B), respectively; and that the

Water defendants and the Albrechts violated O.R.C. 5321.15(A). (R. 13, APX ___, at __ 4,7, 17-19, 47-57). Because these facts must be taken as true in a motion to dismiss the districtcourt, as a matter of law, should have accepted these facts.

The plain wording of O.R.C. 5321.01(B) supports [Consumers] position. Theexistence of an agency is a question of fact, rather than law.19 An agency relationship is creatednot by the manifest intent of the parties but rather by the conduct and relationship between theparties. Evidence of past or prior dealings, therefore, is relevant to the determination of whetheran agency relationship exists.

20In addition, its existence must be traceable to the principal,

because an agency relationship is created by the actions of the principal, not the agent.21In this case, [Consumers] allege that the Albrechts directed the Water defendants to

terminate service to their residence; and the Water defendants executed this directive knowing

that [Consumers] resided therein, and without any inquiry as to the occupancy status of thatresidence.22 Thus, the Water defendants acted on behalf of the Albrechts as an agent to terminate[Consumers] water service.

In sum, the LTA provides an independent source of state law creating a property right incontinued water service to [Consumers]. The LTA was an attempt to balance the competinginterest of landlord and tenants.23 To achieve this balance, the LTA was an attempt to clarifyand broaden tenants rights.24 The argument that the Water defendants are not agents of theAlbrechts is not a liberal interpretation of the law, and would frustrate the purpose of the LTA.To accept this argument would condone a landlords self-help eviction by delegating theunlawful act to a third party, who would not be held responsible for the unlawful act, eventhough the party knew the consequence of his actions. For all these reasons, this Court shouldreverse the decision of the District Court and find that the LTA creates a property right incontinued water service for [Consumers].

2. The Water defendants rules and regulations are another independent source of property

rights

Another source for [Consumers] property rights emanate from the Water DistrictsRules, promulgated pursuant to O.R.C. 6119.06(N). These rules have the force and effect oflaw, which under Craftmay be considered an independent law source. The Magistrate Judgesreading and interpretation of these Rules is contrary to law.

The cardinal purpose for judicial examination of any written instrument is to ascertainand give effect to the intent of the parties.25 In so accomplishing this purpose, Courts should

19Chevrolet v. Calhoun, 2004 Ohio 1006, at *P8 (Ohio Ct. App. March 4, 2004).20Majesky v. Ballmer, No. 67624, 1995 Ohio App. LEXIS 144, at *14 (Ohio Ct. App. Jan. 19, 1995).21 Restatement (Second) of Agency 27 comment b (1957).22 R. 13, APX ___ at 17-19.23 Shroades v. Rental Homes, Inc., 68 Ohio St.2d 20, 25 (1981).24Brady v. Koehnke, 1994 WL 155719, at *5 (Hamilton Cty. 1994)(APX__).25 Foster Wheeler Envir., Inc. v. Franklin Cty. Convn Fac. Auth., (1997) 78 Ohio St.3d 353, 362 (citing Aultman

Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St. 3d 51 (1989)); see alsoVencor, Inc. v. Std. Life & Accident Ins.

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read the entire document in order to gather intent from the consolidation of the whole. 26 Further,[c]ommon words appearing in a written instrument will be given their ordinary meaning unlessmanifest absurdity results.

27Here, the Rules state in part as follows:

II. SERVICE APPLICATION

A. Any owner of a single family dwelling, auto court, duplex, or multipledwelling building, a person holding property having reasonableaccessibility to the source of, and who is in need of having water

supplied to this property, may be a customer of the District. Personswho receive the approval of the Board of Trustees may be a customer ofthe District by paying the current service tap-in fee along with thesigning of a water users agreement and an acknowledgment and/orcasement as provided and required by the District, provided that noperson otherwise eligible shall be permitted to obtain water service fromthe District if the capacity of the water system is exhausted by the needsof its existing customers. (Emphasis added).

* * *IX. CHANGE OF OCCUPANCY

A. Not less than one weeks notice must be given personally to the Districtto discontinue service or to change occupancy.

Thus, in this case, Water Districts Service Application Rule II.A defines [Consumers], aspersons who may be customers of the District who have had reasonable accessibility to thesource of water services, and they are in need of having water supplied to the [premises].Holding property should be read as commonly used. Thus, [Consumers] are those who areholding property as tenants.28 Thus, the Rules provide an independent law source underCraft.

Likewise, Change of Occupancy Rule IX.A. indicates that not less than one weeks noticecan be given to the Water defendants to discontinue service. This lag time provides time tonotify tenants of the termination. Thus, this Rule creates an independent law source for[Consumers] to be given at least one weekof continued service, after the Albrechts initiatedtermination. The trial court erred by not finding a property right in the Water Districts ownRules.

3. Ohio contract law is an independent source of property rights

A third party beneficiary may enforce the rights and obligations of a contract that confersan intended benefit to a contemplated party. An intended third party beneficiary contract was

created in this case because the Water defendants had knowledge, via the contract for servicesand their own conditional regulations, that [Consumers], who pay for these services indirectly,

Co., 317 F.3d 629, 635 (6th Cir. 2002) (The language of [a] contract should be understood in its plain and ordinarymeaning).26Id.27Id.28 Hold: to have and keep as ones own; have the duties, privileges, etc. of; own, possess; occupy. WebstersNew World Dictionary (1989) pages 642-43.

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occupied the premises and were for whom the intended benefit of the contractual promises hadbeen made.29 Thus, contrary to the R&R, under the Rules, [Consumers] can enforce the contractentered into between the Albrechts and the Water defendants.

Service Application Rule II.A recognizes that [Consumers] and other non-billed tenantshave a substantial interest in continued service, and that the utility owes them a duty, especially

when the landlord requests termination of service. Furthermore, Rule II.C contemplates anintended beneficiary by explicitly stating [b]ills will be sent solely to the owner/owners, ratherthan sending the bills to the deeded property and place of service. Thus this rule addressessituations where the place of service is not the locus of the owner, but that of a party intended toreceive the benefits of service.

The reading of Rule II.C in this manner is especially true when read in conjunction withRule II.A since it is the only other place in the regulations where any references are madeproviding for the needs of a person holding property, rather than just owners, therebycreating an intended third party beneficiary relationship between [Consumers] and the Waterdefendants. Thus, although [Consumers] are not a named party to the service contract, since theyare not owners, they may enforce the promises made intended for their benefit. The trial courts

decision must be reversed.4. Substantive due process creates an independent law source

Substantive due process serves as a vehicle to limit various aspects of potentiallyoppressive government action.30 Substantive due process claims may be loosely divided intotwo categories: (1) deprivations of a particular constitutional guarantee; and (2) actions thatshock the conscience.31 [Consumers] complain that both categories apply in this case. First,[Consumers] have alleged a particular constitutional guarantee. Although the Supreme Court hasnot decided whether continued receipt of utility services is a right of constitutional status, otherfederal courts have found such a property right in the Constitution, without reference to state ormunicipal law.

The rationale underlying these cases is that a consumers reliance upon continued serviceamounts to a protected property right.32 In fact, the Sixth Circuit has described continued utilityservice as much more important than other interests recognized by the Supreme Court asmeriting due process protection.

33In Palmer, the Court held shutting off utility service inflicts

hardship upon a consumer that goes far beyond such deprivation that a loss of drivingprivileges,34 delay in paying unemployment benefits,35 or the denial of direct welfare payments.36The Palmercourt affirmed the District Courts ruling that continued utility service was aproperty right protected by the Constitution.37 Craftmandates that services can only be

29Seifer v. Phe, 196 F.Supp.2d 622, 633 (S.D. Ohio 2002) (citation omitted).30Howard v. Grinage, 82 F.3d 1343, 1349 (6th Cir. 1996).31Pusey v. City of Youngstown, 11 F.3d 652, 656 (6th Cir.1993), cert. denied, 512 U.S. 1237 (1994);Mansfield Apt.

Owners Assn v. City of Mansfield, 988 F.2d 1469 (6th Cir. 1993).32See,Davis; Koger; Condosta v. Vermont Elec. Coop., Inc., 400 F.Supp. 358 (D.Vt. 1974);Donnelly v. City of

Eureka, 399 F.Supp. 64 (D. Kan. 1974) (Donnelly);Bronson v. Con. Ed. of N.Y., 350 F.Supp. 443 (S.D.N.Y.1972);Hattell v. Pub. Serv. Co. of Colo., 350 F. Supp. 240 (D. Colo 1972); Stanford v. Gas Serv. Co., 346 F.Supp.717 (D. Kan. 1972);Lamb v. Hamblin, 57 F.R.D. 58 (D. Minn. 1972).33 Palmer v. Columbia Gas Co., 479 F.2d 153 (6th Cir. 1973).34Bell v. Burson, 402 U.S. 535 (1971).35 Sherbert v. Werner, 374 U.S. 398 (1963).36Goldberg v. Kelley, 397 U.S. 254 (1970).37See, Donnelly;Davis;Koger;Stanford.

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terminated after providing an opportunity for due process.Although [Consumers], like other non-billed tenants, may not be named on their water

bills, they are nonetheless the actual users of the service and the individuals who need theprotection of Due Process procedures. The fact that services are essential and that the utility is amonopoly does not change regardless of who must pay for it. Constitutionally, [Consumers]

interests in continued service are clearly greater than that of the Albrechts, who do not reside inthe premises. The constitutional protection arises because continued utility services, onceprovided, are at least as important, if not more important, than other constitutionally protectedrights. Thus, [Consumers] have stated a substantive due process claim.

Second, the Magistrate Judges claim that [Consumers] position is impractical andsilly must be rejected for various reasons. This case was referred to the magistrate to resolvethe pending motions, not to try the case without evidence. The correct analysis is to review thefacts in [Consumers] favor, and apply Ohio law to determine whether the conduct shocks theconscience. The magistrate did neither.

Ohio law clearly establishes that defendants-appellees took the law in [their] ownhands.

38It is difficult to imagine a more volative situation from which extreme violence could

be reasonably anticipated than the surreptitious [termination of water services without dueprocess].39 Since the proposed complaint alleges facts that shock the conscience,[Consumers] state a substantive due process claim. The decision must be reversed.

B. [Consumers] state a due process claim for relief against the Albrechts

In order to assert a 42 U.S.C. 1983 civil rights claim, a plaintiff must allege and provethat a person acting under color of state law deprived him/her of a right secured by the FederalConstitution or laws of the United States.40 The protection afforded to citizens by the FourteenthAmendment applies to state or governmental action as well.

41

In this case, the proposed complaint presents a due process claim against the Albrechts aswell as the Water defendants. The Albrechts actions were taken under color of state law. Thereis a sufficiently close nexus between the Water defendants and the Albrechts conduct so thatthe Albrechts conduct may be fairly attributed to the Water defendants.42 Since there is notdispute that the LTA applies to the Albrechts, [Consumers] independent law source is O.R.C. 5321.01(B) and/or 5321.15(A). Thus, [Consumers] state a due process claim against theAlbrechts for terminating their water services without pre-termination notice and due process.The trial courts decision must be reversed.

II. THE TRIAL COURT ERRED AS A MATTER OF LAW BY DISMISSING

[CONSUMERS] SECTION 1983 EQUAL PROTECTION CLAIMS

In the context of utility shut-off cases, the Equal Protection analysis focuses onpredetermination procedures that affect the customer after termination.43 [Consumers] claim that

38Coward v. Fleming, 89 Ohio App. 485, 493 (Hamilton Cty. 1951).39Edwards v. C.N. Investments, 27 Ohio Misc. 57, 61 (Muni. Shaker 1971) (J. Rocker).40Christy v. Randlett, 932 F.2d 502, 504 (6th Cir.1991).41Mays, 277 F.3d at 880.42 Chapman, 319 F.3d at 834-835.43 See, e.g., Davis; Koger.

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the Water defendants classification scheme cannot meet the rational basis test.Under traditional Equal Protection analysis, a classification must be sustained if the

classification itself is rationally related to legitimate governmental interests.44

The Magistratefound that the policies are related to two legitimate governmental interests; ease of collection ofaccounts and the conservation of water. (R. 20, APX __ at __). This analysis is defective for

five reasons.First, the ease of bill collection does not provide a sufficient basis for the refusal tocontinue services in [Consumers] name and/or to open a new account under their name, socialsecurity numbers and additional identifiable information.45 Second, there is not a scintilla ofevidence that depriving [Consumers] of the necessity of water is a legitimate or rational means ofconservation of the environment and the prevention of water depletion in the Ohio River Valley.Such a finding violates the standard for review in this case.

Third, the Water defendants do not have a legitimate interest in participating in theAlbrechts self-help eviction of [Consumers].46 Fourth, [Consumers] are person[s]holdingproperty reasonable accessibility to the source of, and who [are] in need of having water suppliedto the [premises], and therefore, may be customers of the district. [Consumers] have a right

to be considered customers of the Water defendants.Last, as a condition of obtaining service, providing a deed to the property or proof ofownership is arbitrary and capricious. [Consumers] sufficiently alleged that their treatmentunder the rules is arbitrary and disparate.47 The trial courts decision must be reversed.

III. THE TRIAL COURT ERRED AS A MATTER OF LAW BY FINDING THAT

DEFENDANT AST IS ENTITLED TO QUALIFIED IMMUNITY

The Magistrate Judge recommended that defendant Ast is entitled to qualified immunitybecause [Consumers] have not established that there is a constitutional violation. This finding iswithout merit.

As previously discussed, the constitutional claims against Ast are based upon clearlyestablished law in the Sixth Circuit, of which a reasonable person should know. Thisdetermination is based on the allegations contained in the amended complaint and in the Waterdefendants Rules. Thus, Ast violated clearly established law.

Further, Ast knew the Rules, and knew or should have known of the potentialconstitutional and/or ECOA violations. Where an official could be expected to know that hisconduct would violate statutory or constitutional rights, he shouldbe made to hesitate.48 Thisstandard makes Ast on occasion to have to pause to consider whether a proposed course ofaction can be squared with the Constitution and laws of the United States.49 Thus, Ast is notentitled to qualified immunity. The trial courts decision must be reversed.

44United States Dept. of Agriculture v. Moreno, 413 U.S. 528 (1973).

45 Freeman v. City of Minneapolis, 635 F.Supp. 178, 184 (D. Minn. 1986);Davis, 497 F.2d at 144.46SeeDavis, 497 F.2d at 144-145; Allegheny Pitts. Coal v. Webster County, 488 U.S. 336 (1989) (discussing nolegitimate interest grounds of the equal protection aand substantive due process doctrines).47See Bush v. Gore, 531 U.S. 98, 104-05 (2000).48Harlow v. Fitzgerald, 457 U.S. 800, 819 (1982); Davis v. Mansfield Metropolitan Housing Authority, 751 F.2d180, 186 (6th Cir. 1984).49Mitchell v. Forsyth, 472 U.S. 511, 524 (1980).

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IV. THE TRIAL COURT ERRED AS A MATTER OF LAW BY DISMISSING[CONSUMERS] EQUAL CREDIT OPPORTUNITY ACT CLAIMS

The trial court adopted the Magistrate Judges position that [Consumers] do not state aclaim for relief under the ECOA. The R&R states that [Consumer 1] and [Consumer 2] (a

married female) were denied credit but that the complaint does not either alleged that either[Consumer 2]s sex or marital status was the reason for the denial. The R&R further states thatMays v. Buckeye Rural Electric Cooperative,

50 should not be applied to determine whether[Consumers] received a ECOA notice for new water services in violation of 12 C.F.R. 202.09.(R. 20, APX __ at __). The trial courts decision must be reversed, because the amendedcomplaint alleges aprima facie case, andMays is controlling.

The ECOA prohibits creditors from discriminating against any credit applicant withrespect to any aspect of a credit transaction on the basis of race, color, religion, nationalorigin, sex, or marital status. 15 U.S.C. 1691(a)(1). As an entity granting members the abilityto defer payment of a debt or to incur debts and defer its payment or to purchase property orservices and defer payments thereof, Water defendants are creditors within the meaning of the

ECOA. 15 U.S.C. 1691a(d).

51

One of the purposes of the ECOA is to eradicate creditdiscrimination waged against women, especially married women whom creditors traditionallyrefuse to consider for individual credit.52 ECOA claims of discrimination are evaluated usingthe same framework that is applied to Title VII cases.53

The Water defendants policy of providing water service accounts only to landlordsviolates the ECOA because the policy results in a disparately high rejection of applications fromwomen and minority applicants.54 (See proposed second amended complaint 45).55 Thus,[Consumers] seek to establish a claim under a disparate impact theory, which is actionable underthe ECOA. See 15 U.S.C. 1691(a)(1), FRD Official Staff Commentary, EEO-1 202.6(a)(2),and 12 C.F.R. 202.06 andMara v. Columbus, Case No. C2-01-710 at 14 (S.D. Ohio 2002) (R.13, APX __ at __ to ___).56

Additionally, [Consumers] claim that no ECOA notice was provided to them and/or otherapplicants for continued or new water services in violation of 12 C.F.R. 202.09. Thenotification provisions of 202.09 apply unless Water defendants extension of credit constitutes

50 277 F.3d 873 (6th Cir. 2002).51Barney v. Holzer Clinic, Ltd. , 110 F.3d 1207, 1209 (6th Cir. 1997) (quoting statutory definition of credit).52Mays, 277 F.3d 873 at 876 (citations omitted).53Lewis v. ACB Business Services, Inc., 135 F.3d 389, 406 (6th Cir. 1998).54 [Consumers] have third-party standing to challenge whether the policy discriminates against minorities. See

Barrows v. Jackson, 346 U.S. 249 (1953) (Equal Protection).55 45. Water defendants established policies and customs and/or patterns and practices of

requiring Plaintiffs and other consumers of, and applicants for, water service to comply

with conditions different from similarly situated customers in order to restore waterservice, including, but not limited to, refusing to provide water service accounts toapplicants who are not landowners, violate the ECOA and Regulation B in variousrespects, including:

a. They result in a disparately high rejection of applications from womenand minority applicants. See 15 U.S.C. 1691(a)(1), FRB Official StaffCommentary, ECO-1, 202.6(a)(2) and 12 C.F.R. 202.6 and/or

b. No ECOA notice of adverse action was provided to consumers ofand/or applicants for water services. See 12 C.F.R. 202.09.

56 An appeal of that case is pending before this Court. See Golden v. City of Columbus, Case No. 03-4252.

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incidental credit.57 The exemptions for incidental credit do not apply in this case.Therefore, the Water defendants are required to comply with 202.09.

Extensions of incidental credit are extensions other than for public utilities creditand/or securities credit and are: (1) not made pursuant to a credit card; (2) not subject to afinance charge as defined in 12 C.F.R. 226.4; and (3) not payable in more than four

installments by agreement. See 12 C.F.R. 202.3(c)(2).In this case, the Water District rules establish that the incidental credit exemption doesnot apply in this case. Rule III.A provides that the customer makes payments in more than fourinstallments by agreement. Also, III.E and F provide for service charges as defined by 12 C.F.R. 226.4. Likewise, the 10% penalty constitutes a service charge as defined by 226.4. Thus, theincidental credit exemption does not apply in this case. Accordingly, the Water defendants arerequired to comply with the notification provisions contained in the ECOA. [Consumers] allegethat they did not receive an ECOA notice. Therefore, the proposed complaint states a claim uponwhich relief can be granted. The Magistrates R&R should be rejected.

V. THE TRIAL COURT ERRED AS A MATTER OF LAW BY DENYING

[CONSUMERS] LEAVE TO FILE THEIR PROPOSED SECOND AMENDEDCOMPLAINT

The trial court adopted the Magistrate Judges position that [Consumers] motion forleave to file a second amended complaint should be denied. This decision is contrary to law.First, as explained above, [Consumers] state due process and equal protection claims for reliefagainst the Water defendants under 1983, and claims under the ECOA. Likewise, the proposedsecond complaint states a due process claim against the Albrechts.

Second, assuming, arguendo, that [Consumer 2] does not have standing58 to establish anECOA claim under the disparate impact theory (i.e., the policy results in a disparately highrejection of applicants for women and minority applicant), then this Court should permitamendment by intervention under Rule 23(d). The Magistrate failed to report that this case is aclass action brought pursuant to Rule 23(b)(2) for declaratory and injunctive relief, and whateffect this status has on standing.

In class actions, permissive intervention under Rule 23(d) is liberally permitted tostrengthen the adequacy of class representative. In some cases, it may be essential in order forthe named plaintiffs to meet the Rule 23(a) requirements for the classes defined in the proposedcomplaint. In such cases, the class representative should not be disqualified or found to beinadequate.59 Instead, courts have routinely encouraged intervention by a class member for thepurpose of substitution when the other class action requirements are satisfied.60

Accordingly, in this case, should [Consumer 2] be disqualified or found to be inadequateto represent the ECOA class, then the trial court should encourage intervention, and set a time forthe motion and proposed intervention complaint to be filed. For these reasons, the trial courtsdecision must be reversed.

57 See Mays, 277 F.3d at 878-79.58 Class membership prerequisite requires that the representative have proper standing. In order to have standing tosue as a class representative, the plaintiff must possess the same interest and suffer the same injury shared by allmembers of the class that he or she seeks to represent. 5 Moores Federal Practice (3 Ed.1997) 23-57, 23.21[1];Pyles v. Johnson, 143 Ohio App.3d 720 (4th Dist. 2002).59 See Newberg and Conte on Class Actions (3rd Ed. 1992) 1609 at 54.60 Simmons v. Brown, 611 F.2d 65 (4th Cir. 1979).

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VI. THE TRIAL COURT ERRED AS A MATTER OF LAW BY FINDING THAT

THE DOCTRINE ESTABLISHED INPARRATT V. TAYLOR APPLIED IN THIS

CASE

The trial court adopted the magistrates position that the doctrine established in Parratt v.Taylor,61 and followed in Cadle v. City of Newton Falls,62 mandates that this entire case bedismissed because the LTA provide a state remedy that comports with procedural dueprocess63 in which the agency relationship and LTA claims can be litigated.64 This decisionis without merit. In Parratt, the Supreme Court limited the use of 1983 cases in federal courtwhen a damage award is adequate, pre-deprivation process is impractical, and adequate post-deprivation remedies are available. Reliance on this doctrine in the present case is misplaced forvarious reasons.

Parrattwas an individual damages action. The case is a civil rights and consumer classaction that requests primarily declaratory or injunctive relief. Thus, unlike Parratt, an individualdamages award is inadequate for [Consumers] and the putative class.

Second, providing [Consumers] and other class members pre-termination notices andother due process rights are not impossible, as was the case in Parratt.65 The Water defendantstermination of the water service was not a random and unauthorized act. Rather, the Waterdefendants actions were based upon an established [administrative] procedure.66 Moreover,the Water defendants have not promulgated rules for plaintiffs to receive notice of termination,or for them to dispute the termination. The only provision, Complaints-Adjustments (proposedcomplaint, Exhibit 1, page 12 of attachment, APX.___ ), applies only to the Albrechts.Therefore, plaintiffs cannot administratively contest being denied continued water service. Noother post-deprivation administrative remedies are available to plaintiffs.67

Plaintiffs state a claim for relief against the Water defendants under Ohio 5321.15(C).However, state law does not provide pre-termination notice of the shut-off. Also, unlike Section1983, 5321.15(C) does not provide adequate relief. By its terms, it can only compensateplaintiffs for actual damages and attorneys fees. Thus, 5321.15(C) does not provide forinjunctive relief and/or for punitive damages, rendering the post-deprivation remedy inadequate.Parrattis not controlling.

CONCLUSION

For the foregoing reasons, [Consumers] respectfully request that this Court: sustain theabove arguments; overrule the granting of the two motions to dismiss; grant their motion forleave to file the proposed complaint (or a motion to intervene with proposed intervention

61 Parratt v. Taylor, 531 U.S. 527 (1981) (statutory damage action sufficient to satisfy due process for prisoner).62

Cadle v. City of Newton Falls, 961 F.2d 1576 (6th

Cir. 1992) (unpublished) (no property interest).63Parratt, 531 U.S. at 541.

64 R. 20, APX __ at 5, 8-9.65 Pre-termination notice was provided to the tenant and landlord inMansfield ApartmentOwners Associationv. Cityof Mansfield, 988 F.2d 1469 (6th Cir 1993) (Mansfield Apartments) (no property right to continued service whereapplicant did not comply with reasonable administrative procedures). By contrast, the Water defendants rules donot provide for pre-termination notice to plaintiffs.66Logan v. Zimmerman Brush Co., 455 U.S. 422, 436 (1981) and Turpen, 26 F.3d at 979-80.67 By contrast, post deprivation rights were afforded to tenants inMansfield Apartments , 988 F.2d at 1475-76(Water Divisions Regulations provide plaintiffs with the right to a hearing regarding their objections).

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complaint); and order any other relief that is just and necessary.

_________________________[Attorneys for Plaintiffs]

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17.3 Consumers Appellate Reply Brief

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

[CONSUMER 1] and [CONSUMER 2],Plaintiffs,

v.

ADAMS COUNTY REGIONAL WATER DISTRICT,andBRIAN AST,and

WILLIAM ALBRECHT andPHYLLIS ALBRECHT,Defendants.

Case No.

ARGUMENT

I. [CONSUMERS] STATE VALID DUE PROCESS CLAIMS

A. The Water defendants mischaracterize [Consumers] arguments regarding theirproperty interest in continued water service

1. Ohios Landlord Tenant Act is a source of property rights in continued water service

In Craft,the United States Supreme Court recognized that a protected property rightexists when state law confers such an interest. See Memphis Light, Gas & Water Div. v. Craft,436 U.S. 1, 9 (1978). [Consumers] submit that Ohios Landlord Tenant Act (LTA), OhioRevised Code 5321.01 et seq., provides an independent source of law creating a propertyright. The Water defendants disagree, essentially arguing that: 1) they have no obligation tosupply water to anybody; 2) they had no contractual relationship with [Consumers]; and 3)

relying upon Ohio Revised Code 6119.09, they are not subject to supervision and regulation byany authority. The Water defendants are completely missing the point on all counts.The issue here is not what the Water defendants must or must not do, but whether Ohios

LTA, as an independent source of state law, creates a property interest in continued water servicefor tenants such as [Consumers]. This statute requires landlords to supply habitable premises fortenants in general, see R.C. 5321.04(A)(1) & (2), keep the plumbing in working order, see R.C. 5321.04(A)(4), and requires landlords to supply running water, and reasonable amounts ofhot water. R.C. 5321.04(A)(6). Moreover, R.C. 5321.15 prevents a landlord from shutting

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off water as a means of evicting tenants outside the judicial process. All of these Ohio laws givetenants a legitimate claim of entitlement to water services and, therefore, a property right incontinued water services. Craft, 436 U.S. at 9; cf. Thomas v. Cohen, 304 F.3d 563, 576 (6th Cir.2002) (finding a property interest in tenants rights to possession under Kentuckys LTA).

The Water defendants further misinterpret [Consumers] argument that, for purposes of

liability, they were acting as agents of the landlords under the LTA. The Water defendants claimthat [Consumers] are attempting to make the broad argument that the Water defendants becomethe agents of a landlord simply by virtue of a water contract between the Water defendants anda landlord. That is not the argument [Consumers] are advancing at all.

Under the LTA, the definition of a landlord includes an agent of the owner. R.C. 5321.01(B). The LTA further states that [n]o landlord shall initiate any act, includingtermination of utilities or services . . . for the purpose of recovering possession of residentialpremises, other than [by judicial means]. R.C. 5321.15(A). In the unlawful termination of[Consumers] service, it was necessary for their landlords to enlist the assistance of the Waterdefendants. Thus, for purposes of the LTA, the Water defendants acted as an agent of theowner falling under the definition of landlord as set forth in R.C. 5321.01(B). Thus, the

Water defendants can be liable to tenants as a landlord for purposes of the LTA.

2. The Water defendants Rules and Regulations are contradictory

[Consumers] claim that the Water defendants Rules and Regulations also give tenants aproperty right in continued water service because the rules specifically refer to a person holdingproperty having reasonable accessibility to the source of, and who is in need of having watersupplied to this property. The Water defendants counter that later portions of the Rules andRegulations require legal title to property to become a customer of the Water defendants.[Consumers] submit that this language creates an ambiguity at best and a contradiction at worstin the Water defendants Rules and Regulations. The Magistrate Judge erred by failing toconstrue the Complaint in the light most favorable to [Consumers] and by dismissing thisargument as a source of a potential property right in continued water service.

3. [Consumers] were third party beneficiaries of the contract between the Water defendants and

their landlords entitling them to the resulting property interests

A third party beneficiary may enforce the rights and obligations of a contract that confersan intended benefit to a contemplated party. See Seifer v. Phe, 196 F. Supp.2d 622, 633 (S.D.Ohio 2002). An intended beneficiary, versus an incidental beneficiary, is one in which thecircumstances indicate that the promisee intends to give the beneficiary the benefit of thepromised performance. Hill v. Sonitrol, 36 Ohio St. 3d 521 (1988). The Water defendantsignore [Consumers] arguments regarding intended beneficiary status and state that their thirdparty beneficiary theory is based upon telephone calls from [Consumers]. This is not anaccurate statement.

The Water defendants own contract for services and their conditional regulations thatallow tenants to occupy the premises and make contractual promises are clearly intended tobenefit tenants. Service Application Rule II.A recognizes that [Consumers] and other non-billedtenants have a substantial interest in continued service and that the utility owes them a duty,especially when the landlord requests termination of service. Further, Rule II.C contemplates

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tenants as intended beneficiaries by explicitly stating [b]ills will be sent solely to theowner/owners, rather than sending the bills to the deeded property and place of service. Thisrule therefore addresses situations where the place of service is not the locus of the owner, butthat of a party intended to receive the benefits of service. As such, the Water defendantspolicies recognize that tenants are the intended beneficiaries of contracts with property owners

and therefore serve as a source of property rights.

4. Substantive Due Process creates an independent law source because the Cadle case isdistinguishable

[Consumers] rely upon substantive due process as an alternative independent law source.The Water defendants counter that Cadle v. City of Newton Falls, Ohio, 961 F.2d 1576 (table),1992 WL 88904 (6th Cir. 1992), stands for the proposition that a substantive due process interestdoes not exist in the present case. The Cadle case is easily distinguishable from the present case.

In Cadle, the plaintiff was nota tenant but a property owner contracting with a City watercompany and receiving water service. See 1992 WL 88904 at *1. His service was terminated

because he violated city and state ordinances by furnishing water to a neighbor via a hoseattached to a spigot on his house, possibly contaminating the City water supply. See id. TheCity, after warning Cadle and filing misdemeanor charges against him, terminated his waterservice. See id. at *3. Cadle filed substantive and procedural due process claims against theCity. See id. This Court, in an unreported opinion, foundCadle was owed no obligation orremedies for receipt of water services in Ohio. See id. at *4. However, Mr. Cadle was blatantlyviolating Ohio law and City ordinances in his receipt of water services despite repeated

warnings. This is a far different situation than the present case and provides no persuasiveauthority whatsoever.

Based on case law such as Craft, [Consumers] claim that substantive due process servesas an alternative source of law creating a property interest in continued water service.

B. In their Proposed Amended Complaint, [Consumers]state a Due Process claim for relief against the Albrechts

In a separate Letter Brief [Consumers] landlords, the Albrechts, adopt the arguments ofthe Water defendants and further argue that they are not state actors for purposes of 42 U.S.C. 1983 and [Consumers] cannot assert their Due Process claims against them.

[Consumers] reiterate that the Albrechts actions were taken under color of state lawbased upon the close nexus between the Water defendants actions and the Albrechts conduct.See Chapman v. Higbee Co., 319 F.3d 825, 834-35 (6th Cir. 2003) (en banc) (holding thatgenuine issue of fact existed as to whether sufficiently close factual nexus existed betweengovernment and private actor such that private actor liable under section 1983).

II. [CONSUMERS] HAVE STATED VALID SECTION 1983 CLAIMS

BECAUSE THERE ARE NO ADEQUATE STATE LAW REMEDIES

A. Parratt applies only to random, unauthorized acts

The Water defendants argue that [Consumers] fail to state a Section 1983 claim because

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there are adequate, available state law remedies, relying upon the doctrine ofParratt v. Taylor,531 U.S. 527 (1981) and citing the Sixth Circuit cases ofJefferson v. Jefferson County PublicSch. Sys., 360 F.3d 583 (6th Cir. 2004) and Cadle v. City of Newton Falls, Ohio, 961 F.2d 1576(table), 1992 WL 88904 (6th Cir. 2002) (citingVicory v. Walton, 721 F.2d 1062 (6th Cir. 1983)for the proposition that a Section 1983 claim is inappropriate when there are adequate state

remedies). Both of these cases are easily distinguishable from the present case. Moreoverand more important, the Water defendants ignore the most recent Sixth Circuit pronouncement inthis area of the law.

InMitchell v. Fankhauser, 2004 Fed. Appx. 0225P (6th Cir. July 14, 2004), this Courthad the opportunity to discuss the Parrattdoctrine in detail, specifically referring toJefferson v.Jefferson County Public School System and Vicory v. Walton, 721 F.2d 1062 (6th Cir. 1983).68This Court explained that Parrattstands for the proposition that a plaintiff claiming a Section1983 violation is generally required to show that available state procedures were inadequate tocompensate him for the deprivation of property. Id. at **8.69

This Court went on to discuss the evolution of the Parrattdoctrine in the United StatesSupreme Court and the Sixth Circuits application of the doctrine. TheMitchell court noted a

significant distinction in cases in which Parrattshould be followed unfortunately not[]consistently applied in our circuits caselaw: those cases arising out of the alleged misconductof state officials (in which Parrattshould be applied) versus those cases arising out of achallenge to an established state procedure (in which Parrattshould notbe applied). Id. at *9-*10. This Court, specifically citing toJefferson, stated, Despite the Supreme Courts and thiscourts pronouncements that Parrattapplies only to random, unauthorized deprivations ofproperty, this court has occasionally applied Parratts requirement of pleading the inadequacy ofstate-court remedies more broadly. Id. at *11. TheMitchell court then proceeded to hold thatthe correct line of authority was that Parrattonly applies to random, unauthorized deprivationsof property. Id. at *12.

In the present case, [Consumers] are notclaiming a random, unauthorized deprivation ofproperty. Instead, [Consumers] claim is quite the opposite: a class-wide claim that the Waterdefendants established, administrative policies deprive all tenants of due process of law.

B. Even ifParratt had broad application, [Consumers]

have pled the inadequacy of state remedies

Despite the Water defendants assertions to the contrary, [Consumers] have pled that theavailable state procedures are inadequate remedies both in their Proposed Amended Complaint at 28 (R. 13, APX__) and in their Objections to the Magistrate Judges R&R (R. 24, p. 25-26,APX__). The available state law remedies in this case set forth in the LTA pursuant to R.C. 5321.15(C) (actual damages and attorneys fees) are not adequate because: 1) this is not anindividual damages case; this is a civil rights consumer class action that, in addition to damages,seeks declaratory and injunctive relief; 2) this case seeks adequate pre-termination procedures,

68Jefferson involved a broad application of the Parrattdoctrine (teacher challenged school district policies aftersuspension and constructive discharge) while Vicory involved a narrow application ofParratt(challenge to aforcible entry and detainer action involving wrongful seizure of a mobile home).69 In Parratt, the United States Supreme Court found that a prisoner who claimed that prison officials deprived himof due process by negligently losing his mail order hobby supplies did not state a due process claim because of theavailable state tort law remedies. The Court noted that the loss of property did not occur as a result of someestablished state procedure. Parratt, 451 U.S. at 543.

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which are not impracticable in this case; and 3) the available post-deprivation remedies arelimited. As such, even if this Court read Parrattbroadly, that doctrine would not be applicableto this case.

III. [CONSUMERS] HAVE STATED VALID EQUAL

CREDIT OPPORTUNITY ACT CLAIMS

The Water defendants dispute [Consumers] Equal Credit Opportunity Act (ECOA)claims against them, first arguing that they do not supply credit as defined by the ECOA. TheWater defendants state that [i]f a supplier of services such as the Water District is considered tobe extending credit because it bills its customers only once a month, such a supplier could onlyavoid the reach of the statute by reading the meter on a round the clock basis and submitting billscontinuously. . . . This clearly is an absurd result not intended by the statute. Appellees Brief,p. 34-35. It is no wonder that the Water defendants are violating the ECOA because it is clearthat they have no idea of the meaning of the statute.

There is no question that utility service involves credit for purposes of the ECOA. See

National Consumer Law Center, Credit Discrimination (3d ed. 2002) at 2.2.2.3. A utilitycompany is a creditor when it supplies utility service and bills the user after the service has beenprovided. Official Staff Commentary, 12 C.F.R. 202.3(a)-2. In the present case, the Waterdefendants most assuredly extend credit for purposes of the ECOA.

The Water defendants further argue that they fall into the exception for incidental creditpursuant to 12 C.F.R. 202.3(c)(1) andMays v. Buckeye Rural Elec. Coop., 277 F.3d 873 (6thCir. 2002). Assuming arguendo that is the case,70 the Water defendants are nonetheless subjectto the general ECOA prohibition against discrimination. See Official Commentary, 12 C.F.R. 202.3-1.

The ECOA argument set forth by [Consumers] is a disparate impact argument: the Waterdefendants refusal to contract or extend credit to tenants has a disparate impact on women andminorities who make up a larger percentage of the tenant population. The Water defendantsstatements regarding the so-called effects test have nothing to do with [Consumers]discrimination claims. See Lewis v. ABC Business Servs., 135 F.3d 389, 406 (6th Cir. 1998)(stating that ECOA claims of discrimination are evaluated using the same framework as appliedto Title VII cases).

CONCLUSION

For the foregoing reasons, [Consumers] respectfully request that this Court: sustain theabove arguments; overrule the granting of the two motions to dismiss; grant their motion forleave to file the proposed complaint (or a motion to intervene with proposed interventioncomplaint); and order any other relief that is just and necessary.

Respectfully submitted,

_________________________[Attorneys for Plaintiffs]

70 The incidental credit exemption allows a creditor to avoid compliance with only certain aspects of the ECOA,including the notice provisions of 12 C.F.R. 209.9.