## Facts

- The City of Attalla operated a sanitary sewer system and, for many years, provided sewer service both inside the city limits and to certain customers located outside the limits but within the city’s police jurisdiction.
- The sewer system faced significant operational problems, including overflows and regulatory concerns, requiring expensive rehabilitation; city officials sought to reduce system load and raise funds.
- The City did not collect general municipal taxes (e.g., ad valorem or sales taxes) in the police jurisdiction and sought voluntary annexation by the affected businesses as a way to increase revenue; the businesses did not annex.
- The City enacted Ordinance No. 758 (01), directing that sewer service would no longer be provided in the police jurisdiction, which would terminate service to Dean Sausage Company, Machine Products Company, Trambeam, and AAA Plumbing Pottery (collectively, the customers).
- The customers alleged long-standing reliance on the City’s sewer service and claimed that abrupt termination would cause substantial harm, including business disruption and potential environmental and regulatory consequences.
- The trial court issued temporary restraining orders preventing service termination and, after a merits hearing, entered an injunction requiring the City to continue providing sewer service to the customers.

## Issues

1. Whether a municipality that voluntarily extended sewer service to customers in its police jurisdiction may terminate that established service by ordinance based solely on their nonresident location.
2. Whether Ordinance No. 758 (01) was a valid and reasonable exercise of municipal authority or was unreasonable, arbitrary, discriminatory, or otherwise unlawful as applied to existing sewer customers.
3. Whether a city operating a sewer utility in a proprietary capacity owes duties of reasonable and non-discriminatory service that constrain categorical service termination to an existing class of customers.

## Decision

- The Alabama Court of Civil Appeals affirmed the trial court’s judgment.
- The court upheld the injunction requiring the City to continue sewer service to the customers in the police jurisdiction.
- The court concluded that the City could not terminate the customers’ sewer service through Ordinance No. 758 (01) in the manner attempted.
- The court treated the ordinance, as applied to cut off service to these long-served customers, as invalid/unlawful under the governing standards for municipal utility service.
- The appellate court deferred to the trial court’s ore tenus factual findings and found the judgment supported by the evidence.

## Legal Principles

- Municipal ordinances are presumed valid and reasonable, but that presumption may be overcome if the ordinance operates in an unreasonable, arbitrary, capricious, oppressive, or discriminatory manner.
- When a municipality furnishes utility service (including sewer service), it acts in a proprietary capacity and is subject to duties of reasonable and non-discriminatory treatment of customers.
- A municipality that voluntarily extends utility service to customers outside its corporate limits may not arbitrarily discontinue that established service to a defined class of existing customers.
- Financial and capacity concerns may justify measures to manage a utility system, but they do not, standing alone, justify a categorical cutoff of long-provided essential service where the result is unreasonable or discriminatory.

## Conclusion

The court held that Attalla’s long-standing, voluntary provision of sewer service to customers in its police jurisdiction created utility-service obligations that barred the City from using an ordinance to categorically terminate service to that class of existing customers based solely on their nonresident location.


City of Attalla v. Dean Sausage Co., 889 So. 2d 559 (Ala. Civ. App. 2003)