NASHVILLE, Tenn. (Feb. 25, 2002) – In Cookeville’s latest federal court defense of unconstitutional practices of its electric company, District Judge William J. Haynes Jr. awarded declaratory relief to plaintiffs Dewayne and Judy Hargis and found the city again failed to abide by constitutionally protected procedural due process rights.
 

Cookeville’s policy of hanging an orange tag on the doors of utility customers the city claims owe it money does not inform them they can object,” the court said, and fails to meet the standard required by the case Memphis Light, Gas, and Water Div. v. Craft, 436 U.S. 1 (1978).

“In defining a public utility's privilege to terminate for nonpayment of proper charges, Tennessee decisional law draws a line between utility bills that are the subject of a bona fide dispute and those that are not,” attorney Samuel J. Harris argued for the Hargises.

In the Craft case, the Court held “[n]otice in a case of this kind does not comport with constitutional requirements when it does not advise the customer of the availability of a procedure for protesting a proposed termination of utility service as unjustified.”

In the case against Cookeville, Judge Haynes said: “It is likely that this issue could rise again.”

In fact, it did come up again and the city has been under a federal court order since April 2001 to stop the unconstitutional practice of depriving customers of essential services unless they pay up, whether they owe the money or not, without providing them notice of their right to an appeal and of what the appeal process is.

Even with the injunction in place, the city continued its practice and ended up paying thousands in January to settle before another suit was filed. In that case, Cookeville shut off service to 21-year-old TTU student Virginia Moore, who had been given a deadline by which to pay but before the due time, the city cut her off at the request oflandlord.

In the Hargis opinion,Judge Haynes did not grant the monetary damages since they “could not provide proof of any injury,” but taxpayers and the Tennessee Municipal league’s Risk Management Pool had to pay to defend the city’s unconstitutional behavior.

According to the facts articulated by the court, plaintiffs, DeWayne Hargis and Judy Hargis, filed their case under 42 U.S.C. § 1983 and the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 against the Defendants AAA Collections, Inc. ("AAA"), and the City of Cookeville, Tennessee.Plaintiffs assert claims that the City violated their procedural due process rights under the Fourteenth Amendment in threatening to terminate their utility services without an opportunity to object.Plaintiffs allege that AAA, the City's collection agency, violated the FDCPA by its referral of the Plaintiffs' past obligation to the City and its collection of that past debt on the City's behalf.

The court said that on January 9, 1989, the Hargises moved into Ford Trailer Park and initiated utility services with the City.Judy King completed and signed an application for utility services for 1515 Ford Drive in the name of Judy Ann King and DeWayne Hargis, her spouse. Although the Hargis state that the living conditions at Ford Trailer Park were intolerable.

The Hargises were evicted from their residence under a $400 judgment for past due rent.On February 21, 1989, the Plaintiffs vacated the Ford Trailer Park, and the City's utility service at that location was terminated.Plaintiffs, however, did not give notice of their eviction to the City and left without paying approximately 2½ months of utility service at that residence.

The City turned the Hargis' unpaid electric bill over to AAA for collection in late 1989. The City did not know where the Hargises were. With credit for their deposit and interest, the Hargis debt to the City was $398.14. AAA is the only collection agency that the City uses for collection of past due utility bills.Upon collection, AAA would retain as 40% of the unpaid utility bill. AAA was aware of the possibility that the City would send out termination notices once an individual is located.

AAA is also aware that the City uses orange hang tags that notify its customers of a shut off of utilities in three days, if payment is not made.

On May 22, 2000, Plaintiffs went to World Finance Corporation where Judy Hargis applied for a consumer loan.During the application process, Judy Hargis learned that her credit report contained adverse credit information reported by Defendant AAA.Plaintiffs telephoned AAA about this information, and AAA's representative asked for Mr. Hargis' social Security number to verify his identity.

When Mrs. Hargis contacted AAA, she was told that AAA did not do collection work for the hospital that was the outstanding debt listed for them and that AAA had no information regarding hospital bills allegedly owed by the plaintiffs.

Mrs. Hargis then inquired of AAA whether they were aware of any other "old bills" owed by the Plaintiffs.In response to Mrs. Hargis's inquiry, Jan Maddux of AAA located records of Plaintiffs' unpaid electric bill at their former address, 1515 Ford Park Drive.

Mr. Hargis who participated in the telephone conversation, responded that he had never received that bill. Maddux did not discuss repayment of this debt nor threaten to have the Plaintiffs' current utility turned off if the bill were not paid.By that time, AAA had ceased its earlier efforts to collect the Hargises' bill a number of years prior to 2000.