ST. PAUL — The state’s top court on Tuesday scrutinized the city of Duluth’s methodology for calculating stormwater runoff fees, but questioned whether businesses can seek refunds for alleged overpayments.
The Minnesota Supreme Court heard oral arguments in the
class-action lawsuit initiated in 2021
by Moline Machinery LLC and Glass Merchant Inc., which does business as Walsh Windows.
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The businesses contend that the city for years made them shoulder an unfair share of the fees, offering “sweetheart and self-dealing discounts” to other customers. They are seeking reimbursement, which could leave the city on the hook for tens of millions of dollars.
The case was
initially thrown out by a district court judge,
who found Duluth was not unjustly enriched because the rates were designed to break even, not turn a profit. But a three-judge
panel of the Minnesota Court of Appeals said it should move forward,
allowing a jury or judge to determine if the city unjustly retains some benefit from excessive fees.
Assistant City Attorney Elizabeth Sellers Tabor told the Supreme Court that there is no legal mechanism for the plaintiffs to obtain refunds and that it would have “widenin...