A federal judge ruled Tuesday in a lawsuit challenging the town of Fortville’s procedure for disputing unpaid waterbills that class members’ constitutional rights to procedural due process trump the state’s public policy of enforcingcontracts.

Bobbi Kilburn-Winnie and Michelle Allen-Gregory had their water service disconnected after not paying their bills on time.They allege that the procedure that allows customers who want to dispute the amount billed or the impending disconnectionto have a hearing before the Fortville Town Council is so complicated and burdensome that it violates the right to proceduraldue process under the 14th Amendment.

Allen-Gregory has sued over this issue before. In 2014, her complaint stated the town would terminate water service withouta hearing. This led to the town revising its notice and disconnection procedure, but the plaintiffs claimed the new procedurewas “overly burdensome” because it required four written submissions, including a notice of appeal of the serviceor disconnection fee.

The lawsuit was settled in 2015, with the settlement agreement becoming effective Oct. 12, 2015. The agreement containeda released claims clause, at issue in the instant case. The town defendants argue this released claims clause prevents theinstant lawsuit, as Allen-Gregory was a named plaintiff in the original case and Kilburn-Winnie was a member of the settlingclass because she had her water disconnected in February and June 2014 under the defendants’ original procedure. Shealso received settlement proceeds.

After determining state law applies, Chief Judge Richard Young inthe U.S. District Court for the Southern District of Indianafound the plain language of the release bars the plaintiffs’ claim, but that does not necessarily mean it is enforceableagainst Allen-Gregory, Killburn-Winnie or potential class members.

The release is enforceable as it relates to Allen-Gregory because she was the original named plaintiff, participated in thesettlement conference and signed the settlement agreement.

Killburn-Winnie received a notice of the class action and proposed settlement, but there’s no evidence she actuallyread the class action or the settlement agreement and release clause.

“The court recognizes that this ruling strikes against Indiana’s strong public policy of enforcing releases andenforcing contracts in general. This decision also overrules the clear intent of the parties to the Settlement Agreement andthe very purpose of releases. Parties include a release in settlement agreements in order to “foreclose further claims,”Young wrote citing Zolman v. Geneva Leasing Assocs., 780 N.E.2d 387, 392 (Ind. Ct. App. 2002).

“Yet, at least at this stage in the proceeding, the court must allow the releasers to return with a claim Defendantsreasonably believed was waived. The court is troubled by this result and its possible implications.

“Despite this …the court cannot enforce a waiver of a constitutional right until it is satisfied that the individualvoluntarily relinquished a known right. At least in this context, the class members’ constitutional right to proceduraldue process trumps Indiana’s public policy of enforcing contracts, the parties’ contractual intent, and the plainlanguage of the Release.”

Young ordered Allen-Gregory removed from the case. He also granted the defendants leave to renew their motion for summaryjudgment if evidence reveals that Killburn-Winnie knowingly and voluntarily waived her due process rights.

The case is BobbieKilburn-Winnie and Michelle Allen-Gregory, on behalf of themselves and all similarly situated persons v. Town of Fortville,Fortville Water Works and Fortville Utilities, 1:15-cv-0784.