Suit moves to federal court
A lawsuit filed in Harris County against the Montrose Management District is now set to be heard in federal court.
The class action, originally filed last month in state district court, is the latest legal action taken against the management district, which has been defending itself against claims it was formed unlawfully and should be dissolved.
A group of commercial property owners in Montrose who are subject to the district’s assessments are seeking to be reimbursed millions of dollars they paid to the agency over the past several years. The plaintiffs have also made a dissolution claim.
The management district this week had the case “removed” from state to U.S. District Court for the Southern District of Texas. The removal is because the plaintiffs asserted federal constitutional claims, according to a district spokeswoman. She said there were no other updates to report at this time.
The lawsuit follows a recent ruling from a related case that originated several years ago in which a judge called the assess-
ments “void” and said the district “must reimburse its unlawful assessment to those who paid them.” That judge, however, later vacated a judgment in that case, and it remains open and pending.
A hearing in that case is scheduled for March 13.
The new lawsuit is set to be heard by U.S. District Judge Alfred H. Bennett. A pretrial and scheduling conference is scheduled for May 26.
“We really don’t care who hears the case because it’s our legal position that if any judge hears the case, as long as they apply laws accurately, we’re going to win no matter where they are,” said Andy Taylor, attorney for the commercial property owners.
In an interview last month, Clark Lord, an attorney for the district, defended the group’s legality and cited earlier court rulings in its favor.
“It’s the district’s position that in the end the new court will find the district has followed the law completely, that there is no actionable legal cause against the district that would either dissolve it, invalidate our assessments and most of all have us pay money back,” Lord said.
The Montrose Management District is one of dozens in the Houston area created by the Legislature to promote economic development and make improvements to public areas in individual neighborhoods.
Commercial property owners help fund the improvements through assessments. In Montrose, they are assessed at a rate of 12.5 cents per each $100 of property value.
The earlier lawsuit that remains pending in state court dates back to April 2012 when a property owner sued, challenging the legality of the assessments.
Late last year, the judge in that case wrote in a findings of fact and conclusions of law that “the assessments paid by owners of real property within the district were not made voluntarily, but were paid under duress.” The judgment said the district has assessed and collected nearly $6.6 million.
It also said the assessments were void because the district board didn’t have enough valid property owners who signed a petition required to begin charging assessments.
The district has said the property owners are not entitled to a refund because claims that the funds were paid under duress were never proven. It also said the previous judge’s ruling ordering the district to reimburse the total amount of the funds it collected is erroneous because retroactive monetary relief was not requested.
Lord said the district is “confident that we followed every step of the law and our petitions are valid and that a judge in the end will agree with us.”