BERRYVILLE — Another hearing in the $18 fee lawsuit associated with the NABORS Landfill debacle was held Friday morning, but it ended with another court date set in November and bond holders weren’t identified.
The lawsuit is one of six filed in the Ozark Mountain Solid Waste District, which consists of Baxter, Boone, Carroll, Marion, Newton and Searcy counties.
The district board of directors voted in 2012 to default on the bonds due to a lack of revenue. Soon after, the district filed for federal bankruptcy protection, but that was denied.
Bank of the Ozarks (now Bank OZK), acting as trustee for the bond holders, filed suit against the district in Pulaski County Circuit Court, where Judge Tim Fox ruled in favor of the trustee and a and a receiver, Little Rock lawyer Geoffrey Treece, was appointed to file a report.
Treece’s report recommended the $18 fee be collected on every residential and business property in the district until bond holder are paid off, which could be almost 20 years. Fox approved the report and ruled that tax collectors across the state collect that fee. That led to court proceedings in the Ozarks.
The bulk of the lawsuits are the same, but the plaintiffs are individual residents of each county. Fayetteville lawyers Matt Bishop and Wendy Howerton filed all six suits. The plaintiff in Carroll County is Paul Summers.
Each of the suits alleges the court-ordered $18 fee collected on business and residential property taxes is actually a tax and an illegal exaction. They ask the court to block collection of the fee, which is at present used to pay back investors who bought bonds used to purchase the now-defunct NABORS landfill.
At Friday’s hearing, Circuit Judge Scott Jackson noted that the defendants in the suit filed a motion to dismiss the suit, but Summers had filed an amended complaint that the defendants hadn’t had a chance to answer as of that day.
Mary-Tipton Thalheimer, Little Rock lawyer representing the defendants, said the amended complaint basically asks Judge Jackson to issue a ruling contradicting Judge Fox’s ruling, which would amount to a collateral attack.
In addition, Summers asks that the appropriations bill for the Arkansas Department of Environmental Quality be declared unconstitutional. She said ADEQ has not been made a party to the lawsuit and the current defendants have no interest in the agency’s budget.
Bishop said there was no intention for a collateral attack, but the tax collectors and the taxpayers were never made a part of the original lawsuit. He said Treece could go to Judge Fox and say he didn’t do his research well enough and he was wrong.
“That’s his problem” Bishop said.
As for ADEQ’s involvement, Bishop said an email to Treece from an ADEQ lawyer established the basis for Treece’s report to Judge Fox. He also said Summers doesn’t want to invalidate the entire ADEQ appropriations bill, only the part that allows ADEQ to sue individual taxpayers for clean-up of the landfill.
Thalheimer again reiterated that a ruling for the plaintiff would amount to conflicting orders given to the receiver and collectors.
Judge Jackson said he would rule on the defendant’s motion for summary judgement within three weeks, then a hearing would be held after the plaintiff answers Summers’ amended complaint.
He set a hearing for 9 a.m. Tuesday, Nov. 26, in Berryville.
After Friday’s hearing, Bishop was asked about the content of an email from activist group Secure Arkansas sent out regarding “$18 Trash Tax Final Hearing (and exposing possible bondholders).”
Bishop said there could be a way to identify all bond holders, but it would be through separate litigation. He said those bonds are still being traded at fluctuating prices, but the price doesn’t seem to correlate to current court proceedings.
Identifying bond holders isn’t necessary to finish the current case.