REQUEST DENIED: Supreme Court Denies Des Moines

Monday, the country’s highest court rejected a request by the City of Des Moines to review the franchise fee case.

In 2004, Des Moines homeowner Lisa Kragnes questioned a new charge on her MidAmerican Energy bill, which turned out to be a franchise fee charged by the City of Des Moines.

In July of 2004, Kragnes filed a lawsuit against the city. In January, 2006, the Polk County District Court ruled the fee was an illegal tax. Kragnes’ attorney took the case a step further, filing a motion to create a class action. The city appealed the decision to the Iowa Supreme Court. The following May, the Iowa Supreme Court upheld Kragnes’ side of the case. In June 2009, Polk County District Judge Joel Novak ordered the city to issue refunds. The city again appealed to the Iowa Supreme Court. Last march, it upheld the district court’s decision, siding with Kragnes, so in June, the city asked the US Supreme Court to consider the case.

Attorneys for Lisa Kragnes said this is another delay tactic, and the city doesn’t want to pay the roughly $40 million dollars it could owe its residents.

“We`ve been wrangling over these issues now for eight years and costs continue to be incurred by the city and the interest continues to accumulate so I would hope that the city would also see some value in saying ok. This is the result and we have to deal with the choices that we made and let’s move on,” said Brad Schroeder, Kragnes’ attorney.

In order to move on, a discussion needs to happen between the attorneys on both sides and a Polk County District Judge. Among other things, they need to establish how those refunds will be issued to individuals and businesses.

Brad Schroeder Kragnes’ attorney said it’s their wish the city issue checks to MidAmerican customers. It’s his belief; however, the city would opt for a claims process, in which each individual would file a claim with the city. Attorneys for the city said they’re still reviewing all of their options and nothing is off the table at this point.

The city attorney, Jeff Lester said they were disappointed by the court’s decision to not hear the case, but not surprised. He said the US Supreme Court grants a very small percentage of petitions like this. Lester said the city’s biggest concern is protecting taxpayers, and there is still a lot to be determined in court.

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