What Is New With Municipal Fee Class Actions in September 2026? Latest court filings and settlement notices and Key Takeaways

The biggest development in municipal fee class actions this season is that Texas's Eighth Court of Appeals refused to reconsider its ruling that El Paso's water-bill "environmental franchise fee" is an illegal tax, leaving the city with one narrow path to the Texas Supreme Court and a deadline of Oct. 3, 2026.

Alongside it, three settlements are now paying or preparing to pay: Garden City, Georgia's $1.4 million fire-fee deal, Detroit's $4.45 million water-rate settlement, and East Lansing's $7.8 million franchise-fee reimbursement fund. A municipal fee class action argues that a charge on your utility bill or property tax statement is not really a fee for a service — it is a tax the city imposed without a vote. That distinction decides the case, and it is why these suits are clustering in states with constitutional limits on unvoted taxes: Michigan's Headlee Amendment, California's Proposition 218, Georgia's ad valorem rule, and Texas's franchise-fee law.

Official resources:

Read the official notice from Gardencityfirefeessettlement — Use this primary source to verify the official announcement.
Read the official notice from Elpasomatters — Use this primary source to verify the official announcement.

El Paso: a $14 million-a-year fee ruled an illegal tax
Which settlements are actually paying now
How small the refunds really are
Procedure decides these cases more often than the merits
What to do if you paid a fee under challenge
Frequently Asked Questions

El Paso: a $14 million-a-year fee ruled an illegal tax

El Paso added an "environmental franchise fee" to water bills and raised it from $1.10 to $6 a month, collecting roughly $14 million a year. The Eighth Court of Appeals held that charge was an impermissible tax, and according to El Paso Matters' report on the rehearing order, the court denied the city's motion for rehearing on an order signed July 20, 2026. The judgment for former state Rep. Joe Pickett stands. What that does not mean is a check in the mail.

CBS4 El Paso reported that the city received an extension to Oct. 3, 2026 to petition the Texas Supreme Court and says it is still evaluating its appellate options. Until that window closes or the high court acts, the tens of millions collected since 2015 remain unrefunded and no classwide refund is payable. For El Paso ratepayers, the practical step is to keep water bills showing the line item. If a refund mechanism is ever built, proof of payment is what establishes the amount owed to you.

Which settlements are actually paying now

Three are at or past approval, and each treats class members differently: The Detroit and East Lansing split is worth internalizing: **automatic credits go to people the city still bills, while everyone else has to file.** If you moved, closed an account, or sold the property, you are almost always in the file-a-claim group — and that group is where deadlines get missed.

**Garden City, Georgia — fire protection fee.** The city agreed to $1.4 million in *Bobby Black v. Garden City* in Chatham County Superior Court, with a final approval hearing set for June 5, 2026 in Courtroom C, and agreed to stop billing the fee after Dec. 31, 2025, per the official settlement site.
**Detroit — tiered water rates.** *Ajax Metal Processing Inc. v. City of Detroit* settled for $4.45 million over claims that Detroit's tiered rate structure made high-volume customers pay above the cost of service. Former customers had to file by Aug. 26, 2026; that window has closed. Current customers receive automatic account credits.
**East Lansing, Michigan — BWL franchise fee.** The city approved a $7,800,971.93 reimbursement fund after the Michigan Supreme Court found the Lansing Board of Water and Light franchise fee violated the Headlee Amendment. Eligibility covers fees paid in East Lansing between April 2, 2019 and April 30, 2025, and claims must be filed.

How small the refunds really are

Garden City's numbers are the clearest illustration. Class members are property owners who paid the fire fee from Oct. 7, 2020 through final approval, and the administrator estimates each pro rata refund at roughly 27% of fees paid, according to the publication notice of settlement. That is a fraction of what most owners were billed across those years.

Impact fee cases can pay more, because the underlying charge is far larger. One impact fee settlement that received final approval covers about 10,000 impact fee payments, with partial refunds generally running $820 to $1,050 per residence depending on the year of payment; notice was mailed May 14, 2026 and the first refunds were slated for late July 2026. A single impact fee is a four- or five-figure charge at permitting, so even a partial refund is substantial. The pattern holds across all of them: relief is capped by the class period, not by how long the city collected. A city that billed a fee for fifteen years and faces a five-year class period keeps two thirds of the money even after losing.

Procedure decides these cases more often than the merits

California produced two rulings that make the point from opposite directions. In *Toy v. City & County of San Francisco*, the First District Court of Appeal held that a class action challenging SFPUC water rates adopted in May 2023 as exceeding cost of service under Proposition 218 had to be brought as a reverse validation action instead — a procedural holding published by the Court of Appeal that ended the case after a year of litigation without reaching whether the rates were lawful. The Azusa case cut the other way.

A California appeals court revived a Proposition 218 challenge to the city's sewer and trash franchise fees, holding that plaintiffs who seek only mandate and declaratory relief — not money back — do not have to pay under protest or exhaust the city's refund-claim procedure first. Asking for less can clear a procedural hurdle that asking for refunds does not. The lesson for a reader watching a case in their own city: a dismissal is frequently about the wrong vehicle or a missed protest step, not a finding that the fee was legal. Those cases often return in a different form.

What to do if you paid a fee under challenge

**Find out whether you are a former or current customer.** Former customers file; current customers usually get credits. Detroit's deadline has already passed for the former group.
**Check the class period dates, not just the city.** East Lansing's runs April 2, 2019 to April 30, 2025. A fee paid in 2018 is outside it.
**Keep bills and closing documents.** For property-based fees like Garden City's fire fee or an impact fee, the person who paid at the relevant time is the claimant — which after a sale may not be the current owner.
**Read the claim deadline off the official settlement site or mailed notice**, not a news summary. Administrators publish the operative dates.
**Do not wait on an appellate case.** El Paso is not paying anyone while its petition window to the Texas Supreme Court stays open through Oct. 3, 2026.

Frequently Asked Questions

Does a court ruling that a fee is an illegal tax automatically get me a refund?

No. El Paso's fee was held an impermissible tax and the rehearing was denied, yet no classwide refund is payable while the city's petition deadline to the Texas Supreme Court runs to Oct. 3, 2026.

Why would my refund be so much smaller than what I paid?

Refunds are pro rata from a limited pool over a defined class period. Garden City's administrator estimates about 27% of fees paid, and the class period starts Oct. 7, 2020 rather than when the fee began.

I moved out of the city — am I still eligible?

Often yes, but you likely have to file rather than receive an automatic credit. That was the structure in Detroit's $4.45 million settlement, where former customers had a filing deadline of Aug. 26, 2026 and current customers got account credits.

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