State of Indiana v. City of Gary
2:16-cv-00512
N.D. Ind.Jun 25, 2025Background
- The Gary Entities entered into a 2018 consent decree to resolve Clean Water Act violations, requiring infrastructure upgrades and court oversight.
- The Customer Municipalities (Lake Station, Hobart, and Merrillville Conservancy District) contract with the Gary Entities for wastewater treatment services.
- In late 2024, the Customer Municipalities petitioned the Indiana Regulatory Commission to review proposed rate increases by the Gary Entities.
- The Gary Entities responded by filing a declaratory judgment action, seeking confirmation that the consent decree requires rate increases for all users, including the Customer Municipalities.
- The Court consolidated the declaratory judgment action with the original consent decree case.
- The Gary Entities sought leave to file a First Amended Complaint addressing a motion to dismiss based on lack of subject matter jurisdiction and case or controversy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Leave to amend the complaint | Amendment addresses jurisdictional challenge | Futile and will cause undue delay | Leave granted |
| Case or controversy under Article III | Amended complaint eliminates doubts | Still no justiciable controversy exists | Not resolved yet |
| Prejudice or inefficiency from amendment | No undue delay or prejudice | Amendment delays resolution of dispositive issues | No undue delay |
| Futility of amendment | Amendment could resolve jurisdiction issues | Amendment would not survive a motion to dismiss | Not futile |
Key Cases Cited
- Foman v. Davis, 371 U.S. 178 (liberal standard for granting leave to amend pleadings)
- Mulvania v. Sheriff of Rock Island Cnty., 850 F.3d 849 (7th Cir. 2017) (district courts should liberally grant leave to amend pleadings)
- Villa v. City of Chicago, 924 F.2d 629 (7th Cir. 1991) (factors making amendment inappropriate)
- Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago & Nw. Indiana, 786 F.3d 510 (7th Cir. 2015) (plaintiffs typically get at least one chance to amend)
- Gandhi v. Sitara Cap. Mgmt., LLC, 721 F.3d 865 (7th Cir. 2013) (futility can justify denying leave to amend)