Maple Run at Austin Municipal Utility District v. Monaghan

Maple Run at Austin Municipal Utility District (Maple Run) (defendant) was formed in an area south of the city of Austin to provide utility services to the area’s residents. Maple Run issued municipal bonds to finance the construction of water and wastewater facilities. But the revenues from water and wastewater services were very low, causing Maple Run to experience financial distress. Subsequently, the Texas legislature enacted Tex. Loc. Gov’t Code § 43.082 (the statute). The statute authorized the dissolution of a municipal utility district that met the statute’s specific criteria. These criteria mainly concerned the debt held by a municipal utility district. The statute required an adjacent city to assume the assets and liabilities of the municipal utility district upon dissolution. However, Maple Run was the only municipal utility district in the state that met the statute’s specific criteria. Even though there were other municipal utility districts with overall indebtedness higher than that of Maple Run, these districts were not covered by the statute. Pursuant to the statute, Maple Run expressed its intention to dissolve, which meant that Austin was required to assume Maple Run’s assets and liabilities. James Monaghan (plaintiff), a Maple Run landowner, brought suit, contending that the statute was unconstitutional. The trial court declared the statute unconstitutional. Maple Run appealed.