Court Opinion

ID: 4097975
Source: CourtListenerOpinion
Date Created: 2016-11-14 18:01:03.441569+00
Date Added: 2024-06-11T07:45:32.581083
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                                    File Name: 16a0270p.06

                   UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________

 In re: CITY OF DETROIT, MICH.,                        ┐
                                          Debtor.      │
                                                       │
 _________________________________________             │
 MAURIKIA LYDA, JOHN SMITH, NICOLE HILL,               │
 ROSALYN WALKER, ANNETTE PARHAM, JANICE                 >      No. 15-2236
                                                       │
 WARD, SYLVIA TAYLOR, SCOTT EUBANK, JOANNE
                                                       │
 JACKSON, and TAMMIKA R. WILLIAMS, individually
                                                       │
 and on behalf of all others similarly situated;
                                                       │
 MICHIGAN WELFARE RIGHTS ORGANIZATION;                 │
 PEOPLE’S WATER BOARD; NATIONAL ACTION                 │
 NETWORK – MICHIGAN CHAPTER; MORATORIUM                │
 NOW!,                                                 │
                            Plaintiffs-Appellants,     │
                                                       │
        v.
                                                       │
 CITY OF DETROIT, MICH.; DETROIT WATER AND             │
 SEWERAGE DEPARTMENT,                                  │
                         Defendants-Appellees.         │
                                                       ┘
                         Appeal from the United States District Court
                        for the Eastern District of Michigan at Detroit.
                  No. 2:15-cv-10038—Bernard A. Friedman, District Judge.

                                   Argued: August 2, 2016

                           Decided and Filed: November 14, 2016

                Before: SUTTON, GRIFFIN, and DONALD, Circuit Judges.
                                _________________

                                        COUNSEL

ARGUED: Mark P. Fancher, ACLU FUND OF MICHIGAN, Detroit, Michigan, for
Appellants. Marc N. Swanson, MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.,
Detroit, Michigan, for Appellees. ON BRIEF: Mark P. Fancher, ACLU FUND OF
MICHIGAN, Detroit, Michigan, Alice B. Jennings, EDWARDS & JENNINGS P.C., Detroit,
Michigan, Kurt Thornbladh, THORNBLADH LEGAL GROUP PLLC, Dearborn, Michigan,

                                              1
No. 15-2236                          In re City of Detroit, Mich.                      Page 2

John C. Philo, MAURICE & JANE SUGAR LAW CENTER FOR ECONOMIC & SOCIAL
JUSTICE, Detroit, Michigan, for Appellants. Marc N. Swanson, Jonathan S. Green, Sonal H.
Mithani, Ronald A. Spinner, MILLER, CANFIELD, PADDOCK AND STONE, P.L.C., Detroit,
Michigan, for Appellees.
                                         _________________

                                             OPINION
                                         _________________

       GRIFFIN, Circuit Judge. This appeal stems from an adversary proceeding in the City of
Detroit’s chapter 9 bankruptcy case. Plaintiffs are customers, and the purported representatives
of customers, of the Detroit Water and Sewerage Department (DWSD). Relying primarily on
42 U.S.C. § 1983 and Monell v. Department of Social Services, 436 U.S. 658 (1978), they filed a
complaint alleging a series of claims arising from DWSD’s termination of water service to
thousands of residential customers. The legal theories underlying plaintiffs’ claims are varied,
but the relief requested uniform: “preliminary and permanent injunctive relief stopping water
shut offs and restor[ing] service,” and an order directing DWSD “to implement a water
affordability plan with income based payments” for residential customers.

       Section 904 of the Bankruptcy Code explicitly prohibits this relief. Whether grounded in
state law or federal constitutional law, a bankruptcy court order requiring DWSD to provide
water service at a specific price, or refrain from terminating service, “interfere[s]” with the City’s
“political [and] governmental powers,” its “property [and] revenues,” and its “use [and]
enjoyment of . . . income-producing property.” 11 U.S.C. § 904. Plaintiffs’ due process and
equal protection claims are, moreover, inadequately pled. Because plaintiffs cannot recover on
their state-law or constitutional claims, we affirm the order of the district court affirming the
bankruptcy court’s order of dismissal.

                                                  I.

       The City of Detroit filed for chapter 9 bankruptcy protection in July 2013. See In re City
of Detroit, No. 13-53846 (Bankr. E.D. Mich. filed July 8, 2013). At the time, the City and its
residents faced problems “run[ning] wide and deep”—including the affordable provision of basic
No. 15-2236                           In re City of Detroit, Mich.                     Page 3

utilities. In July 2014, plaintiffs filed an adversary complaint seeking to intervene in the case.
As the district court explained:

         Plaintiffs are ten residents of the City of Detroit, Michigan, who are residential
         customers of the Detroit Water and Sewerage Department (“DWSD”), and four
         organizations who claim to “represent[] members throughout the City of Detroit
         who are residential customers of DWSD.” The individual plaintiffs allege that in
         2013 or 2014 the DWSD turned off their water, or threatened to do so, because
         their water bills were in arrears. Six of the plaintiffs indicate that their water
         service was turned off but then restored after they or their landlords paid a portion
         of the arrearage (generally one-third) and entered into payment plans, sometimes
         with advocacy assistance from one of the plaintiff organizations. Of the other
         four individual plaintiffs, two say they could not afford to pay the arrearage or the
         terms of the payment plan, or both, and remain without water; and the other two
         avoided service interruption when they, or their landlord, entered into payment
         plans. All plaintiffs find the cost of DWSD’s water service to be unaffordable.

Plaintiffs purported to represent themselves and a proposed class of “all persons living in
households who have been issued notices of water-shutoffs,” and “who have had their water or
sewerage service shutoff.”

         Their amended complaint included seven counts. In Count I, plaintiffs alleged that
terminating service constituted a “[b]reach of [e]xecutory [c]ontract[s]” in violation of 11 U.S.C.
§ 365.     In Count II, they alleged DWSD violated their procedural due process rights by
terminating service “without sufficient prior notice, without the opportunity for a hearing, or
without an effective post termination hearing process.” In Count III, they alleged DWSD
violated their right to equal protection by “treating residential account holders in arrears
differently than [delinquent] commercial account holders” who did not face termination of
service. In Count IV, they alleged defendants created a “public health emergency” in violation
of the Michigan Constitution. In Count V, they alleged estoppel, on the ground that customers
reasonably relied on DWSD’s former policy of “allow[ing] the accumulation of large unpaid
water bills without shut-offs.” In Count VI, plaintiffs sought declaratory and injunctive relief
enjoining the “mass water shut offs.” And in Count VII, they alleged defendants violated their
rights as humans, and as beneficiaries of the public trust, to water. Although not alleged in a
specific count, the bankruptcy court also read the allegations to include a substantive due process
claim for continued water service at an affordable rate.
No. 15-2236                         In re City of Detroit, Mich.                    Page 4

       With the exception of a request for costs and attorney’s fees, plaintiffs prayed only for
declaratory and injunctive relief, including: preliminary and permanent injunctions “stop[ping]
all water shut offs and restor[ing] service to DWSD residential customers”; a declaration that
DWSD’s billing and shutoff procedures violated due process and equal protection rights, as well
as the “human right to water” and the “public trust doctrine”; a declaration that the water
provided by defendants is held in the public trust; and an order requiring “DWSD to implement a
water affordability plan with income based payments for DWSD residential customers.”

       Shortly after initiating suit, plaintiffs moved for a temporary restraining order (TRO)
requiring DWSD to restore service to residential customers and prohibiting further shutoffs.
Defendants objected to the request and moved for dismissal.          In support of their motion,
defendants relied primarily on 11 U.S.C. § 904. That statute provides:

       Notwithstanding any power of the court, unless the debtor consents or the plan so
       provides, the court may not, by any stay, order, or decree, in the case or
       otherwise, interfere with—

       (1) any of the political or governmental powers of the debtor;

       (2) any of the property or revenues of the debtor; or

       (3) the debtor’s use or enjoyment of any income-producing property.

11 U.S.C. § 904. As defendants saw it, “§ 904 explicitly prevent[ed]” the bankruptcy court from
granting the relief sought, regardless of the theory under which plaintiffs asserted their claims.
“Since the Court cannot grant effectual relief to the Plaintiffs even if they prevail,” defendants
urged the court to dismiss the adversary proceeding. Insofar as § 904 did not resolve the matter,
they argued that Counts I through VII failed to state a claim upon which relief could be granted.

       Plaintiffs responded. They countered that as DWSD customers, they shared executory
contracts with DWSD, and § 904 “do[es] not deprive the Court of supervision of assumption and
rejection[] of executory contracts under Section 365 of the Bankruptcy Code.” Plaintiffs argued
the bankruptcy court could, and should, leverage this “supervis[ory]” authority to “compel
Defendant[s] to assume executory contracts” including the relief sought.
No. 15-2236                           In re City of Detroit, Mich.                       Page 5

        The bankruptcy court held hearings on both motions. Delivering its initial ruling from
the bench, the court granted defendants’ motion to dismiss and denied plaintiffs’ motion for a
TRO.

        In response, plaintiffs filed four motions for reconsideration, each of which included a
request for permission to file a second amended complaint. Finding no palpable defect the
correction of which would result in a different disposition of the case, see L.B.R. 9024-1(a)(3)
(E.D. Mich.), the bankruptcy court denied the motions. It likewise denied plaintiffs’ requests to
amend as untimely. “However, in light of certain arguments plaintiffs raise[d],” the court found
it “necessary to supplement and clarify” its earlier ruling. It stated:

        The Court concludes the City’s motion to dismiss was properly granted, and thus
        the plaintiffs’ several motions for reconsideration must be denied, for the
        following three reasons:

        (1) Under § 904 of the bankruptcy code, except as to the plaintiffs’ constitutional
        claims, this Court lacks the authority to grant the injunctive relief requested.

        (2) While issues arising under § 365 of the bankruptcy code relating to executory
        contracts do fall within the Court’s core jurisdiction, the relationship between
        DWSD and its customers is not an executory contract. Moreover, even if the
        relationship is an executory contract, the relief that the plaintiffs seek is outside of
        the scope of § 365 and is prohibited by § 904.

        (3) Although the plaintiffs’ allegations of violations of due process and equal
        protection are not subject to § 904 because they are constitutional claims, they fail
        to state claims on which relief can be granted.

        Finally, the Court concludes, in the alternative, that the evidence presented at the
        hearing . . . does not establish that the Court should grant a preliminary injunction.

        Plaintiffs appealed to the district court, challenging the bankruptcy court’s decision in
toto.   The district court affirmed.      It endorsed the bankruptcy court’s resolution of each
substantive claim. With respect to plaintiffs’ request for a TRO, the court affirmed without
considering the evidence in the alternative, because “[p]laintiffs are not entitled to any relief
based on a complaint that fails to state a claim.” Finally, it affirmed the denial of plaintiffs’
“improperly asserted” request for leave to amend, which “was not supported by a brief or by a
proposed [second] amended complaint.”
No. 15-2236                                In re City of Detroit, Mich.                              Page 6

         Plaintiffs appeal. The only issue they do not contest is the bankruptcy court’s dismissal
of their executory contract claim.1

                                                         II.

         We begin with the question we posed at the outset of oral argument: whether this case is
moot. After reviewing supplemental briefing on this point, we conclude it is not.

         “Article III of the Constitution grants the Judicial Branch authority to adjudicate ‘Cases’
and ‘Controversies.’” Already, LLC v. Nike, Inc., 133 S. Ct. 721, 726 (2013). Courts have “no
business deciding legal disputes or expounding on law” without them. Id. (internal quotation
marks omitted). “A case becomes moot—and therefore no longer a ‘Case’ or ‘Controversy’ for
purposes of Article III—when the issues presented are no longer ‘live’ or the parties lack a
legally cognizable interest in the outcome.” Id. (internal quotation marks omitted). “If events
occur during the case, including during the appeal, that make it ‘impossible for the court to grant
any effectual relief whatever to a prevailing party,’ the appeal must be dismissed as moot.”
Fialka-Feldman v. Oakland Univ. Bd. of Trustees, 639 F.3d 711, 713 (6th Cir. 2011) (quoting
Church of Scientology v. United States, 506 U.S. 9, 12 (1992)).

                                                         A.

         This case involves two intervening events. First, as the bankruptcy court noted in its
supplemental opinion, “none of the plaintiffs are currently without water service.” Following
oral argument before this court, DWSD “conducted a search of its billing systems,” and “found
nothing to indicate that the status of any of the plaintiffs’ water service has changed since the
opinion was issued.”         Because plaintiffs received the injunctive relief they requested, i.e.,
restoration of service, and did not seek damages, see Memphis Light, Gas and Water Div. v.
Craft, 436 U.S. 1, 8 (1978), defendants argue this appeal is moot. We disagree.

         Plaintiffs “have sought, from the very beginning, declaratory relief as well as an
injunction.” Super Tire Eng’g Co. v. McCorkle, 416 U.S. 115, 121 (1974). They may retain an
interest in obtaining a declaratory judgment if the challenged conduct is capable of repetition yet
         1
           While neither lower court entered a judgment in this case, we have jurisdiction over the final order of the
district court affirming the bankruptcy court’s order of dismissal. See 28 U.S.C. § 158(d)(1).
No. 15-2236                        In re City of Detroit, Mich.                    Page 7

evading review. Id. at 122. This doctrine permits suits for prospective relief to go forward in
“exceptional situations,” where: (1) the challenged conduct is too short in duration to be fully
litigated before it expires; and (2) there is a reasonable expectation that the same complaining
party will again be subject to the same action. Lewis v. Cont’l Bank Corp., 494 U.S. 472, 481
(1990) (citation omitted).   In this case, plaintiffs offered proof of both.   See Lawrence v.
Blackwell, 430 F.3d 368, 371 (6th Cir. 2005) (the party seeking to avoid mootness “bears the
burden of establishing both prongs”).

        At the hearing on plaintiffs’ motion for a TRO, John Smith testified that DWSD
terminated his water service for three to five months in early 2014. Defendant restored Smith’s
service as of the date of the hearing, but scheduled another termination to begin the following
day. Maurikia Lyda testified that DWSD terminated her water service for just over a month
between June and July of 2014, only to restore service on the day she filed suit. Like Smith,
Lyda had water at the time of the hearing, but she presented the court with a current shutoff
notice and explained she was unable to pay the amount necessary to avoid another termination.
With their supplemental brief, plaintiffs presented an affidavit from Nicole Hill, who described
three shutoffs between 2014 and 2016. Hill cannot afford her August 2016 water bill and
anticipates a fourth shutoff in the near future. Thus, this controversy is not just “capable of
repetition”—in Hill’s case, it is repeating. Honig v. Doe, 484 U.S. 305, 319 n.6 (1988); see also
e.g., Barry v. Lyon, 834 F.3d 706, 712–13, 715 (6th Cir. 2016) (finding “[t]he record fully
supports th[e] conclusion . . . that the violation involved was capable of repetition but evading
review,” where the plaintiff experienced “repeated problems” maintaining his food assistance
benefits).

        Defendants argue otherwise. They assert that the shutoffs are not capable of repetition
“because DWSD has implemented the Water Residential Assistance Program,” among other
strategies, to keep water rates within reach of low-income Detroiters. As defendants explain it,
the WRAP “provides assistance to qualifying residential customers whose water service has been
shut off or who have a past due bill. It is designed to encourage long term self-sufficiency by
providing bill payment assistance for those in immediate crisis and water use efficiency tools in
No. 15-2236                                In re City of Detroit, Mich.                               Page 8

the hope of reducing future utility bills.”2 Those who do not qualify for the WRAP may be
eligible for DWSD’s “10/30/50” plan, which allows customers to enter a payment plan by paying
down ten percent of their past due balance—an improvement over the former plan requiring a
thirty percent down payment.3

         These efforts are commendable. But they do not impact the continuing viability of
plaintiffs’ claims. First, it appears none of the named plaintiffs are enrolled in the WRAP or the
10/30/50 payment plan; defendants do not contend that they are. Smith and Lyda testified that
they could not afford the requisite ten percent down payment, and Hill continues to struggle with
her water bills notwithstanding these new options. The existence of programs that could—but
ultimately do not—help plaintiffs does not moot their claims. Second, these programs relate
only to one of several issues on appeal—plaintiffs’ claim that they are entitled to continued water
service at a price they can afford. Even if we agreed this issue is moot (and we do not), “the case
as a whole remains alive because other issues have not become moot.” Int’l Union, United
Auto., Aerospace, Agric. and Implement Workers of Am. v. Dana Corp., 697 F.2d 718, 721 (6th
Cir. 1983) (citation omitted); see e.g., Ky. W. Va. Gas Co. v. Oil, Chem., and Atomic Workers
Int’l Union, 549 F.2d 407, 411–12 (6th Cir. 1977) (examining the issues presented “separately to
determine whether or not they have become moot”). Finally, the timing of service interruptions
cannot be ignored—DWSD reconnected Lyda’s water service on the day she filed suit, and
planned to terminate Smith’s for the second time the day after the evidentiary hearing.
Coincidental or not, this is the type of conduct the capable-of-repetition exception is intended to
preserve for review. See United States v. Oregon Med. Society, 343 U.S. 326, 333 (1952)
(warning courts to “beware of efforts to defeat injunctive relief by protestations of repentance
and reform, especially when abandonment seems timed to anticipate suit, and there is probability
of resumption”).

         2
           The WRAP provides those with a household income at or below 150% of the federal poverty threshold up
to $1,000 in assistance per year towards their water bills. Enrolled customers who remain current on monthly bills
are also eligible to have a portion of their past due balance forgiven. If a participant’s water usage is significantly
higher than the regional average, DWSD may conduct a water audit to identify possible leaks or other ways to
reduce consumption.
         3
         If customers miss a payment, “they can reapply for the program by putting down 30 percent of their past-
due balance. A second missed payment will require a 50 percent down payment of their past-due amount. Any
customer who misses a third payment will no longer be eligible for the payment plan.”
No. 15-2236                          In re City of Detroit, Mich.                     Page 9

       “[T]he chain of potential events does not have to be air-tight or even probable to support
the court’s finding of non-mootness. Instead, it is sufficient that [plaintiffs] possibly could” find
themselves “once again in the same situation [they] faced when this suit was filed.” Barry, 834
F.3d at 716. Plaintiffs have made at least that showing. Current restoration of service does not
moot their claims.

                                                 B.

       A second intervening event compels a different conclusion with regard to plaintiffs’
procedural due process claim. Plaintiffs allege DWSD violated their due process rights by
“[s]ystematically terminating water services without providing adequate notice of shutoffs,” bills
due, procedures to contest bills and shutoffs, or potential payment plans. Less than a month after
plaintiffs filed their amended complaint, Detroit Mayor Mike Duggan announced changes to the
procedures they disputed as part of DWSD’s “Ten Point Plan.”

       “Legislative repeal or amendment of a challenged statute . . . usually eliminates th[e]
requisite case-or-controversy because a statute must be analyzed by the appellate court in its
present form.” Green Party of Tenn. v. Hargett, 700 F.3d 816, 822 (6th Cir. 2012) (quoting Ky.
Right to Life v. Terry, 108 F.3d 637, 644 (6th Cir. 1997)). But “[a] controversy does not cease to
exist merely by virtue of a change in the applicable law”—or in this case, the applicable
procedure, Hamilton Cty. Educ. Ass’n v. Hamilton Cty. Bd. of Educ., 822 F.3d 831, 835 (6th Cir.
2016); “if that were the rule, a defendant could moot a case by repealing the challenged statute
and replacing it with one that differs only in some insignificant respect.” Ne. Fla. Chapter of
Associated Gen. Contractors of Am. v. City of Jacksonville, 508 U.S. 656, 662 (1993). The
question instead is whether the new procedure is “sufficiently similar to the repealed [procedure]
that it is permissible to say that the challenged conduct continues.” Id. at 662 n.3. If the current
procedure “operates in the same fundamental way” its predecessor did, the original controversy
remains alive. Green Party, 700 F.3d at 823 (citation omitted). If, on the other hand, the
procedure “has been sufficiently altered so as to present a substantially different controversy,”
the claim is moot. Hamilton Cty., 822 F.3d at 835 (citation omitted).
No. 15-2236                         In re City of Detroit, Mich.                    Page 10

         This case involves the latter circumstance.      Apart from finding plaintiffs’ factual
allegations insufficient, the bankruptcy court reasoned that the complaint incorporated DWSD’s
old bills and shutoff notices by reference, see Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007), and “consider[ed] them in determining the adequacy of the plaintiffs’
due process allegations.” It concluded their “specific content” provided plaintiffs all the notice
the Due Process Clause required. But the factual predicate for plaintiffs’ notice claim—and the
bankruptcy court’s review of it—has changed.

         DWSD’s shutoff procedure is no longer limited to a bill, followed by a shutoff notice,
followed by termination of service. Defendant now places door hangers on households seven
days before a scheduled termination. The hangers serve as another layer of warning and include
information about how to make payments, seek payment assistance, and avoid service
interruption. The Ten Point Plan also changed the “specific content” of bills and notices. “Past
Due” bills now include a provision for “COMPLAINTS AND DISPUTES,” warning that it is the
customer’s responsibility to inform DWSD of a dispute within 28 days of the billing date. Water
shutoff notices also explain customer rights not previously disclosed, such as the right to file a
complaint; request and appear at a hearing; enter a payment plan; and delay shutoff in the event
of a medical emergency.

         In light of these changes, we cannot evaluate the bankruptcy court’s review of DWSD’s
old bills and notices because we are bound to consider the procedure “in its present form.”
Green Party, 700 F.3d at 822 (citation omitted). Moreover, the procedural posture of this case
also means we cannot consider the “specific content” of the new bills, door hangers, and shutoff
notices because plaintiffs’ appeal of a Rule 12(b)(6) dismissal limits us to the pleadings. And
unlike the bankruptcy court, we cannot read the complaint to incorporate these extraneous
documents by reference—DWSD did not conceive of, or use them until after the complaint was
filed.

         Regardless of whether the new procedure is adequate, our review confirms that it “has
been sufficiently altered so as to present a substantially different controversy” than the one that
No. 15-2236                               In re City of Detroit, Mich.                              Page 11

existed at the time of filing. Hamilton Cty., 822 F.3d at 835 (citation omitted). Plaintiffs’
procedural due process claim is therefore moot.4

        A continuing controversy persists with regard to plaintiffs’ remaining claims.5 Having
confirmed our jurisdiction over them, we proceed to the merits.

                                                        III.

        “Whether a bankruptcy appeal comes before this court by way of the Bankruptcy
Appellate Panel (BAP) or the district court, our review is of the bankruptcy court’s decision.”
Tidewater Fin. Co. v. Curry (In re Curry), 509 F.3d 735, 735 (6th Cir. 2007). We review the
bankruptcy court’s dismissal of the complaint for failure to state a claim and its interpretation of
11 U.S.C. § 904 de novo. Se. Waffles, LLC v. U.S. Dep’t of Treasury (In re Se. Waffles, LLC),
702 F.3d 850, 856 (6th Cir. 2012); Deutsche Bank Nat. Trust Co. v. Tucker, 621 F.3d 460, 462
(6th Cir. 2010).

        “The pivotal issue in this case is one of statutory construction,” Deutsche Bank, 621 F.3d
at 462, namely, whether and to what extent plaintiffs’ complaint survives 11 U.S.C. § 904.
While the bankruptcy court determined that § 904 foreclosed recovery only on plaintiffs’ state-
law claims, defendants argued below that the provision’s effect is broader, prohibiting the court
from awarding any of the relief requested, whether plaintiffs alleged their injuries as state-law or
constitutional harms. We agree.

        4
          We previously applied the voluntary cessation exception to determine whether a change in water
termination procedures moots a challenge to the earlier policy. See Golden v. City of Columbus, 404 F.3d 950, 962
n.10 (6th Cir. 2005). Plaintiffs do not ask us to scrutinize DWSD’s conduct under this exception, though it does not
change the outcome. Voluntary cessation of a disputed procedure negates mootness only when “legislators . . .
publicly expressed an intention to re-enact the offending legislation,” or in this case, the offending procedure.
Brandywine, Inc. v. City of Richmond, 359 F.3d 830, 836 (6th Cir. 2004); see also Bench Billboard v. City of
Cincinnati, 675 F.3d 974, 981–82 (6th Cir. 2012). DWSD has not expressed any such intent.
        5
           The parties argue over the potential mootness of these claims as if the City’s chapter 9 case were closed.
It is not. The bankruptcy court confirmed the City’s plan of adjustment, but it has not dismissed the action. See In
re City of Detroit, No. 13-53846 (Bankr. E.D. Mich.). In its confirmation order, the court retained jurisdiction over
adversary proceedings like plaintiffs’ (among other matters), and these disputes remain pending. Further, the plan
itself mentions water rates in only a few short lines, stating that the City “may seek to implement a rate stability
program” at a future date. As the bankruptcy court found, this provision “does not bind the City to take any specific
actions,” nor does it prohibit defendants from acting in accordance with an order awarding injunctive or declaratory
relief. In other words, nothing regarding the present status of the case makes it “impossible for the court to grant
any effectual relief whatever” to plaintiffs if they prevail. Fialka-Feldman, 639 F.3d at 713.
No. 15-2236                          In re City of Detroit, Mich.                      Page 12

                                                 A.

       “The general policy considerations underlying the municipal debt adjustment plan of
chapter 9 are the same as that of chapter 11 reorganization: to give the debtor a breathing spell
from debt collection efforts and establish a repayment plan with creditors.” In re Addison Cmty.
Hosp. Auth., 175 B.R. 646, 649 (Bankr. E.D. Mich. 1994). “One dramatic difference” between
the two is § 904, which limits the bankruptcy court’s authority over the municipal debtor. In re
City of Stockton, 486 B.R. 194, 198 (Bankr. E.D. Cal. 2013) (Stockton II). It provides:

       Notwithstanding any power of the court, unless the debtor consents or the plan so
       provides, the court may not, by any stay, order, or decree, in the case or
       otherwise, interfere with—

       (1) any of the political or governmental powers of the debtor;

       (2) any of the property or revenues of the debtor; or

       (3) the debtor’s use or enjoyment of any income-producing property.

11 U.S.C. § 904. “This section makes clear that the court may not interfere with the choices a
municipality makes as to what services and benefits it will provide.” Addison, 175 B.R. at 649.
Were that not clear enough, a companion provision in § 903 reiterates that “[t]his chapter does
not limit or impair the power of a State to control, by legislation or otherwise, a municipality . . .
in the exercise of the political or governmental powers of such municipality,” with limited
exception. 11 U.S.C. § 903.

Section 904 “is a keystone in the constitutional arch between federal bankruptcy power and state
sovereignty.” Stockton II, 486 B.R. at 198. Powers not delegated to the federal government in
our Constitution are reserved to the states. U.S. Const. amend. X. One of those powers is the
power to create and govern municipalities. Addison, 175 B.R. at 649. And “[t]he sovereignty of
the state essential to its proper functioning under the Federal Constitution cannot be surrendered;
it cannot be taken away by any form of legislation.”                Ashton v. Cameron Cty. Water
Improvement Dist. No. 1, 298 U.S. 513, 531 (1936) (striking down § 904’s earliest predecessor).
Congress therefore drafted chapter 9 “to give courts only enough jurisdiction to provide
meaningful assistance to municipalities that require it, not to address the policy matters that such
municipalities control.” Addison, 175 B.R. at 649; see also Ass’n of Retired Emps. of the City of
No. 15-2236                           In re City of Detroit, Mich.                   Page 13

Stockton v. City of Stockton (In re City of Stockton), 478 B.R. 8, 17–18 (Bankr. E.D. Cal. 2012)
(Stockton I) (detailing statutory history).

       “The argument that the plain language of the statute should be applied is always strong.”
In re City of Detroit, 524 B.R. 147, 208 (Bankr. E.D. Mich. 2014). Application of § 904’s plain
language is straightforward:

       In the overall construct, § 904 performs the role of the clean-up hitter in baseball.
       Its preambular language “[n]otwithstanding any power of the court, . . . the court
       may not, by any stay, order, or decree, in the case or otherwise . . .” is so
       comprehensive that it can only mean that a federal court can use no tool in its
       toolkit—no inherent authority power, no implied equitable power, no Bankruptcy
       Code § 105 power, no writ, no stay, no order—to interfere with a
       municipality regarding political or governmental powers, property or revenues,
       or use or enjoyment of income-producing property. As a practical matter, the
       § 904 restriction functions as an anti-injunction statute—and more.

Stockton I, 478 B.R. at 20 (citations omitted, emphasis added).

       The relief plaintiffs seek is exclusively injunctive and declaratory: preliminary and
permanent injunctions ending water shutoffs and restoring service; declarations that DWSD’s
billing and shutoff procedures are illegal in multiple respects; and an order requiring DWSD to
“implement a water affordability plan with income based payments for DWSD residential
customers.”    Section 904’s plain language expressly prohibits the bankruptcy court from
awarding any of these remedies.

       Preliminary or permanent injunctions directing DWSD to stop terminations or to provide
water service—including service at a specific price—necessarily “interfere[s] with” the city’s
“governmental powers,” its “property [and] revenues,” as well as its “use [and] enjoyment of . . .
income-producing property.” See 11 U.S.C. § 904. A declaration that DWSD’s practices are
illegal or unconstitutional does the same. Section 904 strips the bankruptcy court of authority to
order anything of the sort. See Stockton I, 478 B.R. at 21 (regarding the plaintiffs’ request for
monetary relief and attorney’s fees).

       Plaintiffs address the text of § 904 only in their reply. They concede that the provision
limits the bankruptcy court’s authority “as to the property of the [C]ity,” and do not explain how
No. 15-2236                          In re City of Detroit, Mich.                      Page 14

the court can grant declaratory or injunctive relief without offending these limitations. The party
seeking to overcome the plain language of the Bankruptcy Code “bears an ‘exceptionally heavy’
burden.” Patterson v. Shumate, 504 U.S. 753, 760 (1992) (quoting Union Bank v. Wolas,
502 U.S. 151, 155–56 (1991)). Plaintiffs do not carry theirs.

                                                 B.

       Although plaintiffs sought the same declaratory and injunctive relief for their state-law
and constitutional claims, the bankruptcy court interpreted § 904 as barring recovery only on the
former, and not the latter: “The Court concludes that § 904 does not protect the City from the
bankruptcy court’s jurisdiction over plaintiffs’ constitutional claims because the City does not
have the ‘governmental power’ to violate the due process and equal protection mandates of the
Constitution.” Citing Monell, it further explained “[t]he Tenth Amendment’s reservation of
nondelegated powers . . . is not implicated by a federal-court judgment enforcing the express
prohibitions of unlawful state conduct enacted by the Fourteenth Amendment.” (citation
omitted). “The City must comply with those constitutional mandates.” This reasoning is not
persuasive.

       Municipal governments indisputably do not have “governmental power” to violate
citizens’ constitutional rights. But it does not follow that the bankruptcy court has judicial power
to enjoin such violations. Section 904 says it does not. “[W]hen the statute’s language is plain,
the sole function of the courts . . . is to enforce it according to its terms”—all of its terms. Lamie
v. U.S. Trustee, 540 U.S. 526, 534 (2004) (internal quotation marks omitted); see also TRW, Inc.
v. Andrews, 534 U.S. 19, 31 (2001) (“[N]o clause, sentence, or word” of a statute should be read
as “superfluous, void, or insignificant.”) (citation omitted). Relying solely on § 904(1), the
bankruptcy court did not address the statute’s prohibitions against interference with the “property
or revenues of the debtor,” or “use or enjoyment of any income-producing property”—both of
which would be transgressed if the court awarded the declaratory and injunctive relief plaintiffs
requested. See 11 U.S.C. § 904(2)–(3).

       That a federal court’s power should be more constrained in the chapter 9 context than in a
typical Monell action also makes sense. Monell plaintiffs may claim damages, see generally,
No. 15-2236                         In re City of Detroit, Mich.                     Page 15

Carey v. Piphus, 435 U.S. 247 (1978), and prospective injunctive relief, such as the
implementation of a training program that better protects citizens’ constitutional rights, provided
they make the appropriate showing, see, e.g., Hearring v. Sliwowski, 806 F.3d 864, 867–68 (6th
Cir. 2015). We agree that the Tenth Amendment is not a barrier to a federal court’s authority
over a municipality in that setting. Monell, 436 U.S. at 690 n.54.

       But a discrete change in policy in a particular office or department of local government is
far removed from the complete financial overhaul undertaken in a municipal reorganization.
Detroit’s case is a good example. “At the time of filing, the City had over $18 billion in
escalating debt, over 100,000 creditors, hundreds of millions of dollars of negative cash flow,”
failing infrastructure, and “a crumbling water and sewer system.” In re City of Detroit, ___ F.3d
___, Nos. 15-2194/2337/2353/2371/2379, 2016 WL 5682704, *1 (6th Cir. Oct. 3, 2016). The
bankruptcy court bore responsibility for approving a plan of adjustment equally vast in its aim to
remedy these conditions. See id. at *2. Concerns for state sovereignty loom larger with so much
at stake. “As a state-federal cooperative enterprise conducted in delicate circumstances in which
state sovereignty must be respected, Congress has been sedulous to assure that the bankruptcy
power not be used in municipal insolvencies in a manner that oversteps delicate state-federal
boundaries.” Stockton I, 478 B.R. at 20. The massive scale of a municipal bankruptcy simply
provides more opportunities for excessive federal court interference.

       Hence, in addition to §§ 903 and 904, “[t]he entire structure of chapter 9 has been
influenced by [a] pervasive concern to preserve the niceties of the state-federal relationship.” Id.
Unlike in a chapter 11 case for instance, a chapter 9 petition creates no bankruptcy estate, and the
Code’s restrictions on use, sale, or lease of property do not apply. See 11 U.S.C. § 901(a)
(excluding the application of 11 U.S.C. § 363); see also Melissa B. Jacoby, Federalism Form
and Function in the Detroit Bankruptcy, 33 Yale J. on Reg. 55, 61 (2016) (describing the unique
features of a municipal reorganization). There is no provision for the appointment of a trustee or
examiner, see 11 U.S.C. § 901(a) (excluding application of 11 U.S.C. § 1104), nor is there any
provision for involuntary bankruptcy; the city alone files its chapter 9 petition with the consent
of the state, 11 U.S.C. § 109(c)(2). And the city alone files and amends its plan of adjustment.
11 U.S.C. §§ 941 & 942. “Neither the court nor creditors can directly force a liquidation of a
No. 15-2236                                 In re City of Detroit, Mich.                               Page 16

municipality’s assets in bankruptcy.” Jacoby, supra at 61. Reading § 904 to preclude recovery
on common-law and constitutional claims alike complements this structure.

         In rebuttal, plaintiffs argue that their constitutional claims supersede § 904 because
Congress cannot circumvent rights guaranteed to citizens through the Fourteenth Amendment.
But § 904 does not limit rights—it limits remedies. The bankruptcy court later determined that
creditors asserting constitutional challenges against the City through 42 U.S.C. § 1983 may have
their claim to damages impaired and discharged in bankruptcy like any other unsecured creditor:
“The § 1983 remedial scheme may ‘emanate’ or ‘flow from’ the Fourteenth Amendment, as the
§ 1983 creditors argue. This does not, however, elevate that remedy to a constitutionally
protected status.” In re City of Detroit, 524 B.R. 262–65; see also Baker v. McCollan, 443 U.S.
137, 144 n.3 (1979) (noting that § 1983 “is not itself a source of substantive rights, but a method
for vindicating federal rights” found elsewhere in the constitution and federal statutes). Its
conclusion is bolstered by the fact that chapter 9 does not incorporate 11 U.S.C. § 523, which
prohibits “individual debtor[s]” from discharging debts arising from “willful or malicious injury
by the debtor to another”—reinforcing notion that such debts are dischargeable for a
municipality. See 11 U.S.C. §§ 523(a)(6) (exempting debts for “willful and malicious injury”
from discharge); 901(a) (excluding application of 11 U.S.C. § 523); see also Deocampo v. Potts,
836 F.3d 1134, 1140 n.10 (9th Cir. 2016). Plaintiffs’ constitutional rights are inviolable; but the
remedies available to them in the chapter 9 setting are not.6

         “A statute’s plain meaning must be enforced, of course.” U.S. Nat’l Bank of Or. v. Indep.
Ins. Agents of Am., Inc., 508 U.S. 439, 454 (1993). Section 904’s mandate is clear: it prohibits
federal courts overseeing a municipal bankruptcy from interfering with the debtor’s political or
governmental powers, property or revenues, or use or enjoyment of income-producing property,
regardless of whether the claims at issue are constitutional. 11 U.S.C. § 904. Because § 904
prohibits the bankruptcy court from awarding the relief sought, notwithstanding the

         6
            Although an adversary proceeding is normally an appropriate vehicle to obtain injunctive and declaratory
relief, see Fed. R. Bankr. P. 7001(7) & (9), in view of the City’s § 904 defense, plaintiffs may have been better off
moving for relief from the automatic stay to pursue their claims outside of bankruptcy court. See 11 U.S.C. § 362;
see also id. § 901(a) (incorporating § 362). Plaintiffs would have to prove that they are a “party in interest,” entitled
to lift the stay “for cause,” despite their status as non-creditors. 11 U.S.C. § 362(d)(1); see also Addison, 175 B.R. at
649–50; In re City of San Bernardino, 558 B.R. 321, 328–33 (Bankr. C.D. Cal. 2016).
No. 15-2236                         In re City of Detroit, Mich.                     Page 17

constitutional dimension of their injuries, plaintiffs failed to state a claim upon which relief can
be granted. See Hamdi ex rel. Hamdi v. Napolitano, 620 F.3d 615, 628–29 (6th Cir. 2010).
We therefore affirm the dismissal of plaintiffs’ amended complaint on these alternative grounds.

                                                IV.

       As explained, “Congress has tailored the federal municipal bankruptcy laws to preserve
the States’ reserved powers over their municipalities.” Puerto Rico v. Franklin Cal. Tax-Free
Trust, 136 S. Ct. 1938, 1944 (2016). Plaintiffs cannot upset that carefully tailored balance and
expand the bankruptcy court’s authority over the City based on the manner in which they draft
their complaint. But even if they could, their constitutional claims fare no better under well-
settled precedent.

       After concluding plaintiffs’ substantive due process and equal protection claims survived
the City’s § 904 challenge, the bankruptcy court dismissed both causes of action for failure to
state a claim upon which relief can be granted. See Fed. R. Bankr. P. 7012 (incorporating Fed.
R. Civ. P. 12). Plaintiffs argue this decision was in error. We disagree.

       We review the dismissal of a complaint for failure to state a claim de novo. Se. Texas
Inns, Inc. v. Prime Hosp. Corp., 462 F.3d 666, 671 (6th Cir. 2006). To survive a Rule 12(b)(6)
motion, “a complaint must contain sufficient factual matter, accepted as true, ‘to state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The plausibility standard is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted
unlawfully.” Id. (quoting Twombly, 550 U.S. at 557). “If the plaintiffs do not nudge their claims
across the line from conceivable to plausible, their complaint must be dismissed.” Lutz v.
Chesapeake Appalachia, L.L.C., 717 F.3d 459, 464 (6th Cir. 2013) (citation and brackets
omitted). Dismissal is likewise appropriate where the complaint, however factually detailed,
fails to state a claim as a matter of law. Mitchell v. McNeil, 487 F.3d 374, 379 (6th Cir. 2007).
No. 15-2236                                  In re City of Detroit, Mich.               Page 18

                                                          A.

       The bankruptcy court read plaintiffs’ complaint to include a claim for a substantive due
process “right to water service at a price they can afford to pay.”7 It concluded “that there is no
constitutional or fundamental right either to affordable water service or to an affordable payment
plan for account arrearages.”

       “Substantive due process is ‘the doctrine that governmental deprivations of life, liberty or
property are subject to limitations regardless of the adequacy of the procedures employed.’”
Range v. Douglas, 763 F.3d 573, 588 (6th Cir. 2014) (quoting Pearson v. City of Grand Blanc,
961 F.2d 1211, 1216 (6th Cir. 1992) (brackets omitted)). The class of interests it protects is
“narrower than those protected by procedural due process.” Id. at 588 n.6. Government conduct
violates substantive due process rights only if it deprives an individual of a particular
constitutional guarantee, or otherwise “shock[s] the conscience.” Id. at 588 (quoting Bell v. Ohio
State Univ., 351 F.3d 240, 249–50 (6th Cir. 2003)). Withholding water on condition of payment
for delinquent charges does neither.                 See Mansfield Apartment Owners Ass’n v. City of
Mansfield, 988 F.2d 1469, 1476–78 (6th Cir. 1993).

       “Based on the City’s legal obligation to provide municipal water service to its residents,”
the bankruptcy court found it “plausible that the plaintiffs could establish a liberty or property
right to water service to which procedural due process rights apply.” However, “not all property
interests that create procedural due process protections necessarily create substantive due process
rights.” Id. at 1477. A municipality’s provision of utility service may create a property interest
“cognizable under the Due Process Clause,” bringing that service “within the compass of the
Fourteenth Amendment’s procedural protections, measured according to . . . Matthews v.
Eldridge.” Id. (quoting Ransom v. Marrazzo, 848 F.2d 398, 411–12 (3d Cir. 1988)). But “it
does not transform the expectation into a substantive guarantee against the state in any
circumstance.” Id. (quoting Ransom, 848 F.2d at 412).

       “Substantive due process affords only those protections so rooted in the traditions and
conscience of our people as to be ranked as fundamental.” EJS Props., LLC v. City of Toledo,

       7
           Both parties agree with this interpretation.
No. 15-2236                          In re City of Detroit, Mich.                     Page 19

698 F.3d 845, 862 (6th Cir. 2012) (quoting Charles v. Baesler, 910 F.2d 1349, 1353 (6th Cir.
1990)). These rights are “implicit in the concept of ordered liberty, such that neither liberty nor
justice would exist if they were sacrificed.” Washington v. Glucksburg, 521 U.S. 702, 721
(1997) (internal quotation marks omitted). Thus, “the list of fundamental rights is short,”
Grinter v. Knight, 532 F.3d 567, 573 (6th Cir. 2008), and seldom expanded, see Washington,
521 U.S. at 720. Rights derived from state law, as opposed to the constitution, usually do not
make the cut. Charles, 910 F.2d at 1353. “Most state-created rights that qualify for procedural
due process protections do not rise to the level of substantive due process protection.” Range,
763 F.3d at 588 n.6.

       This is the case for plaintiffs’ alleged property right to continued water service—or
continued affordable water service. A right of this nature is not rooted in our nation’s traditions
or implicit in the concept of ordered liberty. See Mansfield, 988 F.2d at 1477; Golden, 404 F.3d
at 960. If such a right exists, it is rooted in Michigan law and the customer relationship plaintiffs
share with DWSD. Memphis Light, 436 U.S. at 10–11; see also Midkiff v. Adams Cty. Reg’l
Water Dist., 409 F.3d 758, 763–64 (6th Cir. 2005); Mich. Comp. Laws § 123.166. Accordingly,
we previously “reject[ed] the claim that conditioning the receipt of water service on the
satisfaction of past due charges . . . raises the question of a substantive due process violation.”
Mansfield, 988 F.2d at 1477. We reject it again today: “there is no fundamental right to water
service.” Golden, 404 F.3d at 960.

       Moreover, substantive due process requires only that DWSD’s policy be “rationally
related to the asserted legitimate governmental purpose of maintaining a financially stable
municipal entity.” Mansfield, 988 F.2d at 1477; see also Midkiff, 409 F.3d at 769–70. Michigan
law directs municipalities to set water rates at the reasonable cost of providing the service.
See Mich. Comp. Laws § 141.121(1). As the bankruptcy court found, this practice is rationally
related to maintaining DWSD’s financial stability:

       Nothing suggests that it is arbitrary for the State of Michigan to require its
       municipalities to set water rates at the reasonable cost of delivering the service.
       Rather, the substantial costs involved [in] making water service available to
       customers suggests that it is entirely rational to fix the rates according to those
       costs rather than ability to pay. In a rate structure based on ability to pay, every
       dollar that a customer would not pay because of an inability to pay is one more
No. 15-2236                         In re City of Detroit, Mich.                     Page 20

       dollar that other customers, or taxpayers, would have to pay. It is not irrational
       for the state to determine not to permit its municipalities to adopt such an
       alternative rate structure.

       The bankruptcy court expressed empathy for plaintiffs’ circumstances. We echo its
concern. The “inability . . . to pay for water service on a current basis or to make up large
arrearages due to past inability to pay is a serious, tragic problem facing the City and some
residents.” But the court correctly declined to “conclude that the plaintiffs’ due process rights
were violated when their water service was terminated for failing to pay, even when that failure
was due to an inability to pay.” It did not err in dismissing plaintiffs’ claim for affordable water
service.

                                                B.

       In Count III, plaintiffs alleged DWSD violated their equal protection rights by
terminating their water service, while neglecting to do the same for delinquent commercial
customers. The bankruptcy court dismissed their claim as insufficiently pled.

       “To state an equal protection claim, a plaintiff must adequately plead that the government
treated the plaintiff disparately as compared to similarly situated persons and that such disparate
treatment either burdens a fundamental right, targets a suspect class, or has no rational basis.”
Ctr. for Bio-Ethical Reform, Inc. v. Napolitano, 648 F.3d 365, 379 (6th Cir. 2011) (internal
quotation marks omitted). Because no fundamental right or suspect class is involved in this case,
plaintiffs bear the burden of establishing DWSD’s policy “is not rationally related to any
legitimate public interest.” Ondo v. City of Cleveland, 795 F.3d 597, 608 (6th Cir. 2015).

       This is an uphill climb. Under the rational basis standard, government action is afforded
a strong presumption of validity, and we will uphold it as long as “there is a rational relationship
between the disparity of treatment and some legitimate government purpose.” Heller v. Doe,
509 U.S. 312, 320 (1993). “A State, moreover, has no obligation to produce evidence to sustain
the rationality of a statutory classification.” Id. The policy is presumed constitutional, and the
burden is on plaintiffs to negate “every conceivable basis which might support it.” Id. at 320
(citation omitted). Such deference is based on “a paradigm of judicial restraint.” TriHealth, Inc.
v. Bd. of Comm’rs, Hamilton Cty., 430 F.3d 783, 791 (6th Cir. 2005) (citation omitted). The
No. 15-2236                         In re City of Detroit, Mich.                     Page 21

judiciary does not “sit as a superlegislature to judge the wisdom or desirability of legislative
policy determinations made in areas that neither affect fundamental rights nor proceed along
suspect lines.” Heller, 509 U.S. at 319 (citation omitted). Our “Constitution presumes that . . .
improvident decisions will eventually be rectified by the democratic process and that judicial
intervention is generally unwarranted no matter how unwisely we may think a political branch
has acted.” TriHealth, 430 F.3d at 791 (citation omitted).

       Plaintiffs assert that Heller’s standard of presumed rationality is inapplicable in the Rule
12(b)(6) context. In their view, requiring an equal protection claimant to “incorporate into their
pleadings lengthy lists of rebuttable rationales for challenged legislation” is “an impossible” task
at odds with Twombly’s holding that a complaint need only include enough facts to “raise a right
to relief above the speculative level.” (Appellants’ Br., at 27 (quoting Twombly, 550 U.S. at
555)). Plaintiffs are mistaken.

       Heller applies at the pleadings stage. Midkiff, 409 F.3d at 770. “To survive a motion to
dismiss” in the rational basis context, “a plaintiff must allege facts sufficient to overcome the
presumption of rationality that applies to government classifications.” Wroblewski v. City of
Washburn, 965 F.2d 452, 460 (7th Cir. 1992).

       We put this principle to work in Bower v. Village of Mount Sterling, 44 F. App’x 670 (6th
Cir. 2002). The plaintiff in Bower alleged the defendants violated his equal protection rights by
denying him “the opportunity to become a full-time police officer in the same manner as other
Village officers.” Id. at 672. He overcame “the presumption of rationality” in the defendants’
decision by alleging facts that negated the two most likely non-discriminatory reasons defendants
declined to hire him: a prior sexual harassment complaint, and the mayor’s statement to Bower’s
supervisor that the Village council could not appoint him to a full-time position because
appointing officers was not a council function. Id. at 675–76, 678. Specifically, the plaintiff
alleged defendants appointed him as a reserve and part-time officer after the sexual harassment
complaint (suggesting this was not their true motivation in denying him a full-time position).
He also claimed the mayor’s statement was contrary to Ohio law, as well as the council’s past
practice: “Plaintiff alleges that at least two other officers were hired in the exact same fashion
No. 15-2236                              In re City of Detroit, Mich.                            Page 22

[that the mayor] represented was not a council function.” Id. at 675, 678. The Bower court
agreed that these facts adequately state an equal protection violation. Id. at 678.

        Comparatively, plaintiffs here allege that: (1) “[a]t the time . . . of the residential water
shutoffs,” “there were numerous commercial water service consumers that were acknowledged
to be delinquent in their payments”; (2) DWSD did not terminate water service to commercial
customers “until there was international condemnation of the selective termination of water
services”; and (3) there is no rational basis for the difference in treatment, as both residential and
commercial customers “receive the same type of services.” The amended complaint includes no
facts rebutting the likely non-discriminatory reasons DWSD may treat residential and
commercial customers differently. And there are many. As the district court stated:

        [T]he difference in treatment might be justified by the fact that commercial water
        customers have more complex service connections. . . . [It] might also be justified
        by the fact that terminating water service to commercial customers could
        seriously harm their businesses, causing layoffs and other undesirable economic
        consequences. The City might also reasonably find that commercial customers
        are more likely than residential customers to eventually pay past-due water bills.

Absent facts sufficient to overcome any of these explanations, plaintiffs’ assertion that there is
no rational basis for the difference in treatment is a legal conclusion not entitled to the
assumption of truth. Iqbal, 556 U.S. at 678. The bankruptcy court therefore correctly dismissed
plaintiffs’ equal protection claim.

                                                       V.

        Finally, plaintiffs contend the district court abused its discretion in denying them leave to
file a second amended complaint correcting the deficiencies in their constitutional claims.8

        But plaintiffs never moved for leave to amend. After the bankruptcy court granted
defendants’ motion to dismiss, plaintiffs filed four motions for reconsideration and included the
same single-sentence request for leave to amend in each one. They did not offer a proposed
second amended complaint or otherwise “state with particularity the grounds” for the relief
sought. Fed. R. Bankr. P. 9013 (incorporating Fed. R. Civ. P. 7(b)(1)). The bankruptcy court
        8
         Insofar as this challenge relates to plaintiffs’ procedural due process claim, their request to amend the
complaint is moot for the reasons stated in section II.B.
No. 15-2236                          In re City of Detroit, Mich.                       Page 23

was not obligated to grant so perfunctory a request buried in motions directed at a different
purpose. See Evans v. Pearson Enters., Inc., 434 F.3d 839, 853 (6th Cir. 2006). In any event,
plaintiffs offered no set of factual allegations entitling them to relief in view of § 904. We find
no abuse of discretion in the bankruptcy court’s decision. Id. at 853–54.

                                                VI.

          The foregoing conclusions moot plaintiffs’ appeal of the bankruptcy court’s decision
denying their request for a TRO. Plaintiffs are not entitled to any relief, much less preliminary
relief.

                                                VII.

          The circumstances plaintiffs allege are truly unfortunate. Living without water, even if
only for a few days, poses a substantial risk to health and safety. Beyond that, it is a significant
indignity. But plaintiffs have not identified a legal theory capable of evading § 904’s broad
prohibitions against injunctive and declaratory relief. Nor have they alleged facts sufficient to
state claims for the violation of substantive due process or equal protection rights.

          For these reasons, we VACATE the district court’s order with respect plaintiffs’ now-
moot procedural due process claim, and AFFIRM its order affirming dismissal of plaintiffs’
remaining claims.