ArentFox Schiff Represents CarMax in $1.3M Suit Against Westborough Over Alleged Water and Sewage Overbilling
In a dispute that’s as unexpected as it is costly for a used-car giant, CarMax Auto Superstores Inc. has filed a $1.3 million lawsuit against the town of Westborough, Massachusetts, accusing local officials of overcharging the retailer for water and sewage services since 2016. Boston-based law firm ArentFox Schiff is backing the company in the case, which was lodged in Worcester County Superior Court on October 15, 2025, highlighting tensions between corporate expansions and municipal billing practices in suburban New England. The suit alleges the town inflated rates to 10 times CarMax’s actual usage, raising broader questions about transparency in public utilities and the financial burdens on businesses navigating local regulations.
The controversy centers on CarMax’s Westborough store, which opened in July 2016 as the retailer’s first Massachusetts location, a 30,000-square-foot facility on Route 9 designed to serve the booming Boston commuter market. According to the complaint, the town began billing the site at rates far exceeding its documented consumption – estimated at 10 times the actual metered usage for both water and sewage services – without justification or adjustment. CarMax claims this overbilling, which persisted for nearly a decade, stems from flawed rate calculations tied to the property’s commercial classification, leading to cumulative charges exceeding $1.3 million. The retailer seeks a declaratory judgment invalidating the billing method and full reimbursement, arguing the town’s practices violate state law on equitable utility rates.
This isn’t CarMax’s first brush with regulatory scrutiny, but it’s a rare pivot from the retailer’s more common legal headaches involving vehicle sales and environmental compliance. The Virginia-based chain, which reported $29.7 billion in fiscal 2024 revenue from over 240 stores nationwide, has faced multimillion-dollar settlements for issues like improper hazardous waste disposal in California (a $1.6 million deal in 2020) and non-disclosure of vehicle recalls across 36 states ($1 million in 2022). Earlier this year, the EPA settled with a Missouri CarMax for Clean Water Act violations at a single store. Yet, this utility billing suit marks a departure, pitting the company against a small-town government in a case that could set precedents for how municipalities assess commercial properties amid rising infrastructure costs.
ArentFox Schiff, a firm with a robust corporate litigation practice, brings seasoned muscle to the table. Lead counsel Gregory S. S. Paonessa, a Boston-based partner specializing in commercial disputes, has not commented publicly, but the firm’s involvement signals a strategic push for swift resolution. The suit argues that Westborough’s formula – which allegedly multiplies base rates by an inflated “fixture unit” count – lacks statutory backing and discriminates against larger commercial users like CarMax, potentially violating Massachusetts General Laws Chapter 40, Section 42A on equitable rates. No counsel has yet appeared for the town, but local officials have dismissed the claims as “miscalculations” in preliminary statements, vowing a vigorous defense to protect taxpayer funds.
Public reactions have been muted but pointed, with X (formerly Twitter) lighting up under #CarMaxBillingBlunder with a few hundred mentions since the filing. Westborough residents, a tight-knit community of 20,000 with a median income of $120,000, are split: Some decry the suit as corporate bullying against a town reliant on utility revenues for schools and roads, while others question opaque billing that could affect homeowners too. “If CarMax is overpaying 10x, what’s my bill hiding?” posted one local, echoing broader gripes about utility transparency in suburban America. The case draws parallels to a March 2025 UK class action where six water companies fended off £1.5 billion in claims over sewage leak underreporting, underscoring global frustrations with utility overreach.
For everyday Americans navigating the housing and auto markets, this CarMax suit underscores the hidden costs of commercial expansion that ripple to consumers. Economically, it spotlights the $1.2 trillion U.S. water infrastructure crisis, where outdated billing can inflate costs for businesses – potentially passed to car buyers via higher lot fees or taxes – amid a 2025 federal push for $50 billion in upgrades under the Bipartisan Infrastructure Law. Lifestyle angle? In a post-pandemic world of remote work and suburban booms, disputes like this erode trust in local services, echoing homeowner battles over HOA fees or utility hikes that squeeze middle-class budgets already strained by 3.2% inflation. Politically incorrect truth: Towns like Westborough, with their NIMBY vibes and budget shortfalls, often squeeze big-box newcomers like CarMax for revenue, turning “welcome wagons” into wallet raids – a dynamic that favors entrenched locals over economic growth, while corporations cry foul only when the bill bites back. Tech tie-in? AI-driven metering could prevent such errors, but adoption lags in cash-strapped municipalities, leaving manual miscalculations to fuel suits. Sports parallel? Like a franchise relocation fee dispute in the NFL, it’s about who pays for the turf – here, the sewage lines – when a new player rolls into town.
User intent here is straightforward: Readers searching “ArentFox CarMax $1.3M suit water sewage” want the facts – filing details, claims, and stakes – amid a slow-burn corporate-government clash. Managing the spin: The case is early-stage, with no hearings set; track Worcester Superior Court dockets for updates, and skip unsubstantiated rumors of broader CarMax utility probes. For similar disputes, check EPA water violation trackers or state AG consumer portals.
As Westborough’s water meters tick on, this $1.3M showdown isn’t just about pipes – it’s a test of how far towns can stretch rates before the courts flush the excess. With ArentFox in CarMax’s corner, expect a drawn-out drain on both sides, but a win could cascade to other retailers feeling the squeeze.
By Sam Michael
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