Water company extorting money from me!

A small water company has told me I need to pay the previous owners bill of 1,000.00 and a transfer fee of 500.00 to turn water service on. I told them there was no lien against the property and they told me it doesn't matter I'm responsible for those fees. I understand the transfer fee but 500? Anyways I paid it so they would turn water on. Now since the house is sold they want me to pay another 500.00 to close service!

Now that my deal is closed I want to sue them for extorting money from me. Has anyone had success in this? Any suggestions?
What's the best method in getting the judge to see my way.


Thanks Everyone.