A 10-year-old lawsuit over water and sewer service and territory in central Baldwin County was partially settled last month after the defendant, the publicly owned East Central Baldwin Water Authority (ECBWA), entered into a 35-year settlement agreement with one plaintiff, the privately owned Baldwin County Sewer Service (BCSS).
Two other plaintiffs, the town of Summerdale and the city of Robertsdale, were working on separate settlements in the case, although Summerdale Mayor David Wilson told Lagniappe its claims will likely go to trial early next year.
The suit, which also included the Baldwin County Commission as a defendant, was based on a pair of amendments ECBWA made to its articles of incorporation in 2002 and 2008, both of which were approved by the commission. The first enlarged and expanded its service territory to include almost one-third of the county, and the second allowed the utility to introduce sewer service, a move both the city and town objected to.
Motions for summary judgment were not considered until 2012, after BCSS joined the complaint and argued “the 2002 amendment was invalid because other public water systems were adequate to provide water services to the portion of ECBWA’s service area that was added pursuant to that amendment [and] the 2008 amendment was invalid because other public sewer systems were adequate to provide sewer services in ECBWA’s service area and because [ECBWA] did not actually propose to render sewer services.”
Former Judge Lang Floyd issued an order in favor of the plaintiffs, finding the 2002 amendment was erroneous because it contained “geographic areas … that were already being served by the city of Robertsdale” and “the [county commission] acted upon the assumption that the statements in the application were true when in fact the 2002 application contained statements that were not true and, therefore, the approval was not valid.”
ECBWA appealed the case, and in 2015 the Alabama Court of Civil Appeals determined the plaintiffs failed to show an “injury of fact,” and therefore lacked standing to challenge the amendments.
“Robertsdale and Summerdale both seek redress based on the fact that they might at some point in the future want to provide water services to the 2002 ECBWA expanded service area. That injury is clearly hypothetical in nature. We also note that there is no indication that ECBWA has sought to prevent Robertsdale from providing water services to its preexisting customers in the 2002 [ECBWA] expanded service area,” the court wrote.
Further, while the court acknowledged BCSS had plans to expand its sewer service in the territory claimed by ECBWA, because ECBWA had no plans of its own, “we cannot conclude that BCSS has been limited or will certainly be limited in expanding its sewer services in the [ECBWA] service area and, thus, has sustained an injury in fact.”
Floyd’s decision was reversed, but the plaintiffs appealed to the Alabama Supreme Court, which reversed the Court of Appeals’ order in 2017.
The case was complicated by a USDA Rural Utilities Service Loan ECBWA obtained in July 2003, which awarded $2.3 million for part of the 2002 expansion, but prohibited other utilities from providing the same service within that area until the loan was repaid.
In the settlement agreement between BCSS and ECBWA eventually reached Nov. 19, ECBWA is prohibited from seeking federal funds for sewer work for a term of 35 years, but allows it to pursue a sewer system “without the benefit of federal funds,” as long as it allows BCSS first right of refusal. BCSS was also awarded the same right after the 35-year term expires, with the agreement also stipulating ECBWA must provide BCSS its “most favorable offer.” Accordingly, BCSS is also prohibited from providing water service within ECBWA’s territory, but BCSS doesn’t currently provide water service anywhere in the county.
“We had water service and [ECBWA] brought theirs inside our corporate limits illegally … they were given a permit by Baldwin County when we didn’t have a say,” Wilson said of Summerdale’s ongoing claims last week. “Summeradle offered to purchase the water lines inside our municipal limits, with an agreement we could access the rest of our corporate limits. We’re definitely going to a trial.”
Robertsdale Mayor Charles Murphy said, “it’s been a lengthy case … with an extremely large amount of evidence and arguments” but, “it looks like we’re getting pretty close in reaching a settlement on the basis of the action.”
“We operate our own sewer system and Summerdale sold theirs to BCSS … we have different claims, but the issue we got into was in 2002 [ECBWA] gained territory that was already being serviced by municipalities and there were deficiencies in how that approved,” Murphy added.
In another twist, Bay Minette Mayor Bob Wills, an attorney who represented ECBWA throughout the case, and the Baldwin County Commission during the period the 2002 amendment was approved, was disqualified from continuing to represent the defendant in a late November order by Judge Clark Stankoski.
In August, Summerdale attorney James Curenton argued Wills should be disqualified based on a rule against a lawyer serving as a witness.
“Such duel [sic] representation … has resulted in Mr. Wills having to be an advocate and being called as a necessary witness at trial,” Curenton wrote. “Mr. Wills is the most material witness in this case due to his admission that the expanded territory approved by the [county commission] allowed ECBWA to encroach into municipal limits and municipal service areas that were being serviced by municipalities already.”
A letter from the Alabama State Bar to Wills in August reached the same conclusion. Wills did not return messages seeking comment for this story.
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