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Springfield City Utilities took the win in a legal dispute with a rural water district over service territory.
The federal court case between Greene County Public Water Supply District No. 1 and the city of Springfield may be subject to appeals, but for the moment, City Utilities is chalking up a favorable ruling. Public Water Supply District No. 1 sued Springfield City Utilities in 2021, claiming it held the rights to distribute water to three subdivisions in unincorporated Greene County between Springfield and Battlefield.
The three subdivisions, Abbey Lane, Teton Estates and Monta Vista Heights, are located around the intersection of South Farm Road 135 and Weaver Road and generally surround McBridge Elementary School.
PWSD1 claimed financial damages and asked the federal court to order all of the water infrastructure within the subdivisions be transferred from City Utilities into the water district’s possession. It also requested the court to order the turnover of all customer billing data.
Dwayne Fulk, chief legal officer for Springfield City Utilities, briefed the Springfield Board of Public Utilities on the case outcome at a meeting Oct. 27, three days after a panel of three circuit judges upheld a ruling by U.S. District Judge Steven Bough.
“The trial court judge, Judge Bough out of Kansas City, ruled in our favor on summary judgment, and the federal court of appeals ruled in our favor based on the statute of limitations in the case, which is a five-year statute of limitations in Missouri,” Fulk said.
PWSD1 hired attorneys from Doyle, Harris, Davis and Haughey, a Tulsa-based law firm claiming to represent at least 85 rural water districts in cases of service area disputes. The attorneys build their argument on U.S. Code 126. This statute grants federally indebted water associations/districts complete exclusivity in selling water within their service area.
The attorneys sought a ruling for Public Water Supply District 1, “to enforce their lawful right to be the exclusive water service provider within their service area.”
Five-year limit was expired, judges find
U.S. Circuit Judge Ralph R. Erickson authored the opinion in favor of the city of Springfield on behalf of the three-member panel. The judges ruled that the water district ran out of time to challenge Springfield City Utilities’ entry into the three subdivisions.
“Ample evidence demonstrates that PWSD has been aware of the city’s provision of water service to the disputed subdivisions since at least the 1990s,” Erickson wrote in the footnotes of the opinion. “For example, a PWSD board member testified that members of PWSD’s board of directors knew in the 1970s and 1990s that the City served the Disputed Subdivisions. While PWSD rejects this board member’s testimony, it cites no evidence supporting its position.”
Attorneys for the water district tried to argue that the statute of limitations had not expired because Springfield continues to provide water service to the subdivisions, and therefore, every day of water service restarts the clock for the statute of limitations. The appellate judges took down the notion of the resetting clock.
“Contrary to PWSD’s contention, it is not a continuing violation, and the statute of limitations does not reset, when a municipality continues to add and provide service to customers in a subdivision it already serves,” Erickson wrote in the opinion. “The city’s ongoing provision of water service in the disputed subdivisions is merely a consequence of its initial service, not a continuing violation.”
According to the Missouri Department of Natural Resources, Greene County PWSD1 serves a population of 8.738 people on 3,625 connections. The average daily consumption is about 290,000 gallons, and the system has a capacity of 943,000 gallons of water per day.
Appeals still possible
Fulk explained that PWSD1 could continue to appeal the ruling, either by asking federal judges from the Eighth Circuit to review the case en banc — a review in which all judges from a circuit review a case — or it could seek an appeal with the U.S. Supreme Court.
“The federal judge deferred state law claims, and so the district sued City Utilities in state court, as well,” Fulk said. “We received a favorable outcome in that case based on a motion to dismiss, and that is also on appeal with the Southern District Court of Appeals in the Missouri Court of Appeals.”
Fulk did not know the likelihood of an appeal when he briefed the Springfield Board of Public Utilities.
“That also depends on the likelihood that the U.S. Supreme Court in this case would accept rediscovery in that appeal, because it depends on whether it’s a case that’s ripe for judgment, whether there is a difference in the federal districts, and also whether it’s a case that the court would prefer to take on political grounds that it might be something that would set precedent,” Fulk said.
Fulk said the city of Springfield defended itself with a mix of in-house attorneys and with hired attorneys from St. Louis-based Stinson LLP and Springfield-based Neale and Newman. He could not estimate the total cost of the case, the appeals and the state court case in attorneys fees to Springfield City Utilities.
“I don’t know that we have a total number, and I guess it would depend on which part of it,” Fulk said.
According to its website, the Public Water Supply District 1 Board of Directors held a closed-session meeting to discuss legal matters on Oct. 31, seven days after the three-member panel issued its appellate court opinion.