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City’s legal bills in water system fight: Nearly $700,000 and counting


North Carolina Supreme Court Chamber

Taxpayer-funded litigation expected to top $1 million as appeal goes forward

Documents obtained through the office of City Manager Gary Jackson’s office show that since June 30, 2013 the city has paid a total of $695,597.20 to the three law firms – one local and two in Charlotte – that have represented it since the State of North Carolina first brought suit to wrest the water system away from municipal control.

The lion’s share of fees — $579,302.34 — during that period was paid to Moore & Van Allen of Charlotte, while another Charlotte firm, Parker Poe Adams & Bernstein, was paid $14,699.24. Long, Parker, Warren Anderson & Payne, the city’s local counsel on the lawsuit process, has been paid $101,595.62, according the city manager’s office’s tally.

The meter began running when, in 2013, the North Carolina General Assembly passed a law transferring control of the city’s water system to the Metropolitan Sewerage District. The city promptly sued, charging that the law was invalid because the North Carolina Constitution prohibits the state from enacting laws having directly to do with municipalities’ health and sanitation; Established case law, the city maintained, plainly includes water systems under that rubric.

In June of 2014 Wake County Superior Court struck down the law. The court’s decision turned aside the state’s assertion that the law was intended as a statewide statute and was not directed specifically towards Asheville. Asheville’s water system, it said, belonged to Asheville. The state promptly filed notice of appeal.

Arguments before the North Carolina Court of Appeals in June of this year centered around whether or not Asheville actually owned its water system to begin with. Deputy Attorney General I. Faison Hicks flatly asserted at the time that “Municipal water systems belong to the state,” basing his argument on the premise that both cities and their water systems are chartered by the state, and the implication is that, having created both entities, the state retains ownership of them. Hicks also maintained the city was not actually “losing” its water system because it would continue to function and serve the city; it would just do so under direction of a different entity.

But Dan Clotfelder, a Parker Poe partner, called the state’s argument a “peculiar contention” and said it was self evident that Asheville would in fact lose a valueable asset if it lost control of its water.

On October 6 the three-judge appellate court handed down its unanimous decision: it struck down the injunction that had been in place while the appeals process had been playing out and upheld the constitutionality of the 2013 Water Act. It did, however, say that Asheville had standing to continue to pursue the case if it so desired,

Asheville so desired. The city immediately filed notice of appeal to the state’s Supreme Court. For the time being the water system remains under the city’s direct control while the city’s legal team prepares its next round of arguments.

All of which requires legal research, a great deal of conferencing and considerable additional research, which means many more hours of billable attorney time, which in turn translates into more taxpayer-funded legal expense. The law firms employed by the city are nationally recognized and they don’t come cheap.

Moore & Van Allen is one of the oldest and largest law firms in Charlotte. It maintains satellite offices in Morrisville, North Carolina, and in Charleston. It represents ten of the 15 Fortune 500 companies that are headquartered in North Carolina and its client roster includes international manufacturers, national banks and rapidly expanding health care companies. Heading up Moore & Van Allen’s Asheville water team is Jonathan Watkins, a dynamic young litigator whose own credentials include work for Monsanto and IBM.

Parker Poe is a leading representative of energy and utility companies. The firm employees more than 200 attorneys at offices in Charlotte, Raleigh, Charleston, Columbia, Spartanburg and Washington, D.C. Dan Clotfelder, who argued Asheville’s case before the appellate court, is Mayor of Charlotte and was in fact a state senator at the time the Water Act was passed.

Long, Parker, Warren, Anderson & Payne is a general practice Asheville law firm but lists appellate procedure as one of its areas of special expertise. Senior partner Bob Long is generally recognized as one of Asheville’s most prominent lawyers.

And yet there was that unanimous en banc verdict in October; some observers say that in light of it, taking the water case to the next level could be a costly exercise in futility. Others think Asheville has no choice but to give a supreme court appeal its best shot, if only for the sake of being able to say it has exhausted all its possibilities. On October 14, a week after the appeals court decision was announced, city council unanimously voted to do exactly that.

There has no word yet as to when the case may actually be calendared.

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