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mountain water reservoir

Mountain Water's 1 million-gallon dome reservoir sits on the north side of Missoula next to the Waterworks Hill trailhead.

The Carlyle Group is again claiming it doesn't own Mountain Water Co.

The last time the global equity firm did so in the pending condemnation case, Missoula County District Court disagreed. Judge Karen Townsend denied Carlyle's request to be dismissed from the case, citing its "legal arguments with scant support."

In May, the city of Missoula took Mountain and owner Carlyle Infrastructure Partners to court. The city is trying to force Carlyle to sell the water company to the city.

Now, Mountain Water is requesting more time to prepare for the eminent domain trial set for March 2015. The water company alleges the city of Missoula – the plaintiff – is using stall tactics that are hampering the defense's ability to do timely research.

"Despite ... diligent efforts, a continuance is needed to allow Defendants sufficient time to adequately prepare this major, complex case for trial," reads the brief. "Without a continuance, Mountain's ability to prepare for trial is materially impaired."

The city of Missoula argues the case is no more complicated now than it was when Mountain Water agreed to a trial start date of March 18, 2015. Plus, it argues it has provided information to the defense ahead of schedule, and the case is no less complex for the city.

"A closer look at Mountain Water's complaints reveals they are much ado about nothing," wrote the city.


In a recent related order, Judge Townsend said the cat is out of the bag when it comes to the purported value of Mountain Water.

If the court rules ownership by the municipality is "more necessary" than ownership by the private company, it may appoint "impartial commissioners or jurors" to set a fair price for Mountain Water.

At a court hearing in July, Townsend asked the parties to refrain from talking about value so as not to poison the pool of candidates. The city alleged the defendants broke the rules by getting third parties to talk about value instead.

In her order, the court disagreed: "The court does not find that Mountain Water or Carlyle have deliberately engaged in any effort to taint this proceeding."

The third parties are Algonquin Power and Utilities Corp. and subsidiary Liberty Utilities, a potential purchaser of Mountain Water.

"This court cannot reasonably restrict statements made by non-parties regarding a proposed or pending purchase of Mountain Water Company or its parent companies," Townsend wrote. "The court has no jurisdiction to order Algonquin or Liberty to do anything."

However, the court remains concerned about tainting the pool.

"The court again requests the parties refrain from advancing positions or waging public relations battles that may or may not cause future problems in selecting impartial commissioners or jurors in this litigation," the judge wrote.

"However, this litigation is an important public issue and one that involves governmental entities and the court does not find it necessary or appropriate to order a bright-line rule regarding what parties may or may not say."


The city also had requested the court take "judicial notice" of a separate but related case, also pending in District Court.

In that case, the Montana Consumer Counsel alleges the Montana Public Service Commission approved water rates that don't pass on savings Carlyle promised to consumers.

The city alleged "illegal, ex parte communication" between Public Service Commission staff and Mountain Water representatives. At a court hearing, however, Judge Ed McLean disagreed and said he did not consider the emails ex parte communication but business exchanges.

"Are they not supposed to communicate with each other about this case at all?" McLean said.

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University of Montana, higher education