The Montana Supreme Court has upheld a District Court ruling denying the Carlyle Group’s request to halt the valuation process of Mountain Water Co., giving the city of Missoula another victory in its effort to take ownership of its drinking water system.
The state's high court found that Missoula County District Court did not err when it denied Carlyle’s motion to stop the trail phase of the proceedings until the high court first had a chance to rule on Carlyle’s initial appeal of condemnation.
In June, Missoula County District Judge Karen Townsend found that public ownership of the city’s drinking water system was “more necessary” than its current status as a private, for-profit enterprise.
The decision gave the city the right to purchase Mountain Water through the process of eminent domain. Carlyle and Mountain Water have appealed that ruling and had asked to halt the valuation process until a decision was first rendered by the high court.
In its seven-page brief, the Supreme Court said Carlyle’s appeal of the condemnation ruling will “go forward in this (Supreme) Court, whether or not there is a stay of proceedings.”
“We accordingly conclude that good cause for a stay has not been established and that the District Court did not abuse its discretion in denying the motions for a stay of proceedings,” the court stated in its unanimous ruling.
The high court also found that potential harms noted by Carlyle and the employees of Mountain Water in their request to stay the proceedings were “remote and speculative.”
Mountain Water’s employees had said they’d be irreparably harmed if and when the utility transferred to the city. They said they’d lose health benefits, pensions and stock options working for the city.
The Supreme Court also agreed with the city’s argument that attempts by Carlyle to delay the proceedings would add to the eventual cost of acquisition.
Dale Bickell, the city’s CAO, has stated that for every month the case is delayed, the city stands to lose $350,000 in cost savings to ratepayers. The city has said that favorable bond rates are likely to change as interest rates rise.
But attorneys representing Carlyle and Mountain Water told Townsend earlier this month that financial harms to the city resulting from trial delays shouldn’t be considered by District Court.
“The Montana Supreme Court made it clear that they are wrong,” said Scott Stearns, one of the city’s attorneys in the case. “The Montana Supreme Court ruled, ‘We must also take into account the concerns raised by the city about the significant losses or expenses occasioned by a delay.’ ”
On Wednesday, the city declined comment, saying the court’s ruling spoke for itself. Calls to Mountain Water were not returned.
Valuation proceedings are scheduled to begin in Missoula County District Court on Nov. 2, when a hearing before three water commissioners attempts to place a value on the utility.
If needed, District Court has reserved the week of Jan. 11 for a jury trial. The dates were favored by Mountain Water and Carlyle, though the city had asked that the hearing take place sooner, again citing costs associated with delays.