Town takes unusual step to gain control of utility

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The town of Mooresville’s legal fight to reclaim control of its water utility is so rare in Indiana that observers say just one other community has taken such drastic action.

But lawyers representing the Morgan County community in its lawsuit against Indiana American Water think history is on their side. And that history could prove powerful.

The Indiana Supreme Court and the Legislature in the past five years weighed in on a similar issue following a years-long battle involving the city of Fort Wayne and its water utility operator.

“I am sure, given the length of time that litigation took, it could be a very expensive procedure,” said Bette Dodd, a utility lawyer at Lewis & Kappes who is not involved in the Mooresville suit. “But some of the gray areas have been resolved.”

Indiana American Water is a unit of Voorhees, N.J.-based American Water Works Co. Inc. with nearly 300,000 customers in 51 communities throughout the state. It has served Mooresville since 2000, when it bought Hoosier Water Co. Inc.

Officials of Mooresville sued Indiana American Water in Morgan Superior Court in late December.

Prompted by a fear of rising water rates, the officials want to acquire the town’s water utility through eminent domain. The legal action follows the town’s attempt to purchase the utility for $6.5 million, an offer too low for the liking of Indiana American Water.

Indiana American Water fired the first salvo in the dispute by suing the town in October, charging that officials violated due process by approving an ordinance to pursue their purchase of the utility.

Sorting out the legal morass could take time, judging from the 10 years Fort Wayne has spent to gain control of its water utility. Even so, the legal waters Mooresville will maneuver might not be as murky now that a precedent has been set.

“I think the path is pretty clear,” said Chris Janak, a lawyer at Bose McKinney & Evans LLP who represents the town. “Mooresville is allowed by law to do this.”

Indiana American Water’s attorney, however, is not so sure.

“There are first-impression things that will still have to be dealt with,” said Cristy Wheeler, the company’s corporate counsel. “It’s very unusual in Indiana, and it’s never happened to us.”

For guidance, Mooresville can turn to Fort Wayne’s tiff with Aqua Indiana, a division of Bryn Mawr, Pa.-based Aqua America Inc. that began in 2002. Dissatisfied with service, the city attempted to use eminent domain to force a sale of part of Aqua’s service area.

The Indiana Supreme Court sided with Fort Wayne in 2007 and the city took control of a portion of the service area the following year. The city now is attempting to gain control of the entire area by purchasing the rest of Aqua’s service area.

Between the Supreme Court decision and Fort Wayne’s follow-up battle with Aqua America, in 2009, the General Assembly passed a law supporting the court’s decision backing use of eminent domain to purchase a private utility.

Mooresville’s acquisition of Indiana American Water might seem like a lock, then, but legislation introduced this session by state Sen. Jim Merritt, R-Indianapolis, is much more friendly to water utilities.

Senate Bill 548 would allow communities to buy their water utilities only after the utilities fail to remedy repeated violations. And even then, a city would need public approval through referendum.

The Indiana Chamber of Commerce supports parts of the legislation but thinks a referendum may be unnecessary, said Vince Griffin, vice president of energy and environmental affairs.

“It seems to have some very rigorous things in there,” he said, “but we like it to not be easy for a municipality to divorce you and take over.”

While lawmakers debate the bill, Mooresville and Indiana American Water continue hurling barbs.

Janak, Mooresville’s lawyer, says the utility has raised rates and plans to raise them even more without investing in the town’s water infrastructure.

“As clear as the law is, it is incredibly contentious,” he said. “More than it should be.”

Indiana American Water says the average customer in Mooresville pays about $35 per month, which would rise to $39 with its plans to improve infrastructure.

“We’ve been scratching our heads all along about what’s been going on here,” Indiana American Water President Alan DeBoy said. “They think they can operate it at lower rates and more efficiently, but it’s not logical because they have no scale.”•


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  1. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  2. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

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  4. rensselaer imdiana is doing same thing to children from the judge to attorney and dfs staff they need to be investigated as well

  5. Sex offenders are victims twice, once when they are molested as kids, and again when they repeat the behavior, you never see money spent on helping them do you. That's why this circle continues