Friday, June 21, 2013

Water Lawsuit

Asheville Water Merger Lawsuit


The city has filed a rather weak lawsuit against the state and MSD. Buncombe and Henderson counties are, oddly, not named in the suit.

You can read their complaint on my Scribd account.

The key features of the complaint are that the legislation is unconstitutional, that the bond transfer injures the city, and that the corporation of Asheville is a person.

The city contends that HB488 was a local bill and it is unconstitutional to pass legislation in a local bill that affects sanitation. First, the law does not affect sanitation. It changes operational structure only. Second, the legislation is a public bill and would apply to any municipality that meets the conditions set forth. Therefore, it is constitutional.

The city contends that forcing a transfer of bonds to MSD would jeopardize the city's credit standing. The bonds that Asheville "floated" were Revenue Bonds backed, not by taxpayers, but by current and future water system ratepayers. It doesn't matter who holds those bonds, Asheville or MSD, the ratepayers will always be the obligors. Nothing changes with a transfer of ownership. In fact, handing local government bond transfers is what the state treasurer does on a regular basis. They should be done by now.

The city contends that Asheville is a person and must be compensated for a taking. First, a corporation is not a person. Second, the city does not own the water system. Third, a transfer of assets from one government entity to another does not obligate either to any financial reconciliation.

Interview with Attorney Frayda Bluestein, School of Government
Asheville water lawsuit.

Ownership is difficult to untangle. But the one thing that is clear is that it's not owned by Asheville. See this report for a breakdown of ownership:

The water merger is law but is now subject to a temporary restraining order brought by the city. The defendant, the State of North Carolina, asked for the TRO to be extended another 60 days, which was granted by the judge. That is so that the bond transfer matter can be resolved before the case is heard in court. That will blow a big hole right through this lawsuit. The last nail is to ******REDACTED*******. That will completely dispose of the lawsuit to the city's disfavor.

The lawsuit claims that Asheville, the corporation, is a person. And I thought they were against that sort of thing.

Eliminate Corporate Personhood
By Gordon Smith
January 26, 2012

"A resolution calling for a Constitutional Amendment to invalidate the 2010 Supreme Court’s Citizen United decision will be on the February 14th agenda of Asheville City Council"

Resolution No. 12-37 - Resolution to Eliminate Corporate Personhood
Asheville City Council
Page 16

"Councilman Smith said that the groups Move to Amend and Asheville Growing Business Alliance asked him to move forward the resolution to eliminate corporate personhood...Councilman Bothwell moved for the adoption of Resolution No. 12-37 to eliminate corporate personhood. This motion was seconded by Councilman Pelly and carried unanimously."