Federal Judge Rules in Favor of Ross County

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Service Area(s): legal

Attorneys representing Ross County Water Co. will ask a federal judge to force the city of Chillicothe to pay its attorney fees from a lawsuit against the city.

"We'll be seeking the full amount, and we're not expecting to come in with anything less," said Matt Dooley, an private attorney hired to represent the county water agency in its successful lawsuit against the city.

On Monday, Federal Judge Michael Watson ruled the city had no right to begin installation of water lines in the area of Delano and Hospital roads just north of Adena Regional Medical Center in 2008.

Watson, who oversees the U.S. District Court of the Southern District of Ohio, issued a preliminary ruling in February 2009, but both parties have been waiting more than a year for an official ruling from the court.

Chillicothe Law Director Toni Eddy is reviewing the ruling and would not make any comment on whether the city would appeal.

"It's a little too early for me to say one way or the other," she said. "I need the opportunity to speak with the mayor and counsel."

Bill Neal, general manager of Ross County Water Co., said he was disappointed the RCWC had to take legal action, but was pleased by the outcome.

"This is nice to have a final resolution," Neal said. "It's something we've been waiting a long time to hear. We thought we had a really strong case. That's the reason we fought it."

One of the key parts of Watson's ruling is the interpretation of a portion of a federal statute that grants rural water districts and associations who are indebted to the federal government the right to be the only seller of water in their service area.

The judge found the county water agency was a proper association, because it owes startup money to the federal government and it already has water services in the area.

Watson said the county proved they had water lines in place as early as 1974, including a recent upgrade in 2003 to a 16-inch line to accommodate a higher volume. The judge dismissed the city's complaint that recent water lines had been installed in the area by RCWC in 2008.

"Lines already existed in and were immediately adjacent to the disputed area since the 1970s; new lines were installed to upgrade the system and to continue to serve an area already served by RCWC," the ruling reads.

Neal said the RCWC is prepared to handle any development that would like to locate in the area, including property on Hospital Road north of Delano Road owned by Cloverleaf Development Co.

"We don't know what the plans are in that area," Neal said. "But we have the lines, and they're big lines, and we can provide service for whatever comes down the road."

As part of their defense, the city claimed Ross County Water added water lines after the court issued an order precluding Chillicothe from constructing lines and that the county filed the lawsuit when Chillicothe's legal counsel was recovering from a serious illness.

Watson, however, saw things a different way. He pointed to evidence showing the county attempted to negotiate with the city several months before filing the lawsuit. Dooley said he "personally sat down with the law director of Chillicothe in 2008" and reviewed the federal statute, but that the city was "not amenable."

Along with Dooley, the county was represented by Dennis O'Toole, who serves as general counsel for a number of rural water authorities in Ohio and is recognized for his work using the specific federal law to defend rural water companies.

"That's one of the reasons we went with this firm," Neal said. "They have a really good record when it comes to this stuff, and they told us we had a strong case."

Neal said he's also hopeful the city will have to pay for attorney fees.

"We have a fiduciary responsibility to our members to help recover our costs," he said.

It's unclear how much RCWC will be asking for in attorney fees. Dooley said his office is preparing the paperwork to submit, which will include a detailed explanation of attorney fees. The paperwork must be filed within the next 14 days.

Former Athens Law Director Garry Hunter, who was hired by the city of Chillicothe as special counsel to defend the suit, was paid $39,211. He earned $150 an hour -- paid in 2009 of the water administration fee fund -- for representing the city and billed them for his expenses, including mileage and paperwork costs.

This article originally appeared in the Chillicothe Gazette, Loren Genson, on March 17, 2010.
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