Attorneys said they expect a judge to respond this week to a request for a temporary restraining order that could undo recent actions at Central Alabama Water and limit future moves. The request comes as part of a lawsuit two of the utility’s former board members filed last month.
Richard Rice, an attorney for former board members William Muhammad and Brenda Lewis, said the court needs to act immediately.
“So many changes have taken place over the last two to three months that potentially could cause irreparable harm,” he said, citing a mass employee layoff and expansion of a new chief executive’s authority to make decisions without board oversight. “Those types of things could drastically change the overall integrity of the organization and place the ratepayers and the users, the drinkers of the water, put them in a position where they create a public health risk.”
The federal lawsuit, which Muhammad and Lewis filed on behalf of themselves and other Birmingham voters and ratepayers, contends Birmingham residents bought the water utility in the 1950s. It alleges the state unconstitutionally seized control by restructuring the utility’s board of directors in 2015 and 2025, shifting majority representation from the city to the suburbs. The suit claims the state violated the Fifth and 14th amendments by taking property — the utility’s assets — without just compensation and by targeting only one utility with its legislation.
Defendants in the case include Gov. Kay Ivey and other state and county officials.
The motion for a temporary restraining order asks the judge to prevent further actions that would “permanently destroy the internal structure, governance, institutional workforce and capital integrity” of the utility while the court considers the overall case. If granted, it also could restore employment to workers who were laid off as part of a reduction in force that cut almost a quarter of staff or were fired in connection with drug testing or other provisions of a new employee handbook.
“All the people who were fired should be re-hired until this process is over,” said Calvin Grigsby, another attorney representing Muhammad and Lewis.
The restraining-order motion makes 11 specific requests — including one to resume a project to stabilize a high-hazard dam — and Judge Anna M. Manasco of the U.S. District Court for the Northern District of Alabama could deny or grant all of them or grant only certain ones, Grigsby said.
“We’re hopeful we’ll prevail on all of them,” Grigsby said. “But the employees are key, because the employees are the most important asset of any company.”
Defendants in the lawsuit were due to submit to the court by Friday a response to the temporary restraining order motion, Rice said. The plaintiffs have until Monday to reply to that response, he said.
The judge’s next move could be to deny the motion altogether, ask for more information, hold a hearing, set a hearing date or say she’s considering the matter, Rice said, adding he anticipates one of those things will happen this week.
An attorney working on the case for the new water board was not available for comment. A spokesperson for the utility says it does not discuss pending litigation.
Summary judgment requested
Attorneys for Muhammad and Lewis also have submitted a motion for summary judgments in the case. A judge can rule on all or parts of a case based on facts presented and without a trial. Grigsby said his clients have made four summary judgment requests, and — as with requests in the temporary restraining order motion — the judge could selectively grant them.
“So the court could say, ‘I deny your equal protection claim, but I’m going to grant your impairment of contract claim,’” he said.
The contract-impairment claim, which is central to the lawsuit, hinges on the public utility being established by individuals rather than a state or municipal government.
“The Constitution of the United States says that if you have a private benefit corporation, that company is governed by its charter,” Grigsby said. “The state cannot substitute board members for the board members that were elected or appointed under the charter of the corporation because there’s a constitution that says you can’t impair contract rights, and the articles of incorporation in the charter are contract rights of the people who originally set up the Birmingham Water Works Board.”
Defendants also were due to respond to the summary judgment motion by Friday, with plaintiffs submitting a reply by Monday.
Case could be transferred and combined
The governor and other defendants have filed a motion to transfer the case to the District Court for the Middle District of Alabama and combine it with a lawsuit Birmingham city officials have filed challenging the 2025 law that restructured the utility.
That motion argues the two cases are “at least parallel, and in many ways virtually identical,” and the general principal in federal district courts is to avoid duplication.
Rice and Grigsby said their legal team opposes that motion and submitted a response in that vein to the court on Friday.
“The city of Birmingham’s lawsuit that the mayor and the city council filed is about racial discrimination and the history of racial discrimination from the state of Alabama … whereas the lawsuit that we filed on behalf of the ratepayers and on behalf of the citizens of Birmingham is not,” Rice said. “We have two different themes and legal theories, and the elements to prove our case is not in alignment with the way that they have presented their case.”
