A federal judge on Thursday dismissed a lawsuit that challenged the restructuring of Alabama’s largest water utility. The suit argued the state unlawfully seized control of Birmingham Water Works through laws that turned the utility into a regional authority, now operating as Central Alabama Water.
U.S. District Court Judge Anna Manasco’s dismissal of the case was based mainly on technicalities. William Muhammad, one of two former water works boards members who filed the lawsuit, said he and Brenda Lewis disagree with the idea the state has the power to take a corporation – in this case a public water utility that the lawsuit contends Birmingham residents own.
“We’re dealing with an absolute, straight-up robbery from the state,” Muhammad said after Thursday's court hearing. “If they do this to us as a community then they could do it to anybody.”
In her ruling from the bench, Manasco said she was dismissing the lawsuit for two reasons. One was that the complaint, which named as defendants several county and state officials as well as some of CAW’s current board members and CEO, did not clearly lay out what each defendant did wrong or what the court could order them to do to correct the alleged wrongdoing.
After a hearing in the case in April, Manasco informed the plaintiffs’ attorneys of the problems she saw with the lawsuit and gave them an opportunity to amend their complaint, which they did. But Manasco said they didn’t follow her instructions.
“The court issued a manual about how to replead the complaint, such that each claim against each defendant has to be separated out with factual allegations and relief sought,” Manasco said Thursday. “That was not done.”
Calvin Grigsby, an attorney for the former board members, said after the hearing that formulating the complaint in such a way was impractical given the circumstances.
“What the court basically said is, ‘It's a perfect crime,’” Grigsby said. “In other words, there's nobody that you can pin it on. When you have such a multi-level conspiracy, it's not possible to allege what each person did until you do discovery. You got to go out and get people under oath before you can figure out exactly what they did.”
The other reason Manasco gave for dismissing the complaint was that the plaintiffs didn’t have “standing.” To have standing, someone who brings a lawsuit typically must show they have been harmed or will be harmed because of the action they’re challenging.
The plaintiffs are clear “that what they want is the legislation at issue to be unwound, but that alone is … not the making of a sufficient set of allegations to establish these plaintiffs' standing to assert these claims against these defendants, which is a minimal requirement at this stage of the litigation,” Manasco said in her ruling.
Muhammad pushed back against that assertion as well.
“We have standing as ratepayers – the people who built this system, the people who inherently are supposed to own it,” he said.
Muhammad and Lewis filed the suit on behalf of Birmingham voters and CAW ratepayers as well as themselves.
Grigsby said the plaintiffs’ legal team would review the judge’s ruling and decide whether to appeal.
Shan Paden, an attorney for CAW, said the utility is pleased with the dismissal. He said he had no further comment because a similar case is still pending.
Manasco heard arguments in that case, which Birmingham city officials filed, during the same proceeding on Thursday. She said she’ll issue a separate, written ruling in that case.
