RURAL WATER, SEWER AND SOLID WASTE MGMT. DIST. NO. 1 v. CITY OF GUTHRIE

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RURAL WATER, SEWER AND SOLID WASTE MGMT. DIST. NO. 1 v. CITY OF GUTHRIE

2014 OK CIV APP 48

325 P.3d 1

Case Number: 109575

Decided: 10/25/2013

Mandate Issued: 05/08/2014

DIVISION I

THE COURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA, DIVISION I

Cite as: 2014 OK CIV APP 48 , 325 P.3d 1

RURAL WATER, SEWER AND SOLID WASTE MANAGEMENT DISTRICT NO. 1,

LOGAN COUNTY, OKLAHOMA, an agency and legally constituted authority of the STATE

OF OKLAHOMA, Plaintiff/Appellant,

v.

CITY OF GUTHRIE, an Oklahoma

Municipality and THE GUTHRIE PUBLIC WORKS AUTHORITY, a public trust,

Defendants/Appellees.

APPEAL FROM THE DISTRICT COURT OF

LOGAN COUNTY, OKLAHOMA

HONORABLE PHILLIP C. CORLEY, JUDGE

AFFIRMED

Steven M. Harris, Michael D. Davis, S. Max Harris, DOYLE HARRIS DAVIS &

HAUGHEY, Tulsa, Oklahoma, for Plaintiff/Appellant,

Andrew W. Lester, Johnny

G. Beech, Carrie L. Williams, LESTER, LOVING & DAVIES, P.C., Edmond,

Oklahoma, for Defendants/Appellees.

ROBERT D. BELL, JUDGE:

¶1 Plaintiff/Appellant, Rural Water, Sewer and Solid Waste Management

District No. 1, Logan County, Oklahoma (Logan-1), appeals from the trial court's

grant of summary judgment to Defendants/Appellees, the City of Guthrie and the

Guthrie Public Works Authority (collectively, Guthrie), in this action to compel

Guthrie to sell water to Logan-1. For the reasons set forth below, we

affirm.

¶2 Logan-1 is an Oklahoma rural water district and agency of the State of

Oklahoma. Guthrie owns or controls a water treatment plant and water

distribution facilities. Logan-1 contended Guthrie has surplus treated water

which it has wrongfully and repeatedly refused to sell. Thus, Logan-1 filed the

instant lawsuit seeking a judicial order to compel Guthrie to sell Logan-1 its

surplus water.

¶3 Both sides moved for summary judgment. Logan-1 argued Guthrie should be

forced to sell its surplus water pursuant to 82 O.S. 2011 §105.21 and alleged

Guthrie wrongfully denied Logan-1 access to an essential facility in violation

of the Oklahoma Antitrust Reform Act, 79 O.S. 2011 §201 et seq .

Both theories of recovery sought the compelled sale of water by Guthrie to

Logan-1. Guthrie countered: §105.21 applies only to stream water; Guthrie has

discretion under 11 O.S. 2011

§37-120 to deny Logan-1's requests; pursuant to 82 O.S. 2011 §105.9, Logan-1 was

required to first seek a permit from the Oklahoma Water Resources Board (OWRB)

before filing suit; and Guthrie is exempt from antitrust liability pursuant to

Fine Airport Parking, Inc. v. City of Tulsa , 2003 OK 27 , 71 P.3d 5 .

¶4 The trial court granted summary judgment to Guthrie. Specifically, the

court held §105.21 applies only to stream water and does not cover treated water

for municipalities. It also held Logan-1 cannot show under the antitrust laws

that it lacks suitable, available alternatives to purchase water. From said

judgment, Logan-1 appeals. 1 This matter stands submitted for accelerated

appellate review without appellate briefs on the trial court record pursuant to

Rule 13(h), Rules for District Courts , 12 O.S. 2011 , Ch. 2, App., and

Rule 1.36, Oklahoma Supreme Court Rules , 12 O.S. 2011 , Ch. 15, App. 1.

Pursuant to the parties' joint request, this appeal was stayed from January 24,

2013, through September 25, 2013, for unsuccessful settlement negotiations.

¶5 This Court's standard of review of a trial court's grant of summary

judgment is de novo . Hoyt v. Paul R. Miller, M.D., Inc ., 1996 OK 80, ¶2 , 921 P.2d 350, 351-2 . Summary judgment

is proper when the evidentiary materials "establish that there is no genuine

issue as to any material fact, and that the moving party is entitled to judgment

as a matter of law." Shelley v. Kiwash Elec. Co-op ., 1996 OK 44, ¶15 , 914 P.2d 669, 674 .

¶6 We first address Logan-1's argument that Guthrie was required by 82 O.S. §105.21 to sell its surplus

water to Logan-1. Logan-1 also urges the same statutory provision authorized it

to seek judicial intervention without first trying to obtain relief from the

OWRB. Section 105.21 states:

The owner of any works for the storage, diversion or carriage of water,

which contain water in excess of his needs for irrigation or other

beneficial use for which it has been appropriated, shall be required to

deliver such surplus, at reasonable rates for storage or carriage, or both,

as the case may be, to the parties entitled to the use of the water for

beneficial purposes. In case of the refusal of such owner to deliver any

such surplus water at reasonable rates as determined by the Board, he may be

compelled to do so by the district court for the county in which the surplus

water is to be used.

Guthrie asserts §105.21 does not apply to the treated water in its system

and, pursuant to 11 O.S. §37-120,

it has discretion to determine whether, when, to whom, and under what conditions

it chooses to sell water. 2

¶7 Section 105.21 is part of what is referred to as the "stream water use

statutes," 82 O.S. §105.1 -

105.32. Messer-Bowers Co. v. State ex rel. Okla. Water Res. Bd. , 2000 OK 54, ¶6 , 8 P.3d 877, 879 . 3 As Guthrie maintains, and the

trial court properly held, §105.21 applies only to "stream water" and not to

water that has been appropriated by or is in treatment facilities of a

municipality. Further, if the water at issue was governed by the stream water

use statutes, Logan-1 would have been required by 82 O.S. 2011 §105.9 to apply for and

obtain a permit from the OWRB before being allowed to take the same. We find no

error. 4

¶8 With respect to Logan-1's second proposition, we hold Guthrie's waterworks

are not subject to the Oklahoma Antitrust Reform Act. An analogous issue was

addressed in Fine Airport Parking, Inc. v. City of Tulsa , 2003 OK 27 , 71 P.3d 5 . There, an off-airport

parking operator sued the City of Tulsa and its airport public authorities,

alleging their price-setting practices violated state antitrust laws. The Court

began its analysis by noting the "two ostensibly conflicting enactments" of the

Antitrust Reform Act and the Municipal Airports Act, 3 O.S. §61 et seq .

Fine at ¶24, 71 P.3d at 13 . The "Antitrust Reform Act makes it unlawful

for a person, including a municipality, to monopolize or attempt to monopolize

any part of trade or commerce in a relevant market," while "the Municipal

Airports Act allows a municipality to operate and regulate parking facilities

and fix the rate for parking services at the municipal airport . . . ."

Id .

¶9 After discussing general rules for resolving statutory conflicts and the

purpose of the antitrust law, the Court continued:

In enacting the Municipal Airports Act, the Legislature authorized

municipalities to plan, develop and operate public airports and declared

these activities to be "public and governmental functions." It also granted

municipalities various powers, including the power to "fix the charges,

rentals or fees for the privileges or services" at a municipal airport, and

declared these powers to be exercised "for a public purpose, and matters of

public necessity." A reading of these provisions leads us to but a single

conclusion--When a municipality operates an airport pursuant to the

Municipal Airports Act, it is acting in a governmental capacity as an arm of

the state to meet a public need and not solely for its own

benefit.

Id . at ¶27, 71 P.3d at 13-4 (citations omitted). The Court concluded

"that Tulsa's operation of an airport parking facility as authorized by the

Municipal Airports Act . . . is not subject to the Oklahoma Antitrust Reform Act

. . . ." Id . at ¶28, 71 P.3d at 14 .

¶10 Turning to the present case, there are multiple constitutional and

statutory provisions authorizing municipalities to operate and regulate

waterworks. See , e.g., Okla. Const. art. 18, §5(a) & (b) (governing

municipal franchises); Okla. Const. art. 18, §6 (granting broad authority for

municipalities to engage in business); 11 O.S. 2011 §22-104 (authorizing

municipalities to engage in businesses, including water-works); 11 O.S. 2011 §37-101 et seq .

(governing municipal waterworks and water supplies). Title 11 O.S. 2011 §37-121 specifically

states municipalities:

may enter into a contract or lease program as a governmental

function for the purpose of buying, selling, or distributing water . . .

inside or outside of the municipal limits . . . . All said facilities,

contracts, leases, activities, programs, and performance thereof, on behalf

of the municipality, shall be governmental in nature (emphasis

added).

¶11 Applying the rationale of Fine , we hold that when a municipality

operates its waterworks pursuant to the above authority, "it is acting in a

governmental capacity as an arm of the state to meet a public need."

Fine , 2003 OK 27 at ¶27 ,

71 P.3d at 14 . Therefore, Guthrie's operation of its waterworks as authorized by

Oklahoma's waterworks statutes is not subject to the Oklahoma Antitrust Reform

Act.

¶12 On the basis of the foregoing and upon de novo review, we conclude

there exists no issue of disputed material facts and Guthrie is entitled to

judgment as a matter of law. The judgment of the trial court is therefore

affirmed.

¶13 AFFIRMED.

BUETTNER, P.J., and JOPLIN, C.J., concur.

FOOTNOTES

1 Guthrie

also filed a counter-appeal urging "another basis for affirming the judgment of

the trial court with respect to Count I." This argument is addressed in Note 4,

infra .

2 Section

37-120 addresses a municipality's ability to extend water lines and sell water

outside its corporate city limits. Among other things, the statute provides:

All water so sold and furnished to persons, firms, corporations and other

municipalities beyond and without the corporate limits of the municipality so

selling and furnishing the same shall be sold and furnished only under written

contracts upon such terms and conditions as may be agreed upon by negotiation

between the municipality and such persons, firms, corporations or other

municipalities. Nothing herein contained shall be construed to impose any duty

or obligation upon any municipality to sell or furnish water to any person,

firm, corporation or municipality beyond its corporate limits except as the

municipality may expressly undertake by the terms of the written

contract.

3

Although Messer-Bowers referenced the stream water use statutes as "Okla.

Stat. Tit. §§ 105.1-105.18 (1991 & Supp.1999)," the later-enacted §§105.19 -

105.32 appear within the same statutory provisions and under the same general

"STREAM WATER USE" heading.

4 Because

we hold the stream water use statutes are inapplicable, we reject Guthrie's

proposition, raised in its counter petition in error, that Logan failed to

properly exhaust its administrative remedies because it did not first seek a

permit from the OWRB.

Citationizer © Summary of Documents Citing This Document Cite

Name

Level

None Found.

Citationizer: Table of Authority Cite

Name

Level

Oklahoma Supreme Court Cases

Cite Name Level

2003 OK 27 , 71 P.3d 5 , FINE AIRPORT PARKING, INC. v. CITY OF TULSA Discussed at Length

1996 OK 44 , 914 P.2d 669 , 67 OBJ 1190, Shelley v. Kiwash Elec. Cooperative, Inc. Discussed

1996 OK 80 , 921 P.2d 350 , 67 OBJ 2308, Hoyt v. Paul R. Miller, M.D., Inc. Discussed

2000 OK 54 , 8 P.3d 877 , 71 OBJ 1775, MESSER-BOWERS CO. v. STATE ex. rel.. OKLAHOMA WATER RESOURCES BD. Discussed

Title 3 . Aircraft and Airports

Cite Name Level

3 O.S. 61 , 3 O.S. 61 , Municipalities Power to Acquire and Operate Airport Facilities-Eminent Domain-Issue Bonds Cited

Title 11 . Cities and Towns

Cite Name Level

11 O.S. 22 -104, Right to Engage in Business - Public Utilities and Improvements - Eminent Domain - Issuance of Bonds - Lease of Public Utility Cited

11 O.S. 37 -101, Definitions Cited

11 O.S. 37 -120, Extension of Lines Beyond Limits - Contracts for Furnishing Water Outside Limits. Discussed

11 O.S. 37 -121, Contract or Lease for Purchase, Sale and Distribution of Water - Extensions Cited

Title 79 . Trusts and Pools

Cite Name Level

79 O.S. 201 , Short Title Cited

Title 82 . Waters and Water Rights

Cite Name Level

82 O.S. 105 .1, Definitions Cited

82 O.S. 105 .9, Application for Water Rights Discussed

82 O.S. 105 .21, Surplus Water Discussed