Appeals Court OKs Transfer Of Asheville Water System | Eastern North Carolina Now

 Publisher's note: The author of this post is Michael Lowrey, who is an associate editor for the Carolina Journal, John Hood Publisher.

Judges say constitution gives legislature great leeway in regulating local governments

 RALEIGH — The city of Asheville and customers living outside the city who rely on Asheville for their drinking water long have had a contentious relationship. The issue was again before the state's second highest court in October, this time over whether a law passed in 2013 taking control of the water system away from Asheville could pass muster under the state's constitution.

 Though Asheville currently operates a water system, it does not provide sewer services. That instead is the responsibility of the Metropolitan Sewerage District of Buncombe County. In 2013, the General Assembly passed a local bill shifting control of the water authority from the city to MSD.

 The city sued to block the transfer, and in June 2014, Superior Court Judge Howard Manning held that the statute violated three provisions of the state constitution:

• It is a "local law" relating to "health," "sanitation," and "non-navigable streams," in violation of Article II, Section 24.
• It constitutes an unlawful taking of Asheville's property without just compensation in violation of Article I, Sections 19 and 35.
• It violates Asheville's rights under the "law of the land" clause found in Article I, Section 19.

 The state appealed Manning's ruling, which a three-judge panel of the N.C. Court of Appeals overturned.

 "We disagree and hold that the Transfer Provision does not violate these constitutional provisions," wrote Judge Chris Dillon for a unanimous appeals court.

 Under North Carolina law, localities are creations of the state, and the General Assembly retains the authority to regulate towns and counties except to the degree that it conflicts with the state or federal constitutions.

 Since 1917, the N.C. Constitution has prohibited the General Assembly from enacting so-called "local" laws that touch on any of 14 subjects, including laws "relating to health [or] sanitation" and laws "relating to non-navigable streams." Asheville contended that the transfer, because it was in a local bill and related to both those topics, was invalid.

 The Court of Appeals came to a different conclusion. "[I]n the present case, we need not reach whether the Transfer Provision constitutes a 'local law," wrote Dillon.

 "Rather, we hold that it is not plain and clear and beyond reasonable doubt that the Transfer Provision falls within the ambit of either prohibited subject identified by the trial court." (Emphasis in decision.)

 Dillon noted that litigation over Asheville's water system had established that "the mere implication of water or a water system in a legislative enactment does not necessitate a conclusion that it relates to health and sanitation in violation of the Constitution."

 Examining the new law's stated purpose and text, the appeals court found that the law appeared to prioritize concerns about governance and the quality of services rendered over health and sanitation issues. Nor did the law "fall within the ambit of the phrase 'relating to non-navigable streams.'"

 The city also claimed that the transfer violated the "law of the land" clause of the N.C. Constitution, in that there was no "rational basis" to treat Asheville differently from other municipalities that operate water systems and that there was no "rational basis" to transfer the water system from the city to the MSD.

 The appeals court disagreed.

 "Asheville contends, and the trial court agreed, that the General Assembly had no 'rational' basis for singling out Asheville in the Transfer Provision," wrote Dillon.

 "Assuming that the Transfer Provision has this effect, we believe that the fact that the General Assembly irrationally singles out one municipality in legislation merely means that the legislation is a 'local' law; it does not render the legislation unconstitutional, per se."

 The city also claimed that it was entitled to compensation from the state for the value of the water system. The Court of Appeals again disagreed, noting that in the 1923 case Trenton v. New Jersey, the U.S. Supreme Court held that compensation in such circumstances was not necessary. The appeals court also noted that cases from the Minnesota and Pennsylvania supreme courts had reached the same conclusion.

 The case is City of Asheville v State of North Carolina, (14-1255).