In 5-0 decision, it rejects piracy claim by Moongate Water Co.
state Supreme Court ruled Thursday that the city of Las Cruces did not
unlawfully take away business from a private water company.
a 5-0 ruling, the court rejected Moongate Water Co.’s claims that the
city stole its customer base and that it deserved compensation for projected losses.
court found that Moongate did not have a right to provide water within a
designated area to the exclusion of Las Cruces. It also ruled that
Moongate was not entitled to compensation from the city for a possible
loss of customers.
On the record before us, Moongate has not proven that it had
established infrastructure and was already serving customers in the
annexed area. Absent such proof of a tangible loss, a public utility is
not entitled to just compensation when a municipality lawfully exercises
its right to serve in the public utility’s certificated area,” Justice
Edward L. Chavez, right, wrote for the court.
initially won the case before then-District Judge Robert E. Robles of
Dona Ana County. The state Court of Appeals reversed Robles’ decision.
With Thursday’s ruling, the Supreme Court affirmed the appeals court’s
arguments before the Supreme Court last December, Moongate attorney
Steven Tucker said the company served thirsty parts of the desert when
nobody else would.
conceded that Las Cruces did not take the water company’s pumps or
pipes or even any of its existing customers. But when the city annexed
three subdivisions that were in Moongate’s service territory, the
company lost something just as important — the opportunity for more
business, Tucker said.
calculated a loss of $3 million in potential customers to which it
claimed an exclusive right. The subdivisions taken in by the city were
Dos Suenos, Los Enamorados and Rincon Mesa.
Tom Bird, an attorney who represented Las Cruces before the Supreme
Court, argued that the Legislature intended that there be competition in
cities for water service. Las Cruces, with about 100,000 people, is not
a place where a regulated utility gets a monopoly on the marketplace,
hammered at the point that Moongate could show no actual losses, but
sued when the city became a competitor for new business.
The Supreme Court’s decision probably will end a case that had been in litigation for more than six years.