BRUNSWICK COUNTY — In a provisional ruling, Superior Court Judge Charles Henry notified all parties in the H2GO case he intends to enter a permanent injunction. But the injunction would be stayed (or paused), pending the outcome of Belville’s recent appeal.
In April, Judge Henry ruled the November 2017 transfer of all of Brunswick Regional Water and Sewer H2GO’s assets to the Town of Belville was illegal, null and void. The next week, Belville filed a notice to appeal the decision.
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The move created some confusion about the status of H2GO, and what actual immediate effect Judge Henry’s ruling would have in light of the pending appeal.
Under Henry’s proposed arrangement, things would effectively remain as they have been: Belville technically maintains the title to H2GO’s assets, the long-fought-over reverse osmosis plant still cannot move forward, and H2GO’s board has limited control over what actions it can take as litigation carries on.
The freeze comes as the 2019 local elections approach, including several spots on the H2GO Board. Both anti-RO-plant commissioners, Trudy Trombley and Chairman Jeff Gerken, are up for reelection. Candidate filing begins Friday.
On hold
“You don’t get caught with your hand in the cookie jar and still get to keep the cookie,” a conclusion in Leland’s request for a preliminary injunction states.
The metaphor undersells the importance of what’s at stake: $60 million in H2GO assets is the cookie.
In turn, Belville argues it “does not seek to keep the cookie” Leland asserts it “stole from the cookie jar.” Instead, Belville seeks to maintain the current scenario, in which “neither party can keep the cookie until the rightful owner is determined.”
On June 11, Judge Henry wrote to all parties in a provisional ruling, requesting Leland prepare a permanent injunction and Belville produce filings staying the injunction. Both actions could be combined into one filing, Henry told the parties.
Henry’s provisional ruling sides with Leland’s request for a permanent injunction. It would replace the preliminary injunction, which has been in place since January 2018. After Belville’s notice of appeal, Leland asked for a preliminary injunction that would transfer all of H2GO’s assets back to H2GO (the preliminary injunction in place now means H2GO’s assets are still contractually titled to Belville, but daily operations are managed by H2GO — according to Leland, it kept H2GO on “life support”).
Leland asked for a permanent injunction on May 16, citing the upcoming November 2019 election, H2GO’s “firmly established” board, the alignment of H2GO and Leland, and that a title transfer should be “seamless.” The town also argues Belville’s appeal is premature and that Henry’s April order is non-appealable since it is not a final order. “This premature appeal appears to be part of a delay strategy to try to prevent the current board from ever coming to power,” Leland’s filing states.
The next day, Belville filed a motion to stay proceedings to “maintain the status quo.” Belville opposed Leland’s reasoning behind immediately handing H2GO’s title back to H2GO. Among other things, Belville argues its pending appeal creates the possibility to transfer assets back to H2GO, then back to Belville, if an injunction were enforced in the interim.
As of July 1, the requested injunction and stay have not been filed in the ever-growing H2GO case files.
What it means
“Judges typically inform the parties how they will rule and then enter a final order – usually consistent with that ruling but not always,” Leland’s attorney, Joe Dowdy, said in a provided statement.
Lead attorneys for Leland and H2GO have both previously raised serious doubts as to whether Belville’s appeal will survive.
“That means Belville must give everything back but not until it loses on appeal,” according to Dowdy. “Belville will have to file another appeal because its current appeal is procedurally improper. There’s nothing unusual about the Court’s rulings, which are overwhelming in Leland’s favor.”
On May 21, at an H2GO board meeting at Leland Town Hall, Belville Mayor Mike Allen spoke to a small crowd while commissioners were out of the room in closed session. Leland entered Allen’s statements, recorded and transcribed, into the court filings.
“The appeal is going no matter what. The judge can introduce what they call a permanent injunction. He has the ability to do that. Which he can tell us to turn all the assets over. But what happens during that, we can also appeal that,” Allen allegedly said at the meeting, according to court filings.
When Leland first released Allen’s statements via a press release, Belville’s spokesperson raised doubts about the accuracy and fullness of the quotes.
“Votes in November will be the key. The people can stand up and speak and if you speak loud enough it will pretty much take care of the issue,” Leland asserts Allen said at the meeting.
According to Dowdy, Henry’s recent provisional ruling does not address mounting legal fees, which have grown to $1 million between all three parties since the suit began in November 2017.
“The ruling also leaves open the issue of attorneys’ fees. The General Statutes require Belville to pay Leland’s attorneys’ fees, and one can imagine that Belville’s citizens will be annoyed that, when their leadership finds itself in a hole, it keeps asking for a bigger shovel that those citizens will have to foot the bill for,” Dowdy said.
Belville and H2GO did not immediately respond to requests to comment.
Related coverage:
Belville considering appealing after H2GO transfer ruled as unlawful
In rare ruling, court finds Belville and H2GO commissioners acted in bad faith
Send tips and comments to Johanna Ferebee at [email protected]
