A May lawsuit against the city of Billings seeking the refund of years of franchise fees paid by Billings water, sewer and garbage customers reached a snag last week after the attorney representing the city challenged the judge assigned to the case, moving for a substitution.

The plaintiffs’ lawyer, Matthew G. Monforton of Bozeman, said Monday the city’s motion to disqualify Yellowstone County District Court Judge Donald L. Harris followed the city’s efforts to “indefinitely stretch out” the class certification sought by the seven plaintiffs in their lawsuit. If that happens, it would entitle thousands of ratepayers to a possible refund.

Each side has the right to challenge the assigned judge one time.

State law requires the class certification decision be made as quickly as possible, Monforton said, and during Wednesday’s conference, “Judge Harris firmly rejected the (city’s) request” to delay the class certification, setting an Oct. 5 deadline for plaintiffs to file their briefs regarding the case for class certification.

Within hours of Wednesday's conference, Monforton noted, the city’s attorney, Doug James of Moulton Bellingham PC, filed a motion to substitute another judge in place of Harris.

“The obvious inference is that they are making this as protracted and expensive as possible for the taxpayers of the city,” Monforton said.

Harris is the same judge who in May ordered the release of the identities of three police officers who had sex with a city employee while on duty or in City Hall.

City Attorney Brent Brooks and City Administrator Bruce McCandless did not respond to a Gazette request for comment Monday. In an email, James said "under long-standing Montana law, parties to a lawsuit have the option of substituting a judge, without cause. In this case, Judge Harris was substituted without cause, within the time limits set by statute."

Filed two months ago by seven Billings residents including State Sen. Roger Webb, R-Billings, and Terry Odegard and Tom Zurbuchen, both frequent attendees at city council meetings, the lawsuit alleges that franchise fees are not a fee but rather an illegal tax. The lawsuit seeks an order prohibiting the city from collecting franchise fees — and in fact, franchise fees are not included in the city’s 2018-19 budget. The suit also asks for “reasonable attorneys’ fees and costs” and unspecified declaratory and injunctive relief.

Zurbuchen, who attended Wednesday’s scheduling conference, called the city’s move a delay tactic.

“I am frustrated, but I know we are going to win,” he said. “The whole thing is to get the city to do business legally, but I’ll be dead and buried before I see that happen.

“All we want to do is make sure (the franchise fee) stays out of the budget forever,” he said, noting that the council could consider “a resolution to bring it back” whenever it wants to, including its next business meeting, if a majority of council members so desired.

During last week’s scheduling conference, James told Harris that the city’s liability in the case could reach $20 million.

“We don’t think it’s that much,” Monforton said, “but we do believe the city for years has illegally extracted money from taxpayers in the form of an illegal sales tax.”

As part of their filings, the city’s attorneys argue Billings homeowners signed off on the city’s right to collect the franchise fee when homeowners signed their subdivision improvement agreement. They’ve attached a number of those agreements to their filings, and told Harris last week they “have all kinds of depositions and discovery” work in front of them, and that “90 days is not nearly enough time,” according to Monforton.

Included in the city’s filings, he said, are 4,000 pages of subdivision improvement agreements.

Zurbuchen said he and the other plaintiffs plan to move forward with their legal efforts.

“We can’t quit now,” he said. “All we can do is continue no matter the delays they try. They filed 4,000 pages of SIAs that aren’t even part of the case. Our case is just on the monthly bill that public works sends to ratepayers (for water, sewer and garbage service).”

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City Government Reporter

City reporter for The Billings Gazette.