Billings waste water treatment plant

The Billings wastewater treatment plant.  Seven residents are suing the city seeking a refund and the elimination of franchise fees the city used to charge for water, sewer and garbage service.

All six district judges in Yellowstone County have either disqualified themselves or have been substituted in a possible class action suit against the City of Billings for collecting franchise fees on utility bills from residents.

Judge Greg Pinski from the Eighth Judicial District in Great Falls will now hear the case and decide if it can proceed as a class-action suit.

The case, filed by six Billings residents, is being considered as a possible class-action suit because it claims the city has illegally collected franchise fees from all ratepayers on utility bills when the city was not allowed to do so. 

If the class-action suit were certified and successful, the city could be on the hook for as much as $20 million in fees owed to residents. 

Five of the six judges in the district had disqualified themselves from the case. In doing so, they do not have to list a reason for the disqualification. 

However, earlier in the case, Doug James, one of two attorneys representing the city, had filed a "report" to the court showing that all six judges lived within the city limits and had paid the franchise fees as part of their bill. The city argued that because they were all possible plaintiffs if the suit were certified as a class action, they "may have a potential conflict of interest in the case" because they stood to make money by the decision.

Matthew G. Monforton said that while the potential for a conflict was there, Montana law and ethics canon also gives judges a way to avoid the conflict, for example, by renouncing any monetary settlement that is reached in the case.

The only other judge in the district, Don Harris, was substituted from the case after initially hearing it. Montana allows any party to the lawsuit to substitute, or "bump," a judge off a case once. The City of Billings used its substitution to remove Harris. 

Matthew G. Monforton, one of two attorneys representing the residents, called the situation where five sitting judges were disqualified "unprecedented." 

"This makes the case more expensive and it adds cost," Monforton said.

James disagreed, pointing out that Montana has only one bankruptcy judge for the entire state and the cases are often handled by videoconference or phone.

"The distances involved have not delayed cases or resulted in significant additional expense," James said in a written response to Gazette questions.

If the case were to go to trial, it would likely be held in Billings, and Pinski would travel. 

James told The Gazette the case was originally assigned to Department 7, one of the newly created judicial districts. Two candidates, Colette Davies and Thomas Pardy, are running for that seat. James said that if Pardy is elected, it's reasonable for him to recuse himself because he is an attorney on the city's legal staff. If Davies is elected, the case could then be transferred back to her from Pinski in January when she's sworn in. 

Monforton said that his clients viewed the move as another delay and stall tactic aimed at dragging the case out longer.

"There will also be a further delay because Judge Pinski will have to get himself up to speed on the case he just inherited," Monforton said.

James said it's not about slowing the case, instead it's about making sure the city's interests are well represented in the case. 

"We are not trying to slow the process down. However, we are working to insure that the case is tried fairly for all parties," James said.

Instead, James pointed out that the city sent three separate discovery requests to the plaintiffs on May 31, and is still waiting for those. He said the city has agreed to three separate extensions of time for them.  

Montana law allows for judges to hear cases from other districts when there is a disqualification. Usually, those cases are heard by a judge from a neighboring county. But because of workloads or other issues, any sitting district judge can be called.

The next step in the case is likely to determine whether the lawsuit qualifies as a class-action, meaning many ratepayers could stand to get money back if the citizens' case is successful. 

"We have a strong case, and we are certain we will prevail no matter who hears the case," Monforton said. 

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