IN THE CIRCUIT COURT OF FAIRFAX COUNTY. ) ) ) Plaintiffs, ) ) v. ) Case No

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1 V I R G I N IA IN THE CIRCUIT COURT OF FAIRFAX COUNTY CITY OF FALLS CHURCH, VIRGINIA, et al., Plaintiffs, v. Case No BOARD OF SUPERVISORS OF FAIRFAX COUNTY, VIRGINIA, et al., Defendants. MOTION CRAVING OYER AND DEMURRER OF FAIRFAX COUNTY WATER AUTHORITY Defendant Fairfax County Water Authority ( Fairfax Water, by counsel and pursuant to Rules 3:8 and 3:12(b 1 of the Supreme Court of Virginia, submits this Motion Craving Oyer and Demurrer in response to the Complaint filed by Plaintiffs City of Falls Church ( Falls Church, Virginia, the City Council of the City of Falls Church, Virginia (the Council, and Wyatt Shields ( Shields, Falls Church City Manager (collectively the City. MOTION CRAVING OYER Fairfax Water craves oyer of the same documents that are the subject of the Motion Craving Oyer filed on March 30, 2012, by the original Defendants, the Board of Supervisors of Fairfax County (the Board, Virginia, Fairfax County, Virginia (the County and James Patteson, Director, Fairfax County Department of Public Works and Environmental Services ( Patteson (collectively Fairfax County : 1 Fairfax Water was joined as a party on April 2, 2012, when, under Rule 3:12(b, it was served with a motion to join by the Defendants, the Board of Supervisors of Fairfax County, Virginia, Fairfax County, Virginia and James Patteson. 1

2 the December 6, 2011 Motion of the Board pursuant to which the Board adopted the ordinance that is the subject of this action ( Board Motion ; and the legislative record relating to that ordinance ( Legislative Record. Fairfax Water incorporates by reference all of the grounds asserted in Fairfax County s Motion Craving Oyer. WHEREFORE, the Court should order the City to file the Board Motion and the Legislative Record, and those documents should be deemed part of the City s pleadings. DEMURRER The Complaint, and each of its counts, fails to state a legally cognizable claim for the reasons stated below. Fairfax Water incorporates by reference each of the grounds set forth in the Demurrer filed by Fairfax County on March 30, LACK OF JUSTICIABLE CONTROVERSY & IMPROPER DECLARATORY JUDGMENT (ALL COUNTS 1. The Complaint seeks to invalidate an amendment to Chapter 65 of the 1976 Code of the County of Fairfax, Virginia (the Ordinance adopted by the Board on December 6, 2011 to regulate the provision and sale of water service within the County. Nearly every count of the Complaint challenges the validity of the Ordinance in one way or another (Counts I-VI, VIII, IX, X-XVI, or seeks to recover damages from the Board for injuries the City claims it may suffer from the Ordinance. (Counts XVII - XIX. 2. The Complaint, however, fails to allege any actual or threatened enforcement of the Ordinance against the City or its agents. Indeed, the Complaint admits that subsection (b of the Ordinance, which regulates permissible water rates within the County, does not even take effect until July 1, (See Complaint, 170. The Complaint also admits that the Ordinance contains an administrative procedure that offers the City the potential to charge water rates higher than 2

3 Fairfax Water s rates. Yet the Complaint fails to allege that the City has ever availed itself of that procedure. Therefore, it is totally uncertain whether, or to what extent, the Ordinance may be enforced against the City. 3. In addition, other than a wholly conclusory statement that is not taken as true on Demurrer (Complaint, 212, the Complaint fails to allege that the Ordinance has harmed the City. In fact, in various places, the Complaint refers only to potential future harms that might result when and if any aspect of the Ordinance is ever enforced against the City. (E.g., id., 340, 347, 354. Accordingly, any claimed potential future damage or harm to the City that allegedly may result from future enforcement of the Ordinance is totally speculative. For these reasons, the City s various attacks upon the ordinance and its damages claims are simply not ripe, and should be dismissed. 4. Virtually all of the Counts seek declaratory relief. (See, e.g., Complaint at 74-75, Prayer for Relief. The Court s power to grant such declaratory relief is purely discretionary, and that discretion must be exercised with great care and caution. Fundamental principles of separation of powers justify the Court s refusal to exercise that discretion at this juncture. Any review of the Ordinance s validity should properly take place in the context of an actual, as-applied setting in which the Board has determined how or to what extent it may ultimately enforce the Ordinance against the City in a specific situation, as opposed to the abstract and theoretical context in which the City s disputes have all been framed. Review of the Ordinance at such future time would ensure a clearly delineated, actual, concrete controversy, and would avoid the potential for unintended consequences from deciding important legal issues in an ill-defined context. 3

4 THIS COURT S RULINGS IN A PRIOR CASE BETWEEN THE PARTIES BAR THE CITY S DILLON RULE CHALLENGE TO THE BOARD S POWER TO LIMIT THE CITY S EXPANSION OF WATER SERVICE IN THE COUNTY AND TO DESIGNATE FAIRFAX WATER AS THE EXCLUSIVE PROVIDER OF NEW SERVICE WITHIN THE COUNTY (COUNTS III -VI, VIII 5. In the City s Dillon Rule-based claims in Counts III-VI and VIII, the City asserts, among other things, that the Board has no statutory power under Code , or otherwise to limit the City s expansion of water service into the County, or to designate Fairfax Water as the exclusive provider of new service. This Court, however, considered and rejected that contention in prior litigation between the City, the Board, the County, and Fairfax Water (Case No , as to which this Court can take judicial notice for the purposes of this Demurrer. The Court s ruling in that prior case is final and no longer subject to appeal. 6. Accordingly, the City s claims are precluded under Rule 1:6 and principles of collateral estoppel or res judicata. THE CITY S DILLON RULE COUNTS FAIL AS A MATTER OF LAW (COUNTS III-VI, VIII, IX 7. The Complaint s various Dillon Rule attacks on the Ordinance s validity in Counts III-VI, VIII, IX all fail as a matter of law because the Board was empowered to adopt the Ordinance pursuant to Code , -2112, -2144, and decisions of the Supreme Court of Virginia. These statutes and legal authorities confer upon the Board the necessary power to regulate the provision and sale of water service within the County by the City and other providers, and to designate an exclusive provider of water service without regard to any anti-competitive effect. These powers are salutary and necessary incidents to the Board s police power to protect the welfare of the County and its inhabitants. The terms and scope of the Ordinance also represent a reasonable legislative selection by the Board for implementing its statutorily conferred powers. 4

5 8. The Board s broad powers to regulate and control the provision of water service within the County through adoption of the Ordinance is not in any way overridden by the City s Charter, Code , -2119, or any other applicable provision of Virginia law. Under well established principles, any extraterritorial powers that the City may have to furnish water service outside of its territorial limits must be strictly and narrowly construed. The City s extraterritorial powers, and any enabling authority for them, must also be harmonized with the regulatory powers conferred upon the Board pursuant to Code , -2112, and case law authority, so as to avoid any conflict to the fullest extent possible. 9. Upholding the Ordinance allows these various statutory provisions to be read together and harmonized as required by the governing law. The Ordinance does not prohibit the City from furnishing water within the County. Rather, it merely designates where within the County water service by the City or providers other than Fairfax Water can continue. 10. Similarly, the rate regulation aspects of the Ordinance are fully consistent with the regulatory authority conferred upon the Board by the previously cited enabling statutes. The Ordinance also does not necessarily preclude the City from charging rates higher than Fairfax Water s. Rather, as conceded by the City, the Ordinance contains an administrative procedure that allows the City or any other provider to seek approval for a higher rate, if it can be justified as fair and reasonable. If the City disagrees with that determination, it can appeal it to the Board, and thereafter seek judicial review if desired. 11. By contrast, the City s arguments, if accepted by this Court, would render the Board s express regulatory powers under Code , and a dead letter, in violation of the rule that the Court must harmonize each of the various statutory provisions so that none becomes meaningless surplusage. 5

6 12. The City also misreads the extent of its authority under Code , which, by its own terms, allows the City to maintain extraterritorial water facilities only for the purpose of furnishing water for the use of its inhabitants, and confers no authority to sell water to inhabitants of other localities. (Emphasis added. In addition, Code on its face constrains the City s ability to construct new water system facilities within Fairfax County without the County s consent. 13. The City s assertion in Count IX that the Ordinance improperly imposes duties on Fairfax Water in violation of Code is without merit. Designating Fairfax Water as the exclusive provider of new service within the County is expressly consistent with Code , which, among other things, empowers the Board to establish an exclusive service area for any sewage or water system and to prohibit, restrict or regulate competition between entities providing sewage or water service. Moreover, Code expressly authorizes agreements between [a]ny two or more localities, authorities, sanitary districts or other public entities to create one or more exclusive service areas for the provision of sewage or water service, that fix the rates or charges for any sewage or water service provided separately or jointly by such entities, and that restrict or eliminate competition between or among such entities and any other public entity for the provision of sewage or water service. Such an agreement between the County and Fairfax Water is evident from the terms of the Ordinance itself and the corresponding Connection Rule for New Construction/Redevelopment adopted by Fairfax Water on January 12, 2012 to comply with and implement the Ordinance. (Complaint, Exhibit 5. 2 Accordingly, the City s 2 To the extent that Count IX asserts that the Ordinance improperly delegates rate-making authority to Fairfax Water, it fails for the reasons stated in Fairfax Water s Demurrer to Count XI, which are incorporated herein by reference. (See infra at 24. 6

7 Dillon Rule claims in Counts III-VI, VIII, IX fail as a matter of law and must be dismissed with prejudice. 14. Lastly, if the Court has any doubt as to how the various statutes and terms of the City s charter at issue are to be harmonized, the Court should exercise its discretion under the Declaratory Judgment Act to refuse to hear the City s claims in Counts III-VI, VIII, IX at this time, before the Board s enforcement of the Ordinance. For the reasons previously stated, adjudication of the Ordinance s validity in the context of a distinct, and clear-cut factual application is far preferable and consistent with the principles of separation of powers. THE ORDINANCE WAS ADOPTED IN CONFORMITY WITH CODE (COUNTS I & II 15. Count I of the Complaint fails to state a legally cognizable claim because the Complaint and attached exhibits establish that the notice and advertisements for the Ordinance satisfied the requirements of Va. Code Ann (F. The Complaint admits that the Board published two advertisements of the Ordinance as required by Code (F. (Complaint, 39. As a matter of law, those advertisements (attached as Exhibit 2 to the Complaint, on their face, contain a descriptive notice of an intention to pass the Ordinance, and state that the full text of the Ordinance is available for review at the office of the Clerk of the Board. Nothing more is required by Code (F. 16. Count II, which alleges that the Ordinance runs afoul of Code (E by purportedly having two effective dates, also fails as a matter of law. Nothing in Code (E prohibits the Board from adopting an ordinance containing two separate subsections which, as here, each has a distinct effective date. Moreover, the term date in Code (E is not limited to the singular form in view of Code 1-227, which provides that singular 7

8 terms used in the Code must be read to include the plural forms of the word. Counts I and II should be dismissed with prejudice. THE CITY S REQUEST FOR A DECLARATORY JUDGMENT ON THE MEANING OF THE PLANS GRANDFATHER SHOULD BE DISMISSED (COUNT VII 17. Count VII of the Complaint asks this Court to issue a declaratory judgment as to the meaning of certain grandfathering language that the Board adopted in connection with the Ordinance (referred to in the Complaint as the Plans Grandfather (Complaint, 46, 265. This claim should be dismissed as a matter of law. 18. First, the Plans Grandfather was part of the Board s action on December 6, 2011 adopting the Ordinance. (Complaint, 52. That action a motion was not included with the Complaint, however, rendering it impossible to read the language in the proper context of the actual motion passed by the Board. Consistent with separation of powers principles, the Court should not attempt to construe this language without the actual motion in which it was presented. Indeed, the Court should not attempt to construe it at all until the Board has been given a chance to construe it in the context of a particular situation calling for its application to one or more specific properties. 19. Second, even if the Court were to exercise its discretionary declaratory judgment powers, the City s reading of the Plans Grandfather is incorrect. The City attempts to read the term plans to include properties for which development plans had been approved, and on which structures were built, years or even decades ago. The City states that this reading would result in the Ordinance being inapplicable to most or all of the properties served by the City s water system in Fairfax County [that] had approved plans as of the date the Ordinance was adopted, such that all or most of the properties served by the City s water system in Fairfax County would be totally exempt from the Ordinance. (Complaint, 265. That construction would strip the Ordinance of 8

9 virtually all practical effect by exempting all or most of the City s water service to some 128,000 3 County residents from regulation by the Ordinance. Such a result would undermine the plain object and intent of the Ordinance to regulate water service within the County for the benefit of the County s inhabitants. 20. When fairly read as a whole, the use of the term plans in the Plans Grandfather refers only to development plans that were submitted, but not approved, prior to December 7, 2011, and which obtain final approval by December 7, Had the Board intended plans to mean development plans approved before December 7, 2011, it would have said so. It did not. This reading of the Ordinance is also consistent with that of the administrative official charged with implementation and enforcement of the Ordinance (see Complaint, Ex. 4, which should be given deference by this Court under applicable principles. In short, the City s reading of the Plans Grandfather is plainly incorrect and would lead to an absurd result. Count VII should be dismissed with prejudice. THE ORDINANCE DOES NOT UNLAWFULLY DELEGATE LEGISLATIVE AUTHORITY TO FAIRFAX WATER (COUNTS X, XI 21. Count X alleges that the Ordinance improperly delegates legislative authority to Fairfax Water to establish the area of the County within which Fairfax Water is to be the presumptive water service provider. Count XI asserts that the Ordinance unlawfully delegates ratemaking power to Fairfax Water. Both claims fail as a matter of law. 22. Code and authorize the Board to regulate water service and rates within the County, to designate an exclusive water service provider, and to enter into agreements with providers, such as Fairfax Water, for the provision of water service within the County. 3 Complaint, 23. 9

10 23. Nothing in the Ordinance delegates any power to Fairfax Water to determine the water service area prescribed by the Ordinance. That area is defined by the Ordinance. Allowing Fairfax Water the opportunity to determine whether it is able to provide water service to a particular customer is not delegating authority to Fairfax Water to determine the extent of the service area. That aspect of the Ordinance simply ensures that if Fairfax Water is unable to furnish water service to a customer within the designated area, then another provider may serve that customer. Such action is fully consistent with Code and Count X should be dismissed with prejudice. 24. Similarly, using the rates and charges of Fairfax Water as the baseline to review the rates for other water service providers in the County is entirely rational, since Fairfax Water s are the lowest rates. This in no way delegates legislative powers to Fairfax Water. Count XI should be dismissed with prejudice. THE ORDINANCE DOES NOT UNLAWFULLY DELEGATE POWER TO THE DIRECTOR OF DPWES (COUNT XII 25. Count XII asserts that the Ordinance unlawfully delegates legislative powers to the Director of the County s Department of Public Works and Environmental Services. (See Complaint That claim is legally incorrect for the reasons stated by Fairfax County in its Demurrer, V at 5-6, which Fairfax Water incorporates by reference. THE ORDINANCE IS NOT ARBITRARY, CAPRICIOUS AND UNREASONABLE (COUNT XIV 26. Count XIV alleges that the Ordinance is arbitrary, capricious and unreasonable in its entirety. (Complaint, 312. This claim fails as a matter law and should be dismissed with prejudice for all the reasons stated by Fairfax County in its Demurrer, VII, C at 7, which Fairfax Water incorporates by reference. 10

11 THE CITY S CONSTITUTIONAL AND 1983 CHALLENGES FAIL AS A MATTER OF LAW (COUNTS XIII, XV, XVI, XVII 27. The City s various state and federal constitutional challenges and claims against the County defendants, pursuant to 42 U.S.C and 1988, all fail as a matter of law for the reasons stated in Fairfax County s Demurrer, VI & VII, A-F at 6-9, which Fairfax Water incorporates by reference. THE CITY S TORTIOUS INTERFERENCE CLAIMS FAIL AS A MATTER OF LAW (COUNTS XVIII, XIX 28. The City s tortious interference claims in Counts XVIII and XIX of the Complaint against the County defendants fail to state legally cognizable claims for the reasons stated in Fairfax County s Demurrer, VIII, A-B at 8, which reasons Fairfax Water incorporates by reference. WYATT SHIELDS LACKS STANDING AS A PARTY PLAINTIFF (ALL COUNTS 29. The Complaint names Wyatt Shields ( Shields, the City Manager of the City of Falls Church, as a party plaintiff. For the reasons stated in Fairfax County s Demurrer, X at 10, which Fairfax Water incorporates by reference, Shields lacks any standing to assert any claims in this action. Accordingly, he should be dismissed as a plaintiff in this action. WHEREFORE, Fairfax Water respectfully requests that its Demurrer to each of the Counts of the Complaint be sustained, and that the Complaint be dismissed with prejudice. 11

12 mc'm FAIRFAX COUNTY WATER AUTHORITY Counsel C Stuart A. Raphael (VSB No Arthur E. Schmalz (VSB No Jill M. Dennis (VSB No HUNTON & WILLIAMS LLP Pinnacle Drive, Suite 1700 McLean, Virginia Telephone: ( Facsimile: ( sraphael@ hunton.com hunton.com hunton.com Counsel for Fai@ax County Water Authority

13 CERTIFICATE OF SERVICE I certify that on April 23,2012, a complete and accurate copy of this Motion Craving Oyer and Demurrer was sent by first-class mail and to the following counsel of record in this action: J. Patrick Taves, Esq. T. David Stoner, Esq. Randall T. Greehan, Esq. Michael W.S. Lockaby, Esq. GREEHAN, TAVES, PANDAK & STONER, PLLC Avion Parkway, Suite 210 Chantilly, Virginia Telephone: Fax: ptaves@ atpslaw.com dstoner@ ntpslaw.com ntpslaw.com - - gtps1aw.com David P. Bobzien, Esq., County Attorney Cynthia L. Tianti, Esq., Deputy County Attorney Cynthia A. Bailey, Esq. Assistant County Attorney Government Center Pkwy, Suite 549 Fairfax, Va ( ( (fax cvnthia.bailev@ fairfaxcounty.gov Counsel for Defendants The Board of Supervisors of Fai@ax County, Virginia, The County of Fai@a, Virginia and James Patteson John E. Foster, Esq. FALLS CHURCH CITY ATTORNEY 300 Park Avenue, #302 East Falls Church, Virginia Telephone: Fax: fallschurchva.aov Counsel for Plaintifls City of Falls Church, Virginia, City Council of the City of Falls Church, Virginia, and Wyatt Shields, City Manager Counsel