A long-standing antitrust dispute that pits the private Summit Water Distribution Company against Summit County’s Mountain Regional Water Special Service District will likely be resolved at trial, a judge in 3rd District Court has ruled.
At issue is whether county officials abused their power by conditioning development approvals on a builder at Promontory ignoring private water companies and agreeing to buy his water from Mountain Regional, the defendant in the case.
Comments Promontory developer Rich Sonntag made to The Park Record in 2002 show he was coerced into signing up with Mountain Regional when Summit Water had intended to beat the county’s price, said Brent Hatch, an attorney for Summit Water Distribution Co.
A contract between the county, Mountain Regional and Promontory also demonstrates illegal tying arrangements, Hatch said.
“The contract itself specifically does that and Sonntag specifically said that in The Park Record,” Hatch said about a 54-page ruling and order Judge Bruce Lubeck issued Feb. 27. “The judge basically said if The Park Record story is right, we win.”
Sonntag hasn’t disputed the quote except to say “it’s not what he meant,” Hatch added.
“I think the county is trying to shade the facts here and Sonntag is trying to play both sides,” Hatch said. “He is now a developer whose whole fortune is tied into the county. If you’re a developer and you want, in the future to do other projects, do you really think you’re going to be in a position to burn them? You’ll turn around and your next project they won’t approve and that’s why this is such a bad thing.”
The county was dealt a blow by the Utah Supreme Court when justices declared unanimously that a judge in district court had erred in dismissing the antitrust case and sent the case back to the lower court. Antitrust laws in Utah aim to prevent monopolies from forming.
But Lubeck ruled against Summit Water last month on a motion for partial summary judgment the private water company filed last June. That court document detailed a letter from deputy Summit County attorney David Thomas which states that Sonntag “let me know that he understands that burning the county will kill his project.”
“The court believes the law is as plaintiffs urge and if the facts were undisputed about the conditioning element the court would grant summary judgment to [Summit Water,]” Lubeck states in his recent ruling. “A county simply may not, in this court’s belief under antitrust laws, compel a developer to purchase water or any other product from the county.”
Still, an attorney for Summit County claims Sonntag’s decision to buy water from Mountain Regional was made independently.
“We simply feel that we’re going to have good evidence to show that Rich Sonntag and Promontory made an independent business decision based on what they thought was the best economic or financial arrangement for them with respect to water service,” said Jody Burnett, an attorney contracted by Summit County for the antitrust case. “The next phase will be to complete discovery and eventually have a trial on that question of that tying or conditioning arrangement.”
The judge ruled against Summit Water’s motion for partial summary judgment because “there is a disputed question of fact,” Burnett said.
“And that will require a trial to resolve that,” he added.
Summit Water claims the county conspired to eliminate the private company when Mountain Regional formed in 2000.
“This is a huge, huge victory for us. If the facts are what we say they are, we win,” Hatch said. “If they can do this to developers, then nobody is ever going to use Summit Water. They have no choice.”
Meanwhile, Summit County Attorney David Brickey said Summit Water can seek only declaratory relief and not monetary damages from the government.
“What the taxpayers can take from this is that Summit Water will never be able to extract any taxpayer dollars from this lawsuit,” Brickey said.
He insists Summit County has “never engaged in antitrust behavior.”
“It’s illegal; and Mr. Hatch is going to spend a lot of Summit Water dollars to prove something that didn’t happen,” Brickey said.