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08/01/97 FOUNTAIN WATER DISTRICT v. ILLINOIS

August 1, 1997

FOUNTAIN WATER DISTRICT, A PUBLIC WATER DISTRICT, PETITIONER,
v.
ILLINOIS COMMERCE COMMISSION AND ILLINOIS-AMERICAN WATER COMPANY, RESPONDENTS.



Petition for Review of Order of the Illinois Commerce Commission. ICC No. 95-0186.

The Honorable Justice Welch delivered the opinion of the court. Maag and Chapman, JJ., concur.

The opinion of the court was delivered by: Welch

The Honorable Justice WELCH delivered the opinion of the court:

Fountain Water District, a public water district, appeals from an order of the Illinois Commerce Commission which granted a certificate of public convenience and necessity to Illinois-American Water Company to extend its water distribution system to a subdivision, known as Country Aire Estates, located within the geographical boundaries of, but not serviced by, Fountain Water District. For reasons which follow, we affirm.

Fountain Water District (Fountain) is a public water district, organized and created under the provisions of the Public Water District Act. 70 ILCS 3705/0.01 et seq. (West 1994). That act provides that in this State any contiguous area of not more than 500,000 inhabitants may be created into a public water district by a process of referendum and order of court which fixes and determines the limits and boundaries of the district. 70 ILCS 3705/1, 2 (West 1994). The public water district is a public corporation and a political subdivision of the State. 70 ILCS 3705/2 (West 1994).

The Public Water District Act prohibits a public water district from operating a water distribution system within any city, town, or village within its geographical limits except by contract therewith, but the act permits a district to supply water to areas located outside its geographical limits. 70 ILCS 3705/1, 10 (West 1994). The district may levy taxes and issue revenue bonds. 70 ILCS 3705/5a, 17 (West 1994). Finally, the act provides that it shall be deemed a general law, complete in itself, and that it shall be liberally construed. 70 ILCS 3705/25 (West 1994).

Illinois-American Water Company (Illinois-American) is a public utility within the meaning of the Public Utilities Act (220 ILCS 5/3- 105 (West 1994)). It provides water service to areas in St. Clair County and Monroe County, including the area contiguous to that serviced by Fountain Water District. As a public utility, Illinois-American is regulated and supervised by the Illinois Commerce Commission (Commission) pursuant to the Public Utilities Act. 220 ILCS 5/4-101 (West 1994).

Country Aire Estates, the subdivision in question, is located within the geographical boundaries of Fountain Water District but is not being serviced by that district. A few of the property owners in the subdivision receive their water from Illinois-American pursuant to a certificate of public convenience and necessity issued by the Commission in 1993 with the consent of Fountain. The rest of the landowners in the subdivision obtain their water from individual cisterns or wells.

On April 24, 1995, Illinois-American filed with the Commission an application for a certificate of public convenience and necessity authorizing it to expand its water service to residents of the Country Aire Estates subdivision. Fountain intervened in the proceedings before the Commission and objected to the granting of a certificate of public convenience and necessity to Illinois-American to service the Country Aire Estates subdivision. Fountain argued that: (1) as the public water district within whose boundaries the subdivision was located, it has the exclusive right to provide service to the subdivision; (2) it possesses "first in the fields" protection from another water provider usurping the opportunity to provide water to the subdivision; and (3) based on prior acts and representations, Illinois-American is barred by collateral estoppel from obtaining a certificate to service the subdivision.

Following a hearing, the Commission granted Illinois-American a certificate of public convenience and necessity to provide water to the Country Aire Estates subdivision. Fountain appeals.

Fountain's first argument on appeal is that the Commission did not have jurisdiction to grant Illinois-American authority to service an area located within the corporate boundaries of a public water district, and that Fountain has the exclusive right to service residents located within its corporate boundaries. This argument involves a question of law, which we review de novo. People ex rel. Hartigan v. Illinois Commerce Comm'n, 148 Ill. 2d 348, 367, 170 Ill. Dec. 386, 592 N.E.2d 1066 (1992).

There are certain points on which the parties and this court agree: Fountain has the right to service the Country Aire Estates subdivision, as it lies within the geographical boundaries of the district; the Commission does not have jurisdiction over Fountain, which is a public water district rather than a public utility (see 220ILCS 5/3-105 (West 1994)); and neither the Public Utilities Act nor the Public Water District Act expressly authorizes or prohibits a public utility to service an area located within a public water district, and neither act grants to a public water district the exclusive right to service landowners within its geographical boundaries. Fountain argues, however, that the Public Water District Act does provide a means whereby owners of property located within the district may petition the court to disconnect from the district (70 ILCS 3705/28.1 (West 1994)), and that only then may a public utility seek authorization to service the area. Fountain argues that this more specific provision of the Public Water District Act allowing such disconnection should control over the more general provisions of the Public Utilities Act which do not address the question. See People v. Villarreal, 152 Ill. 2d 368, 178 Ill. Dec. 400, 604 N.E.2d 923 (1992). Fountain concludes that the Commission does not have jurisdiction to grant Illinois-American permission to service an area located within the corporate boundaries of a public water district.

Fountain offers no case law in support of its position. However, this court dealt with a similar issue in People ex rel. Chicago Title & Trust Co. v. Mission Brook Sanitary District, 76 Ill. App. 2d 423, 222 N.E.2d 8 (1966), and concluded that two competing suppliers of water, a village and a sanitary district, had coequal jurisdiction to service an overlapping area. The property in question was located within the territorial boundaries of the sanitary district and was subject to its jurisdiction on both water and sewer matters. The landowner sought subdivision plat approval from the Village of Northbrook, which withheld such approval unless the land was annexed to the village and the owner obtained its water from the village rather than the sanitary district. However, the sanitary district refused to allow connection to its sewer system unless the landowner also obtained its water from the district. At the time, neither municipality was operating a water distribution system on the subject property.

The sanitary district argued that it had exclusive jurisdiction of the property located within its boundaries by legislative grant found in the Sanitary District Act of 1936 (70 ILCS 2805/0.1 et seq. (West 1994)), an act quite similar to the Public Water District Act involved in the case at bar. This court pointed out that the Sanitary District Act of 1936 does not grant exclusive jurisdiction to the sanitary district, nor does it provide that no other system of waterworks may be established within the territorial limits of the district. Mission Brook Sanitary District, 76 Ill. App. 2d 423, 222 N.E.2d 8. The court held that if a rule of exclusive jurisdiction over the territory is desirable, it is for the legislature to so provide. Mission ...


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