Sunday, February 22, 2009

Ohio municipalities' three-mile planning radius has no impact on 1926(b) protection

A federal court in Ohio has determined that a statutory three-mile planning radius granted to Ohio municipalities has no impact on Section 1926(b) protection.  The City of Chillicothe resisted a motion for preliminary injunction by a neighboring nonprofit water company that owes money to the USDA.  Chillicothe argued that the water company lacked the authority to provide water service within the three-mile planning radius granted to all Ohio municipalities.  But the text of the Ohio statute does not reference water services.  When a court grants a preliminary injunction, it must assess the likelihood of success on the merits.  Here, the Court made a preliminary assessment in favor of the water company on this issue.  Of note, though, the federal court found that Chillicothe's counsel had not offered argument, analysis, or authorities on these issues and reserved final resolution of the claims of municipal exclusivity for later on in the lawsuit.  It remains to be seen whether the Court in Chillicothe will more fully address the issue of whether Ohio laws impose any restraints on the monopoly protection granted by Section 1926(b).  You can find the preliminary decision here.