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Virgin Valley Water Board Goes to Supreme Court to Avoid Jury Review of Rate Setting Practices

The Virgin Valley Water Board (VVWB) has retained former Nevada Lieutenant Governor (2015 to 2019) Mark Hutchison of Hutchison & Steffen, PLLC, Las Vegas, to take a rate-setting issue to the Nevada Supreme Court and reconsider motions botched by attorney Jedidiah (Bo) Bingham.

For three years and eight months, VVWB attorney Jedidiah (Bo) Bingham, at public expense, attempted and failed to defend the water boards’ actions to raise the price of polluted Virgin River water used for local irrigation by 500 % in the civil suit (A-18-774539-B) against the Water Board by Paradise Canyon (DBA as the Wolf Creek Golf Course) seeking to halt the Boards pricing practices.

Bo Bingham by Andrew Davey

Bingham avoided going directly to the rate-paying issue opting to argue a series of motions claiming that the owners of Paradise Canyon violated various provisions in irrigation water contracts. He lost all those arguments. (see Table 2)

More recently, on October 25, 2021, Bingham claimed that Plaintiff’s appraiser’s conclusion that two markets existed for Virgin River irrigation water was inconsistent with real estate appraisal standards.

According to the real estate appraiser hired by the owners of Paradise Canyon, two rates exist for leasing Virgin River irrigation water. The Southern Nevada Water Authority (SNWA) pays $1,115 for Virgin River water considered for conversion to domestic use in the Las Vegas area. However, irrigators paid $300 for shares needed to irrigate in the Mesquite-Bunkerville area.

Table 1 reflects a historical rate charged by the VVWB for local irrigation water compared to prices paid by the SNWA.

Annual Irrigation Rate analysis
Lessee First right of refusal holder Number of shares Rent amount per share
SNWA No 14 $1,512.50
SNWA N/A 8 $1,203.00
Bunker Farm Inc Yes 37 $250.00
Conestoga Golf Course (Pulte) Yes 150 $250.00
Mesquite Gaming Yes 80 $250.00
Paradise Canyon LLC (Wolf Creek) Yes 155 $250.00

Table 1 Water District annual share rate

Bingham contends that only a current SNWA rate currently set at $1,115 rate counts, and a two-rate conclusion should not go to a jury to evaluate. Once again, Bingham lost. On January 03, 2022, Las Vegas District Court Judge Timothy Williams denied the motion to exclude the appraiser. Judge Williams said the Court would permit Paradise Canyon attorneys to directly examine him at trial and lay the foundation for Anderson’s expert opinions and evaluations.

Bingham has one marginal victory. On October 14, Bingham told Judge Williams that because former water board member Karl Olaf Gustaveson had Alzheimer’s disease when he died on February 29, 2020, his deposition taken by the plaintiffs’ attorney Jeffery Sylvester was void.

Sylvester pointed out that never in five previous motions had they relied on Gustaveson’s testimony. “Nor, Sylvester reminded the Judge, had you relied on Gustaveson’s testimony in your rulings.” So on December 02, 2021, Judge Williams granted Bingham’s request to exclude the deposition.

Following Bingham’s costly failures (Table 2), the VVWB decided to give public funds to Hutchison to pull Bingham’s chestnuts out of the fire.

Mark Hutchison

On Monday, September 13, Bingham introduced Hutchison to Judge Williams to plead for a redo of various Bingham motions that the Judge overturned.

However, on December 6, 2021, Judge Williams denied Hutchison’s redo request on the effluent (wastewater) and sub-lease issues. (see Table 2)

On August 23, 2021, Judge Williams said that the rule of perpetuities does not apply to the contract under consideration in this case. Therefore, Judge Williams granted Plaintiff a perpetual right of renewal.

Nonetheless, Judge Williams agreed to rehear the perpetuity arguments. And he set 9:30 a.m March 9, 2022, as the hearing time and date.

Previously Sylvester, told the Court that Bingham drafted the contract with the perpetuity provision. “Did Bingham draft a [perpetuity] provision that he knew was unenforceable?” That is counterintuitive?” Sylvester said.

During the perpetuity hearing, Sylvester alleged that Bingham lied 150 times to the Judge while simultaneously and improperly adding 25 new cases, new arguments, and different legal theories during his lengthy oral motion presentations.  The Paradise Canyon attorney suggested that when attorneys present demonstrably false information, a Judge is no longer bound to accept the veracity of those statements.

Three months after being introduced to Judge Williams on December 21, 2021, Hutchison asked the Nevada Supreme Court to prohibit Judge Williams under the Public Trust Doctrine from requesting a jury to review irrigation water lease rates set by the Virgin Valley Water Board.

In his petition to the Supreme Court, Hutchison claimed that Nevada’s Public Trust Doctrine gave the Water Board the necessary authority to set rates. And he claims they do so in compliance with the covenant of good faith and fair dealing provision, which the Plaintiffs argue the water board has violated in their rate-setting processes.

Essentially, Hutchison says that the water board has the authority to do what it wants when it wants and how it wants when setting rates. And he wants the full Nevada Supreme court to tell Judge Williams that neither he nor a jury has the power to contest those decisions.

And by preparing the writ, Hutchison is telling Judge Williams that he was wrong on August 29, 2018, Judge Williams to tell Bingham that the Water Board, as a political subdivision of the State of Nevada, had to act both in good faith and without being arbitrary and capricious. He said they do not have a right to do whatever they want in denying Bingham’s motion not to interfere in the board’s rate-setting activities.

The Supreme Court
The VVWB gave Bingham and his law firm an undisclosed amount of public funds to drag this case out for three years and eight months without resolution. But instead of questioning Bingham’s legal prowess, the VVWB wants Hutchison to challenge Judge William’s rulings before the entire Supreme Court.

In an overwhelming majority of the cases, the Supreme Court hears matters after adjudication through lower courts and higher court appeals.

Generally, Supreme Court justices feel that they are a court of final review, not first review. Further, the hearings and assessments provide a host of briefing material and lower-court rulings that contribute to a substantive base to resolve appealed legal issues.

But the Supreme Court is not prohibited by law from sidestepping the process and reviewing legal issues but only in rare cases and when requiring extraordinary remedies.

According to Harmon (2021), [i] To obtain issuance of a writ of mandamus or any other extraordinary writ, like a writ of prohibiting a district court judge from taking some action, a party must be able to demonstrate the following:

  1. First, the petitioner must show that the district court manifestly abused its discretion or acted arbitrarily or capriciously.  Merely contending that the district court committed an error is not sufficient.  An appeal is more than an adequate remedy for most committed errors in a   Instead, writ relief is only appropriate when the lower Court:
    1. acts contrary to the law;
    2. misapplies the law;
    3. takes a manifestly unreasonable action; or
    4. exercises partiality, prejudice, bias, or ill will.
  2. Second, the petitioner must show that no other plain, speedy, or adequate legal remedy is available to correct the alleged error.  Essentially, a party must be able to demonstrate that some impending, irreparable harm will occur if the Supreme Court does not remedy the district court’s error before entry of final judgment.  It is not sufficient merely to claim that extraordinary writ relief would be easier or more expeditious than awaiting the right to appeal.

In sum, a petitioner must show that the district court manifestly abused its discretion by taking action or making a decision “in the absence of an established factual and legal basis to do so.

Supreme Courts are reluctant to grant extraordinary relief. They instead prefer to decide cases on as complete a record as possible, concerns about protecting its docket, and proper respect for the lower courts.

It is hard to understand anything more degrading to a competent District Judge than challenging him before the Supreme Court. And to do so in an extraordinary and unprecedented way compounds the humiliation.

The decision to file such a writ and challenge the Judge shows how desperate the water board is to keep their rate-setting behavior out of a public jury’s review.

A-18-774539-B Paradise Canyon LLC (Plaintiff(s) vs. Virgin Valley Water District (Defendants(s)
Jedidiah (Bo) Bingham Judge Timothy Williams
Dismiss case (Water Board has absolute authority to set rates) This is a case for the jury to decide, the Judge said
Must involve City in this suit Judge Williams reminded Mesquigen City Attorney Robert Sweetin that had the Plaintiff (Paradise Canyon) wanted the City involved, they would have included them.  
Must prove the beneficial use “It is not a breach of the lease by failing to establish beneficial use or refusing to amend the Lease to divest itself of all or portions of leased irrigations shares.”
Must use effluent  The Lease did require the Golf Course owners to use available effluent water. However, the Judge noted that the “conduct” of Water Board officials ” has resulted in a waiver of such condition. Therefore, the failure to use available recycled or effluent water was an immaterial provision under the lease.”
Must not sublease The Lease does address and prohibits the sub-leasing of Irrigation Shares. However, the Judge pointed to “uncontroverted evidence” that the Virgin Valley Water District (VVWD) had noticed, was aware of, and accepted the water use arrangements in 2011, 2012, and 2014. Judge Williams noted that the VVWD inaction resulted in a waiver even if the sub-lease applied.
Have complied with Covenant and Good Faith by holding meetings Must comply with Nevada’s Covenant and Good Faith law. Issue for the jury to decide
Perpetuity does not apply Judge Williams granted Plaintiff a perpetual right of renewal.
Dismiss Paradise Canyon appraiser The Judge denied Bingham’s motion to exclude the appraiser. Judge Williams said the Court would permit Paradise Canyon attorneys to directly examine him at trial and lay the foundation for Anderson’s expert opinions and evaluations.
Exclude deposition testimony of Karl Gustaveson Granted December 02, 2021
Perpetuity redo Set for 9:30 a.m. March 9, 2022
Effluent redo Denied December 6, 2021
sub-lease redo Denied December 6, 2021
Absolute authority to set rate to Supreme Court Set for 9 a.m. February 16, 2022

Table 2 Paradise vs. VVWB case summaries

Endnote:

[i] Sarah E. Harmon, 2021 The Nevada Supreme Court is Searching for the Extraoprdinary” at https://baileykennedy.com/the-nevada-supreme-court-is-searching-for-the-extraordinary/

 





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About Author

Michael McGreer Mesquite, Nevada
Dr. Michael Manford McGreer is managing editor of Nevada-today.com and writes on issues that impact public policy.

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