Appeals court sides with Powell-Clinch utility commissioners

Information from WYSH Radio

The commissioners of the Powell-Clinch Utility District scored a legal victory last week in their dispute with the state’s Utility Management Review Board when an appeals court overturned a lower court’s ruling that they could be held liable for, and removed from office, for acts that allegedly occurred before a change in state law in 2009.

The issue before the appeals court was to determine if the three commissioners—Charles Oldham, Jerry Shattuck, and Charles Taylor—could be removed from office based on a change in state law that went into effect in June of 2009 which added an amendment that “failing to fulfill the commissioner or commissioners’ fiduciary responsibility in the operation or oversight of the district” would be considered as one of the possible grounds for the removal of utility even if the alleged acts occurred before the amendment went into effect.

As we have previously reported, in October 2010, the state Comptroller gave the Utility Management Review Board the results of an investigative audit into the utility’s operation. In turn, the Review Board began proceedings the following year to oust the three commissioners from office, citing 28 separate counts of what they called failure to oversee the district’s operations. Some of those allegations included failing to adequately supervise former district manager Del Roberts, which the board said resulted in the misappropriation of approximately $100,000 from the district and a failing to reconcile bank accounts and customer accounts on a timely basis.

The three PCUD commissioners challenged the Board’s efforts to oust them, denying any allegation of wrongdoing. The case has wound its way through the court system, ending up in Davidson County Chancery Court, which sided with the Review Board in its attempted application of the 2009 amendment.

An appeal was heard in March and this past Friday, the Appeals Court overturned that decision, opining that applying the “portion of the 2009 amendments to [state law] permitting the removal of utility district commissioners for failing to fulfill their fiduciary responsibility in the operation…of the district, absent the elements of [knowledge] or willfulness, is an impermissible retrospective application of law.” The Appeals threw out the judgment against the PCUD board members and remanded the case back to the lower court.

View the entire ruling by visiting http://www.tncourts.gov/courts/court-appeals/opinions/2013/05/24/commissioners-powell-clinch-utility-district-v-utility?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+tncourts%2Fopinions+%28Tennessee+appellate+court+opinions%29.

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