815 S.E.2d 21
S.C. Ct. App.2018Background
- Laurens Commission of Public Works (LCPW) and City of Fountain Inn both provide municipal natural gas service and met in 1992 to propose a boundary (the "Map") dividing service areas; the Map was never formally ratified.
- For roughly two decades both municipalities generally observed that boundary while occasionally serving across it with mutual permission.
- In 2011 LCPW sought to serve ZF Transmissions in Owings Industrial Park, located inside LCPW's portion of the Map; Fountain Inn also bid. LCPW ultimately contracted with ZF.
- LCPW sued for declaratory relief under S.C. Code § 5-7-60, seeking a declaration that Fountain Inn cannot provide gas service within LCPW’s designated service area without LCPW’s consent; it also sought injunctive relief (temporary injunction denied).
- At bench trial the court found LCPW had provided service in the contested area for over two decades and had the infrastructure and budgetary certifications to constitute a "designated service area" under § 5-7-60; Fountain Inn appealed.
Issues
| Issue | Plaintiff's Argument (LCPW) | Defendant's Argument (Fountain Inn) | Held |
|---|---|---|---|
| Whether LCPW has a § 5-7-60 "designated service area" preventing Fountain Inn from serving customers there without permission | LCPW argued long‑term provision of service and budgeted/certified plans establish a designated service area | Fountain Inn argued municipalities are limited outside corporate limits and LCPW did not establish a designated service area (or that the Map was not binding) | Court held LCPW established a designated service area because it had been providing service and had infrastructure and budgetary certification; Fountain Inn cannot serve there without permission |
| Proper standard of review | Legal standard: statutory interpretation (de novo) | Argued equitable standard for injunction/defer to trial judge credibility findings | Court applied statutory‑interpretation standard (action at law) because resolution turns on § 5-7-60 construction |
| Whether the Map itself created a binding boundary/contract | LCPW relied on long practice rather than sole reliance on the Map | Fountain Inn contended the Map was not a binding contract and could not bind future councils/customers | Court resolved case on long‑term practice and provision of service, not on enforceability of the Map, so it did not decide Map as binding contract |
Key Cases Cited
- City of Newberry v. Pub. Serv. Comm'n of S.C., 287 S.C. 404 (S.C. 1986) (discusses § 5-7-60 authority and limits on municipal functions outside corporate limits)
- Mathis v. Hair, 358 S.C. 48 (Ct. App. 2003) (explains § 5-7-60 defines designated service area as area where service is being provided)
- Spartanburg Sanitary Sewer Dist. v. City of Spartanburg, 283 S.C. 67 (S.C. 1984) (designated service area found where sewer infrastructure was constructed and serving users)
- Grier v. AMISUB of S.C., Inc., 397 S.C. 532 (S.C. 2011) (statutory plain‑language rule; courts must follow unambiguous statutory text)
- Duke Energy Corp. v. S.C. Dep't of Revenue, 415 S.C. 351 (S.C. 2016) (confirms questions of statutory interpretation are questions of law reviewed de novo)
- Williams v. Town of Hilton Head Island, 311 S.C. 417 (S.C. 1993) (discusses home rule authority of municipalities under Article VIII)