833 S.E.2d 834
S.C.2019Background
- In 1992 Laurens (through LCPW) and Fountain Inn informally agreed to a boundary line (the "1992 Map") for providing natural gas outside their municipal limits; the boundary was never formally ratified by either city's governing body or Laurens County.
- An industrial park (Owings Industrial Park) was later developed in the unincorporated area between the two cities; ZF Transmissions solicited bids for natural gas service from both LCPW and Fountain Inn.
- LCPW sued, seeking a declaratory judgment that it had a "designated service area" under S.C. Code § 5-7-60 (based on the 1992 Map and long-standing service) and an injunction barring Fountain Inn from providing gas in that area; LCPW abandoned contract/estoppel claims at trial.
- The circuit court found LCPW had established a designated service area and enjoined Fountain Inn; the court of appeals affirmed.
- The South Carolina Supreme Court granted certiorari and reversed, holding the statute requires certification "by the governing body thereof" as to all listed means of creating a designated service area and that Laurens County never certified LCPW as the exclusive provider.
Issues
| Issue | Plaintiff's Argument (LCPW) | Defendant's Argument (Fountain Inn) | Held |
|---|---|---|---|
| Whether a municipality (or its utility) may establish a "designated service area" under § 5-7-60 without certification by the governing body of the area | The 1992 Map plus decades of exclusive service (and an informal agreement) suffice to create a designated service area; "as certified by the governing body" applies only to the "funds have been applied for" clause or refers to the municipality/LCPW | The statute requires certification by the governing body of the designated area (here, Laurens County); no county certification occurred, so no designated service area exists | The Supreme Court held the phrase "as certified by the governing body thereof" applies to all three listed circumstances; county certification was required and absent, so LCPW failed to establish a designated service area and the injunction was reversed |
Key Cases Cited
- Hodges v. Rainey, 341 S.C. 79, 533 S.E.2d 578 (2000) (plain-language statutory interpretation principle)
- Childs v. City of Columbia, 87 S.C. 566, 70 S.E.2d 296 (1911) (municipal duties and limits in serving nonresidents)
- City of Darlington v. Kilgo, 302 S.C. 40, 393 S.E.2d 376 (1990) (interpreting § 5-7-60 in contract context between city and county)
- Carolina Power & Light Co. v. Darlington Cty., 315 S.C. 5, 431 S.E.2d 580 (1993) (contracts required to avoid inclusion in county service districts)
- Spartanburg Sanitary Sewer Dist. v. City of Spartanburg, 283 S.C. 67, 321 S.E.2d 258 (1984) (dispute involving municipality and special purpose district service boundaries)
- Calcaterra v. City of Columbia, 315 S.C. 196, 432 S.E.2d 498 (Ct. App. 1993) (importance of municipal authorization/ordinance for service contracts)