A federal court has denied the San Jacinto River Authority’s motion to dismiss an antitrust lawsuit filed against the regulatory agency.
The U.S. District Court for the Southern District of Texas Houston Division ruled the lawsuit brought by private water utility companies Quadvest and Woodland Oaks Utility will be allowed to continue.
In the lawsuit, plaintiffs allege the SJRA has conspired to establish a monopoly on water supply in Montgomery County by purchasing all available surface water resources in the region as well as lobbying the Texas Legislature to create the Lone Star Groundwater Conservation District to regulate all available groundwater resources.
The SJRA claimed the lawsuit “frivolous” and filed a motion to dismiss it. The motion to dismiss claimed that the lawsuit was brought too late, that the SJRA was immune from the lawsuit due to the creation by the state and that its action did not violate the Sherman Antitrust Act.
“We asked the court to throw out Quadvest’s lawsuit without giving it a hearing. It’s something courts are generally reluctant to do, even with cases as frivolous as this one,” SJRA General Manager Jace Houston said. “The claim is clearly without merit and will eventually be dismissed.”
Following the ruling, Quadvest released a news release Aug. 20 claiming the ruling was one of the most impactful losses to the SJRA.
"U.S. District Judge Vanessa D. Gilmore's ruling destroyed SJRA's defenses, making it clear that SJRA must stand to account for its apparent violations of federal antitrust laws," the release stated.
SJRA admitted its actions are anti-competitive but argued the state of Texas authorized its actions, according to Quadvest. Gilmore ruled SJRA cannot provide any proof the Texas legislature authorized SJRA to violate federal antitrust laws.
"After years of appeals and delays, SJRA is getting closer and closer to facing trial for their actions in the Montgomery County water fiasco," the Quadvest news release concluded.