Arizona Water Supplier Johnson Utilities Sues Homeowner Over Criticism

Emily Hughes of Pinal County, Arizona was unhappy with her water quality and the services of her water provider, Johnson Utilities. She complained vocally and participated in groups devoted to criticizing Johnson Utilities.

They're suing her for it.

Johnson Utilities — which has a history of suing its critics for defamation — and its owner George H. Johnson have filed a defamation lawsuit against Hughes demanding $100,000. Johnson Utilities claims among other things that Hughes must have staged a local news interview in which her tapwater ran yellow in order to defame their good services. Alternatively, they claim, the yellow water was a result of her own bad heater or pipes, not their services. They further argue that Hughes is part of some sort of conspiracy to harm Johnson Utilities because she supports a local mining project they oppose. It's . . . colorful.

But Johnson Utilities' complaint is very curious. It seems almost calculated to draw a First Amendment or anti-SLAPP attack.

First, much of the complaint is consumed with setting forth clearly protected activities:

9. Since early 2013, Defendant has repeatedly expressed extreme hostility towards Plaintiffs.

10. Defendant has repeatedly harassed Plaintiffs as a result of such hostility.

11. At some point in late 2012 or early 2013, Defendant participated in forming and/or joined a group called "Citizens Against Johnson Utilities."

12. This group,was renamed the "San Tan Valley Safe Water Advocates" in or
about August of2013. Both Citizens Against Johnson Utilities and the San Tan Valley
Safe Water Advocates are hereinafter referred to as the "Group."

13. During her involvement with the Group, Defendant has repeatedly issued disparaging statements concerning Plaintiffs.

14. Indeed, Defendant has taken every opportunity to disparage and harm Plaintiffs' interests, and has engaged in a ceaseless vendetta against Plaintiffs.

15. The Group has hosted a Facebook page which has been accessible to an undetermined number of individuals.

16. Defendant has made numerous disparaging postings on this Facebook page concerning Plaintiffs.

That's all classic protected speech under the First Amendment with no hint of how it might be defamatory. Later, Johnson Utilities does cite a few statements of fact which, if proved false, might be defamatory (for instance, the claim that Hughes somehow staged the yellow water interview). But the complaint also focuses on specific statements that are clearly protected as opinion:

"George Johnson does not run an honest business."

Plaintiff Johnson Utilities, LLC "isn't exactly forthright with us."

On June 30, 2013, Defendant falsely stated on the Group's Facebook page
14 that Plaintiff Johnson Utilities, LLC's water was "smelly yesterday."

In other words, Johnson Utilities has used its complaint to attack not just a few potentially defamatory false statements of fact, but a wide array of statements of opinion and classic protest activities.

That's not even the oddest thing.

Arizona has a fairly modest anti-SLAPP statute. An anti-SLAPP statute, as our readers know, allows a defendant in a defamation case to file an early motion forcing the plaintiff to prove that it can prevail over the defendant's First Amendment defenses. In a state with a good anti-SLAPP statute, you don't have to wait until summary judgment or trial to show that the plaintiff is trying frivolously to censor you — you can force them to support their claims at the start of the case, and get attorney fees if they fail.

I say that Arizon's anti-SLAPP statute is modest because it's much narrower than statutes in California and Texas. In those states you can file a motion when a complaint attacks any protected speech. In Arizona — as in some other states — you can only file an anti-SLAPP motion if you've been sued based on petitioning the government:

A. In any legal action that involves a party's exercise of the right of petition, the defending party may file a motion to dismiss the action under this section. . . . .

B. The court shall grant the motion unless the party against whom the motion is made shows that the moving party's exercise of the right of petition did not contain any reasonable factual support or any arguable basis in law and that the moving party's acts caused actual compensable injury to the responding party.

It would be rather easy for Johnson Utilities to avoid application of the Arizona anti-SLAPP statute by focusing only on statements not made in the course of petitioning the government. Instead, bizarrely, Johnson Utilities has decided to emphasize that Hughes was petitioning the government, portray it as sinister, and complain about it:

17. In June of 2013, Plaintiff Johnson Utilities, LLC was going to be appearing before the Arizona Corporation Commission regarding the rates to be authorized for its water and wastewater services.

18. Due to the costs associated with operating the utility (specifically including the costs associated with income tax expenses), Plaintiff Johnson Utilities, LLC intended to request permission from the Arizona Corporation Commission to increase the rates to be charged for such services to take into account those expenses.

19. Defendant had the intent to oppose any rate changes that could be beneficial to Plaintiff Johnson Utilities, LLC.

20. Plaintiff Johnson Utilities, LLC was scheduled to appear before the Arizona Corporation Commission on June 11,2013 at 12:00 P.M. to request the increase in rates.

21. Throughout the spring and summer of2013, Defendant had complained of low water pressure at her residence.

22. In a bid to derail Plaintiff Johnson Utilities, LLC's request for a rate increase, Defendant formulated a scheme to defame and disparage Plaintiff to influence the Arizona Corporation Commission to deny the request.

. . . .

115. Upon information and belief, as a contributing result of Defendant's actions, the Arizona Corporation Commission postponed Plaintiff Johnson Utilities; LLC's rate hearing and delayed the implementation of the requested rate increase.

Put another way, Johnson Utilities just conceded that the speech it is complaining about was part of a campaign to petition the government, and that part of the harm it is complaining about is government action in response to her petitioning, thus admitting that the Arizona anti-SLAPP statute applies. Perhaps there is some sort of deep legal strategy behind that. If there is, it eludes me. Hughes' attorney should consider an anti-SLAPP motion, which would allow an attack on the portions of the complaint that target opinion and protected speech and force Johnson Utilities to offer proof its conspiracy theory about Hughes.

Complaining to a government body about a utility is the classic example of what anti-SLAPP statutes are designed to protect. There's nothing closer to the heart of the statute. Johnson Utilities' requests to the government have generated controversy before. Some citizens specifically complained that Johnson Utilities sues its critics and that such a business should not be trusted. That's a fair argument. Suing consumers over criticism has a cost in credibility with the government and the public, and it should.

Meanwhile, Ms. Hughes has set up a defense fund.

Last 5 posts by Ken White

Comments

  1. Ed Clarke says

    Her complaints are without merit because any reasonable person would expect to get yellow water from a johnson.

  2. Hasdrubal says

    18. Due to the costs associated with operating the utility (specifically including the costs associated with income tax expenses), Plaintiff Johnson Utilities, LLC intended to request permission from the Arizona Corporation Commission to increase the rates to be charged for such services to take into account those expenses.

    Wow, that reads as simple managerial incompetence. "Our profits are being taxed too much so we need to increase our rates!" Time to start increasing expenses, like sponsoring the golf tournament that your execs are hanging out at, expanding the corporate box at [insert sports arena here], buy (lease!) a corporate jet, some cars and a couple nice apartments for traveling execs.

    Or, make some capital investments so, I dunno, the water you provide doesn't run yellow, smell, and have low pressure causing people to complain. Make sure to take out loans (rates are great right now) instead of self financing, those are accounting liabilities!

    It's just one line excerpted from a lawsuit, so I'm making ginormous assumptions. But corporate income taxes are generally very manageable by management and accounting.

  3. Peter H says

    Probably nothing, but if corporate income tax rates did not change in the relevant period, could there be a false pleading in the tax whining in #18?

    Also, don't corporate income taxes relate solely to the profit of the business, and therefore not be able to impact the cost of operating the business; just the amount of profit returned to shareholders?

  4. Eva says

    Thank you, thank you, Ken for writing this about my sister's situation and for calling attention to her defense fund. She has a huge amount of vocal support but hardly anyone is donating so much as a dollar.

  5. En Passant says

    Perhaps there is some sort of deep legal strategy behind that. If there is, it eludes me.

    This is too easy. First one must note where water comes from: wells.

    Wells are deep, far too deep a subject for shallow minds.

    Therefore the legal strategy.

    Q.E.D.

  6. LC Rider says

    Is it possible that the "deep legal strategy" is one where the plaintiff's lawyer saw this coming from a mile off yet his client still wanted to push forward with a stupid suit so the complaint was written in such a way as to be tossed at the very beginning under the anti-SLAPP law?

    I mean, it's probably not all that ethical, but I could see it happening at least once…

  7. En Passant says

    LC Rider Oct 30, 2013 @9:54 am:

    I mean, it's probably not all that ethicalprofessional harikiri, but I could see it happening at least once…

    FTFY.

  8. Dan says

    @Eva: Surely she can find a lawyer to take the case on contingency, if not pro bono? Ken seems to think it's a slam dunk and he tends to be right…

    Anyway, keep fighting the good fight against smelly water.

  9. Garrett says

    Wouldn't it just be easier to put up an FAQ on their website stating:

    Q: What should I do if I have yellow, smelly water?
    A: Call a professional plumber to investigate. This is probably your piping.

    Then the people complaining turn into That Crazy Person Who Blames Everybody Else For Their Problems and gets ignored, as opposed to a David and Goliath lawsuit.

  10. Irk says

    @ En Passant: Harakiri. The more honorable term is seppuku, though I'm not sure it'd apply in this case.

  11. VPJ says

    Her complaints are without merit because any reasonable person would expect to get yellow water from a johnson.

    I just spit beer all over my keyboard.

    Ed Clarke is today's winner of the internet.

  12. says

    Sounds like the complaints about water pressure have been acknowledged to be accurate. From the KPHO website story:

    Johnson Utilities released the following statement on Wednesday:

    "Johnson Utilities experienced reduced pressure on parts of its system during the peak demand times due to construction on the system and two wells that were taken out of service. We have adjusted pressures at our other water plants to make up for the loss in production.We are also connecting three existing wells directly to our storage tanks and one new well will be added to the system within the next 30 days once approved by ADEQ. We anticipate the pressure increasing as each of these construction projects are finished.

    "Johnson Utilities has received water pressure complaints in the previous weeks from several customers. We have researched and found that these customers are located close to a mountain at the highest elevation of our system. Since they are at a higher elevation than the rest of the system, their homes experienced a larger drop in pressure during our peak demand. We have recently checked the pressure at the highest elevation in this community and it has ranged from 30 to 40 psi during our peak demand. Although this is above the minimum 20 psi standard, we understand our customer's desire for us to maintain the pressure above 40 psi at all times, so they can run all of their appliances. Our current construction projects will assist in this goal when complete.

  13. Frank Rizzo says

    Johnson Utilities?

    Sewage spills too? From 2008:
    Pinal County residents Bambi Sandquist and Kristi Fisher were named in a lawsuit filed by Johnson Utilities this week in Pinal County Superior Court. They are accused in the lawsuit of posting defamatory statements about Johnson Utilities on http://www.newszap.com. The Web forum is run by Independent Newspapers of Arizona, which publishes the Queen Creek Independent newspaper.

    Their postings were in regard to recent sewage spills from a Johnson Utilities facility that health officials say pose a public health hazard. State environmental and regulatory agencies are investigating the spills.

    September 2013:

    “Sewer leaks are part of doing the business," Brown said. "I mean, every wastewater treatment company — sewer company — has sewer leaks.”

    It’s not the first time Johnson Utilities has had problems this year. Earlier in 2013, a sewer leak contaminated a decorative pond in San Tan Heights. Some residents told 3TV they’re fed up with the problems.

  14. I was Anonymous says

    @Ed Clarke

    Her complaints are without merit because any reasonable person would expect to get yellow water from a johnson.

    You, sir, have won the the internetz.

  15. Matthew Cline says

    Later, Johnson Utilities does cite a few statements of fact which, if proved false, might be defamatory (for instance, the claim that Hughes somehow staged the yellow water interview).

    How would they go about proving that? Could they get a warrant that would require her to let plumbers they'd hired investigates the pipes in her house?

  16. Jeff Brown says

    I'm rather well versed in this case since I was subpoenaed by JU (Johnson Utilities) Counsel to provide letters, emails, texts, etc.. related to the case. So I simply want to clarify that this particular legal issue that Ken writes about is the one that has George Johnson as the Plaintiff. This is NOT the one brought just in the past week or so in Federal Court where George Johnson is being sued by a former employee for Sexual Harassment, Discrimination, Wrongful Termination or Voter Intimidation. http://www.azfamily.com/news/Woman-suing-Johnson-Utilities-for-sexual-harassment-voter-intimidation-228708611.html

  17. Jeff Brown says

    Nor is this issue necessarily related to the 2004 news article that said "La Osa Ranch, however, is where Johnson is really making his reputation as a scoundrel.". That one had to do with a bunch of Big Horn Sheep that went blind or missing or something according to the news article and there was something about destruction of a Hohokam archaeology site dating back perhaps 1000 years or so. Who can remember all that's been written!? http://www.phoenixnewtimes.com/2004-01-22/news/big-bad-developer/full/

  18. Matt says

    Wait, are you suggesting that suing your customers isn't a good business model?

    Good question. What's the latest on the bus guy in IL?

  19. Ridiculous! says

    Mr. Johnson has a long history of suing other critics; the single case referenced in the story link is merely the tip of the iceberg. Johnson is a SLAPP artist, plain and simple. Besides, anyone who still reads his monthly newsletters to his customers has the genuine right to be puzzled about who deserves to be suing whom for defamation. Well past time for the guy to retire, or be retired. Whichever.

  20. Tom Price says

    Isn't THIS defamation???

    Johnson Utilities claims among other things that Hughes must have staged.

  21. Trebuchet says

    I just checked Google and this post is now result number 4 for "Johnson Utilities". The first post is quite naturally for the company's website; all the rest of the top ten are about lawsuits. One of the "news" results lists JU as "number 2 crybaby of the week!"

  22. J Jordan says

    Is there anything that can be done about this situation? I am sure that the property values in the areas serviced by Johnson Utilities are bound to take a hit.

  23. bobby b says

    I know I'm too late here, and so maybe this just disappears into the inter-aether, but . . .

    I was under the impression that a showing that the complained-of speech was of a "constitutionally protected" type goes to whether the speech may be shut down in advance, before it's even been made, but that if the speech has been published already, it's less meaningful, because . . .

    . . . if the speech truly was of a defamatory nature (and remember, being false is one of the requirements for defamation, along with acting with malice in this situation), then those constitutional protections aren't going to shield the speaker from liability.

    Even the so-called "protected types of speech" may be defamatory and damaging. The proof bar gets higher for them, but you still can't defame.

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