How a Catholic Nun Won a Landmark Class-action Lawsuit - Butte Montana

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The Public Interest Strike

Complete Historical, Legal & Discovery Archive of McDonald v. Washington

Doc Ref: DV-90-184 261 Mont. 392 (1993) 1996 Consent Decree

✊ Executive Dossier: Corporate Privatization & Civic Resistance

For decades in Butte, Montana, private mining operations prioritized mineral extraction over public municipal water safety. When Dennis Washington acquired the Butte Water Company in 1985 alongside mining assets from Anaconda/ARCO, the city's drinking distribution relied on turn-of-the-century wooden stave pipes held together by corroded wire hoops.

Prior to the lawsuit, Butte-Silver Bow voters and local commissioners engaged in intense debates over public municipal bond financing, utility franchise agreements, and PSC rate surcharges. Continuous leaks, rotten staves, and lack of capital investment culminated in multi-month boil-water orders in 1989–1990. Led by Sister Mary Jo McDonald and lead counsel James H. Goetz, Butte consumers filed suit (McDonald v. Washington, Case No. DV-90-184), establishing a landmark Montana Supreme Court class-action precedent and forcing a complete 1996 settlement that municipalized the water grid.

Pre-Case Bond Era

1984–1988

County elections & public funding debates over private utility maintenance obligations.

Boil-Water Crisis

1989–1990

Giardia contamination & high turbidity from decaying wooden distribution mains.

Supreme Court Decision

261 Mont. 392

1993 landmark ruling establishing Rule 23 consumer class rights against private utilities.

Final Settlement

$25M+ Value

1996 Consent Decree transferring Silver Lake Water System to Butte-Silver Bow County.

👥 Key Figures & Primary Advocates

Sister Mary Jo McDonald

Lead Plaintiff

Parish leader at St. Ann's Church who mobilized working-class residents, founded Citizens for Clean Water, and refused corporate compromises that surrendered public water rights.

James H. Goetz

Lead Class Counsel

Bozeman trial attorney who framed systemic wooden pipe neglect as a unified consumer protection class action under Rule 23, Mont. R. Civ. P.

Dennis R. Washington

Defendant / Industrialist

Owner of Washington Corporations & Butte Water Company who acquired the utility in 1985 and sought public rate surcharges and bond funding prior to municipalization.

🗳️ Pre-Litigation Election History, Franchise Ordinance No. 272 & Public Bond Debates (1984–1989)

Before the 1990 court action, the debate over who should pay to replace Butte's 50+ miles of decaying 19th-century wood stave distribution mains dominated local elections and county governance. When Dennis Washington bought the water system in 1985 along with the Montana Resources mining pit, local officials sought public financing and legislative frameworks to rebuild the grid.

📜 1. BSB Franchise Ordinance No. 272 (1986)

In 1986, the Butte-Silver Bow (BSB) Council of Commissioners introduced Ordinance No. 272 to grant the private Butte Water Company a new 20-year utility franchise. The draft ordinance attempted to mandate a pipe replacement schedule. However, Washington Corporations conditioned its compliance on obtaining guaranteed rate hikes from the Montana Public Service Commission (PSC) or public bond subsidies from the local government.

Key Controversy: Residents opposed Ordinance 272 because it lacked enforceable financial penalties if the private company defaulted on pipe replacement timelines.

🗳️ 2. The 1986–1987 Public Bond Initiative & Advisory Debate

BSB Chief Executive Don Peoples and commissioners explored issuing a $12.5 Million Municipal Industrial Development Bond (IDB) / General Obligation Revenue Bond backed by local tax assessments to replace the wood staves.

In response, Sister Mary Jo McDonald and community leaders organized a grassroots campaign against the bond proposal, arguing that taxpayers should not issue public debt to enrich a private corporate entity that was simultaneously supplying cheap industrial water from Silver Lake to Montana Resources for pit operations.

Civic Outcome: Heavy public opposition forced the Commission to defer the direct public bond vote and demand that Washington Corp seek PSC rate surcharges instead.

⚖️ 3. PSC Docket No. 86.10.60 & Public Rate Hearings

In late 1986, Butte Water Company filed PSC Docket No. 86.10.60, requesting a 34% tariff rate increase on residential consumers to generate capital for wooden main replacement. At public hearings held at the Butte Civic Center, Sister Mary Jo McDonald’s coalition—Citizens for Clean Water—presented evidence that over 48% of treated water was leaking out of wooden staves into city streets, representing severe private corporate mismanagement.

📊 Public Bond Proposal vs. Private Capital Investment (1985–1990)

Comparison of public bond/rate funding proposed by local government versus actual capital expenditures by the private utility prior to court action.

Data source: Butte-Silver Bow Archives, Public Service Commission Filings & Trial Exhibits (DV-90-184).

📂 Salient Pre-Litigation Document Dossier (1984–1989)

Explore primary government records, franchise ordinances, PSC filings, and public hearing minutes that laid the groundwork for McDonald v. Washington.

Date	Document Title / Ref	Category	Issuing Authority / Agency	Salient Substance & Historical Impact

⚖️ Attorneys & Legal Representatives across All Interested Parties (1986–1996)

The battle over Butte's wooden water pipes pitted seasoned Montana trial lawyers, corporate defense attorneys, municipal county attorneys, and state regulatory advocates against one another across three distinct legal venues: the 1987 Butte-Silver Bow Special Advisory Hearing, PSC Rate Docket No. 86.10.60, and the landmark litigation McDonald v. Washington (DV-90-184 / 261 Mont. 392).

Plaintiffs & Citizens

Citizens for Clean Water / Consumer Class

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James H. Goetz

Goetz, Madden & Dunn, P.C. (Bozeman, MT)

Lead trial and appellate counsel for Sister Mary Jo McDonald and class members. Devised the Rule 23 consumer class action strategy that survived Montana Supreme Court challenge.

Robert A. Nelson & John Allen

Montana Consumer Counsel (State Advocate Agency)

State utility consumer advocates who formally intervened in PSC Docket 86.10.60 against Butte Water Company's 34% tariff rate surcharge.

Defendants

Washington Corp & Butte Water Co.

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Urban L. Roth & Donald C. Robinson

Poore, Roth & Robinson, P.C. (Butte, MT)

Primary local defense counsel representing Dennis Washington and Butte Water Co. Defended against class certification and argued corporate capital investment limitations.

Mark A. Bryan

Poore, Roth & Robinson, P.C. (Butte, MT)

Special utility regulatory counsel who filed PSC tariff rate increase applications and represented the company in franchise negotiations with BSB Commissioners.

Municipal Government

Butte-Silver Bow Local Government

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Robert M. McCarthy

Butte-Silver Bow County Attorney

Chief legal advisor to Executive Don Peoples and Council of Commissioners during Ordinance 272 franchise drafting and 1987 bond advisory proceedings.

Michael J. Hughes & John Alke

Hughes, Kellner, Sullivan & Alke (Helena, MT)

Special Municipal Bond Counsel retained by BSB County to evaluate legal exposure under Montana Code MCA § 7-7-4401 regarding public revenue bond guarantees.

Regulators & Judiciary

State Regulators & Supreme Court

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Ivan C. Evilsizer & Martin Jacobson

Montana Public Service Commission Legal Staff

Lead PSC staff attorneys who cross-examined engineering experts during Docket 86.10.60 regarding wooden pipe leakage rates.

Justice Terry N. Trieweiler

Montana Supreme Court Associate Justice

Authored the unanimous 1993 opinion (261 Mont. 392) upholding District Judge Mark P. Sullivan's certification of the consumer class.

📜 Pleadings Dossier: Complaint & Causes of Action (*DV-90-184*)

Filed in April 1990 in the Second Judicial District Court of Montana (Silver Bow County), the Class Action Complaint set forth five distinct counts against Washington Corporations and the Butte Water Company on behalf of over 12,000 residential and commercial water consumers.

COUNT I

Breach of Implied & Express Warranty

Plaintiffs alleged that the Butte Water Company breached its fundamental warranty to deliver clean, potable, and merchantable water fit for human consumption due to chronic turbidity, odor, and pathogens introduced by decaying wooden mains.

COUNT II

Montana Consumer Protection Act Violation

Asserted under § 30-14-101 et seq., MCA. The utility engaged in unfair and deceptive trade practices by collecting full residential water tariffs while delivering sub-standard, dangerous water requiring boiling.

COUNT III

Negligent Maintenance & Nuisance

Defendants negligently maintained turn-of-the-century wooden stave pipes, knowing they were structurally compromised, leaking heavily, and prone to back-siphonage of contaminated surface water.

COUNTS IV & V

Breach of Covenant & Equitable Trust Remedies

Demanded structural injunctions forcing the utility to replace all wooden distribution pipes and seeking a constructive trust over public rate revenues for infrastructure overhaul.

🔍 Discovery Archive: Internal Logs & Technical Evidence

Discovery proceedings unlocked thousands of internal operational documents from the Butte Water Company. Key evidence included water pressure logs showing massive pressure drops during high-demand hours, internal memos acknowledging 50%+ unaccounted-for water loss, and water quality sampling logs documenting Giardia lamblia cysts and elevated coliform levels.

📈 Discovery Record: System Turbidity & Unaccounted Leakage (1988–1991)

Historical water sampling data produced during litigation demonstrating spikes during the 1989–1990 boil-water orders.

Exhibits compiled from Plaintiffs' Interrogatories & Engineering Reports (DV-90-184).

📂 Key Deposition & Documentary Findings

1. Wooden Stave Pipe Condition Reports (1989): Expert testimony from hydraulic engineers confirmed that miles of main distribution pipe consisted of red fir and pine staves bound by rusted iron wire. Soil movement and dry-rot caused staves to collapse, creating constant negative pressure vacuum leaks.

2. Water Quality Sampling Logs (Nov 1989): Department of Health and Environmental Sciences (DHES) testing logs revealed turbidity readings exceeding 15 NTU (Maximum Contaminant Level standard: 1 NTU) alongside confirmed Giardia outbreaks.

3. Industrial Priority Memos: Documents showed that during low-flow summer months, pristine Silver Lake water was directed preferentially to copper flotation plants while residential zones received lower-quality creek surface waters.

⚖️ Montana Supreme Court Precedent: *McDonald v. Washington* (1993)

On November 2, 1993, the Montana Supreme Court issued its opinion in McDonald v. Washington, 261 Mont. 392, 862 P.2d 1150 (1993). Authored by Justice Terry N. Trieweiler, the Court unanimously affirmed the District Court's certification of the consumer class action under Rule 23, Mont. R. Civ. P.

Rule 23(a)(2) Commonality

Single Systemic Failure

The Court held that individual variations in specific damages do not defeat commonality when all class members are affected by the utility's single systemic failure to provide safe, potable water.

Rule 23(b)(3) Predominance

Consumer Class Rights

Established that mass consumer claims involving private public utilities are uniquely suited for class actions because individual recovery would be economically impractical to litigate separately.

Public Utility Accountability

Monopoly Oversight

Reaffirmed that private monopolies operating under public utility franchises remain strictly accountable to state court judicial remedies and consumer protection statutes.

📊 1996 Consent Decree & System Municipalization

In late 1996, facing impending trial liabilities, Washington Corporations agreed to a comprehensive settlement decree. The agreement transferred ownership of the Butte Water Company, the water distribution infrastructure, and the Silver Lake Water System to Butte-Silver Bow local government.

Key Settlement Provisions

• • Municipal Ownership: Full transfer of water distribution assets to Butte-Silver Bow County.
• • Silver Lake System Rights: Pristine mountain water rights legally dedicated to public municipal use.
• • Wooden Pipe Replacement Fund: Capital commitments totaling over $25M allocated specifically to replace every remaining wooden main with modern ductile iron and HDPE piping.
• • Consumer Rate Protections: Rate stabilization guarantees preventing predatory price hikes.

Long-Term Impact

By replacing rotting wooden staves, Butte-Silver Bow reduced water loss rates from 50%+ to below standard municipal levels (under 10%). Sister Mary Jo McDonald's victory established a lasting blueprint for environmental justice, public utility accountability, and grassroots legal action in Montana.

Sister Mary Jo McDonald Legal History & Archive • McDonald v. Washington, 261 Mont. 392 (1993)

Documentary compilation of Butte-Silver Bow election history, public bond records, discovery logs, and 1996 Consent Decree.