THREE former members of the board of directors of Metropolitan Cebu Water District (MCWD) -- who were dismissed by then mayor Edgardo Labella, with the dismissal upheld by the Cebu Regional Trial Court -- have gone to the Supreme Court. Last Thursday, August 31, 2023, they filed a 78-page "petition for review on certiorari" of the lower court's ruling.
Last June 30, RTC Judge Anacleto G. Debalucos dismissed "for lack of merit" the civil complaint filed in 2019 against the late mayor Labella, LWUA acting chief Jeci Lapus and four interim board members. Complainants and MCWD board members Augustus G. Pe Jr., Ralph J. Sevilla and Cecilia J. Adlawan filed a motion for reconsideration, which the RTC denied on August 6. Pe and the two others -- through their lawyers Amando Virgil Ligutan, Sunshine Enriquez and Bea Veronica Lee of the SALiGAL Law Offices -- thus decided to appeal the RTC ruling to the SC.
Labella's removal of three directors appointed by the mayor's predecessor had set off a lot of storm until the RTC ruling last June. Then it was followed, on August 17, by the formal dismissal of chairman Jose Daluz III and directors Miguelito Pato and Jodelyn May Seno, after fumbling in two early attempts, raising once more the issue of power of LGUs over local water districts.
PUBLIC INTEREST. There is surely public interest in the legal turmoil at the MCWD board. MCWD service area includes four cities (Cebu, Lapu-Lapu, Mandaue and Talisay) and four towns (Compostela, Consolacion, Cordova, and Liloan). Water consumers in Metro Cebu and their local governments want to know how the water district is managed.
Other local water districts in the country (531, according to a 2021 count), similarly uncertain as to how the Local Water Districts Law interpreted, would like to be guided by a high court ruling. The petitioners said the SC ruling in the MCWD case "will affect hundreds of local water districts and their relation" with their respective LGUs.
MAIN QUESTION the Cebu RTC tackled and petitioners want the SC to resolve is summed up in petition's lead line: Can the mayor of Cebu City terminate the board of directors of Metropolitan Cebu Water District?
To people watching on the side, that may cover two sub-questions: (a) What kind of "autonomy or independence" does MCWD enjoy under the law? (b) Does removal of a director constitute "control" over MCWD, which is prohibited by the law?
[Related: Explainer, July 15, 2023 -- "Where Jun Pe, 2 other MCWD ex-directors got it right and got it wrong"]
RTC SAID YES; PETITIONERS SAY NO. Judge Debalucos said the mayor has both the power to appoint and the power to dismiss MCWD directors because "absent any contrary provisions of law, the power to appoint carries with it the power to remove." And the power to remove or discipline does not belong to the MCWD board because there's no provision in Presidential Decree 198, the Local Water Utilities Act, that gives such power. Besides, he said, that power in the board's hands "may dangerously result is mutual protection among the BOD members themselves."
Pe and co-petitioners anchor their plea on what they say is the explicit provision and intent regarding the power of LGUs over a local water district: PD 198, in section 7, provides that the LGU loses its ownership, control and supervision over a local water district after the LWD is formed. And removing a director is "an exercise of control" over MCWD.
The "doctrine of implication" was cited by the RTC judge because he saw no contrary provisions. His ruling said a contrary provision does not exist. In contrast, Pe and co-petitioners say there is, pointing to Section 7 of PD 198, on the prohibition to remove imposed on the mayor, and Section 17 of the same law, on the right of the board to remove.
The judge must think there's no law expressly giving the power to remove an MCWD director to anyone else and the mayor is IMPLIEDLY GIVEN that power. On the other hand, the petitioners think the power to remove a director is given to the board and the mayor is EXPRESSLY PROHIBITED from exercising that power. To news watchers, it is something like, the MCWD board has the power but whoever is given that power, it is not the mayor.
Pe et al say the law is expressed on the prohibition of LGU "control." In contrast, the judge must believe that removal of a director is not "an exercise of control."
The petitioners warn in their petition that the judge "dangerously ventured into the province of judicial legislation." The judge warned in his decision, as cited here earlier, the power in the board's hands "may dangerously result in mutual protection among the board members themselves."
WHAT KIND OF AUTONOMY IS IT under the law on local water utilities? To Pe and co-petitioners, under Section 8 of the law (PD #198), it is "unequivocal" that after a local water district is formed, it will no longer fall under the local unit's jurisdiction. PD #768, they argue, merely transferred the policy statement -- against LGU's control over a water district -- from one section (6) to another section (7). The Local Government Code, they also contend, didn't amend PD #198 as it "didn't expressly provide that mayors can terminate directors of local water districts."
To support their stand, the petitioners cite the "ruling" of the LWUA administrator, a co-defendant in the RTC case, that then mayor Labella "was not authorized to terminate" Pe and his co-directors. They also lean on DILG opinion that "participation of the mayors, if any, is limited to the act of appointing the board of directors only; they cannot terminate the directors after."
In contrast, RTC Judge Debalucos in his ruling said "disciplining" by the mayor doesn't affect the law's intent of autonomy. The provision, he said, merely aims "to prevent the LGU from meddling in purely internal affairs, management or operation of the district." Otherwise, the judge said, the mayor "wouldn't have been given the right to appoint directors, or the law would've expressly provided that the power to discipline a BOD member is vested in particular office or agency."
Wouldn't have or couldn't have: The law wasn't clear, it had gaps, so the judge filled in under his task of interpreting the law.
MATTER OF DUE PROCESS. Once the question of the mayor's power to fire a director is resolved, there's still the collateral issue of whether dismissal of the three directors was legal since they were not given due process by the then mayor.
The RTC ruling noted that mayor Labella didn't give Pe and his co-petitioners due process of law: they were "not notified and given the opportunity to explain their side," according to LWUA's own finding. But the court said the deficiency was corrected when LWUA gave the petitioners the chance to explain.
It would be interesting to see if the SC would allow absence of due process on the level of a disciplining authority. But if the mayor had no power to terminate Pe and his colleagues, can it be said the disciplining was exercised by LWUA, which in effect corrected such alleged flaws as lack of authority of the mayor and absence of due process?
'DAGGER' ON ARGUMENT. Petitioners allege the LWUA director, a co-defendant in the RTC case, wrote in an opinion that "the power of the mayor to appoint" under the law "does not carry with it the power to terminate" the BOD members.
And petitioners said, almost gleefully, "In a rather remarkable manner, during trial, respondents' witnesses themselves wielded and thrust the proverbial dagger to the heart of their argument" that the termination was legal.
Let's see if the SC would view similarly the LWUA chief's and other witnesses' testimony: that they killed their own defense.