Sen. Hagan drops backing for judge
GREENSBORO — A state judge ruled in favor of a company that includes U.S. Sen. Kay Hagan’s husband a week after she recommended that judge for a possible lifetime federal appointment.
Superior Court Judge Calvin E. Murphy signed a decision Oct. 23 favoring the owners of five small hydroelectric plants on the Deep River, one of them belonging to Hydrodyne Industries. That company lists the senator’s husband, Greensboro lawyer Charles T. “Chip” Hagan III, as a managing member.
Nine days earlier, on Oct. 14, Kay Hagan recommended Murphy of Charlotte as one of three candidates to fill a vacant seat on the U.S. District Court for Western North Carolina. President Barack Obama is likely to pick one of the candidates, who then must be confirmed by the U.S. Senate.
Sen. Hagan withdrew Murphy’s name Wednesday after the News & Record asked her to comment.
“I was not aware that Judge Murphy was hearing a case in which my husband had an interest,” she said in a statement. “I respect Judge Murphy’s record of service, and I do not believe he did anything wrong.
“However, to avoid any appearance of favoritism from my office, I am asking the White House to withdraw Judge Murphy’s name from consideration for U.S. District Court Judge for North Carolina’s western district.”
Murphy ruled against the Piedmont Triad Regional Water Authority in a lawsuit by Hydrodyne and other small power plants along the Deep’s 80-mile course from Guilford to Chatham County. The suit involves a possible payment of unspecified millions of dollars to the power plants’ operators.
The lawsuit seeks money to make up for the downstream power plants’ lost earnings. Owners claim the authority deprived their water-powered turbines as it filled Randleman Reservoir. They also contend the authority is continuing to hold back water needed by the plants and eventually will do more harm by withdrawing millions of gallons of drinking water a day to distribute regionally.
The water authority claims it reached out to plant owners as long ago as 1991, seeking their help to define how the project would affect the plants. But the owners did not cooperate then and now raise the issue too late with little evidence of actual harm, the authority argued.
Murphy sided with the plant owners. In his ruling, he said the reservoir did harm the plants and that the owners are due compensation. A jury will have to decide how much, Murphy said in his 11-page ruling.
The water authority’s executive director, John Kime, said the agency did not get a fair shake in Murphy’s courtroom. Various judges who handled different parts of the case, Murphy included, seemed to have their eye on that federal court vacancy, Kime said.
“It was clear to me that we weren’t getting an unbiased opinion, based on politics,” he said.
Murphy’s potential conflict of interest might be another issue in an appeal of his ruling that the authority already planned, Kime said.
Murphy and Chip Hagan did not return calls Wednesday seeking comment.
It’s not clear Murphy even knew of Chip Hagan’s connection to the case, said J. Scott Hale, an attorney in Chip Hagan’s law firm who is representing the plant owners. Kay Hagan has no connection to Hydrodyne and her husband has a “minority” interest in it, Hale said.
Chip Hagan was in the courtroom just once during several hearings Murphy presided over, Hale said. He sat in the audience, not at the lawyers’ table, Hale said.
Chip Hagan is named, however, in some of the lawsuit’s paperwork as “manager and authorized representative” of Hydrodyne, which owns and operates a hydroelectric plant known as the High Falls Power Plant in Moore County.
It is not unseemly for the spouse of a U.S. senator to participate in a lawsuit that could end up costing some of her constituents dearly, Hale said. The water authority is financed by the local governments that created it — Greensboro, High Point, Jamestown, Archdale, Randleman and Randolph County.— and which will use its drinking water.
The suit is only seeking fair repayment from the authority for taking some of the water the plant owners need to make electricity, Hale said.
“This is an expense the water authority knew was part of the development and operation of the dam and reservoir, just like they have had to purchase land,” Hale said, noting its own experts told the authority at different times it would harm the plants.
Murphy’s ruling was rooted in “long-standing North Carolina law,” Hale said.
“We have been surprised by the water authority’s failure to recognize existing North Carolina law,” Hale said.
Contact Taft Wireback at 373-7100 or taft.wireback@news-record.com
Accompanying Photos
Photo Caption: The High Falls hydroelectric dam is owned by U.S. Sen. Kay Hagan’s husband and her two brothers-in-law.
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