East Side Water discusses board legitimacy

East Side Water System, Inc., heard from its legal advisor at its board meeting Wednesday concerning its course of action following a recent Third Circuit Court of Appeal decision.
Jacob Fusilier explained to the board the appellate court’s decision that struck down the change in the quorum needed for a valid election. “The Court said it should never have been moved from a majority down to 10 percent,” he explained.
The basis for this, according to Fusilier, is that the Articles of Incorporation and the corporate bylaws should never conflict. “The charter always outranks the bylaws,” he said. “Years ago the board voted to change the bylaws to say it could be 10 percent, but they never voted to change the charter.”
Fusilier also explained to the board that the appellate court ordered a new round of elections with a quorum of 50 percent. “If you can’t get it the first time, you have to have another set of elections,” he explained, “and then whatever membership shows up will constitute a quorum there. Then that will be the new board.”
According to Fusilier, the problem now is whether or not the last two elections were valid. The last two elections in question were when the new board members were elected. As counsel stated, “No judge has actually said that the new board is invalid and that the old board should come back.”
Upon advice of counsel, the board voted to file a Declaratory Judgment in district court. This will trigger Judge Gary Ortego holding a hearing on the matter. As Fusilier stated, “the trial court will then send it up to the Third Circuit.”
The end result of the Declaratory Judgment will be a court saying whether or not the current board is valid or if the board should be comprised of the board members who sat on the board prior to the last two elections.
In other action, the board:
• voted not to seek a Writ of Certiorari with the State Supreme Court to appeal the Third Circuit’s decision.
• voted not to appeal to a the full Court of Appeal for a rehearing.
• voted to keep Jacob Fusilier as its board attorney.
• and voted to place the proposal to change the voting quorum from 50 percent to 10 percent on the April election.