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Company accuses state agency of illegal relationship with foundation

Company accuses state agency of illegal relationship with foundation

Court asked to determine legal battle over stream mitigation contracts

September 19th, 2013 in News

No hearings have been set, yet. But the two defendants in a two-month-old lawsuit this week asked Cole County Circuit Judge Jon Beetem to dismiss the civil suit before it really gets started.

The Swallow Tail company, based in Harrisonville, is a "private wetland and stream compensatory mitigation bank provider" that sued the state Conservation department and the not-for-profit Conservation Heritage Foundation on July 9, accusing them of working together to hurt for-profit companies and benefit the foundation.

The lawsuit accused the state agency and the foundation of having a too-cozy, "illegal" relationship that's resulted in the foundation having an unfair advantage over Swallow Tail and other companies in contracts with the U.S. Army Corps of Engineers.

The suit raised five counts against the department and foundation, saying their actions and cooperation:

• "Constitute a tortious interference with Swallow Tail's business expectancy."

• Are a conspiracy "to attempt to monopolize (Missouri's) stream mitigation industry" to benefit the foundation.

• Violate provisions of a 1999 memorandum of understanding between the foundation and the Corps, damaging "Swallow Tail in its ability to participate in the mitigation banking market."

• Violate Missouri's Constitution by allowing Conservation employees to work with the foundation on its stream mitigation plans, resulting in the unconstitutional spending of "public money to benefit (a) private ... association."

• Seek to "destroy competition in the stream mitigation field by creating an unbalanced playing field in which only (the foundation) would be truly competitive."

Swallow Tail's lawsuit asked the court to prohibit the department and foundation "from engaging in the unlawful conduct," order the department and foundation to end their relationship, award the company triple damages and award it damages for its past and future lost business and its attorney's fees.

The legal battle involves the ways the Corps of Engineers awards contracts for improving some sections of streams when other sections are damaged by construction, farming or other projects.

In separate filings Wednesday, the Conservation department and the foundation asked Beetem to dismiss Swallow Tail's lawsuit, saying the company failed "to state a claim upon which relief can be granted."

In its brief supporting its motion to dismiss, the foundation rejected the company's claim of lost mitigation banking business. "Swallow Tail must proceed beyond mere speculation and identify the business relationship interfered with," the foundation said.

The department's 18-page brief argued Swallow Tail can't prove some of its claims because the Corps of Engineers approved them.

Instead of challenging the Corps' decision in federal court, Swallow Tail sued in state court, Jefferson City lawyer Heidi Vollet wrote for the department. She added a footnote that the company likely wouldn't win in federal court, either.

The department and foundation argue that the agencies' cooperative work is protected from the lawsuit's anti-trust claims.

Both want Beetem to rule that Swallow Tail didn't prove its right to benefit from the foundation's contract with the Corps of Engineers.

Beetem could rule based on the motions that have been filed, or schedule a hearing for oral arguments.