G.R. No. 197146 , December 6, 2016
HON. MICHAEL L. RAMA, ET AL., PETITIONERS, VS. HON. GILBERT P. MOISES, ET AL., RESPONDENTS.

FACTS

This case involves a dispute over the appointing authority for the Board of Directors of the Metropolitan Cebu Water District (MCWD). The petitioners, including the Mayor of Cebu City, challenged the authority of the Governor of Cebu Province to appoint members to the MCWD Board. The controversy stemmed from the interpretation of Section 3(b) of Presidential Decree No. 198 (The Provincial Water Utilities Act of 1973), which designates the appointing authority based on geographic coverage and the location of the majority of active water service connections. Cebu City, a highly urbanized city, argued that the provision, by allowing the provincial governor to make appointments because a component city (Cebu City at the time of MCWD’s formation) fell within the province’s territory, impaired its local autonomy.
The Regional Trial Court ruled in favor of the Provincial Governor. On appeal, the Supreme Court majority declared Section 3(b) of P.D. No. 198 unconstitutional insofar as it allowed an LGU to appoint board members for a water district serving another LGU, finding it violative of local autonomy. The majority crafted a new “majority rule” threshold, stating the appointing authority should be the LGU where a majority (at least 51%) of the water connections are located.

ISSUE

Whether the Supreme Court majority erred in partially striking down Section 3(b) of P.D. No. 198 as unconstitutional and in prescribing a new “majority rule” for determining the appointing authority for a water district’s board.

RULING

Justice Leonardo-De Castro, in her dissenting opinion joined by Justice Brion, argued that the majority decision was legally flawed. She contended there was no impairment of local autonomy because the decision to form or join a water district is a voluntary, legislative act of an LGU through its Sanggunian. By enacting the resolution of formation, the LGU consciously accepts the complete package of powers, rights, and obligations under P.D. No. 198, including the appointing authority scheme. The water district, once formed, is an independent juridical entity not under the jurisdiction of any political subdivision. Therefore, the appointing power vested by the law in a specific LGU does not subordinate other member LGUs.
The dissent strongly criticized the majority for engaging in judicial legislation. It held that the Court effectively amended the law by replacing the statutory criteria with its own “majority rule” formula, a role reserved for the legislature. The dissent emphasized that if the appointing authority formula in P.D. No. 198 is deemed outdated, the remedy is through legislative amendment, not judicial prescription. The dissenting Justices voted to deny the petition and uphold the constitutionality of the challenged provision.