Tuesday, April 4, 2017

Agricultural Law in the Spotlight: Federal Court Dismisses Des Moines Water Works Case

Written by Robert T. Caccese—Staff Attorney

On March 17, 2017, the U.S. District Court, N.D. Iowa, Western Division dismissed a lawsuit brought by an Iowa municipal water utility against thirteen Iowa agricultural water drainage districts (Board of Water Works Trustees of the City of Des Moines, Iowa v. SCA County Board of Supervisors, 2017 WL 1042072). The Des Moines Water Works (DMWW) is a municipal water utility (political subdivision) charged with providing drinking water to an estimated 500,000 citizens in the Des Moines area. The utility draws water primarily from the Raccoon and Des Moines Rivers, with the Raccoon draining over two million acres across seventeen counties. As a public water supplier, DMWW is mandated to meet maximum contaminant levels when serving water to customers, per obligations set out in state laws and the federal Safe Drinking Water Act. Included as a contaminant are nitrates, a common by-product of fertilizers in agricultural field runoff. Since the mid-1990s, nitrate concentrations in the Raccoon River have increased beyond acceptable standards set out by the U.S. Environmental Protection Agency, requiring DMWW to increase its resources to treat water from the river into safe drinking levels.. Specifically, DMWW stated three water treatment plants had been in continuous operation for extended time periods during 2015 and forced the authority to explore options of designing a new multi-million dollar nitrate-removal facility with larger capacities.

DMWW pointed to Iowa drainage districts as the primary culprits for increased nitrate levels in Raccoon River water. Drainage districts are political subdivision creations of Iowa with the purpose of allowing wetland areas to be converted into productive agricultural land. Districts enable property owners to fund improvements together, specifically through placement of tiles in swales, ditches, or man-made canals, which collect and convey water to streams and rivers. Importantly, the Iowa Legislature limited the powers of drainage districts to solely draining water from overlying land when it created the entities. In this specific part of Iowa, thirteen drainage districts contribute flows to the Raccoon River.

In 2015, DMWW filed suit in U.S. District Court, N.D. Iowa, Western Division against the Sac County Board of Trustees as Trustees of Drainage Districts, et. al. (thirteen districts total), alleging ten causes of action ranging from Clean Water Act violations to constitutional claims. Specifically, DMWW alleged the actions of the drainage districts caused additional costs necessary for complying with state and federal water regulations because of increased nitrate contributions into the Raccoon River. Another disagreement among parties focused on whether districts were considered “point sources” under the confines of the Clean Water Act; thus requiring a National Pollution Discharge Elimination System (NPDES) permit to discharge into navigable waterways. Simply put, the case centered on which political entity retained responsibility to pay to comply with state and federal regulations. After motions for summary judgment by the defendants, the District Court certified four questions to the Iowa Supreme Court for clarification of state law to proceed with the case. Specifically, the District Court inquired about implied immunity for drainage districts, due process and equal protection violations, and property interests in regards to takings claims by the government.

With regard to immunity of drainage districts to suits for damages and/or injunctive relief, the Iowa Supreme Court focused on the text of Iowa Code Chapter 468, which lays out the powers of drainage districts. The Court reasoned under the express language of the Code, “drainage districts are limited in their powers to restoring, maintaining, and increasing the flow of water through a drainage system.” References to removing contaminants from water or the quality of the water filtered through districts is expressly missing from the Code. Because of a lack of duty to remove nitrates, redressing the perceived injury to DMWW is not possible by the drainage districts because of their limited powers conferred to them by the Legislature. As a result, DMWW lacked standing to further address the notion of whether the districts could be considered “point sources” under the Clean Water Act. The Court held that while DMWW may have suffered an injury, “drainage districts lack the ability to redress that injury.”  The District Court held the first two claims failed for this reason and granted defendants summary judgment motion.

For Counts III through X, DMWW argued the grant of immunity to drainage districts violated Due Process, Equal Protection, and Takings clauses of the U.S. Constitution.  However, the District Court noted that because DMWW is a public entity created by the Iowa Legislature, they cannot invoke protections of the Fourteenth Amendment (reserved for private entities). Furthermore, DMWW’s claim “was not based on a suspect class or fundamental right”, leading to a rational basis review by the Court. Based on the limited powers and purpose conferred to districts in their enabling legislation, the Court ruled a rational basis existed for their immunity from suit and compliance of the Equal Protection clause. Although DMWW argued irrational results in nutrient management strategy obligations cause unfairness in compliance, the District Court viewed this as a policy issue best served for the Iowa Legislature to address. In regards to alleged Due Process violations by the districts, the District Court cited no authority supported a fundamental right to clean water. Instead, the Court noted “DMWW had continuous access to Raccoon River water and districts lack the broad police powers utilized by counties and other political subdivisions,” as noted by the Iowa Supreme Court.

Finally, DMWW’s takings claim was rejected by both the Iowa and District Courts. The Takings clause of the Fifth Amendment requires compensation where the government takes “private property” for public use. In this case, water in Iowa is owned by the state in trust for the public. DMWW does not own the water, nor was denied access to it. Because Raccoon River water is considered a public resource, a taking did not occur. As a result, the Court dismissed Counts III-X and granted the drainage districts motion for summary judgement, effectively dismissing the case altogether. In sum, DMWW must continue to treat collected Raccoon River water to comply with state and federal laws and may not sue drainage districts. Instead, DMWW consumers will likely see fees increase to compensate for increased treatment costs. Overall, the Court’s ruling allows the possibility of new dialogue and collaboration among parties to develop solutions to the water quality issue, while sustaining Iowa farming practices. Significantly, the ruling may provide insight for other states faced with similar issues in this context, in particular Pennsylvania.  

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