Moore v. Hampton Roads Sanitation District Commission , 557 F.2d 1030 ( 1976 )

THOMSEN, Senior District Judge.

Claiming jurisdiction under 28 U.S.C. 1331 (federal question jurisdiction) and 28 U.S.C. 1333 (admiralty and maritime jurisdiction), plaintiffs’ complaint alleged that the value of oyster beds in the Warwick River leased to them by the Commonwealth of Virginia has been destroyed as a result of improper operation of a sewage disposal system by defendants, City of Newport News (City) and Hampton Roads Sanitation District Commission (Commission). From a judgment entered in favor of defendants after trial, plaintiffs have appealed.¹ Plaintiffs base their claims against the City on alleged negligence, nuisance and taking of their property without just compensation; they base their claims against the Commission only on an alleged taking.

Leases of underwater beds for cultivation and harvesting of oysters are granted by the Commonwealth for a term of 20 years at an annual rental of $1.50 per acre or fraction thereof, renewable by the lessee after each term, and are treated as chattels real under Virginia law. Va.Ann.Code, 1973 Repl.Vol., § 28.1-109(12).

The Warwick is a small river which empties into the James a short distance northwest of Hampton Roads. The few miles with which we are concerned, in which the oyster beds leased to plaintiffs are located, lie between the lower part of Fort Eustis and the City of Newport News and are navigable and tidal. The State Health Commissioner has closed and reopened the Warwick River or portions thereof to direct marketing of oysters a number of times since 1941.

The City has for many years operated pumping stations which pump sewage to sewage plants operated by the Commission. On several occasions these pumping stations have overflowed into the Warwick River. In 1962 the State Health Commissioner prohibited the harvesting of oysters in the entire river for a short period; that closure is not the basis of any claim in this case. By 1966 portions of the river had been released from that prohibition; however, in 1966 one or more pumping stations overflowed and the State Health Commissioner again closed, due to the high coliform counts, the northern portion of the river in which the beds of several plaintiffs were located. In 1972 there were additional pumping station overflows and the central portion of the river, in which the beds of some of the plaintiffs are located, was closed. The statute under which the closures were made permits transplanting of oysters from closed areas into approved areas if a special permit is obtained. Va.Ann. Code, 1973 Repl.Vol., § 28.1-179. Some of the plaintiffs took advantage of this provision, but the evidence indicates that the results were not satisfactory.

During all material times the Sanitation Commission has operated sewage treatment plants in the area. Since 1967 the Commission has operated the James River Sewage Treatment Plant, which discharges treated sewage into the water at the mouth of the Warwick. In that year the State Health Commissioner closed for the direct marketing of oysters and other shell fish (in accordance with Food and Drug Administration requirements) a buffer zone around the outfall opening.²

The case came on for trial before a jury on issues of liability, issues of damages being reserved. At the conclusion of plaintiffs’ evidence the district judge directed a verdict in favor of defendant Commission, ruling that no case against it had been proved on any ground.³ At the conclusion of all the evidence, the judge submitted to the jury three “inquiries”, which the jury answered to the effect that: (1) the high coliform count in the Warwick River which was the reason for the 1966 and 1972 closures was proximately caused by the maintenance and operation of the sewer system of the City; (2) the City was guilty of negligence in the operation and maintenance of its sewer system as the same affected the Warwick River; and (3) such negligence was a proximate cause of conditions requiring the closure of the Warwick River.

The City thereafter filed a motion for judgment n. o. v. which the district judge granted on the grounds that the action against the City is barred (1) by the doctrine of sovereign immunity, and (2) by the failure of the plaintiffs to give the City the 60-day statutory notice of their claims provided for in Va.Ann.Code, 1957 Repl.Vol., § 8-653, as it read before the 1973 amendment thereto.⁴ Plaintiffs’ appeal challenges both of these rulings, as well as the district court’s ruling that there was no exercise of eminent domain by the Commission. Before resolving these questions, we will discuss the issue raised by defendants’ cross-appeals (see n. 1, above).

The City and the Commission challenge the ruling of the district court that there is no longer an unqualified public right to discharge sewage into tidal streams. The Commission argues that it has not been shown to have violated any provision of Virginia law governing water pollution, and therefore the closing of oyster grounds by the State Health Commissioner due to a pollution hazard was a risk to which the lessees were subject when they took their leases. The City argues that occasional discharges of untreated sewage into the Warwick River do not violate the legislative policy against pollution, and that the oyster men took their leases subject to the risk of such occasional discharges.

The common law right of the public to dump sewage in tidal streams was recognized in a line of cases applying Virginia law decided during the period 1916 to 1939. Hampton v. Watson, 119 Va. 95, 89 S.E. 81 (1916); Darling v. Newport News, 123 Va. 14, 96 S.E. 307 (1918), aff’d, 249 U.S. 540, 39 S.Ct. 371, 63 L.Ed. 759 (1919); Commonwealth ex rel. Atty. Gen. v. Newport News, 158 Va. 521, 164 S.E. 689 (1932); DuPont Rayon Co., Inc. v. Richmond Industries, Inc., 85 F.2d 981 (4 Cir. 1936); Old Dominion Land Co. v. Warwick County, 172 Va. 160, 200 S.E. 619 (1939). In Darling, the Supreme Court, speaking through Justice Holmes, agreed with the Virginia court that “when land is let under the water of Hampton Roads, even though let for oyster beds, the lessee must be held to take the risk of the pollution of the water”. 249 U.S. at 543, 39 S.Ct. at 372. The Court held that the grant was subject to the right of the State to authorize the City of Newport News to discharge its sewage into the Roads, and that the consequent pollution of the plaintiff's oysters was neither a taking of his property without due process nor an impairment of his contract rights.

Since 1939, however, Virginia has imposed ever-stronger controls on the discharge of sewage into state waters. A Virginia statute now prohibits the discharge of raw sewage into such waters. Va.Ann.Code, 1973 Repl.Vol., § 62.1-44.5. We conclude that whether or not the discharges of raw sewage by the City can be characterized as occasional, they are not now protected by the public policy of the State, and plaintiffs’ rights to cultivate oysters are not subject to a right of the City to violate state law.⁵

The Commission, however, has not been shown to have violated any statutory or regulatory provision. The public right to discharge sewage into the Warwick has been qualified by the legislature only to the extent provided by the pollution control statutes. The Commission, in exercising its statutory right to discharge treated sewage into the Warwick, abridged no rights of the plaintiffs, who took their leases subject to the risk of closure due to lawful discharges.

Because we agree with the district judge that there was no evidence sufficient to prove a case against the Commission on grounds of negligence, nuisance or a taking by the Commission, the judgment in its favor must be affirmed, whether Virginia law or admiralty principles should be applied.⁶ The case against the City, however, requires us to consider whether its liability on grounds of negligence, nuisance and eminent domain is controlled by Virginia law, maritime law or other federal law.

The Warwick River in the area of the beds involved in this case is a navigable stream, subject to the ebb and flow of the tides. Harvesting oysters and clams, like fishing, is a traditional maritime activity; the cultivation of oysters is so closely related to the harvesting of oysters that interference with cultivation which impairs harvesting also meets the situs and nexus tests established by Executive Jet Aviation v. Cleveland, 409 U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972), and comes within the admiralty and maritime jurisdiction. Union Oil Co. v. Oppen, 501 F.2d 558, 560-63 (9 Cir. 1974); Potomac River Ass’n Inc. v. Lundeberg Md. Sea. Sch., Inc., 402 F.Supp. 344, 358 (D.Md.1975); Burgess v. M/V Tamano, 370 F.Supp. 247 (D.Me.1973); State Dept. of Fish and Game v. S. S. Bournemouth, 307 F.Supp. 922 (C.D.Cal.1969) (decided prior to Executive Jet).⁷

Whether in a particular case an admiralty court will adopt state law or fashion its own principles for application depends upon whether the adoption of state law would impair the uniformity of admiralty law, and whether there is some admiralty principle which preempts state law. Workman v. New York City, 179 U.S. 552, 21 S.Ct. 212, 45 L.Ed. 314 (1900); St. Hilaire Moye v. Henderson, 496 F.2d 973 (8 Cir. 1974); In re M/T Alva Cape, 405 F.2d 962 (2 Cir. 1969).

All of the parties in this case are Virginians; there is no such interstate problem as was involved in Illinois v. Milwaukee, 406 U.S. 91, 92 S.Ct. 1385, 31 L.Ed.2d 712 (1972), and Texas v. Pankey, 441 F.2d 236 (10 Cir. 1971). Cf. Committee for the Consideration of the Jones Falls Sewage System v. Train, 539 F.2d 1006 (4 Cir. 1976). The absence of any interstate factor reduces but does not eliminate the importance of the uniformity element in the decision.

Virginia law controls the construction of the Virginia statutes and the nature and extent of the rights which plaintiffs acquired under their leases. The problem is whether Virginia law should control (1) the question whether the City is immune from liability in such a suit as this and (2) the applicability to this case of the requirement of notice contained in § 8-653 of the Virginia Code, the two points upon which the district judge based his decision to enter a judgment n. o. v. in favor of the City.

Under Virginia law a City is immune from liability for negligence in performing governmental functions, but not for negligence in performing proprietary functions. Fenon v. City of Norfolk, 203 Va. 551, 125 S.E.2d 808 (1962). However, the Virginia law with respect to which activities of a municipal corporation are governmental and which are proprietary is far from clear. Taylor v. City of Newport News, 214 Va. 9, 197 S.E.2d 209 (1973) (collection of garbage held to be a governmental activity); Fenon v. City of Norfolk, supra (removal of fallen trees from streets after a hurricane is governmental activity); City of Norfolk v. Hall, 175 Va. 545, 9 S.E.2d 356 (1940) (maintenance of public streets and sidewalks is proprietary activity); Hoggard v. City of Richmond, 172 Va. 145, 200 S.E. 610 (1939) (operation of swimming pool is proprietary activity); Ashbury v. City of Norfolk, 152 Va. 278, 147 S.E. 223 (1929) (removal of garbage by municipality is governmental activity).

On the other hand, the weight of admiralty authority which has been cited or found is in line with those state decisions which have increasingly repudiated or narrowed the immunity of municipal corporations when performing governmental functions. Workman v. New York City, 179 U.S. 552, 21 S.Ct. 212, 45 L.Ed. 314 (1900); In re M/T Alva Cape, 405 F.2d 962 (2 Cir. 1969); Principe Compania Naviera, S. A. v. Board of Commissioners, 333 F.Supp. 353 (E.D.La. 1971); Kelley Island Lime & Transport Co. v. City of Cleveland, 47 F.Supp. 533 (N.D. Ohio 1942); 1 Benedict on Admiralty, 7th Ed. (1974), § 112, at 7-37 et seq. Cf. J. Ray McDermott & Co., Inc. v. Department of Highways, State of La., 267 F.2d 317 (5 Cir. 1959); Broward County, Fla. v. Wickman, 195 F.2d 614 (5 Cir. 1952). For a full review of state cases, see Long v. City of Weirton, 214 S.E.2d 832 (W.Va.1975).

We have grave doubts whether, in the light of the most recent Virginia cases, the Virginia court would extend immunity to the City in such a case as this. It is not necessary to decide that question, because we conclude that maritime law principles should be applied, and that, applying those principles, the City is not immune from liability for such negligence as has been shown in this ease.

There remains the question whether plaintiffs’ claims are barred by their failure to give notice to the City within 60 days after the respective causes of action accrued. Here again, we conclude that maritime law principles should control and that the issue should be decided by applying the doctrine of laches rather than by applying the 60 day notice statute.⁸ Since all facts with respect to laches may not have been fully developed in the district court, evidence and argument with respect thereto should be considered by the district judge on remand.

The district judge concluded that the City was not maintaining a nuisance. Even if that conclusion were not correct, plaintiffs would not be entitled to an injunction against the City’s operation of its sewage system, and the damages, if any, to which a plaintiff might be entitled would not exceed the damages recoverable for negligence.

The judgment in favor of the defendant Commission is affirmed.

The judgment in favor of the defendant City is reversed and the case is remanded for further proceedings consistent with this opinion.

Affirmed in part, reversed in part, and remanded.

1 . The City and the Commission have cross-appealed from an interlocutory order denying their motions to dismiss the action, in order to preserve their contention that they had an unqualified right to discharge sewage into the Warwick River.

2 . The Health Commissioner acted under the provisions of Va.Ann.Code, 1973 Repl.Vol., § 28.1-175 et seq.

3 . The court noted that there had been no evidence that the Commission had been guilty of any negligence or that its plant had overflowed or functioned improperly. The plaintiffs conceded these points but contended that the buffer zone which had been established around the area of the plant’s outfall constituted an unconstitutional taking of their property without compensation. Observing that the Commission in exercise of its power of eminent domain had paid for that part of the river bottom which was physically used for its outfall line, and that the buffer zone had been established by the State Health Commissioner under the authority of § 28.1-175 et seq., of the Virginia Code, the court held that the closure was an appropriate exercise of the State’s police power and did not constitute a taking of the plaintiffs’ property by the Commission.

4 . In considering the post-verdict motion, the court referred to the evidence that certain pumping stations in the sewage collection lines operated by the City had permitted raw sewage to overflow during the period 1970-72. While these pumping stations were located some four to five miles from the oyster beds which were closed in 1972, the court properly concluded that there was evidence from which the jury could find that these overflows were the source of the high coliform count which resulted in the closure.

5 . The City argues that occasional discharges are permitted by Va.Ann.Code, 1973 Repl.Vol., § 62.1-44.4(2), which requires the maintenance of high water quality only “where physically and economically feasible”. Section 44.4(2) applies only to water whose quality is “better than the established standards as of the date on which such standards become effective * * * ”. Although the precise standards set for the Warwick River by the State Water Control Board are not in the record, the Board is required to adopt standards consistent with the general policy of that statute, which protects aquatic life, inter alia, from the detrimental effects of pollution. Va.Ann.Code, § 62.1-44.5(2). The water quality of the Warwick has not been shown to be above any legitimate standards set by the Water Control Board; therefore, Virginia law prohibits such “occasional” discharges of raw sewage as the City caused in this case.

6 . The closing of the beds was ordered by the State Health Commissioner, acting under the police power of the Commonwealth. Defendant Hampton Roads Sanitary Commission had no authority to order such closure.

7 . The Submerged Lands Act, 43 U.S.C. 1301 et seq., recognized in § 1311(a) the right of the several states to manage, administer, lease, develop and use lands beneath the navigable waters within the boundaries of each state in accordance with applicable State law, but provided in § 1311(d) that nothing in the Act should affect the control by or under the constitutional authority of the United States of said lands and waters for the purposes of navigation.

8 . In the following cases admiralty courts have refused to apply state notice statutes in a variety of situations: Raymond International v. M/T Dalzellegle, 336 F.Supp. 679 (S.D.N.Y.1971); Fematt v. Los Angeles, 196 F.Supp. 89 (S.D.Cal.1961); Morales v. Galveston, 181 F.Supp. 202 (S.D.Tex.1959), aff'd on other grounds, 370 U.S. 165, 82 S.Ct. 1226, 8 L.Ed.2d 412 (1962); The West Point, 71 F.Supp. 206 (E.D.Va.1947); Frame v. New York, 34 F.Supp. 194 (S.D.N.Y. 1940).