Rio Linda Elverta Community v. United States

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
RIO LINDA ELVERTA COMMUNITY WATER
DISTRICT, SACRAMENTO SUBURBAN WATER
DISTRICT,
Plaintiffs-Appellants
v.
UNITED STATES,
Defendant-Appellee
______________________
2018-1761, 2018-1762
______________________
Appeals from the United States Court of Federal
Claims in Nos. 1:17-cv-00859-RHH, 1:17-cv-00860-RHH,
Senior Judge Robert H. Hodges, Jr.
______________________
Decided: July 19, 2019
______________________
VICTOR MARC SHER, Sher Edling LLP, San Francisco,
CA, argued for plaintiffs-appellants. Also represented by
MATTHEW KENDALL EDLING.
KATHERINE WADE HAZARD, Environment and Natural
Resources Division, United States Department of Justice,
Washington, DC, argued for defendant-appellee. Also
2 RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
represented by ERIC GRANT, WILLIAM B. LAZARUS, JEFFREY
H. WOOD.
______________________
Before REYNA, SCHALL, and HUGHES, Circuit Judges.
HUGHES, Circuit Judge.
This is a takings case involving water contamination.
Rio Linda Elverta Community Water District and Sacra-
mento Suburban Water District filed complaints in the
United States Court of Federal Claims alleging that, by
contaminating the water supply in the area surrounding
the former McClellan Air Force Base with hexavalent chro-
mium, the United States committed a taking of their usu-
fructuary interests 1 in that water. The Court of Federal
Claims dismissed the complaints for lack of subject matter
jurisdiction. It interpreted the complaints as only assert-
ing a regulatory takings claim and concluded that the com-
plaints failed to allege the facts necessary to satisfy Article
III’s case or controversy requirement. We hold that the Wa-
ter Districts alleged a physical taking, not a regulatory tak-
ing. Because the Court of Federal Claims failed to address
the Water Districts’ physical takings claim, we vacate and
remand for further proceedings.
I
The following is alleged in the plaintiffs’ complaints
and the parties’ briefing on the government’s motion to dis-
miss:
1 A usufructuary interest is the right to use “an-
other’s property, as far as may be had without causing
damage or prejudice to the owner.” Usufruct, A Dictionary
of Modern Legal Usage (2d ed. 1995).
RIO LINDA ELVERTA COMMUNITY v. UNITED STATES 3
A.
Rio Linda Elverta Community Water District and Sac-
ramento Suburban Water District (the Water Districts) are
public drinking water providers organized under the Cali-
fornia Water Code. The Water Districts own the usufruc-
tuary rights to the water within their aquifer, drinking
wells, and transmission infrastructure which they use to
supply drinking water. The Water Districts’ service areas
abut the former McClellan Air Force Base.
McClellan operated from 1936 through 2001. During
this time, the base used and disposed of chromate products
containing hexavalent chromium (Cr6), a metallic element
linked to health risks such as stomach cancer and gastro-
intestinal tumors. Cr6 contamination can be caused by hu-
man activity or natural phenomena. Between 2001 and
2008, some wells near McClellan that provided water for
the Water Districts showed elevated levels of Cr6.
B.
Under the California Safe Drinking Water Act, the Cal-
ifornia Water Board enacts standards governing the maxi-
mum level of contaminants in drinking water. When
setting a maximum contamination level (MCL), the Water
Board must balance public health interests with economic
feasibility. An MCL is legally enforceable, and if a munic-
ipality exceeds an MCL, the Water Board may suspend or
revoke its water system operating permit. See Cal. Health
& Saf. Code §§ 116275(f), 116625.
Although the Water Board has some discretion in set-
ting an MCL, the lowest MCL that the Water Board is per-
mitted to set for a particular contaminant is equal to the
public health goal for that contaminant. The public health
goal is set by a separate agency and is based exclusively on
public health considerations. It represents the level of con-
tamination that presents no more than a de minimis risk
to human health. See Cal. Health & Saf. Code § 116365(c).
4 RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
The public health goal is aspirational. Unlike the MCL,
the public health goal is not a legally enforceable standard.
See id. California’s public health goal for Cr6 is 0.02 parts
per billion (ppb) or less in drinking water. Prior to 2013,
California did not have an MCL for Cr6.
In August 2013, the Water Board proposed a Cr6 MCL
of 10 ppb. After the requisite notice and comment period,
the Water Board adopted the proposed MCL.
The Water Districts subsequently employed a hydrolo-
gist to determine the source of the Cr6 contamination in
their water supply. The hydrologist concluded that Cr6
contamination originated from the McClellan base.
On May 5, 2017, the Superior Court of California for
the County of Sacramento overturned the Cr6 MCL be-
cause the Water Board had failed to conduct a proper fea-
sibility analysis. See Cal. Mfrs. & Tech. Ass’n v. State
Water Res. Control Bd., No. 34-2014-80001850, slip op. at
31 (Cal. Super. Ct. May 5, 2017).
On June 23, 2017, the Water Districts filed complaints
in the Court of Federal Claims alleging that the United
States committed a taking of the Water Districts’ usufruc-
tuary rights by contaminating the Water Districts’ water
supply with Cr6. The government moved to dismiss for
lack of subject matter jurisdiction. It argued that the Wa-
ter Districts failed to allege a takings claim and that the
court lacked jurisdiction given pending litigation in the
United States District Court for the Eastern District of Cal-
ifornia. 2
2 The district court litigation is ongoing and includes
Federal Torts Act claims against the United States. See
Rio Linda Elverta Cmty. Water Dist. v. United States, No.
2:17-cv-01349 (E. D. Cal. filed June 30, 2017); Sacramento
RIO LINDA ELVERTA COMMUNITY v. UNITED STATES 5
The Court of Federal Claims concluded that the com-
plaints did not satisfy the case or controversy requirement
and dismissed both cases. See Rio Linda Elverta Cmty.
Water Dist. v. United States, 136 Fed. Cl. 175 (2018); Sac-
ramento Suburban Water Dist. v. United States, 136 Fed.
Cl. 173 (2018). The court noted that the California courts
had overturned the Cr6 MCL and that the state Water
Board was reexamining the regulation factoring the cost
benefit of compliance. Because the MCL was no longer en-
forceable, and because a regulatory takings action cannot
be based on a speculative regulation, the court reasoned
that the Water Districts could not establish a legally cog-
nizable injury.
II
We review the Court of Federal Claims’ dismissal for
lack of subject matter jurisdiction de novo. Ont. Power
Generation, Inc. v. United States, 369 F.3d 1298, 1300 (Fed.
Cir. 2004). We review findings of jurisdictional fact for
clear error. Hamlet v. United States, 873 F.2d 1414, 1416
(Fed. Cir. 1989). When reviewing a decision dismissing a
complaint for lack of subject matter jurisdiction, “we accept
as true all undisputed facts asserted in the plaintiff’s com-
plaint and draw all reasonable inferences in favor of the
plaintiff.” LaBatte v. United States, 899 F.3d 1373, 1375
(Fed. Cir. 2018) (internal quotation marks omitted). The
Court of Federal Claims errs as a matter of law when it
dismisses a complaint for lack of subject matter jurisdiction
without addressing the “issue in the complaint on . . .
which [the complaint] was founded.” Hamlet, 873 F.2d at
1417.
The Water Districts argue that, because the Cr6 con-
tamination on the base physically invaded their water
Suburban Water Dist. v. United States, No. 2:17-cv-01353
(E. D. Cal. filed June 30, 2017).
6 RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
supply, their complaints alleged a physical, not a regula-
tory, taking. Thus, they assert that the court misconstrued
their claims and erroneously determined that there was no
subject matter jurisdiction. The government makes two ar-
guments in response.
First, it argues that even under a physical taking the-
ory, the Water Districts failed to assert takings claims be-
cause “[a] taking must be predicated on actions undertaken
by the United States,” Navajo Nation v. United States, 631
F.3d 1268, 1274 (Fed. Cir. 2011), and the State of Califor-
nia—not the United States—promulgated the MCL.
We reject this argument. It presumes the complaints
allege that takings claims arise from Cr6 contamination
exceeding the MCL. But they do not. Instead, they allege
a physical invasion of the Water Districts’ property rights.
The MCL is not the injury but the reason the Water Dis-
tricts discovered the contamination.
Second, the government argues that, even if the Water
Districts asserted physical takings claims, the statute of
limitations precludes relief. Under the Tucker Act, the
Court of Federal Claims lacks jurisdiction to hear takings
claims more than six-years after they accrue. See 28 U.S.C.
§§ 1491, 2501. Because the base closed in 2001, the gov-
ernment contends that the Water Districts’ claims are un-
timely.
A cause of action does not accrue until all events
needed to affix the liability have occurred and the claimant
is legally entitled to assert its claims. Catawba Indian
Tribe v. United States, 982 F.2d 1564, 1570 (Fed. Cir.
1993). For a claim to accrue, a claimant generally must
know or have reason to know that the claim exists. Holmes
v. United States, 657 F.3d 1303, 1317 (Fed. Cir. 2011). We
may find accrual suspended if a plaintiff “show[s] that de-
fendant has concealed its acts with the result that plaintiff
was unaware of their existence or . . . that its injury was
inherently unknowable at the accrual date.” Martinez v.
RIO LINDA ELVERTA COMMUNITY v. UNITED STATES 7
United States, 333 F.3d 1295, 1319 (Fed. Cir. 2003) (en
banc) (internal quotation marks omitted).
Determining when the Water Districts’ claims accrued
will require a fact intensive inquiry. Because the Court of
Federal Claims is more suited to conducting such an in-
quiry, we remand this case back to the trial court to ad-
dress this issue in the first instance.
III
Because the Court of Federal Claims did not address
the Water Districts’ physical takings claims, we vacate and
remand for further proceedings.
VACATED AND REMANDED
No costs.