Fent v. Ok. Water Resourses Board
| Citation | 235 F.3d 553 |
| Decision Date | 18 December 2000 |
| Docket Number | No. 99-6188,99-6188 |
| Parties | (10th Cir. 2000) MARGARET B. FENT; JERRY R. FENT, wife and husband as State of Oklahoma resident taxpayers, State of Oklahoma ex rel., Plaintiffs-Appellants, v. OKLAHOMA WATER RESOURCES BOARD, State of Oklahoma, ex rel.; WATER CONSERVATION STORAGE COMMISSION, State of Oklahoma, ex rel.; J. ROSS KIRTLEY; RICHARD MCDONALD; DICK SEYBOLT; LONNIE FARMER; GRADY GRANDSTAFF; ERVIN MITCHELL; BILL SECREST; RICHARD SEVENOAKS; WENDELL E. THOMASSON, all as private individuals, and as public board and commission members of the Oklahoma Water Resources Board and Water Conservation Storage Commission; DEPARTMENT OF DEFENSE; UNITED STATES DEPARTMENT OF THE ARMY; UNITED STATES ARMY CORPS OF ENGINEERS, United States of America, ex rel., Defendants-Appellees |
| Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA. (D.C. No. 98-CV-221)
Russell B. Fister, Oklahoma City, Oklahoma, for Plaintiffs-Appellants.
Robert M. Anthony, Assistant Attorney General, Litigation Section, Oklahoma City, Oklahoma, for Defendant-Appellee State of Oklahoma, and Peter Coppelman, Acting Assistant Attorney General, Ellen J. Durkee and Ethan G. Shenkman, Attorneys, U.S. Department of Justice, Environment & Nat. Resources Div., Washington, D.C., for Defendant-Appellee United States.
Before TACHA, EBEL, and BRISCOE, Circuit Judges.
Plaintiffs appeal1 from several orders resulting in the dismissal of their state law qui tam action, which was removed to federal court by the defendant United States ex rel. Department of Defense, Department of the Army, and Army Corps of Engineers (United States). Specifically, plaintiffs challenge (1) the denial of their motion to remand the case to state court; (2) the dismissal of their cause against the United States on sovereign immunity grounds; and (3) the dismissal, without prejudice, of their remaining claims, against the State of Oklahoma ex rel. Water Resources Board, Water Conservation Storage Commission, and various officers working for those entities, on grounds of Eleventh Amendment Immunity.2 As to the last ruling, plaintiffs do not object to application of the Eleventh Amendment per se, but to the consequent disposition of the barred claims, which they contend should have been remanded to state court rather than dismissed. We affirm the dismissal of the United States, but vacate the orders relating to the state defendants and remand to the district court with directions to remand the case, in turn, to state court.
Oklahoma's qui tam scheme establishes treble liability for public officers who direct payment of state or local funds "in pursuance of any unauthorized, unlawful or fraudulent contract," 62 Okla. Stat. tit. 372, and permits resident taxpayers to bring suit "in the name of the State of Oklahoma as plaintiff" to enforce that liability, 62 Okla. Stat. tit. 373. While 373 also " State ex rel. Scott v. State ex rel. Univ. Hosp. Auth., 887 P.2d 1385, 1387-88 (Okla. Ct. App. 1994) (quoting State ex rel. Trimble v. City of Moore, 818 P.2d 889, 895 (Okla. 1991)). The plaintiff's reward is "one half the amount recovered" in the action. Id. at 1387.
In 1974, the state Water Conservation Storage Commission entered into an installment debt contract with the Army Corps. of Engineers for water storage space in a lake to be constructed by the United States. The contract called for fifty annual payments contingent upon construction costs. The state's payment obligations commenced when the project was completed in 1983. At the time this action was filed, the state had paid $4,414,700.69 toward the contract and had missed six installment payments.3
Plaintiffs filed suit in state court under 372 and 373, alleging the installment contract violated Oklahoma constitutional restrictions regarding public indebtedness. Their complaint sought recovery of the funds already paid to the United States under the contract, and treble damages of $13,244,102.07. The United States removed the action to federal court pursuant to 28 U.S.C. 1442(a)(1) (), with sovereign immunity as the requisite federal defense. See Mesa v. California, 489 U.S. 121, 136-139 (1989) (); see also Dalrymple v. Grand River Dam Auth., 145 F.3d 1180, 1185 (10th Cir. 1998) ().
Plaintiffs moved to remand, arguing the United States consented to joinder as a defendant in state court through the passage of 43 U.S.C. 666. That statute, known as the McCarran Amendment, provides in relevant part as follows:
Consent is hereby given to join the United States as a defendant in any suit (1) for the adjudication of rights to the use of water of a river system or other source, or (2) for the administration of such rights, where it appears that the United States is the owner of or is in the process of acquiring water rights by appropriation under State law, by purchase, by exchange, or otherwise, and the United States is a necessary party to such suit.
As its terms plainly reflect, this waiver of sovereign immunity is limited to suits involving the comprehensive adjudication or administration of all rights in a water system. See Gardner v. Stager, 103 F.3d 886, 888 (9th Cir. 1996) (following Dugan v. Rank, 372 U.S. 609, 618 (1963)). The district court held that plaintiffs' action for damages and recovery of funds paid pursuant to an allegedly illegal contract fell outside the compass of the McCarran Amendment and, accordingly, denied plaintiffs' motion for remand.
Sometime thereafter, the district court disposed of the entire case in two separate orders issued on the same day. It dismissed plaintiffs' claims against the state defendants as barred by the Eleventh Amendment, and dismissed their cause of action against the United States as barred by sovereign immunity. Plaintiffs then moved for reconsideration in one limited respect. Contending that the district court's rulings reflected its lack of subject matter jurisdiction over the case, they argued that the court should not have dismissed their claims against the state defendants but, rather, should have remanded them back to state court pursuant to 28 U.S.C. 1447(c) (). The district court denied plaintiffs' motion without resolving the subject matter jurisdiction question under 1447(c), holding that, in any event, it would be futile to remand any claims to state court because the United States was an indispensable party and would not be subject to suit in that (or any other) forum. Plaintiffs then appealed.
"[T]he doctrine of sovereign immunity prohibits suits against the United States except in those instances in which it has specifically consented to be sued." United States v. Richman (In re Talbot), 124 F.3d 1201, 1206 (10th Cir. 1997). "The United States consents to be sued only when Congress unequivocally expresses in statutory text its intention to waive the United States' sovereign immunity." Id. We review de novo the district court's determination that the United States has not waived its immunity. Shaw v. United States, 213 F.3d 545, 548 (10th Cir. 2000). Further, whether the statutory bases for such waiver invoked by plaintiffs are available under the circumstances "is a legal issue of statutory interpretation which this court also reviews de novo." Id.
Plaintiffs continue to insist the McCarran Amendment applies to this action. We agree with the district court's rejection of this argument for substantially the reasons recited above. Plaintiffs' contention on appeal, that "[w]ater rights can be established and determined by grants, deed, contracts, etc. and litigation is allowed under Section 666 in State Court regardless of the legal vehicle that brings the issue," Appellant's Br. at 14, misses the point. The McCarran Amendment is inapplicable here not because of the contractual source or legal form of plaintiffs' claims, but because of their substanceplaintiffs' action to recover allegedly illegal debt payments and obtain treble damages therefor cannot by any stretch of the legal imagination be characterized as an effort to obtain a comprehensive adjudication of all water rights in a water system.
Plaintiffs also argue that the United States expressly waived its immunity for claims arising out of water resource projects by passage of the Flood Control Act of 1970, 42 U.S.C. 1962d-5b, pursuant to which the United States and Oklahoma entered into the water storage contract in question here. That section provides in part:
(a) Cooperation of non-Federal interest
After December 31, 1970, the construction of any water resources project . . . shall not be commenced until each non-Federal interest has entered into a written agreement with the Secretary of the Army to furnish its required cooperation. In any such agreement entered into by a State . . . or a governmental entity created by the State legislature, the agreement may reflect that it does not obligate future State legislative...
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