Kern-Tulare Water Dist. v. City of Bakersfield
| Decision Date | 18 September 1987 |
| Docket Number | KERN-TULARE,No. 86-2324,86-2324 |
| Citation | 828 F.2d 514 |
| Parties | 1987-2 Trade Cases 67,704 WATER DISTRICT, Plaintiff-Appellee, v. CITY OF BAKERSFIELD, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Donald R. Prinz, Sacramento, Cal., for plaintiff-appellee.
Richard R. Terzian, Los Angeles, Cal., for defendant-appellant.
Appeal from the United States District Court for the Eastern District of California.
Before KOELSCH, SNEED and TANG, Circuit Judges.
In this appeal we confront two issues. We decide first whether the involvement of California water law issues in an antitrust case warrants either dismissal for reasons of wise judicial administration or abstention. Because dismissal was not necessary for reasons of wise judicial administration and since federal resolution of the antitrust claims does not unduly intrude upon state interests, we affirm the district court's refusal to dismiss or abstain. We also decide whether a city enjoys immunity from the antitrust laws for refusing consent to a water district which wished to sell certain water it had acquired from the city. Because we hold that the refusal to consent was a logical and foreseeable result of the city's statutory authorization regarding water rights, we reverse the district court's determination that the city was not entitled to immunity, and remand with instructions to dismiss the action.
The facts are undisputed and appear in the district court opinion at 634 F.Supp 656-57. The City of Bakersfield (City) is located near the Kern River in Kern County, California. In 1976, it acquired certain Kern River water rights and related facilities. The City financed the acquisition by issuing municipal bonds, representing that future revenues from water contracts with utilities would serve to service the debt. Such a contract was entered into with the Kern-Tulare Water District (District). The contract provided for annual payments by the District to the City in the amount of $400,000 in return for 20,000 acre-feet of water per year. The contract provided further that, subject to certain exceptions, the District was prohibited from transfer of water received by the city under the contract without consent of the City.
The District attempted to sell the bulk of its 1983 entitlement to other districts. The City refused consent. The subject water was never used, however; the water eventually ran into the state aqueduct, and out of the Kern County water basin. The District filed an amended complaint in the U.S. District Court for the Eastern District of California on September 20, 1984, which alleged that: (1) the City's refusal to consent to the transfer violated Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1; (2) the City was a monopolist in violation of Sec. 2 of the Sherman Act, 15 U.S.C. Sec. 2; (3) the City breached its contract; and (4) the City violated Sec. 17200 of the California Business and Professions Code, which prohibits unfair competition. The District sought $340,000 in damages.
Pursuant to Fed.R.Civ.P. 56(d), the City moved on December 21, 1984, for a determination of a material issue relating to the retroactive application of the Local Government Antitrust Act of 1984, 15 U.S.C. Secs. 34-36 (the LGAA). The City argued that the LGAA, which immunizes local governments from damages liability under the antitrust laws for acts undertaken in an official capacity, should be applied retroactively to it. The district court rejected this argument and denied the motion on March 26, 1985. Thereafter, the City moved for abstention or, in the alternative, summary judgment, and for reconsideration of the order denying retroactive application of the LGAA. The district court denied the motions in an opinion set forth at 634 F.Supp. 656 (E.D.Cal.1986). The district court certified its decision for interlocutory appeal under 28 U.S.C. Sec. 1292(b).
In denying the City's motion for abstention, the district court declined to abstain under the doctrine enunciated in Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), and declined to dismiss for reasons of "wise judicial administration" under Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). We review its decision for an abuse of discretion. See Turf Paradise v. Arizona Downs, 670 F.2d 813, 819 (9th Cir.1982) (citing Pue v. Sillas, 632 F.2d 74, 78 (9th Cir.1980)), cert. denied, 456 U.S. 1011, 102 S.Ct. 2308, 73 L.Ed.2d 1308 (1982). We affirm the district court's refusal to abstain or dismiss.
Burford abstention is appropriate where
... there have been presented difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case at bar. [citation].... In some cases, however, the state question itself need not be determinative of state policy. It is enough that exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial policy concern.
Colorado River Water, 424 U.S. at 814, 96 S.Ct. at 1244. See Burford, 319 U.S. 315, 63 S.Ct. 1098. The purpose of Burford abstention is the avoidance of federal intrusion into matters which are largely of local concern and which are within the special competence of local courts. International Brotherhood of Electrical Workers, 614 F.2d 206, 212 n. 1 (9th Cir.1980). In Kaiser Steel Corp. v. W.S. Ranch Co., 391 U.S 593, 594, 88 S.Ct. 1753, 1754, 20 L.Ed.2d 835 (1968), the Supreme Court held that whether a trespass relating to water rights could be a "public use" within the meaning of a state constitution constituted a "truly novel" issue of state law which warranted Burford abstention. The court noted that, "in the arid State of New Mexico," the question presented was a crucial one of state law which should await state court adjudication. Id.
In Colorado River Water, while stating that Burford abstention was unavailable, the Supreme Court nonetheless upheld the district court's dismissal of the case. It did so in the interest of "wise judicial administration" in light of several factors which counseled in favor of unified state proceedings. Among these factors were concurrent state jurisdiction over the claims, and the McCarran Amendment, 43 U.S.C. Sec. 666, which evinced a strong federal policy against piecemeal adjudication of water rights in a river system. 424 U.S. at 819, 96 S.Ct. at 1247.
In this case, the district court refused abstention on the grounds that: (1) a decision on the immunity question would have little or no impact upon implementation of state water policy; and (2) state water law was germane only as determinative of immunity, and thus the exercise of federal jurisdiction would not be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern. The court found no "exceptional circumstances" presented by state water policy, "a subject which is unambiguous." 634 F.Supp. at 664-65. We agree substantially with the district court's analysis.
It is possible to characterize this case as one which presents this difficult question of state law: whether a restriction on transfer of surplus water violates the policy in favor of voluntary transfer and against waste. As the district court noted, however, resolution of this question is important only insofar as it determines the federal question of immunity, and not as it bears on policy problems so important that they transcend the result in this case. Every antitrust case which presents a question of Parker immunity necessarily involves construction or application of some state law. Although we choose not to characterize California water law as "unambiguous," we do not confront an unsettled question of state law such as in Louisiana Power & Light v. Thibodaux, 360 U.S. 25, 79 S.Ct. 1070, 3 L.Ed.2d 1058 (1959), or Kaiser Steel. Kaiser Steel concerned a question of state law which was "truly novel": whether a certain statute authorized condemnation of land to secure water for a private business in contravention of a state constitutional provision relating to taking. No such novel question appears here, although we nevertheless confront the "vital concern" of water rights in an "arid State." The question, as always in Parker immunity cases, is whether state law authorizes the challenged action. As in Turf Paradise, we are called upon to adjudicate federal antitrust claims and, in so doing, must refer to state law in order to resolve an immunity question.
Nor is federal determination of the immunity question disruptive of state efforts to establish coherent policy with respect to municipal control over water and water rights. No special considerations of federal-state relations exist here which would make the state law issue appropriate for deferral to the California courts. Concededly, we confront an area of comprehensive and complex regulation under state law. But the mere involvement of an area of state law which is the subject of detailed regulation does not make abstention appropriate. See 670 F.2d at 817. Our adjudication might possibly create conflict with state law; but the mere potential for conflict, without more, does not warrant abstention either. See Colorado River Water, 424 U.S. at 815-16, 96 S.Ct. at 1245; Turf Paradise, 670 F.2d at 820. The question instead is whether such potential conflict would impermissibly impair California's efforts to establish policy regarding the regulation of water and water rights. We answer in the negative. We are called upon to adjudicate the District's federal antitrust claims. The only potential impact on the state arising from federal adjudication of those claims is the limitation of the District to the state courts if it wishes to pursue...
To continue reading
Request your trial
-
Hass v. Oregon State Bar
...exemption. We review de novo the district court's ruling that the Bar is protected by the exemption. Kern-Tulare Water Dist. v. City of Bakersfield, 828 F.2d 514, 518 (9th Cir.1987), cert. denied, --- U.S. ----, 108 S.Ct. 1752, 100 L.Ed.2d 214 Recognizing the principle of state sovereignty ......
-
Bannister v. Armontrout
...Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal. 1986), aff'd in part, rev'd in part on other grounds, 828 F.2d 514 (9th Cir.1987), cert. denied, 486 U.S. 1015, 108 S.Ct. 1752, 100 L.Ed.2d 214 Rule 60(b) provides in relevant part: On motion and upon such terms as are just,......
-
U.S. v. Bell
...Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal.1986), affd. in part and rev'd in part on other grounds, 828 F.2d 514 (9th Cir.1987), cert. denied, 486 U.S. 1015, 108 S.Ct. 1752, 100 L.Ed.2d 214 Defendants seek reconsideration of the June 10, 1999 Order re Miscellaneous fi......
-
CREDIT BUREAU CONNECTION INC. v. PARDINI
...Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal.1986), affirmed in part and reversed in part on other grounds, 828 F.2d 514 (9th Cir.1987). Preliminary Injunction The same standards generally apply to temporary restraining orders and preliminary injunctions. Northeast Ohio......
-
Antitrust and its Intellectual Milieu
...Rubbish, Inc. v . Waste Management, Inc., 998 F.2d1073, 1078-79 (1st Cir. 1993); Kern Tulare Water Dist. v. City of Bak-ersfield, 828 F.2d 514, 519-20 (9th Cir. 1987); L&H Sanitation, Inc. v.Lake City Sanitation, Inc., 769 F.2d 517, 522 (8th Cir. 1985); HybudEquipment Corp. v. City of Akron......