Melissa Indus. Development v. North Collin Water
| Decision Date | 08 April 2003 |
| Docket Number | No. 4:02-CV-345.,4:02-CV-345. |
| Parties | MELISSA INDUSTRIAL DEVELOPMENT CORPORATION and City of Melissa, Texas, Plaintiffs, v. NORTH COLLIN WATER SUPPLY CORPORATION and United States Department of Agriculture acting by and through Ann M. Veneman, Secretary of Agriculture, Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
Richard Mercer Abernathy, Abernathy, Roeder Boyd & Joplin, McKinney, TX, for Melissa Indus. Development Corp. and City of Melissa.
Ronald D. Stutes, Brown & Hofmeister LLP, Dallas, TX, for City of McKinney.
James Wallace Wilson, Rapier & Wilson, Allen, TX, for North Collin Water Supply Corp.
Ruth Harris Yeager, U.S. Attorney's Office, Tyler, TX, Christine Cole Biederman, U. S. Attorney's Office, Piano, TX, for Dept. of Agriculture.
Defendant United States Department of Agriculture (USDA) has filed a Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Docket No. 19). On March 26, 2003, the Court held a hearing on the USDA's Motion to Dismiss. Having considered the parties' submissions, argument of counsel, and the applicable law, the Court finds that the USDA's Motion to Dismiss should be DENIED.
North Collin Water Supply Corporation ("NCWSC") is a non-profit corporation organized for the purpose of providing water utility services to an area within Collin County, Texas, as delineated in its Certificate of Convenience and Necessity ("CCN"). The NCWSC's CCN covers an area of North Collin County, Texas, including land within and adjacent to the incorporated area of the City of Melissa. The CCN covers a total estimated land area of 48,500 acres. Plaintiffs have competed with NCWSC by attempting to provide water services to areas within NCWSC's CCN. Plaintiffs are also holders and owners of membership interests in NCWSC.
The purpose of the loan/grant was to upgrade and improve its water supply system by increasing water delivery pressure to new and existing customers. In 2001, NCWSC applied for a $1,420,000 loan and a $850,000 grant (hereinafter "loan/grant") from the USDA through the federal government's rural water development program.1 The purpose of the loan/grant was to upgrade and improve its water supply system by increasing water delivery pressure to new and existing customers. The USDA has approved NCWSC's application, but the loan/grant have not yet been funded.
Once the loan/grant is funded and NCWSC goes forward with the contemplated improvements, a federal law will be triggered which will generally protect NCWSC's service area from encroachment by any competitors for up to 40 years.2 Section 306 of the CONACT, 7 U.S.C. § 1926, provides that neither the state nor any municipality may curtail or otherwise encroach upon areas being served by recipients of the federal loan and grant program.
On October 21, 2002, the Plaintiff Melissa Industrial Development Corporation and the City of Melissa filed their Original Complaint against the Defendants NCWSC and the USDA seeking injunctive relief, a Writ of Mandamus, and declaratory relief. Plaintiffs contend that NCWSC failed to comply with assorted notice, open records and open meetings provisions as mandated by the Texas Public Information and Texas Non-Profit Corporation Acts, by the Texas Government Code, and by NCWSC's own by-laws. Further, Plaintiffs allege that these failures to comply with state law also constitute failures to comply with federal statutes mandating that certain conditions be met prior to funding the loan and grant. Plaintiffs ask this Court, among other relief, to enjoin the USDA from funding its loan and grant commitment to NCWSC "until such time as the statutory prerequisites under Texas and federal law and Defendant NCWSC's by-laws have been satisfied."3
Specifically, Plaintiffs seek to USDA to refrain from lending money to NCWSC pursuant to 7 U.S.C. § 1926 until such time as the statutory prerequisites under 7 U.S.C. § 1926(a)(3) and NCWSC's by-laws have been satisfied. Plaintiffs further request the issuance of a Writ of Mandamus instructing the USDA to not close the loan/grant until NCWSC has properly complied with its by-laws and Texas and federal law.
In the its Motion to Dismiss, the USDA argues that: (1) the government has not waived sovereign immunity; (2) this Court lacks subject matter jurisdiction; (3) Plaintiffs lack standing to sue; and (4) this case is not ripe. The Court will address each of these arguments in turn.
The standard of review for motions to dismiss under Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6) is the same. See Benton v. United States, 960 F.2d 19, 21 (5th Cir.1992). The moving party bears the burden of showing that "plaintiff can prove no set of facts consistent with the allegations in the complaint which would entitle it to relief." Baton Rouge Bldg. & Constr. Trades Council AFL-CIO v. Jacobs Constructors, Inc., 804 F.2d 879, 881 (5th Cir.1986). The court "must accept all well-pleaded factual allegations in the light most favorable to the non-moving party." American Waste & Pollution Control Co. v. Browning-Ferris Inc., 949 F.2d 1384, 1386 (5th Cir.1991). A court's ultimate conclusion that a case should be dismissed may rest "on any one of three separate bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Barrera-Montenegro v. U.S., 74 F.3d 657, 659 (5th Cir.1996) (citations omitted). Conclusory allegations or legal conclusions however will not suffice to defeat a motion to dismiss. See Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir.1993).
The USDA argues that sovereign immunity has not been waived. The principle of sovereign immunity protects the federal government from suit except insofar as that immunity is waived. A waiver will not be implied and must be unequivocally expressed in statutory text. See Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996). Courts should construe statutes against waiver unless Congress has explicitly provided for it. See, e.g., Peña v. United States, 157 F.3d 984, 986 (5th Cir.1998). "Consequently, no suit may be maintained against the United States unless the suit is brought in exact compliance with the terms of a statute under which the sovereign has consented to be sued." Koehler v. United States, 153 F.3d 263, 265 (5th Cir.1998) (citing Soriano v. United States, 352 U.S. 270, 276, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957)). The burden is on the Plaintiffs to show such consent, because they are the parties asserting federal jurisdiction. See Stockman v. Federal Election Comm'n, 138 F.3d 144, 151 (5th Cir.1998).
The USDA contends that Plaintiffs do not complain of a final agency action and Plaintiffs have failed to exhaust their administrative remedies under the Administrative Procedure Act (APA).4 The APA waives sovereign immunity for non-monetary claims against government agencies. See Rothe Development Corp. v. U.S. Dept. of Defense, 194 F.3d 622, 624 (5th Cir. 1999). The APA provides, in relevant part, that a person suffering a legal wrong or adversely affected or aggrieved by agency action within the meaning of a relevant statute (7 U.S.C. § 1926 in this case) is entitled to judicial review. 5 U.S.C. § 702. "Agency action" is defined by the APA as "the whole or part of any agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act." 5 U.S.C. § 551(13).
When, as in this case, the relevant statutory provisions do not directly provide for judicial review, the APA authorizes judicial review if the action complained of is a "final agency action." 5 U.S.C. § 704; see also American Airlines, Inc. v. Herman, 176 F.3d 283, 287 (5th Cir.1999). If there is no "final agency action," a court lacks subject matter jurisdiction. Veldhoen v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir.1994).
The APA's finality requirement is "flexible" and "pragmatic." Abbott Laboratories v. Gardner, 387 U.S. 136, 149-50, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). In order for an agency action to be "final," the following two conditions must be met: (1) the action must mark the "consummation" of the agency's decision-making process, and (2) the action must be one by which "rights or obligations have been determined" or from which "legal consequences will flow." American Airlines, Inc., 176 F.3d at 287-88; Veldhoen, 35 F.3d at 225 ().
The Court finds that the USDA's approval of NCWSC's loan/grant application is a "final agency action." There is no further approval process and there is no further agency review or appeal. Under the relevant statutory scheme there is nothing left for NCWSC to do but receive and spend the money. See 7 C.F.R. § 1780.36. Further, the loan/grant approval has imposed an obligation between the USDA and NCWSC and fixes the parties' legal relationship and significant legal consequences flow from this loan/grant approval. Accordingly, this is a final agency action subject to this Court's review under the APA.
The USDA further argues that in certain circumstances, such as an agency's action not to exercise investigative or enforcement powers or rule-making authority, the decision is presumptively unreviewable. See 5 U.S.C. § 701(a)(2); see also Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971).
The APA presumptively entitles "[a] person suffering legal...
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