Merced Dredging Co. v. Merced County, 378.

Decision Date29 June 1946
Docket NumberNo. 378.,378.
Citation67 F. Supp. 598
CourtU.S. District Court — Southern District of California




Robert M. Searls, of San Francisco, and C. Ray Robinson, of Merced, Cal., for plaintiff.

Claude H. Adams, Dist. Atty., and William R. Elam, Deputy Dist. Atty., both of Merced, Cal., and Walter H. Stammer, of Fresno, Cal., for defendants.

MATHES, District Judge.

Plaintiff Merced Dredging Company, a Nevada corporation authorized to engage in business in California, has filed in this court a bill of complaint against the county of Merced, California, and the legislative and governing body of the county — the Board of Supervisors — for a preliminary and final injunction staying enforcement of Ordinance No. 253, adopted by the supervisors as "an urgency measure necessary for the immediate preservation of the public peace, health or safety * * *" to take effect immediately. Cal.Const., Art. IV, § 1.

Numerous affidavits have been filed, both in support of, and in opposition to plaintiff's application for a preliminary injunction. Defendants have also submitted a motion to dismiss the bill.

According to the complaint: Since 1935 plaintiff has been engaged in the business of mining gold in the county of Merced on and adjacent to the Merced River, in an area located approximately one mile south of the town of Snelling in said county. Plaintiff's operations consist of mining by use of a power dredge the surface and subsurface gravel channel of the Merced River, including various old channels through which the river flowed in geological ages from the Pleistocene to recent periods. The gravel channel contains placer gold deposits which cannot be mined profitably otherwise than by means of the dredging process. This operation reaches to a depth of approximately twenty feet below the pond level.

The surface of the land so mined is flat valley land adjacent to the present channel, which has in part been overlain by sediments deposited by the river in its meanderings through long periods of time.

Plaintiff owns in fee 840 acres of this land, of which 265 acres have already been dredged. The total area covered by plaintiff's presently-completed and future-intended dredging operations is 680 acres, of which only 415 acres remain to be dredged, and 86 acres are yet to be acquired. Plaintiff estimates that approximately 4½ years will be required in which to dredge all the material which is known to contain pay values within this area.

Approximately one-third of this land is suitable for alfalfa crops, one-third for grazing, and the remainder is swamp and overflow with timber and brush, which may be classed as poor grazing land. The total remaining acreage intended to be dredged by plaintiff is approximately one-twentieth of one per cent of the total arable lands within the county. The total area of land in the county of Merced which has any known dredging value does not exceed 2,000 acres, a considerable portion of which is not fit for cultivation in its natural state due to its overflow and swampy character. This 2,000 acres is approximately one-fourth of one per cent of the county's total of 873,949 acres of arable land as shown by the 1940 United States census.

Plaintiff's operations on these lands to date, involving acquisition and prospecting and the erection of dredging machinery and equipment and appurtenant structures thereon, have entailed capital expenditures in excess of $380,000. It is a profitable business, the land dredged to date having yielded $2,701,089.73 in gold, silver and platinum.

On September 1, 1945, the defendant Board of Supervisors met and adopted Ordinance No. 253. By its terms this ordinance prohibits all persons from carrying on any "surface mining operations in the county of Merced * * * involving the use of dredgers, drag lines, or other soil moving devices which displace rocks and soil, or both, on the earth's surface § 2 * * * without first having obtained a permit so to do, as herein provided." § 9.

Each application for a permit must be accompanied by a "permit fee of $10," and a bond in the penal sum of $300 for each acre covered by the application, a maximum of $10,000, "conditioned to pay all damages to said county and any other person or persons who may be damaged by reason of the mining operations." § 9.

All such operations "shall be conducted in such manner as to replace the rocks and soil displaced by their operations. The coarse material shall be placed at the bottom of the excavation, the fine material at the top, and the top soil shall be replaced on top of the other material. The surface of the land, after dredging, shall be left in as level a condition as it was before any of the said materials were displaced." § 2.

"Any violation * * * is a misdemeanor * * * punishable by a fine not to exceed * * * $500.00, or by imprisonment * * * for not to exceed six months, or by both * * *. For each day that any person fails to comply * * * he shall be guilty of a separate violation thereof." § 11.

"Without in any manner affecting the penal provisions * * * the Board of Supervisors * * * reserve the right * * * to terminate any permit to mine * * * for any violation of this ordinance, after granting a hearing on the question of violation * * *." § 10.

Plaintiff alleges that its future dredging operations will not approach closer than one mile to the nearest residence community or state highway, and will not involve any injury, hazard, or nuisance to adjacent property, or to the people residing in the county, or to the public traveling on the highways, or any injury or threat of injury to public morals, health, safety, or welfare.

It is urged that the effect of ordinance No. 253 is to deprive plaintiff of property without due process of law, and to deny to plaintiff the equal protection of the laws, in contravention of the Fourteenth Amendment to the Federal Constitution; also that enforcement of the ordinance would amount to a taking of private property for public use, without just compensation, contrary to the Fifth Amendment.

The complaint alleges that defendants threaten to enforce the questioned ordinance as against plaintiff, and to cause the arrest and imprisonment of plaintiff's employees and so prevent plaintiff's further dredging operations on its own land, unless plaintiff complies with the provisions of the ordinance. And further that the immediate damage thus threatened to plaintiff's property and property rights is irreparable because plaintiff's remedy at law as against defendants is inadequate. The complaint concludes with an offer "to do equity herein as the Court may determine."

Plaintiff invokes the jurisdiction of this court under § 24 of the Judicial Code upon the ground that "the matter in controversy exceeds * * * $3,000, and (a) arises under the Constitution * * * of the United States * * * or (b) is between citizens of different States" 28 U.S.C.A. § 41(1) (a), (b).

Since plaintiff is a Nevada corporation and defendant county of Merced is a "citizen" of California within the meaning of Article III, § 2, (U.S.Const.), requisite diversity of citizenship exists. Cowles v. Mercer County, 1868, 74 U.S. 118, 122, 7 Wall. 118, 19 L.Ed. 86; Pettibone v. Cook County, 8 Cir., 1941, 120 F.2d 850, 851.

It is equally well settled that a corporation is a "person" within the meaning of the due process and equal protection clauses of the Fourteenth Amendment. Santa Clara County v. Southern Pac. R. R. Co., 1885, 118 U.S. 394, 396, 6 S.Ct. 1132, 30 L.Ed. 118; Covington and Lexington Turnpike Road Co. v. Sandford, 1896, 164 U.S. 578, 592, 17 S.Ct. 198, 41 L.Ed. 560; Liggett Co. v. Baldridge, 1928, 278 U.S. 105, 111, 49 S.Ct. 57, 73 L.Ed. 204. And a foreign corporation permitted, as plaintiff here, to do business within a state may not be subjected to unconstitutional state action. Kentucky Finance Corp. v. Paramount Auto Exchange Corp., 1923, 262 U. S. 544, 550, 43 S.Ct. 636, 67 L.Ed. 1112; Power Mfg. Co. v. Saunders, 1927, 274 U. S. 490, 493, 47 S.Ct. 678, 71 L.Ed. 1165.

Moreover, plaintiff's business is a property right, and as such is entitled to protection against the exercise of state power in contravention of the Federal Constitution. Duplex Printing Press Co. v. Deering, 1921, 254 U.S. 443, 465, 41 S.Ct. 172, 65 L.Ed. 349, 16 A.L.R. 196; Truax v. Corrigan, 1921, 257 U.S. 312, 327, 42 S.Ct. 124, 66 L.Ed. 254, 27 A.L.R. 375; Liggett Co. v. Baldridge, supra, 278 U.S. at page 111, 49 S.Ct. 57.

Article XI, § 11, (Cal.Const.) declares: "Any county * * * may make and enforce within its limits all such local, police, sanitary, and other regulations as are not in conflict with general laws." Except to the extent that the legislature by general laws has preempted the field, any county in California may exercise within its territorial limits the complete police power of the state. In re Holmes, 1921, 187 Cal. 640, 203 P. 398; Stanislaus County, etc., Ass'n v. Stanislaus County, 1937, 8 Cal.2d 378, 383, 384, 65 P.2d 1305.

The California legislature has not sought to regulate dredge mining. Indeed, a measure similar to the questioned ordinance at bar failed of enactment in the 1945 legislature. Senate Bill 37, Senate Final History, p. 109, Final Calendar of Legislative Business, Cal. Legislature, 56th Session (1945).

So the action of the Board of Supervisors of the county of Merced is to be regarded as the action of the state. Raymond v. Chicago Union Traction Co., 1907, 207 U.S. 20, 35, 40, 28 S.Ct. 7, 52 L.Ed. 78, 12 Ann. Cas. 757; Lovell v. City of Griffin, 1938, 303 U.S. 444, 450, 58 S.Ct. 666, 82 L.Ed. 949.

However, a county ordinance is not deemed a "statute of a State" within the meaning of § 266 of the Judicial Code as amended (28 U.S.C.A. § 380) so as to permit a three-judge court to be convened to decide the constitutionality of the measure. Phillips...

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