Metropolitan St. Louis Sewer Dist. v. Ruckelshaus

• Decision Date: 08 February 1984
• Docket Number: No. 83-971C(C).,83-971C(C).
• Citation: 590 F. Supp. 385
• Parties: The METROPOLITAN SAINT LOUIS SEWER DISTRICT, Plaintiff, v. William D. RUCKELSHAUS Administrator of the United States Environmental Protection Agency, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

590 F. Supp. 385

The METROPOLITAN SAINT LOUIS SEWER DISTRICT, Plaintiff, v. William D. RUCKELSHAUS Administrator of the United States Environmental Protection Agency, et al., Defendants.

No. 83-971C(C).

United States District Court, E.D. Missouri, E.D.

February 8, 1984.

Don Stohr, Charles Kaiser, St. Louis, Mo., for plaintiff.

Jay Daughery, Jefferson City, Mo., for all defendants except EPA.

Dean Dunsmore, Washington, D.C., for defendants.

MEMORANDUM

MEREDITH, District Judge.

This matter is before the court on federal defendant's (William D. Ruckelshaus, Administrator of the United States Environmental Protection Agency) motion to dismiss. Plaintiff's complaint seeks (1) a declaration of the rights of the parties with respect to the grant agreements, (2) a declaration that the Hancock Amendment, Article 10, § 22 of the Missouri State Constitution is unconstitutional in so far as it applies to the user charge system required by the contract between plaintiff and defendants because it violates the federal constitution, (3) to enjoin the Missouri State defendants from enforcing the Hancock Amendment with respect to MSD's contractual obligations to adopt a user charge system, (4) to enjoin the EPA and Missouri State defendants from withholding funds due MSD, (5) to award plaintiff its attorney's fees and costs. For the reasons stated forth below, the complaint will be dismissed in its entirety.

Facts

This action is filed by the Metropolitan Saint Louis Sewer District (MSD) challenging the validity of the Hancock Amendment as it relates to a federal requirement to impose a system of user charges as a condition of federal grant funding under 33 U.S.C. § 1251 et seq. Plaintiff states it intends to enact the user charge system as part of its contractual obligations under 33 U.S.C. § 1284(b)(1).

In 1972, Congress amended the Federal Water Pollution Control Act, 33 U.S.C. § 1251, to provide a program at both state and federal level to improve the quality of the nation's water. The administrator of the EPA is authorized to provide construction grant funds to assist local governments in the construction of sewage treatment plants. This authority allows EPA to award 75 percent of the eligible construction costs of sewage treatment facilities to a successful applicant upon demonstration of satisfaction of minimal terms and conditions described by regulation. Recipients of federal grants are required to adopt a system of user charges to pay for the operation and maintenance of the federally funded facility, and the administrator shall publish guidelines for the payment of waste treatment costs by recipients of waste treatment services, including rates of user charges typical of various treatment works. The actual rate charges to be assessed are established by the grantee, with EPA approval.

MSD is a municipal corporation and a political subdivision of the State of Missouri. MSD has operated a system of sewage treatment facilities in the Saint Louis metropolitan area for a number of years. Grant funds have been awarded by EPA to MSD for the improvement of existing facilities and the construction of the facilities.

The Clean Water Act, 33 U.S.C. § 1284(b)(1), required that all recipients of federal grant funds agree to adopt a system of user charges to pay for the operation and maintenance including replacement of the federally funded facilities. Each of the grant agreements between EPA and MSD contains a provision in which MSD has contractually agreed to adopt an approved user charge system. MSD admits that its present user charge system does not comply with the requirements of the Clean Water Act.

MSD has prepared a proposed ordinance to impose a user charge system upon users of sewer services within its territorial jurisdiction. MSD intends to enact the ordinance and commence collection of user charges without first submitting the issue to election. Until MSD actually adopts a user charge system (by vote or not) as required by 33 U.S.C. § 1284(b)(1), EPA and the State defendants are withholding and will continue to withhold further payment of funds due MSD under the existing grant agreements.

Abstention

The question has been raised whether MSD lacks the power to make a contract with the EPA establishing user fees. If MSD could not legally make or enter into the contract which is the basis of this suit, then the contract is void ab initio, and there could be no impairment of contract. This question is now before the Missouri State court, in Wilhemina D. Roberts v. Metropolitan Saint Louis Sewer District, Circuit Court of the City of Saint Louis, No. 834-0268 (filed 26 August 1983). The answer to such question may cause the federal constitutional issue to be moot.

Further, that case very well may resolve the issue of whether the Hancock Amendment precludes plaintiff's particular suggested implementation of the grant agreement required user charge system. Indeed, the State courts may construe the Hancock Amendment in such a way as to avoid or modify the federal constitutional question. Compare Oswald v. City of Blue Springs, 635 S.W.2d 332 (Mo. En Banc 1982) (state political sub-division operating water treatment plant has authority to raise sewage rates) with Roberts v. McNary, 636 S.W.2d 332, 336 (Mo. En Banc 1982) (voters must approve rate increases).

There are two unanswered state law questions which have yet to be decided and which are now pending before the Missouri court system. Abstention of federal courts is appropriate in a case like this presenting a federal constitutional issue which might be mooted in a state court determination of state law. Colorado River Water Conservation District v. United States of America, 424 U.S. 800, 814, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976); National City Lines, Inc. v. LLC Corp., 687 F.2d 1122, 1126 (8th Cir.1982).

Therefore, this case will be dismissed to allow state court determination of state law, since such determination may avoid the federal constitutional issue presented herein.

No Live Case or Controversy

The only relief plaintiff requests against the federal defendant EPA is to enjoin the EPA from withholding funds due plaintiff. Plaintiff admits that its contract with the EPA requires it to adopt a system of user charges which complies with the Clean Water Act. Plaintiff admits that its present user charge system does not comply with these requirements. Plaintiff admits that the EPA is authorized under the contract to rescind the grant agreements, to withhold further payments due and to recover payments already made. Plaintiff and EPA agree that EPA may properly withhold funds. Therefore, plaintiff has failed to allege a dispute between itself and EPA, and has failed to state a claim upon which relief can be granted.

No Subject Matter Jurisdiction

The only relief sought against EPA is to require the EPA to issue funds due plaintiff according to the contract. Plaintiff does seek relief in addition to determining monetary liability of the EPA. However, the declaratory relief sought, with regard to holding the Hancock Amendment unconstitutional as applied to the specific issue of the user charge system required by the contractual obligations imposed by the Clean Water Act, is not directed against the federal defendant EPA. Thus, that part of State of Minnesota v. Heckler, 718 F.2d 852, 858 (8th Cir.1983), which states that if the relief sought has significant prospective effect or value apart from merely determining monetary liability of the government, then the district court may assume jurisdiction over the non-monetary claims, is inapplicable. Clearly, the only relief sought against EPA is a monetary award due MSD under the contract. Jurisdiction for a money award claim is exclusively in the United States Claims Court. State v. Minnesota, 718 F.2d at 857. Plaintiff does not seek to have the EPA-MSD contract terms relating to user fees declared unconstitutional. If so, such prospective determination would involve EPA. A decision of whether the Hancock Amendment impermissibly prevents MSD from carrying out a contract does not involve equitable relief against the federal government as required in State of Minnesota. The only relief sought against EPA being a declaration concerning contract funds, the district court lacks jurisdiction. 28 U.S.C. § 1491(a)(1).

Plaintiff cites State Highway Commission of Missouri v. Volpe, 479 F.2d 1099 (8th Cir.1973), for the proposition that an action against a federal officer seeking disbursement of appropriated funds is within the district court's federal question jurisdiction under 28 U.S.C. § 1331(a). However, in Volpe, the funds were withheld because the Director of the Budget wanted to control inflationary pressures. There was no question that the funds were apportioned. In the case at bar, as noted above, it is clear that while the funds are available if certain requirements are met, MSD has no right to them until it meets its contract obligations. As MSD admits, it has not met those contract obligations. Thus the question is not whether EPA can impound funds (a federal question under § 1331(a)), but whether under the contract it has to pay them (§ 1491(a) jurisdiction). First, plaintiff admits EPA does not have to pay. Second, this contract question is within the exclusive jurisdiction of the Court of Claims. See Polos v. United States of America, 556 F.2d 903, 905 (8th Cir.1977).

For the above reasons, the case properly may be dismissed as to EPA.

Contract Impairment

Even were this court not to defer to the Missouri State courts, as stated above, plaintiff fails to state a claim upon which relief can be granted as to all defendants. There has been no impairment of contract. As a matter of law, this court cannot declare the Hancock Amendment to be unconstitutional in this particular case. Therefore the case properly may be dismissed.

The contract clause of the federal Constitution does not bar all...