Montara Water and Sanitary v. County of San Mateo

Decision Date26 February 2009
Docket NumberCase No. C 08-2814 JF (RS).
Citation598 F.Supp.2d 1070
CourtU.S. District Court — Northern District of California
PartiesMONTARA WATER AND SANITARY DISTRICT, Plaintiff, v. COUNTY OF SAN MATEO, a political subdivision of the State of California, Defendant. The United States of America, Intervenor.

Christine Carin Fitzgerald, Herman H. Fitzgerald, Law Offices of Herman H. Fitzgerald, a Professional Corporation, Burlingame, CA, David E. Schricker, Law Offices of David E. Schricker, Cupertino, CA, for Plaintiff.

Thomas F. Casey, III, David A. Levy, Glenn Michael Levy, San Mateo County County Counsel, Redwood City, CA, for Defendant.

Charles Michael O'Connor, United States Attorney's Office, Northern District of California, San Francisco, CA, for Intervenor.

ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT

JEREMY FOGEL, District Judge.

This action arises from a dispute over the ownership of three water wells located on the property of the Half Moon Bay Airport, a public facility owned since 1948 by the County of San Mateo, California ("the County"). Plaintiff Montara Water and Sanitary District ("Montara") seeks to take the wells by eminent domain. The United States, acting through the Federal Aviation Administration ("the FAA"), has intervened to oppose Montara's efforts. Each party has filed a motion for summary judgment asserting ownership of the wells. The United States claims to have retaken the wells pursuant to a reversion clause contained in the deed by which the airport passed from the federal government to the County in 1948. The United States argues that the reversion was justified by Montara's success in obtaining an interlocutory state-court order authorizing the proposed condemnation and granting Montara current possessory rights over the wells. Montara disputes the existence of any condition justifying the reversion and asks this Court to uphold the state court's order. The County argues that Montara's complaint in eminent domain is preempted in the first instance by the original deed of transfer, federal statutes, FAA regulations, and other evidence of congressional intent to preclude dispositions of airport property that the federal government opposes.

The Court concludes that Montara's successful condemnation of the wells clearly would trigger the reversion clause contained in the airport deed. While Montara has not yet reduced the state court's order to a final judgment permanently divesting the County of its title to the wells, the Court holds that the order effected a transfer of rights sufficient to justify the United States's exercise of its reversionary interest. Because the United States properly exercised its reversionary interest, it now owns the wells. In the interest of completeness, the Court also addresses whether the proposed condemnation is preempted by federal law. In so doing, the Court concludes that even if the reversion clause could not have been triggered until Montara obtained a final judgment and formally divested the County of title, Montara's complaint in eminent domain would be preempted, leaving the County with possession of the wells.1

I. BACKGROUND

The Half Moon Bay Airport was constructed in 1942 for the United States Army, which relinquished the property to the Navy at the end of World War II. The County acquired the airport from the United States, acting through the War Assets Administration and pursuant to the Surplus Property Act of 1944, as amended, by way of a deed dated September 26, 1947 and recorded on May 25, 1948. The airport provides a variety of law enforcement, medical emergency, and sea-rescue services, and is capable of supporting emergency response operations in the event of a disaster preventing road travel. The airport also contains the three water wells that are the subject of the instant dispute. The wells are situated near the airport's eastern boundary; two of the well sites are in close proximity to aircraft parking areas, and one is within the airport's secured area.

Montara, which provides water and sanitary services to the unincorporated coastal communities of Montara and Moss Beach, obtains water from one surface source and several wells, including those located on the airport property. Water has been extracted from the airport wells since approximately 1948. Montara derives its extraction rights from a Revocable Encroachment Permit issued to its predecessor-in-interest in 2004. It pays a volume-based extraction fee which in recent years has yielded an annual payment of approximately $60,000. The fees are deposited in the airport's Enterprise Fund, which supports the facility's largely self-funded operation and maintenance.

Before instituting this action, Montara offered to purchase the airport wells from the County for approximately $5,000. The County refused, and on April 19, 2007, Montara's board adopted a resolution authorizing eminent domain proceedings to obtain title to the property comprising the wells. On May 17, 2007, Montara filed a complaint in eminent domain in the San Mateo Superior Court. The action was transferred to the Santa Clara Superior Court on June 12, 2007, and removed to this Court on June 15, 2007 pursuant to the Quiet Title Act, 28 U.S.C. § 2409a. On October 9, 2007, this Court granted Montara's motion to remand on the ground that the absence of the United States from the action deprived the Court of jurisdiction under the Quiet Title Act.

In November 2007, Montara filed a motion pursuant to § 1255.410 of the California Code of Civil Procedure for an order granting it early possession of the airport wells. On December 19, 2007, the Santa Clara Superior Court granted the motion and issued an Order of Possession giving Montara the right to possess and ultimately condemn the wells. The court established the probable amount of compensation as approximately $6,000. On December 21, 2007, the FAA, which consistently had opposed the condemnation, issued a notice of its intent to revert the airport wells pursuant to the 1947 deed of transfer. The FAA executed and recorded the Notice of Reverter on March 21, 2008. On June 4, 2008, the Superior Court granted the United States's motion to intervene, and on June 5, 2008, the United States removed the action to this Court pursuant to 28 U.S.C. § 1331 (federal question) and 28 U.S.C. § 2409a (Quiet Title Act). Because the United States now was present in the action and expressly claimed title to the wells, the Court denied Montara's second motion to remand. The parties then filed the instant motions for summary judgment.

II. LEGAL STANDARD FOR SUMMARY JUDGMENT

Summary judgment is appropriate when there are no genuine and disputed issues of material fact and the moving party is entitled to prevail as a matter of law. Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.1987). The Court must view the evidence in the light most favorably to the non-moving party, and all reasonable inferences must be drawn in favor of that party. Torres v. City of Los Angeles, 540 F.3d 1031, 1039-40 (9th Cir.2008). The moving party bears the burden of showing that there is no material factual dispute. Therefore, the court must regard as true the opposing party's evidence, if supported by affidavits or other proper evidentiary material. Celotex, 477 U.S. at 324, 106 S.Ct. 2548.

III. DISCUSSION

A determination that Montara's action is preempted by federal law might appear to resolve the instant dispute, requiring a declaration that the Superior Court issued the Order of Possession without jurisdiction to do so, and that the County therefore retains title to the wells. Such a result is precluded, however, if the United States validly has exercised its reversionary interest, thus irrevocably altering the parties' rights. Accordingly, the Court's first task is to determine whether Montara's actions triggered the reversion clause contained in the airport deed. Because the United States challenges this Court's jurisdiction to address this issue, the Court begins by confirming its jurisdiction.

A. Reversion under the 1947 airport deed

1. Subject-matter jurisdiction

The Quiet Title Act provides the exclusive means by which a party may challenge federal ownership of property. Block v. North Dakota, 461 U.S. 273, 286, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983) ("Congress intended the QTA to provide the exclusive means by which adverse claimants could challenge the United States' title to real property."). The United States argues that its re-acquisition of the wells by reversion prevents Montara from seeking title to the property without properly invoking the Quiet Title Act.2 Montara contends that the dispositive question is whether there has been a "breach" triggering the reversion clause, and submits that this question may be decided as a preliminary jurisdictional matter since a finding of no breach would eliminate the United States's claim to any property interest justifying its presence in the action. While Montara is correct that the ultimate question is whether the United States or some other party owns the wells, there is no question that the United States claims to own them. Because Montara also seeks a determination that it owns the wells, the instant case falls squarely within the exclusive grant of jurisdiction provided by the Quiet Title Act.3

The Quiet Title Act provides for a limited waiver of federal sovereign immunity. See Gardner v. Stager, 103 F.3d 886, 888 (9th Cir.1996). The Ninth Circuit has held that "two conditions must exist before a district court can exercise jurisdiction over an action under the Quiet Title Act: 1) the United States must claim an interest in the property at issue; and 2) there must be a disputed title to real property between interests of the plaintiff and the United States." Leisnoi,...

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    ...the United States claims an interest, the trial court had no jurisdiction over this claim. See Montara Water and Sanitary Dist. v. Cnty. of San Mateo, 598 F.Supp.2d 1070, 1075-76 (N.D. Cal. 2009) (concluding case fell squarely within the federal court's exclusive jurisdiction when both the ......

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