National Audubon Soc. v. Department of Water, s. 85-2046

Citation869 F.2d 1196
Decision Date08 February 1989
Docket NumberNos. 85-2046,85-2105 and 85-2236,s. 85-2046
Parties19 Envtl. L. Rep. 20,198 NATIONAL AUDUBON SOCIETY, et al., Plaintiff/Cross-Defendant/Appellee, v. DEPARTMENT OF WATER, et al., Defendants, and State of California, Defendant/Cross-Complainant/Appellant. NATIONAL AUDUBON SOCIETY; Friends of the Earth; Mono Lake Committee; Los Angeles Audubon Society; David Gaines; Charles K. Simis; Walter T. Hansen; and John E. Boynton, Plaintiffs/Cross-Defendants/Appellants, v. DEPARTMENT OF WATER, et al., Defendants, and State of California, Defendant/Cross-Complainant/Appellee. NATIONAL AUDUBON SOCIETY, et al., a corporation, Plaintiffs/Cross-Defendants/Appellees, v. DEPARTMENT OF WATER & POWER OF The CITY OF LOS ANGELES, Defendant/Cross-Complainant, v. UNITED STATES of America, et al., Cross-Defendants, and State of California, Cross-Defendants/Cross-Complainant/Appellant. NATIONAL AUDUBON SOCIETY, et al., a corporation, Plaintiffs/Cross-Defendants/Appellees, v. DEPARTMENT OF WATER & POWER OF The CITY OF LOS ANGELES, Defendant/Cross-Complainant/Appellant, v. UNITED STATES of America, et al., Cross-Defendants, and State of California, Cross-Defendants/Cross-Complainant. NATIONAL AUDUBON SOCIETY, et al., a corporation, Plaintiffs/Cross-Defendants/Appellants, v. DEPARTMENT OF WATER & POWER OF The CITY OF LOS ANGELES, Defendant/Cross-Complainant/Appellees, v. UNITED STATES of America, et al., Cross-Defendants, and State of California, Cross-Defendant/Cross-Complainant. to 85-2238.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

F. Bruce Dodge, Patrick Flynn, San Francisco, Cal., and Lynne M. Yerkes, Walnut Creek, Cal., for plaintiffs/cross-defendants and appellants/cross-appellees.

Janet K. Goldsmith, Sacramento, Cal., for defendant/cross-complainant and appellee/cross-appellant.

Roderick E. Walston, San Francisco, Cal., for cross-defendants and appellees/cross-appellants.

Appeal from the United States District Court for the Eastern District of California.

Before GOODWIN, * REINHARDT and BRUNETTI, Circuit Judges.

BRUNETTI, Circuit Judge:

I

FACTS AND PROCEEDINGS BELOW

These consolidated interlocutory appeals and appeals as-of-right arise from a suit filed in 1979 by the National Audubon Society and others ("Audubon") against the Los Angeles Department of Water and Power ("DWP") to restrain DWP's diversion to Los Angeles of four freshwater streams that would otherwise flow into Mono Lake.

Mono Lake is a natural saline lake located wholly within the State of California. Pursuant to permits granted by the California Water Resources Control Board, DWP has carried out these diversions since 1940. With the diversion of the Lake's surface water sources, its natural volume has been decreased and some 14,000 acres of lake bed have been exposed. The reduction of the Lake volume has also caused increases in salinity and ion concentration.

Audubon's original complaint, filed in the Superior Court for Mono County, asserted: 1) violation of the public trust; 2) violation of California Constitution article XVI, section 6 (prohibiting a gift by the state of a state asset); 3) a quiet title action to establish public trust rights in the waters of the Mono Basin; 4) public and private nuisance (from mud and dust created by reliction); and 5) violation of California Constitution article X, section 4 (prohibiting obstruction The case was transferred to Alpine County Superior Court, and DWP filed a cross-complaint containing four counts. The first count sought adjudication of Basin water rights as to all appropriators; the second sought to quiet title to those rights. These two causes named 117 cross-defendants, including all of the plaintiffs, the State of California, the United States Forest Service, the Bureau of Land Management, and numerous private water users. The third cause of action sought a declaration that, to the extent that the United States has jurisdiction over California's exercise of its navigation trust, Congress has consented to the impairment of the navigable waters of Mono Lake. Finally, DWP asserted that any nuisance at Mono Lake is attributable to the owner of the newly exposed Lake bed, and sought a declaration that conditions at the Lake resulted from a valid exercise of the police power by the State of California.

of navigable waters). Audubon sought declaratory and injunctive relief.

Thereafter, the United States removed the action to federal district court pursuant to 28 U.S.C. Sec. 1442(a)(1) on the grounds that the cross-complaint implicated acts of the named federal agencies. The district court determined that, although only the third cause of action in DWP's complaint implicated the acts of federal agencies, the entire action was removable. Accordingly, the court denied DWP's motion to remand. National Audubon Soc. v. Department of Water and Power, 496 F.Supp. 499 (E.D.Cal.1980).

DWP then made a motion to amend its cross-complaint to drop its third cause of action and filed a concurrent motion to remand to state court on the ground that the original basis for removal had been extinguished. DWP alternatively asked the court to abstain.

At the same time, Audubon sought permission to amend its complaint to include a cause of action based on the federal common law of nuisance. Audubon's federal nuisance claim was predicated on its assertion that Mono Lake is an "interstate or navigable" water in which there is an overriding federal interest, and that DWP's diversions were causing, inter alia, water pollution by increasing the Lake's salinity and ion concentration, and air pollution in the form of alkali dust storms from the newly exposed lake bed. In the same order, the district court granted DWP's motion to amend its cross-complaint, but also granted Audubon's motion to add a new federal claim to its complaint. Accordingly, the court denied DWP's motion to remand.

Shortly thereafter, the district court determined that abstention would be appropriate and instructed Audubon to file an action in state court to resolve two issues: 1) the relationship between the public trust doctrine and the California water rights system, and 2) whether exhaustion of administrative remedies was a prerequisite to Audubon's suit. The court ruled that it would retain jurisdiction over the case during the pendency of the state action.

Audubon's state action for declaratory judgment on the two issues in the lower court's abstention order eventually reached the California Supreme Court. Ruling in favor of Audubon, the court held that the public trust doctrine was not subsumed in the state water rights system and that Audubon was not required to exhaust administrative remedies before the State Water Resources Control Board. National Audubon Society v. Superior Court, 33 Cal.3d 419, 189 Cal.Rptr. 346, 658 P.2d 709, cert. denied sub nom. Los Angeles Dept. of Water & Power v. National Audubon Society, 464 U.S. 977, 104 S.Ct. 413, 78 L.Ed.2d 351 (1983).

The parties returned to federal district court, whereupon DWP, joined by California, filed two motions: the first, a motion for partial summary judgment directed to Audubon's federal nuisance claims, and the second, a renewed motion for remand to state court on the basis that, if the motion for partial summary judgment were granted, no federal issues would remain to be decided.

In an order dated November 8, 1984, the district court granted in part and denied in part DWP's summary judgment motion.

The court held that Audubon could state a federal common law nuisance claim for air pollution caused by dust from the lake bed, and that the air pollution claim was not preempted by the Clean Air Act. The court also held that the water pollution claim was preempted by the Federal Water Pollution Control Act (FWPCA). In addition, the court granted the motion to remand the state law claims to state court, retaining jurisdiction over only the single remaining federal nuisance claim for interstate dust pollution.

By order of April 15, 1984, the district court certified the following three questions for interlocutory appeal: 1) Whether the federal common law nuisance doctrine applies as a basis for restraining the water diversions in this case; 2) Assuming that the federal common law nuisance doctrine applies as a basis for restraining such water diversions, whether the doctrine can be asserted by plaintiffs in this instance; and 3) Whether the district court, having obtained jurisdiction of this matter pursuant to the removal statute of 28 U.S.C. Sec. 1442(a)(1), has discretion to remand this action to the state court after the original basis for removal was deleted in an amendment intended to defeat federal court jurisdiction.

On May 7, 1985, the district court issued a declaratory judgment pursuant to Fed.R.Civ.P. 54(b) on California's cross-complaint. The court ruled that federal common law of nuisance applies to water diversions authorized under state water rights laws to the extent such diversions cause potential impacts on air quality, but not to the extent that such diversions cause potential impacts on water quality. California and Audubon have appealed this judgment. Audubon, California and DWP have appealed the questions previously certified for interlocutory appeal.

II

ANALYSIS
A. Federal Common Law Nuisance Action
1. Standard of Review

The district court granted summary judgment on the federal common law nuisance claims. We review that decision de novo, Poland v. Martin, 761 F.2d 546, 547 (9th Cir.1985), to determine whether there are any genuine issues of material fact, Fed.R.Civ.P. 56(c), and whether the district court correctly applied the relevant substantive law. Ashton v. Cory, 780 F.2d 816, 818 (9th Cir.1986).

2. Federal Common Law Nuisance Claim--Water Pollution

The district court concluded that Audubon's federal common law nuisance claim for water...

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