Squaw Valley Development Co. v. Goldberg

• Decision Date: 20 July 2004
• Docket Number: No. 02-17346.,02-17346.
• Citation: 375 F.3d 936
• Parties: SQUAW VALLEY DEVELOPMENT COMPANY; Squaw Valley Ski Corporation; Squaw Valley Preserve, Plaintiffs-Appellants, v. Martin GOLDBERG; Harold Singer, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

375 F.3d 936

SQUAW VALLEY DEVELOPMENT COMPANY; Squaw Valley Ski Corporation; Squaw Valley Preserve, Plaintiffs-Appellants, v. Martin GOLDBERG; Harold Singer, Defendants-Appellees.

No. 02-17346.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 11, 2004.

Filed July 20, 2004.

COPYRIGHT MATERIAL OMITTED

G. David Robertson and Kirk C. Johnson, Robertson & Benevento, Reno, NV, for the plaintiffs-appellants.

Janill L. Richards, Deputy Attorney General, State of California, Oakland, CA, for the defendants-appellees.

Appeal from the United States District Court for the Eastern District of California; William B. Shubb, District Judge, Presiding. D.C. No. CV 01-2031 WBS.

Before: TASHIMA and CLIFTON, Circuit Judges, and LEIGHTON, District Judge.^*

TASHIMA, Circuit Judge:

Squaw Valley Development Company, Squaw Valley Ski Corporation and Squaw Valley Preserve (collectively, "Squaw Valley") filed this action under 42 U.S.C. § 1983, alleging that two employees of the California Regional Water Quality Control Board, Lahontan Region (the "Lahontan Board") subjected them to selective and over-zealous regulatory oversight in violation of their constitutional rights to equal protection and substantive due process. The district court granted summary judgment in favor of the employees, Harold Singer and Martin Goldberg, on the ground that they are entitled to qualified immunity because there is no triable issue of material fact that a constitutional violation had been committed. Because Squaw Valley presented evidence that Singer may have been motivated by personal animus, we reverse the grant of summary judgment as to Squaw Valley's "class of one" equal protection claim against Singer, but affirm on the remaining claims.

FACTUAL AND PROCEDURAL BACKGROUND

I. Factual Background

Squaw Valley owns and operates a ski resort on approximately 4,200 acres in Placer County, California. The resort is naturally traversed by the South Fork of Squaw Creek (the "South Fork"). Downstream of Squaw Valley's property, the South Fork merges into Squaw Creek proper, which eventually drains into the Truckee River. Squaw Valley is one of approximately 800 "dischargers" subject to regulatory oversight by the Lahontan Board.

The Lahontan Board is one of nine regional boards authorized to regulate and protect California's water resources. It has a small governing board and a staff of over 70 employees (the "Staff"). Singer is and has been the Lahontan Board's Executive Officer since 1989; he directs the Staff. Goldberg has been an environmental scientist on the Staff since April 1999. Although Singer appointed Goldberg to his position, Singer does not directly (immediately) supervise Goldberg.

Singer's duties include enforcing various provisions of the California Water Code pursuant to the authority delegated to him by the Lahontan Board. Singer has the authority to take certain regulatory actions independently from the Lahontan Board; for example, he is authorized to issue a Complaint for Administrative Civil Liability ("ACL") or a Cleanup and Abatement Order ("CAO"). Goldberg also has some authority to enforce California's water quality standards by inspecting and monitoring dischargers' facilities for compliance, and issuing Notices to Comply or Notices of Violations. The Lahontan Board itself may take action when a discharger violates a water quality regulation by issuing Waste Discharge Requirements ("WDRs") or civil liability orders, or by referring violations to the California Attorney General. When a matter is before the Lahontan Board for decision, the Staff recommends a course of action and provides information to assist in the decision-making.

Squaw Valley's environmental water quality obligations are primarily set forth in two documents: (1) the Basin Plan, adopted by the Lahontan Board in October 1994; and (2) Squaw Valley's most recent WDRs, issued by the Lahontan Board on April 8, 1993.

A. The Basin Plan

The Basin Plan "sets forth water quality standards for the surface and groundwater of the [Lahontan] Region, which include both designated beneficial uses of water and the ... numerical objectives which must be maintained or attained to protect those uses." The Basin Plan includes water quality 9563 objectives for numerous contaminates, including turbidity.¹ The Basin Plan requires that all waters of the Lahontan Region "shall be free of changes in turbidity that cause nuisance or adversely affect the water for beneficial uses" and "[i]ncreases in turbidity shall not exceed natural levels by more than 10 percent." The Basin Plan imposes additional water quality objectives for specific water bodies and hydrologic units, including the Truckee River Hydrologic Unit. In the Truckee River unit, "[t]he turbidity shall not be raised above 3 Nephelometric Turbidity Units (NTU) mean of monthly means [MOMM]."²

B. The WDRs

The Lahontan Board issued WDRs which contain water quality objectives and other standards that apply specifically to Squaw Valley. The WDRs contain Squaw Valley's turbidity objective:

4. The discharge of surface flows generated within the facility, or as a result of earth disturbance within the facility, shall not cause the following conditions or alterations in surface waters of the Truckee River Hydrologic Unit:

....

C. The turbidity of waters shall not be raised above 3 NTU (Nephelometric Turbidity Units), mean of monthly means. In no instance shall an increase in turbidity exceed natural levels by more than 10 percent.

C. Regulation of Squaw Valley

Squaw Valley's history of non-compliance with water quality requirements extends back into the 1970s. The Lahontan Board adopted a Cease and Desist Order against Squaw Valley in 1976, and imposed a Stipulated Judgment in 1978. The Lahontan Board also issued CAOs against Squaw Valley in January 1983, September 1983, August 1985, and November 1985. In 1992, Squaw Valley settled an enforcement action resulting from a fuel spill. The Lahontan Board issued an ACL against Squaw Valley in January 1994, and issued more CAOs in August 1994, November 1995, March 1998, and March 1999. Despite this regulatory history, Squaw Valley asserts that prior to 1999 the relationship between the parties "was relatively good."

From 1989 to 1999, Jerry Peacock was the regulator assigned to Squaw Valley. Peacock has a Bachelor of Science degree in civil engineering from the University of California, Berkeley, a Masters Degree in hydrology from Stanford University, and is a registered professional engineer. As a senior staff engineer, Peacock handles the majority of the most complex dischargers that the Lahontan Board oversees. Squaw Valley contends it had few water quality violations during Peacock's tenure, and that Peacock "got along pretty well" with Squaw Valley personnel.

Singer expressed concerns that Peacock was overextended, and in 1999, Singer removed Peacock and assigned Goldberg to oversee Squaw Valley.³

Goldberg had no prior experience as a regulator and was promoted from a "student assistant" — a mostly clerical position — to his position overseeing Squaw Valley. Goldberg's formal education consisted of a degree in soil science from California Polytechnic State University, San Luis Obispo, and, as of August 2002, while working for the Lahontan Board 20 hours a week, he was pursuing a Masters of Science degree in soil science at the University of California, Davis. In June 2002, in a proposal to the Lahontan Board regarding his master's program, Goldberg wrote that "as a young regulator [he] found that [he] did not have the background, broadscale expertise, or scientifically validated field studies with which to critically evaluate [Squaw Valley's and other ski resorts'] projects."

Initially, Singer assigned Goldberg to oversee Squaw Valley exclusively. Singer informed Goldberg that because of Squaw Valley's compliance record and the complexity of the facilities, it warranted a greater amount of oversight than what had been previously provided and what was required of many other dischargers. As a result, Goldberg has been exacting and thorough in his dealings with Squaw Valley.

Squaw Valley's Facility Violation History shows that for 10 years, from 1989 to 1999, Peacock noted an average of one water quality violation per year; however, Goldberg reported at least 21 violations within his first year of overseeing Squaw Valley. Goldberg acknowledges his frustration with Squaw Valley and explains that he has favored formal over informal regulatory action because, in his view, "[c]apturing Squaw Valley's attention has been an ongoing problem ... they are repeat violators" who "often dispute[] the validity" of his suggestions. Goldberg's immediate supervisor also declared that he pays particularly close attention to Squaw Valley because "Squaw Valley questions or disputes almost every regulatory or enforcement action ... and because of the long history of [non-compliance]."

D. The Turbidity Dispute

The natural background level of turbidity in the South Fork is unknown. However, experts, including Peacock, believe the turbidity levels of the North Fork of Squaw Creek are a good indicator of background turbidity. The North Fork's MOMM turbidity is 4.3 NTUs.

Peacock drafted Squaw Valley's "turbidity objective" in 1993. During Peacock's tenure, he treated the objective as allowing an increase in turbidity of 3 NTUs over the natural background levels. During this time, Singer sent a letter endorsing the "above background" turbidity objective.⁴ Accordingly, prior to 1999, Squaw Valley could cause increases in turbidity up to 7.3 NTUs (i.e., 3 NTUs higher than background).

Goldberg applied a turbidity standard whereby the MOMM turbidity could never exceed 3 NTUs total. Singer also endorsed this "absolute" standard and, notwithstanding his prior letter, contends that he always interpreted the Basin Plan and Squaw Valley's WDRs as setting an "absol...