Upper Chattahoochee Riverkeeper Fund, Inc. v. City of Atlanta

• Decision Date: 19 November 2012
• Docket Number: 10–10718.,Nos. 10–10711,s. 10–10711
• Citation: 701 F.3d 669
• Parties: UPPER CHATTAHOOCHEE RIVERKEEPER FUND, INC., et al., Plaintiffs, v. CITY OF ATLANTA, Defendant–Third–Party–Plaintiff–Appellee, v. City of Sandy Springs, Third–Party–Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

701 F.3d 669

UPPER CHATTAHOOCHEE RIVERKEEPER FUND, INC., et al., Plaintiffs,

v.CITY OF ATLANTA, Defendant–Third–Party–Plaintiff–Appellee,

v.City of Sandy Springs, Third–Party–Defendant–Appellant.

Nos. 10–10711, 10–10718.

United States Court of Appeals,Eleventh Circuit.

Nov. 19, 2012.

Frank B. Strickland, Anne Ware Lewis, Bryan P. Tyson, Strickland, Brockington, Lewis, LLP, Wendall K. Willard, Atlanta, GA, for Third–Party–Defendant–Appellant.

Curtis Allen Garrett, Jr., Susan H. Richardson, Aaron J. Ross, Susan A. Cahoon, Ronald Lee Raider, Kilpatrick, Townsend & Stockton, LLP, Marc Philip Goncher, Rajan Bhandari, Elizabeth B. Chandler, Renee McGee Shepherd, Linda Katherine DiSantis, Susan Pease Langford, City of Atlanta Law Dept., Richard A. Horder, Kazmarek, Geiger & Laseter LLP, Sarah Ingram Mills, City of Atlanta Dept. of Watershed Management, Atlanta, GA, for Defendant–Third–Party–Plaintiff–Appellee.

Appeals from the United States District Court for the Northern District of Georgia.

Before CARNES, KRAVITCH and FARRIS,^* Circuit Judges.

PER CURIAM:

A federal Clean Water Act lawsuit filed against the City of Atlanta in 1995 resulted in two consent decrees requiring Atlanta to clean up its sewer system. Ten years later Sandy Springs incorporated, which led to state court proceedings to determine whether Atlanta would be allowed to continue to supply Sandy Springs with water. Atlanta had pledged its water service revenue as part of the collateral for bonds that were issued to finance its compliance with the sewer system consent decrees. Atlanta persuaded the same district court that had issued the sewer system consent decrees to enjoin the parties from pursuing the state law proceedings and to take over supervision of those proceedings. The question is whether the district court had jurisdiction to do that.

I.

For more than a decade the United States District Court for the Northern District of Georgia has been monitoring the City of Atlanta's compliance with two consent decrees that the court issued in September 1998 and December 1999. Those consent decrees resolved complex, multi-party litigation arising from Atlanta's violation of the Clean Water Act, 33 U.S.C. §§ 1251 et seq., and required Atlanta to bring its sewer system into compliance with federal environmental laws. See Upper Chattahoochee Riverkeeper Fund, Inc. et al. v. City of Atlanta, 1:95–cv–2550–TWT; United States et al. v. City of Atlanta, 1:98–cv–1956–TWT. The decrees, however, did not specify how compliance with them is to be financed. Atlanta decided to fund its compliance efforts by issuing bonds, pledging as collateral for them the assets and revenues from its water and sewer system.¹

The consent decrees specifically state that the district court “shall retain jurisdiction of this matter for the purposes of implementing and enforcing the terms and conditions” of the decrees. Cf.Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 381–82, 114 S.Ct. 1673, 1677, 128 L.Ed.2d 391 (1994) (explaining that a district court may “retain jurisdiction” over a “dismissal-producing settlement agreement” at the parties' request). And the court has done so. The court's traditional equitable powers also give it ongoing jurisdiction to supervise Atlanta's compliance, to enforce the terms of the consent decrees, and to protect its jurisdiction over the decrees from collateral threats. See, e.g., United States v. Swift & Co., 286 U.S. 106, 114, 52 S.Ct. 460, 462, 76 L.Ed. 999 (1932); Wesch v. Folsom, 6 F.3d 1465, 1470 (11th Cir.1993).

In December 2005, while Atlanta's compliance efforts and the district court's monitoring of them continued, Sandy Springs, which is located in Fulton County, Georgia, was incorporated as a municipality. Both before and after Sandy Springs was incorporated, Fulton County provided its sewer service and Atlanta provided its water service.²

Georgia's Service Delivery Strategy Act, Ga.Code Ann. §§ 36–70–20 et seq., requires every Georgia county and each of the municipalities within it to adopt a service delivery agreement that identifies the service provider, service areas, and all funding sources for governmental services provided in the county. Id. §§ 36–70–20, 36–70–23, 36–70–26. The Act also prescribes a process for reaching that agreement and resolving any disagreement, which “is intended to minimize inefficiencies resulting from duplication of services and competition between local governments and to provide a mechanism to resolve disputes over local government service delivery, funding equity, and land use.” Id. § 36–70–20. As one court has explained it, the Act “mandates a dispute resolution procedure for the affected county and municipality to follow if they cannot agree on a service delivery strategy.” Cobb Cnty. v. City of Smyrna, 270 Ga.App. 471, 606 S.E.2d 667, 671 (2004); see alsoGa.Code Ann. § 36–70–25.1.

An October 2005 service delivery agreement designated Atlanta as the direct retail water service provider for all of unincorporated Fulton County, which included the area that was—just two months later—incorporated as the City of Sandy Springs. Its incorporation triggered some provisions of the Service Delivery Act. The Act provides that when new municipalities are incorporated, “[e]ach county and affected municipality shall review, and revise if necessary, the approved” service delivery agreement. Id. § 36–70–28(b)(4). After Sandy Springs was incorporated, the process of reviewing and revising Fulton County's service delivery agreement began, and Sandy Springs proposed amendments to the retail water service provider part of that agreement. Some of those amendments, if adopted, would affect the supply of water to Sandy Springs and could reduce the amount or price of the water that it purchases from Atlanta.

Negotiations among Fulton County and several of its municipalities to adopt new service delivery agreements stalled in October 2009, and Fulton County followed the dispute resolution procedure prescribed by Georgia's Service Delivery Strategy Act: it filed a petition in Fulton County Superior Court “seeking mandatory mediation.” SeeGa.Code Ann. § 36–70–25.1(d)(1)(A). The state court appointed a mediator.

Atlanta returned to the federal district court, which had retained jurisdiction to enforce the Clean Water Act consent decrees, and sought to enjoin the service delivery proceedings that were ongoing in state court. The district court granted Atlanta's motion, enjoined the parties from continuing to pursue the service delivery proceedings in state court, and brought Sandy Springs and Fulton County into the Clean Water Act litigation in federal court as third party defendants. While that action may have been pragmatic, we conclude that it went beyond the court's jurisdictional authority.

II.

In its order the district court recounted how disputes “relating to water and sewer service” had arisen between Fulton County and some cities located within it—Atlanta, College Park, Fairburn, Palmetto, Sandy Springs, and Union City.³ Doc. 242 at 2. The court determined that those disputes had “created considerable uncertainty” about Atlanta's ability “to finance improvements to the sewer system that are necessary to comply with the Consent Decrees.” Id. It believed that Federal Rules of Civil Procedure 19 and 21 gave it the “authority to join the Third–Party Defendants,” including the City of Sandy Springs and Fulton County, in order “to avoid the uncertainty, and substantial and immediate threats” to Atlanta's ability to comply with the consent decrees. Id. at 3. The court also concluded that the consent decrees along with “the Clean Water Act, and the Court's powers under the All Writs Act and its Supplemental Jurisdiction under 28 U.S.C. § 1367” gave it the “authority to take actions to prevent interference with the City of Atlanta's continued ability to comply with the Consent Decrees.” Id. at 3–4.

The district court's order went on to prohibit Georgia, Fulton County, and Sandy Springs from using the process that Georgia law prescribed for determining how water would be delivered to citizens in the state. The order stated that: “[The] State of Georgia and ... Fulton County [are] enjoined from applying the Georgia Service Delivery Act procedures under O.C.G.A. § 36–70–20 et seq. to the City of Atlanta ... with respect to the provision of water and sewer services.” Id. at 4. The court's order also “held in abeyance” the sanctions that Georgia law automatically imposes on local governments that do not execute a service delivery agreement, seeGa.Code Ann. § 36–70–27(a)(1). Doc. 242 at 4. It enjoined Fulton County from proceeding any further with the state law-prescribed mandatory mediation in Fulton County Superior Court “with regard to any matter related to the water and sewer service portions” of the county's service delivery agreement. Id. at 5.

After prohibiting the state, the county, and the affected municipalities from using the state's own process or court system to resolve the local service delivery dispute, the district court compelled the state, the county, and the municipalities to submit the dispute to it for supervision and a decision. The court order required that:

The City of Atlanta, Fulton County, and the Third–Party Defendants [shall] conduct any and all negotiations, mediation and other dispute resolution efforts, including those dispute resolution procedures referenced under O.C.G.A. § 36–70–25.1, and if those dispute resolution efforts are unsuccessful, any litigation required to determine the Service Delivery Strategy for Fulton County, as it relates to the water and sewer service portions of the Service Delivery Strategy, under the exclusive supervision of this Court.

... [T]he Service Delivery Act mediation as related to the sewer and water issues ... shall occur exclusively under this Court's supervision.

Id. The district court appointed a mediator who would be supervised by and...