FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, 

Plaintiff-Appellee,

v.

ALISAL WATER CORPORATION; TORO No. 02-15907

WATER SERVICE, INC.; NORTH  D.C. No.

MONTEREY COUNTY WATER CV-97-2009-JF

SERVICE, INC.; MOSS LANDING

WATER SERVICE, INC.; NATHOLYN P.

ADCOCK; ROBERT T. ADCOCK,

Defendants-Appellants. 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee,

v.

ALISAL WATER CORPORATION; TORO

WATER SERVICE, INC.; ROBERT T.

ADCOCK; NORTH MONTEREY

COUNTY WATER SERVICE, INC.; No. 04-16210 MOSS LANDING WATER SERVICE,

INC D.C. No. .; NATHOLYN P. ADCOCK,  Defendants-Appellants, CV-97-20099-JF

and OPINION

PATRICIA ADCOCK; BRUCE PIERSON;

DAVID M. SIMCHO,

Defendants,

JOHN W. RICHARDSON,

Receiver. 

14045
Appeal from the United States District Court

for the Northern District of California

Jeremy Fogel, District Judge, Presiding

Argued and Submitted

June 13, 2005—San Francisco, California

Filed October 13, 2005

Before: Richard C. Tallman, Jay S. Bybee, and

Carlos T. Bea, Circuit Judges.

Opinion by Judge Tallman

14046 UNITED STATES v. ALISAL WATER CORP.
COUNSEL

Marc P. Fairman, San Francisco, California, for the

defendants-appellants. 

Lori Jonas, Department of Justice, Washington, D.C., for the

plaintiff-appellee. 

OPINION

TALLMAN, Circuit Judge: 

Appellants Robert and Natholyn Adcock and various private water systems they owned and operated in Monterey

County, California, violated various public health and safety

regulations under the federal Safe Drinking Water Act

(“SDWA”), 42 U.S.C. §§ 300f-300j. They appeal the district

court’s orders requiring divestiture of all except the largest

water system and imposing financial penalties. We have jurisdiction under 28 U.S.C. §§ 1291 and 1292(a)(2) and affirm.

I

Prior to this litigation, the Adcock family water system

business was organized into four corporations. The largest,

Alisal Water Corporation (“Alisal”), owned and operated several public water systems, some of which are named as defendants: Alco Water Service (“Alco”), Salinas Division, Blackie

Road Water System # 18, Pine Canyon Division of Alco

Water Service, Buena Vista Water System, Wildwood Water

System, San Jerardo Water System, Vierra Canyon Water

System, Vierra Estates Water System, and Langley/Valle

Pacifico Water System. Alisal also wholly owned two subsidiary corporations: Moss Landing Harbor District, which operated the Moss Landing public water system, and North

Monterey County Water Service, Inc. (“NORMCO”), which

14050 UNITED STATES v. ALISAL WATER CORP.
operated NORMCO public water system. The Adcocks held

82.5 percent ownership in Alisal. The fourth corporation was

Toro Water Service (“Toro”), which owned and operated a

public water system of the same name and was wholly owned

by the Adcocks.1

The United States commenced this civil enforcement action

in January 1997 on behalf of the United States Environmental

Protection Agency (“EPA”) against the Appellants. Numerous

violations of SDWA regulations were asserted, including

exceeding total coliform Maximum Contaminant Levels

(“MCL”), failing to monitor for lead and copper, failing to

take required monitoring samples, failing to give required

agency and public notices, failing to report and falsifying

monitoring reports, and failing to keep proper records. The

action was initiated in response to an August 1996 written

request from Dr. David Spath, Chief of the Division of Drinking Water and Environmental Management, California

Department of Health Services (“DHS”). Twelve counts of

multiple regulatory violations (totaling 232 violations) and

one count of fraudulent conveyance were alleged. 

The district court granted summary judgment to the government on the first nine counts in August 2000. See United

States v. Alisal Water Corp., 114 F. Supp. 2d 927, 939 (N.D.

Cal. 2000) (“Alisal I”). After trial, the district court again

ruled for the government on the tenth count (fraudulent conveyance). In November 2002, the district court granted summary judgment against the corporate defendants, but not

1Appellants represent that, as of 2001, these water systems collectively

served approximately 28,000 people, of which Alco served the majority,

approximately 25,000 people. The other systems served significantly

fewer people: Blackie Road Water System (66), San Jerardo Water System (194), Vierra Canyon Water System (150), Langley/Valle Pacifico

Water System (95), Buena Vista Water System (528), Moss Landing Harbor District (550), NORMCO (682), and Toro (1100). Alisal has restructured since the onset of this civil action and Wildwood Water System and

the Pine Canyon Division were reorganized into the other divisions. 

UNITED STATES v. ALISAL WATER CORP. 14051
against Robert and Patricia Adcock individually, on the

remaining three counts, eleven to thirteen. As to the regulatory violations, the Appellants challenge on appeal only the

partial summary judgment on counts eleven and twelve

against Moss Landing and Vierra Canyon. 

The district court found that the proliferation of small water

systems had stretched the Adcocks beyond their ability to

manage effectively and remedy the continuing health violations, endangering their customers. To remedy the underlying

violations the district court initially ordered that all of the

smaller water systems, including NORMCO and Toro (collectively the “Small Utilities”), be placed in receivership and

directed the receiver to investigate and make recommendations about selling the Small Utilities. See United States v.

Alisal Water Corp., 326 F. Supp. 2d 1010, 1028-32 (N.D. Cal.

2002) (“Alisal II”). The Adcocks were permitted to remain in

control of only the largest individual water system, Alco, and

they were ordered to implement substantial improvements

that had been recommended in a previously compiled consultant’s report and to allow monitoring by the receiver. Id. at

1030-31. The district court denied the Appellants’ motion to

stay the order, and a prior panel of our court affirmed the

denial of a stay. During this time, the district court held extensive formal hearings regarding the Appellants’ stewardship

and their course of dealings with federal and state health officials. See id. at 1019-22 (summarizing findings). The district

court also held two public meetings (in August and December

2003), where utility customers were allowed to speak about

their concerns, and the judge invited the public to send written

suggestions. 

In November 2003, the receiver filed his report and the district court subsequently adopted the recommended sale of the

Small Utilities. The court ordered that most of the systems be

sold to the highest bidders, but ordered three of the systems

to be sold to a non-profit public entity, the Pajaro/Sunny Mesa

Community Services District (“PSMCSD”). See United States

14052 UNITED STATES v. ALISAL WATER CORP.
v. Alisal Water Corp., 326 F. Supp. 2d 1032, 1038-39 (N.D.

Cal. 2004) (“Alisal III”). PSMCSD did not have the highest

bid, but the district court found that sale to PSMCSD would

best serve the public interest. Id. at 1037 n.6. The district

court denied the Appellants’ motion to stay the sale order, and

we affirmed the denial of a stay. 

The district court also imposed monetary penalties against

the Appellants. For purposes of determining the appropriate

penalty amount, the district court appointed accountant Richard Pierotti to assess the liquidation value of all of the water

utilities and the Adcocks’ personal assets. The Appellants

hired Dr. Joel Berk to review Pierotti’s valuation methodology; Dr. Berk concluded that Alco was of substantially less

value than Pierotti had found. The district court struck Dr.

Berk’s report as cumulative to evidence previously introduced

by the Appellants. Id. at 1037-38. The district court imposed

a penalty of $500,000, but then credited the Appellants

$300,000 as an offset for the shortfall from not accepting all

of the high bids on the sale of the Small Utilities, leaving a

$200,000 total penalty due. Id. at 1038-39. The Appellants

challenge the order appointing a receiver (No. 02-15907) and

the order authorizing sale of the utilities and imposing penalties (No. 04-16210). 

II

The Appellants also challenge the district court’s jurisdiction over this entire eight-year litigation. They assert for the

first time on appeal that the district court lacked subject matter jurisdiction because the controlling statute states that a

federal EPA enforcement action must be requested by “the

chief executive officer of the State” or “agency of [the] State

which has jurisdiction over compliance by public water systems.” 42 U.S.C. § 300g-3(b)(2). They challenge as legally

insufficient Dr. Spath’s request letter to demonstrate that the

proper state agency requested EPA enforcement because: (1)

Dr. Spath is not the head of the DHS, which they assert is the

UNITED STATES v. ALISAL WATER CORP. 14053
agency with primary jurisdiction over public water systems;

and (2) there is nothing in the record establishing that DHS

delegated such authority to him. See Cal. Health & Safety

Code § 116325 (granting DHS the authority to enforce state

drinking water regulations). 

“The existence of subject matter jurisdiction is a question

of law reviewed de novo.” Opera Plaza Residential Parcel

Homeowners Ass’n v. Hoang, 376 F.3d 831, 833 (9th Cir.

2004). “[District courts] are courts of limited jurisdiction.

They possess only that power authorized by Constitution and

statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 125

S. Ct. 2611, 2616 (June 23, 2005) (internal quotation marks

and citation omitted). As a general matter, federal courts have

subject matter jurisdiction over civil actions “arising under the

Constitution, laws, or treaties of the United States.” See 28

U.S.C. § 1331. By this principle, suits seeking compliance

with, or remedies for, violations of federal water quality statutes and regulations present federal questions. Cf. Chasse v.

Chasen, 595 F.2d 59, 61 (1st Cir. 1979) (citation omitted) (“It

is beyond dispute that validly issued administrative regulations . . . may be treated as ‘laws of the United States’ under

§ 1331(a).”). 

This general grant of federal question jurisdiction is not

limitless—Congress may negate district court jurisdiction

“[b]y virtue of . . . a specific reference or assignment.” ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513, 519 (3d Cir.

1998); see, e.g., Staacke v. United States Sec’y of Labor, 841

F.2d 278, 280 (9th Cir. 1988) (“[F]ederal question jurisdiction

[is] subject . . . to preclusion-of-review statutes created or

retained by Congress.”) (internal quotation marks and citation

omitted); La Voz Radio de la Communidad v. FCC, 223 F.3d

313, 319 (6th Cir. 2000). However, absent statutory direction

to the contrary, a district court validly exercises its jurisdiction over actions “arising under” federal laws. 

In addition to general federal question jurisdiction, “district

courts shall have original jurisdiction of all civil actions, suits

14054 UNITED STATES v. ALISAL WATER CORP.
or proceedings commenced by the United States, or by any

agency or officer thereof expressly authorized to sue by Act

of Congress,” except as otherwise provided by Congress. 28

U.S.C. § 1345. Any exception to the general rule of § 1345

must be clear. See Colorado River Water Conservation Dist.

v. United States, 424 U.S. 800, 808-09 (1976) (“When there

are statutes clearly defining the jurisdiction of the courts the

force and effect of such provisions should not be disturbed by

a mere implication flowing from subsequent legislation.”)

(quoting Rosecrans v. United States, 165 U.S. 257, 262

(1897)). 

[1] Therefore, under either 28 U.S.C. § 1331 or § 1345, the

inquiry here rests on whether the SDWA contains any special

limits or exceptions to the district court’s general statutory

subject matter jurisdiction. Various provisions reflect congressional intent to confer subject matter jurisdiction over

SDWA actions to federal district courts. See, e.g., 42 U.S.C.

§ 300g-3(b) (granting the government authority to “bring a

civil action in the appropriate United States district court” to

enforce compliance with agency orders); § 300j-7(a)(2)

(requiring a petitioner to file a petition for review of agency

action “in the circuit in which the petitioner resides or transacts business which is directly affected by the action”);

§ 300j-8(a) (granting district courts jurisdiction over qualified

citizen’s civil actions). Indeed, “[w]henever any civil penalty

sought by the [government] . . . for a violation of an applicable requirement exceeds $25,000,” as in the case at bar, the

government is statutorily required to bring a civil action in

“the appropriate United States district court.” Id. § 300g3(g)(3)(C). 

The SDWA statutory scheme also creates certain narrow

exceptions to the district court’s jurisdiction, see, e.g., id.

§§ 300g-1(b)(1)(B)(i)(III) & 300h-2(c)(7), but there is no

express statutory negation of the district court’s federal question jurisdiction over enforcement of the SDWA under 42

U.S.C. § 300g-3(b), the provision at issue here. Congress’s

UNITED STATES v. ALISAL WATER CORP. 14055
express identification of particular aspects of SDWA litigation and agency action that are not subject to judicial review

demonstrates that Congress was well aware of its power to

limit the scope of the district court’s subject matter jurisdiction over certain SDWA claims. 

[2] The Appellants argue that 42 U.S.C. § 300g-3(b)(2)

divests the district court of jurisdiction, but we disagree.

Rather than creating a special exception to the district court’s

jurisdictional authority to hear this suit, the statute reflects

only the limitations on the government’s authority to bring

this suit. The statute states that the federal government “may

bring a civil action” in district court “if” so requested (or if

authorized under conditions not relevant here), 42 U.S.C.

§ 300g-3(b)(2); it says nothing to limit the district court’s

jurisdiction over such an action if the government was not acting pursuant to an authorized request from the state.2

 We will

not assume that Congress intended to deprive the court of subject matter jurisdiction over enforcement of federal laws

where Congress has refrained from doing so and where there

is no evidence of such intent. Because the SDWA includes no

special provision limiting jurisdiction over federal question

claims or suits brought by the United States, we conclude that

the district court had subject matter jurisdiction over this suit

and that federal jurisdiction to permit EPA enforcement under

the SDWA statutory scheme is concurrent with that of state

regulators.

2The Appellants could certainly have raised the issue of whether Dr.

Spath’s request letter was sufficient to grant enforcement power to the federal government by moving to dismiss for the government’s “failure to

state a claim upon which relief can be granted” under Federal Rule of

Civil Procedure 12(b)(6), but they did not. Because the record is insufficient to answer that question on appeal and the Appellee’s would be substantially prejudiced if we reached this issue so late in the proceedings, we

must conclude that the claim has been waived. See United States v. Carlson, 900 F.2d 1346, 1349 (9th Cir. 1990). 

14056 UNITED STATES v. ALISAL WATER CORP.
III

On appeal, the Appellants concede that they committed the

majority of the SDWA regulatory violations found by the district court and challenge the adverse summary judgment only

on counts eleven and twelve against Moss Landing and Vierra

Canyon. The government demonstrated that Moss Landing

and Vierra Canyon committed eight violations of total coliform MCL regulations in 2000 and 2001. The Appellants

argue that judgment was impermissibly based on “special”

samples taken by the Appellants to investigate anomalous

results provided by the state. The district court found that the

samples were “routine” and that the only thing that made

these samples “special” was that the Appellants labeled them

as such. 

[3] “We review the grant of summary judgment de novo.”

Buono v. Norton, 371 F.3d 543, 545 (9th Cir. 2004). The

question we must answer is whether the government demonstrated through appropriate means that these water systems

violated total coliform MCLs. By regulation, a water system

which collects fewer than 40 samples per month in accordance with its routine monitoring program is in compliance

with total coliform MCL if no more than five percent of samples in a given month are total coliform-positive. 40 C.F.R.

§ 141.63(a)(1). A total coliform MCL violation is based on

“routine” and “repeat” samples, id. § 141.21(a)(5)-(6), (b)(7),

and may not be based on samples that have been invalidated,

§ 141.21(c), or on “[s]pecial purpose samples,”

§ 141.21(a)(6). 

[4] The regulation details the requirements for a “routine

monitoring plan,” which requires collection of “total coliform

samples at sites which are representative of water throughout

the distribution system according to a written sample siting

plan.” Id. § 141.21(a). But the regulation does not expressly

define “routine samples” for purposes of establishing a violation. The Appellants interpret 40 C.F.R. § 141.21 as requiring

UNITED STATES v. ALISAL WATER CORP. 14057
that only samples taken as part of a routine monitoring plan

be considered “routine.” The government acknowledges that

only “routine” and “repeat” samples may be relied upon, and

that the samples at issue here were not “repeat” samples or

taken as part of a routine monitoring plan. However, the government asserts, and the district court concluded, that “routine” samples are any samples which are not “special” under

the regulation and are representative of water throughout the

system. Therefore, the operative question is what constitutes

a “routine” sample. 

An agency is entitled to interpret its own regulation and

“ordinarily its construction will be affirmed if it is not clearly

erroneous or inconsistent with the regulation.” Pac. Coast

Med. Enters. v. Harris, 633 F.2d 123, 131 (9th Cir. 1980)

(citations omitted). However, because neither party introduced evidence of an official agency definition of a “routine”

sample for purposes of establishing a violation under the regulation, we do not necessarily defer to the government’s position. See, e.g., Bowen v. Georgetown Univ. Hosp., 488 U.S.

204, 212 (1988) (noting that deference does not extend to

“agency litigating positions that are wholly unsupported by

regulations, rulings, or administrative practice”). Such deference may still be appropriate, however, when there is “no reason to suspect” that an agency interpretation introduced only

through a legal brief “does not reflect the agency’s fair and

considered judgment on the matter.” Auer v. Robbins, 519

U.S. 452, 462 (1997). 

[5] We need not decide precisely how much deference the

EPA is due here because we conclude that the only reasonable

interpretation of 40 C.F.R. § 141.21(a) is the one espoused by

the government; we therefore agree that any sample that is

representative of water throughout the system and not a “special purpose sample” or otherwise invalidated is “routine” and

may suffice to establish a regulatory violation. The Appellants’ interpretation of the regulation is untenable. Precluding

reliance on accurate water quality samples simply because

14058 UNITED STATES v. ALISAL WATER CORP.
they were not taken according to a preset plan would prevent

the government from identifying and remedying total coliform MCL violations in a variety of contexts, such as where

the water utility itself submitted only negative samples under

its routine monitoring schedule. This effectively could insulate a violator from judgment in cases where the water utility

purposefully conceals excessive coliform test results in its

routine monitoring plan reporting or fails to keep accurate

records of testing, as the Appellants did here. See Alisal I, 114

F. Supp. 2d at 934. Interpreting the regulation to allow reliance on only samples submitted under a routine monitoring

plan would clearly undermine the effectiveness of the reporting requirements and threaten public health and safety, and so

we reject this unreasonable interpretation of the statute. Cf.

SEC v. Edwards, 540 U.S. 389, 395 (2004) (addressing securities law and declaring that the “[Supreme] Court will not read

into the . . . laws a limitation not compelled by the language

that would so undermine the laws’ purposes.”). 

Moreover, our interpretation is consistent with the overall

regulatory scheme. When interpreting a regulation, we must

avoid an interpretation that would render another regulation

superfluous. See, e.g., Dodd v. United States, 125 S. Ct. 2478,

2490 (2005) (Stevens, J., dissenting). As noted, the regulation

expressly requires reliance on routine and repeat samples, see

40 C.F.R. § 141.21(a)(5)-(6), (b)(7), and expressly precludes

reliance on “special purpose samples,” § 141.21(a)(6), and

samples that have been invalidated, § 141.21(c). If an MCL

violation could be established only on the basis of routine

monitoring samples, then there would be no need for regulators to identify specific types of samples, unrelated to routine

monitoring, that are not the proper basis for such violations.

We therefore conclude that reliance on “routine” samples necessarily includes reliance on any samples that are not “special

purpose samples” or otherwise invalidated. 

[6] The next question is whether the samples here were

“special purpose samples;” otherwise, they are properly conUNITED STATES v. ALISAL WATER CORP. 14059
sidered “routine” and the district court could therefore rely on

them.3See id. § 141.21(a)(6). “Special purpose samples” are

defined by example as “those taken to determine whether disinfection practices are sufficient following pipe placement,

replacement, or repair.” Id. This definition clarifies that “special purpose” samples are those taken at a time when the system has been altered in some way, or there are unusual

circumstances, such that the sample taken may not be indicative of the water quality in general unaltered use. This is also

consistent with the regulatory approach to routine monitoring

samples which must be taken “at sites which are representative of water throughout the distribution system.” Id.

§ 141.21(a)(1). 

[7] The samples on which the district court relied in counts

eleven and twelve are not “special purpose samples” under

this definition. There is no suggestion here that the samples

were tainted by recent changes to the system, and, as the district court found, “[n]othing in the record suggests that the

subject samples were less accurate or probative than other

‘routine’ or ‘repeat’ samples.” There is also no suggestion

here that the samples were otherwise invalid or unreliable, so

it was reasonable and consistent with the regulation to rely

upon them. We therefore conclude that the samples in question were “routine” and we affirm summary judgment on

counts eleven and twelve. 

IV

A

The remainder of the Appellants’ claims on appeal center

on the district court’s choice of remedy and the process by

which the remedy was determined. The Appellants argue that

the district court abused its discretion in ordering divestiture

3Neither party suggests that these samples were invalid under the regulation or compliant with total coliform MCL requirements. 

14060 UNITED STATES v. ALISAL WATER CORP.
because the court did not closely tailor injunctive relief to

address the threat of future harm or exercise the least possible

power adequate to achieve the proposed end. Their argument

in summary is that the district court: (1) erred in reacting to

past violations and not considering the current status because

the facts show a “sharp reduction in violations after 1994” in

the Small Utilities; and (2) erred in not considering each utility separately, specifically referring to Toro, which has been

in regulatory compliance since 1994. 

[8] The Appellants assert that the district court exceeded its

statutory authority in ordering divestiture of the Small Utilities. The Appellants base their claim on the argument that the

court may not order such a remedy because Congress failed

to list divestiture expressly as a possible remedy under the

SDWA.4 However, the court will not generally infer restrictions on inherent judicial authority from congressional

silence: “[U]nless a statute in so many words, or by a necessary and inescapable inference, restricts the court’s jurisdiction in equity, the full scope of that jurisdiction is to be

recognized and applied.” Owner Operator Indep. Drivers

Ass’n v. Swift Transp. Co., 367 F.3d 1108, 1112 (9th Cir.

2004) (quoting Porter v. Warner Holding Co., 328 U.S. 395,

398 (1946)). Where the public interest is involved, “equitable

powers assume an even broader and more flexible character

than when only a private controversy is at stake.” Porter, 328

U.S. at 398 (citation omitted). 

4The Appellants raise this issue for the first time on appeal and so we

could consider it waived. See Carlson, 900 F.2d at 1349. The Appellants

were well aware that the government was seeking complete divestiture and

that the district court had proposed partial divestiture, see Alisal II, 326 F.

Supp. 2d at 1027, and they fail to explain why they did not or could not

challenge the district court’s authority at that time. However, this is a pure

question of law and the record is sufficient to review the issue on appeal.

We therefore conclude that the government will not be prejudiced if we

reach the issue here. See Carlson, 900 F.2d at 1349. 

UNITED STATES v. ALISAL WATER CORP. 14061
[9] Here, the SDWA gives the district court authority to

enter “such judgment as protection of public health may

require.” 42 U.S.C. § 300g-3(b). There is no limiting language, so the statute incorporates the full panoply of the

court’s equitable powers. Cf. United States v. Mass. Water

Res. Auth., 48 F. Supp. 2d 65, 71-72 (D. Mass. 1999) (concluding that the SDWA enforcement provision does not “strip

the courts of their equitable powers”). We therefore conclude

that ordering partial divestiture was not outside of the district

court’s authority.5

“We review a district court’s decision to issue a permanent

injunction for abuse of discretion, but we review any determination underlying the court’s decision by the standard that

applies to that determination.” United States v. Hovsepian,

359 F.3d 1144, 1156 (9th Cir. 2004) (en banc) (citing Silver

Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d

814, 826 (9th Cir. 2001)). The district court’s choice of remedies is reviewed for an abuse of discretion. See Stone v. City

& County of San Francisco, 968 F.2d 850, 861 (9th Cir.

1992). Review of the scope of injunctive relief is also for an

abuse of discretion. Idaho Watersheds Project v. Hahn, 307

F.3d 815, 823 (9th Cir. 2002). The Appellants do not allege

that there were any clearly erroneous findings of fact,6 so we

5

In a related argument, the Appellants assert that the district court

impermissibly encroached on the power of the California Public Utility

Commission (“CPUC”), which has some jurisdiction over public drinking

water. See Hartwell Corp. v. Superior Court, 38 P.3d 1098, 1108-12 (Cal.

2002) (discussing the complex overlap in authority over drinking water

regulation between DHS and the CPUC). They advance no legal basis to

explain how the fact that CPUC has some authority over water systems

negates the district court’s broad authority to enforce federal laws through

exercise of its equitable powers. Moreover, as the government points out,

the sales are necessarily subject to approval by the CPUC. See Alisal II,

326 F. Supp. 2d at 1029. The Appellants’ argument is without merit. 

6The Appellants do assert in a footnote of their brief to this Court that

their son, Thomas Adcock, was qualified to manage the water systems.

This could be construed as challenging the district court’s finding that the

14062 UNITED STATES v. ALISAL WATER CORP.
may only reverse if we find that the district court misapplied

the law or “rule[d] in an irrational manner.” Chang v. United

States, 327 F.3d 911, 925 (9th Cir. 2003) (quoting United

States v. Sherburne, 249 F.3d 1121, 1125-26 (9th Cir. 2001)).

In arguing that the district court was reacting only to past

conduct and not considering recent improvements, the Appellants mischaracterize the record. The district court expressly

considered the Appellants’ overall improvements in compliance subsequent to initiation of this enforcement suit, but

found (and it is not challenged) that Appellants continued to

violate reporting requirements, and produce “inaccurate test

results and unreasonable delay in addressing incidences of

contamination . . . through and including the time of trial.”

Alisal II, 326 F. Supp. 2d at 1018; see id. at 1026. There are

extensive factual findings demonstrating Appellants’ continued noncompliance, which did not cease after initiation of this

litigation. Id. at 1018-21. Moreover, the district court found

and recounted the Appellants’ continued unwillingness to

work with the government, which suggests that ongoing compliance would continue to be problematic. See Alisal III, 326

F. Supp. 2d at 1036-37; Alisal II, 326 F. Supp. 2d at 1022-23.

Given the Appellants’ unwillingness or inability to comply in

an accurate and timely manner while under the close supervision of the EPA and the district court, it was rational to conclude that the Appellants’ behavior would not improve once

this litigation ends. 

Similarly, Appellants’ argument that Toro should not have

been sold because it has been compliant since 1994 is not persuasive. The district court based its partial divestiture order on

Appellants lacked sufficient managerial competence to comply with the

SDWA. See Alisal II, 326 F. Supp. 2d at 1014, 1023-25. However, the

issue is not squarely presented, and regardless is without merit. The district court specifically outlined Thomas Adcock’s shortcomings with

respect to managing the family business. See id. at 1023-25. We conclude

that these findings are not clearly erroneous. 

UNITED STATES v. ALISAL WATER CORP. 14063
the rationale that Appellants could not meet their regulatory

obligations given the number of water systems they controlled

and the pervasive scope of the problems involved with the

various systems. See Alisal II, 326 F. Supp. 2d at 1024, 1026

(noting that evidence showed lack of “managerial resources

and expertise to manage effectively the numerous water systems . . . , especially the smaller ones”). The district court’s

decision reflects its well-supported belief that the Appellants’

efforts were spread too thinly, both financially and administratively, across the various systems and that they were not

capable of handling more than one system in a manner compliant with all regulatory requirements. See id. at 1028. This

is not an irrational conclusion given the Appellants’ poor

overall performance history, and is a valid concern in fashioning an appropriate remedy. 

“In issuing an injunction, the court must balance the equities between the parties and give due regard to the public

interest.” Idaho Watersheds Project, 307 F.3d at 833 (citing

Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531, 542

(1987)). Clearly, the Adcocks have an understandable personal interest in maintaining their family business and a property interest in their ownership of the various systems. On the

other hand, there is no question that the public interest at stake

here, the quality of public drinking water and the health and

safety of the consumers, is fundamental. 

The record reflects that the district court adopted a reasonable compromise in fashioning appropriate relief and tailored

a remedy that took into consideration both the substantial

public interest and the Adcocks’ personal interest. The government originally asked for a complete divestiture; the

Appellants asked only to have to implement recommended

system upgrades (which the record shows they could not

afford to finance). The district court did not order sale of the

largest water system, Alco. There, the district court only

ordered implementation of the recommended improvements.

14064 UNITED STATES v. ALISAL WATER CORP.
The district court’s remedy allows the Appellants to control

operations and service for approximately 90 percent of their

original customer base in a very streamlined fashion, thereby

“giving [Appellants] a clear opportunity to demonstrate that

they can operate at least one water system in compliance with

the law.” Alisal II, 326 F. Supp. 2d at 1028. The Appellants

themselves admit that most of the compliance problems

occurred in the Small Utilities (other than Toro). The Appellants have proven through their service history and throughout

this litigation that they were unable to manage effectively the

several water systems in order to serve the public health. Simply put, they now have the opportunity to prove that they can

safely manage just one. 

The Appellants argue that letting them continue to own and

operate Alco shows that the court was acting inconsistently,

but we think that it demonstrates that the district court was

balancing the competing interests of the public and the Appellants, despite the egregious nature of their prior course of conduct. Alisal II, 326 F. Supp. 2d at 1028-29 (concluding that

while full divestiture was fully justified, partial divestiture

was a “less drastic remedy” and required under principles of

equity). While other appropriate remedies are conceivable,

our review is limited to whether the district court erroneously

applied the law or acted irrationally in imposing the remedy

it did. 

[10] We conclude that the Appellants’ personal interests in

maintaining ownership over the Small Utilities is substantially

outweighed by the profound public interest at stake here. The

regulatory violations that the Appellants committed were

numerous and significant. They were entrusted with safeguarding the health and welfare of the thousands of individuals who rely on these water systems, and they have not

effectively responded to the water quality problems. Furthermore, the record supports the district court’s conclusions that

the Appellants have acted in a manner inconsistent with an

appreciation for the importance of their obligation to the pubUNITED STATES v. ALISAL WATER CORP. 14065
lic. We conclude the district court fashioned a rational remedy

that fairly took into consideration the competing interests.

There was no abuse of discretion in the means employed.

B

The Appellants assert next that the district court violated

their due process rights by: (1) conducting the receivership

bidding process in secret; and (2) improperly considering and

giving weight to public comments and letters not part of the

record, not taken under oath, and not subject to crossexamination. However, the Appellants waived their due process claim regarding the receivership bidding process by failing to raise it in the district court. They state that they

“repeatedly complained” that they were not being informed

about the bidding and sales process. However, their only support in the record is that they once told the district judge that

they did not know the status of the sales and requested additional information, and the court immediately ordered that the

receiver make sales-related documents available as part of his

duties. 

This single evidentiary proffer is hardly evidence of

repeated complaints. It does not demonstrate that the receiver

willfully withheld information (or even that the Appellants

had ever requested the information before or after that day).

Additionally, it does not rise to the stature of a “due process”

violation. Thus, the Appellants do not demonstrate through

the record how their participation was unjustly limited, and

we therefore will not consider the claim. See, e.g., Los Angeles News Serv. v. Reuters Television Int’l, Ltd., 149 F.3d 987,

996 (9th Cir. 1998) (“We will not take up an issue not properly raised below unless necessary to prevent manifest injustice.”) (citation omitted). 

As to the public hearings, the Appellants argue that they

were not allowed to “question” the process, but they did not

object to the process as it occurred. On appeal, the Appellants

14066 UNITED STATES v. ALISAL WATER CORP.
admit they did not object to the district court’s holding the

public hearings, so this issue is waived. Nor did the Appellants object to the lack of evidentiary formality in conducting

the hearings. No objections were timely raised that the speakers were not sworn and were not subject to cross-examination.

However, they did object to the district court’s considering

the statements and letters gathered through the hearing process in the divestiture proceedings, so this aspect of the claim

is properly before us. 

[11] As the Supreme Court acknowledges, “due process” is

difficult to define. See Lassiter v. Dep’t of Soc. Servs., 452

U.S. 18, 24-25 (1981). The process that is due varies according to the nature of the right and the type of proceedings.

Mathews v. Eldridge, 424 U.S. 319, 334 (1976) (“[D]ue process is flexible and calls for such procedural protections as the

particular situation demands.”) (quoting Morrissey v. Brewer,

408 U.S. 471, 481 (1972)) (alteration in original). At its core,

due process requires that a party have adequate notice and

opportunity to be heard. See Dusenbery v. United States, 534

U.S. 161, 167 (2002); LaChance v. Erickson, 522 U.S. 262,

266 (1998). In considering whether a district court accorded

adequate due process, appellate courts “must look at the

actual substance, not the name or form, of the procedure to

see if the claimants’ interests were adequately safeguarded.”

SEC v. Elliott, 953 F.2d 1560, 1567 (11th Cir. 1992) (discussing summary receivership proceedings and citing SEC v.

Wencke, 783 F.2d 829, 836 (9th Cir. 1986)). 

We conclude that there was no due process violation in the

district court considering the information obtained through the

public hearings. Importantly, there is no suggestion that the

Appellants were denied the basic elements of due process—

adequate notice and opportunity to be heard. This is not a situation where a party was unaware of an adverse proceeding or

the district court denied a party forms of process to which

they had expressly asserted a right. The Appellants were well

aware of the contemplated hearing process and their counsel

UNITED STATES v. ALISAL WATER CORP. 14067
attended the hearings. There is no showing that they were in

any way limited in their ability to participate in the hearings

or to refute any testimony presented, or that their interests

were prejudiced or marginalized in this process. Accordingly,

we do not see how the Appellants’ due process rights were

denied. See Guenther v. Comm’r, 939 F.2d 758, 760 (9th Cir.

1991) (explaining that a party’s due process rights would be

infringed if they were “unfairly prejudiced” by ex parte communication). 

Although the form of this process was not typical for the

courts, and we do not endorse such a practice in routine civil

enforcement actions, the substance of the evidence adduced at

the hearings is similar to that which could have been introduced by the government through affidavits or testimony. See,

e.g., FTC v. Amy Travel Serv., Inc., 875 F.2d 564, 576 (7th

Cir. 1989) (holding that, where defendants were found to have

committed deceptive trade practices in a nationwide telemarketing operation, the trial court did not abuse its discretion in

admitting affidavits from consumers who had purchased

travel vouchers from the defendants). In a case of this magnitude, directly affecting public health, evidence of the views of

the individuals affected by the outcome was relevant to the

district court’s choice of remedy. The Appellants have

pointed to no legal authority that would bar the district court

from proceeding in a public-hearing forum and they did not

timely object to proceeding in such a fashion. We recognize

that “a district court’s power to supervise an equity receivership and to determine the appropriate action to be taken in the

administration of the receivership is extremely broad,” SEC v.

Hardy, 803 F.2d 1034, 1037 (9th Cir. 1986), and the hearing

process was an efficient and direct way for the district court

to consider the views of the interested public, which had a

manifest and significant stake in the proceedings. 

Nor do the Appellants point to authority that would require

the district court to conduct a remedy-phase hearing in the

same manner or under the same evidentiary standards that it

14068 UNITED STATES v. ALISAL WATER CORP.
conducts a trial. In the context of a civil suit “crossexamination is not, in every instance, a sine qua non of due

process. It all depends on the situation.” David v. City of Los

Angeles, 307 F.3d 1143, 1147 (9th Cir. 2002), rev’d on other

grounds, 538 U.S. 715 (2003); see U.S. Steel, LLC v. Tieco,

Inc., 261 F.3d 1275, 1287 n.13 (11th Cir. 2001) (noting that

“[o]f course, the Confrontation Clause is not applicable to

civil cases”). In Federal Trade Commission v. Figgie International, Inc., 994 F.2d 595 (9th Cir. 1993), for example, we

allowed the district court to base its calculation of the maximum amount of redress for which the defendant might be liable on the agency’s summation of 127 letters of complaint

that it had received from private citizens. Id. at 608-09 (determining that admission of the letters fell into the residual hearsay exception).7

 Similarly, the district court here considered

evidence of unsworn public comment not to demonstrate the

violations that the Appellants committed, but for the limited

purpose of fashioning a remedy for the violations. 

In concluding that there was no due process violation in

this case, we also rely substantially on the fact that the Appellants’ primary complaints against the evidence adduced at the

public hearings—the lack of sworn testimony and crossexamination—are the direct result of their own failure to

object to the district court holding such hearings and their failure to timely object to the manner in which the hearings were

held and in which the evidence was introduced. They assert

that they were “never allowed” to address the public letters

and comments, but they fail to point out where in the record

they ever asked to do so, despite the fact that counsel was

present at the hearings. Had the Appellants timely objected to

7The Figgie International court relied on its analysis of whether the

complaint letters were admissible under the Federal Rules of Evidence.

See 994 F.2d at 608-09. The Appellants have not raised such an argument

here on appeal, although their “due process” claim could properly be characterized as an unpreserved challenge to the district court’s admission of

such evidence. Because the Appellants did not raise an evidentiary objection to the district court or on appeal, we consider it waived. 

UNITED STATES v. ALISAL WATER CORP. 14069
the proceedings or requested that the hearings be conducted

in a more formal way, the district court could have modified

the process and cured any potential defect. See United States

v. Odom, 736 F.2d 104, 114 (4th Cir. 1984) (noting that “[i]t

is well settled” that a party waives a challenge to failure to

swear in a witness by failing to raise the point during the witness’s testimony, when it could have been corrected). 

[12] We hold that the Appellants’ due process rights were

not violated by the district court’s fashioning a remedy for

regulatory violations by relying in part on evidence introduced through public hearings where: (1) the Appellants

failed to object to the district court’s conducting such hearings; (2) the Appellants failed to object to the witnesses’ not

being sworn or subject to cross-examination; and (3) the

Appellants failed on appeal to show how they were prejudiced

by admission of the evidence.8

V

The Appellants argue next that the court-ordered sale of the

Small Utilities was confiscatory because the sale prices realized were not indicative of their true value, and they seek just

compensation under the Fifth Amendment’s takings clause.

The government points out that the takings clause issue was

not raised below and should therefore be waived. In response,

the Appellants contend that they raised a takings claim below

in their comments to the Pierotti report. They cite to two

places in the record. First, in the context of disputing the

method of valuation, they argued before the district court only

that “[w]here [they are] forced to sell the utility for less than

its rate base, as the [r]eceiver recommends here, there is a taking that violates the Constitution.” And second, they prefaced

a feasibility argument with: “in light of the constitutional

8We emphasize that our holding is extremely narrow. Had the Appellants made timely objections to this unusual procedure or demonstrated

prejudice, our analysis might be different. 

14070 UNITED STATES v. ALISAL WATER CORP.
issues about confiscation . . . .” These are the only references

to a takings claim in the record covering years of litigation.

These references were brief, conclusory statements made

with no supporting legal argument and so are insufficient to

preserve a takings claim for appeal. See, e.g., Broad v.

Sealaska Corp., 85 F.3d 422, 430 (9th Cir. 1996) (“To have

been properly raised below, the argument must be raised sufficiently for the trial court to rule on it.”) (internal quotation

marks and citation omitted); Banks v. Rockwell Int’l N. Am.

Aircraft Operations, 855 F.2d 324, 326 (6th Cir. 1988) (holding that a “vague reference” to an issue before the district

court was insufficient to preserve that issue on appeal). We

therefore consider the Appellants’ takings claim waived.

VI

The Appellants challenge the overall monetary penalty

imposed on the basis that the district court did not consider

the report of Dr. Berk that they submitted. The report challenged the valuation findings of the court-appointed accountant, Pierotti. The Appellants contend that Alco was

substantially overvalued and that the resulting penalty was

excessive. The substance of their argument is that the district

court initially suggested that they would be allowed to object

to the Pierotti report at the penalty hearing, but then had a

“change of heart” and refused to consider the information. 

The district court’s decision to exclude expert testimony is

reviewed for an abuse of discretion. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999). Prior to seeking to introduce Dr. Berk’s report, the Appellants had already introduced

an expert witness, Carl Danner, who testified as to valuation

of the water systems. After reviewing the evidentiary proffer

of Dr. Berk’s report, the district court noted that when it said

it would consider further evidence, it had expected evidence

about “any changes in circumstances that might affect Mr.

Pierotti’s analysis.” The court concluded that Dr. Berk’s

UNITED STATES v. ALISAL WATER CORP. 14071
report was instead simply cumulative of the Danner testimony

and “[v]iewed as a whole, Dr. Berk’s opinions concern[ed]

facts known to and litigated by the parties at trial.” Alisal III,

326 F. Supp. 2d at 1037. 

[13] The Appellants fail to show how Dr. Berk’s report was

new or different from the evidence they had introduced at

trial, and thus they fail to show how the district court abused

its discretion in dismissing the report as cumulative. We

affirm the exclusion of the proffered evidence. The Appellants raise no other argument as to why the penalty was excessive and so we also affirm the penalty as imposed.9

VII

In its receivership order, the district court enjoined not only

the named defendant individuals, Robert and Natholyn, but

also their children, Thomas and Lynette, from “acquir[ing]

any new interest, financial or otherwise, in any ‘public water

system’ . . . without the express permission of [the] Court.”

Alisal II, 326 F. Supp. 2d at 1032. The Appellants do not

9The penalty imposed was well below the maximum penalty allowed by

statute, which states, in part, that: 

[I]f the court determines that there has been a violation of the regulation or schedule or other requirement with respect to which the

action was brought, the court may, taking into account the seriousness of the violation, the population at risk, and other appropriate factors, impose on the violator a civil penalty of not to

exceed $25,000 for each day in which such violation occurs. 

42 U.S.C. § 300g-3(b); id. at § 300g-3(g)(3)(A). The Appellants committed 232 violations, many of which could be considered as extending over

multiple days, which the district court concluded would result in a maximum civil penalty range from $17 million to $400 million. Alisal III, 326

F. Supp. 2d at 1035. The government argued that a penalty of $3 million

to $5 million dollars was appropriate. As noted, the district court ultimately imposed a penalty of $500,000 with a $300,000 offset for the

receiver’s acceptance of bids that were not the highest bids on three water

systems. Id. at 1038-39. 

14072 UNITED STATES v. ALISAL WATER CORP.
claim that the substantive injunctive limitation is overly broad

or otherwise challenge the scope of the injunction but argue

that the injunction is simply not valid against Thomas and

Lynette because they were not parties named in the lawsuit.

The Appellants specifically seek a ruling that would invalidate the injunction under Federal Rule of Civil Procedure

65(d). However, we cannot reach this issue. 

Although not specifically mentioned in Appellants’ briefs,10

Federal Rule of Appellate Procedure 3(c) requires the notice

of appeal to: 

[S]pecify the party or parties taking the appeal by

naming each one in the caption or body of the

notice, but an attorney representing more than one

party may describe those parties with such terms as

“all plaintiffs,” “the defendants,” “the plaintiffs A,

B, et al.,” or “all defendants except X”. . . . 

FED. R. APP. P. 3(c)(1)(A) (emphasis added). Non-parties to

the original action may appeal where they are “bound by the

order from which they were seeking to appeal.” Devlin v.

Scardelletti, 536 U.S. 1, 8 (2002). But non-parties must also

pass through the ordinary “jurisdictional threshold” of Rule

3(c), which requires that they be named in the notice of

appeal. Torres v. Oakland Scavenger Co., 487 U.S. 312, 315

(1988). Moreover, the Appellants are bound by the ordinary

time-constraints imposed upon parties and non-parties alike

by Federal Rule of Appellate Procedure 4(a)(1), which

requires that a notice of appeal be filed within 30 days after

judgment. See FED. R. APP. P. 4(a)(1). 

[14] Here, Thomas and Lynette were not named as defendants in the notice of appeal. The notice of appeal named the

following defendants: Alisal Water Corporation; Toro Water

10“Jurisdictional issues must be raised by this court sua sponte.”

MacKay v. Pfeil, 827 F.2d 540, 542 (9th Cir. 1987). 

UNITED STATES v. ALISAL WATER CORP. 14073
Service, Inc.; North Monterey County Water Service, Inc.;

Moss Landing Water Service, Inc.; Robert T. Adcock; and

Natholyn P. Adcock. Because Thomas and Lynette were not

included in the first notice of appeal, they were required to

file a separate appeal within 30 days of judgment. They failed

to do so. Moreover, it is not objectively clear from the notice

of appeal that they intended to appeal. Cf. Retail Flooring

Dealers of Am., Inc. v. Beaulieu of Am., LLC, 339 F.3d 1146,

1149 (9th Cir. 2003) (holding that when a party’s intent to

appeal is objectively clear, that party is not prevented from

going forward under Federal Rule of Appellate Procedure

3(c)); Simo v. Union of Needletrades, Indus. & Textile

Employees, 322 F.3d 602, 610 (9th Cir. 2003) (same). Consequently, we do not have jurisdiction to consider their challenge to the injunction.

VIII

We conclude that the district court had subject matter jurisdiction over this SDWA civil enforcement action and did not

abuse its discretion or violate the Appellants’ due process

rights in fashioning the remedy imposed. 

AFFIRMED.

14074 UNITED STATES v. ALISAL WATER CORP.