Source: http://ca10.washburnlaw.edu/cases/2003/10/02-7080.htm
Timestamp: 2019-01-17 04:53:26
Document Index: 158348811

Matched Legal Cases: ['§ 1926', '§ 1926', '§ 1926', '§ 1926', '§ 1926', '§ 1926', '§ 1926', '§ 1926', '§ 1926']

02-7080 -- Pittsburg county Rural Water District No. 7 v. City of McAlester -- 10/17/2003
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Between November 1997 and September 1998, the federal district court issued a series of dispositive orders adjudicating the motions in favor of the defendants, ultimately either dismissing or granting summary judgment against Pitt-7 on all of Pitt-7's claims. See Aplt's App. at 143 (Judgment of the United States District Court, filed Oct. 15, 1998). Two of the district court's holdings in these orders are relevant to this appeal.First, the district court examined the impact of Pitt-7's repurchase of its debt in 1989 and determined that any protections afforded Pitt-7 under § 1926(b) were extinguished along with its indebtedness to FMHA. Because Pitt-7 became indebted to FMHA again in 1994, the district court decided that the only viable claims at issue arose from actions taken by McAlester after June 15, 1994.
Second, the district court assessed whether Pitt-7 had made service "available" under § 1926. The district court found that Pitt-7 had "water lines in proximity to the properties," Aplt's App. at 139 (District Court Order, dated Sept. 30, 1998), but that Pitt-7 "must also demonstrate that the lines in place are of sufficient capacity to handle the water needs of the customers to be served at the present time." Id. "With each property referenced," found the district court, "Pitt-7 will require the customer to pay for an extension to its existing water lines in order to provide service." Id. Based on these findings, the district court determined that Pitt-7 "has not made service available to the disputed areas and is, therefore, not entitled to 1926(b) protection." Id. at 140.
Of these three customer groups, the claims arising from Groups 1 and 3 are the focus of the appeal. Regarding Group 1 customers, the district court concluded that Pitt-7's § 1926 claims involving those customers were time-barred. The district court reasoned that a two-year statute of limitations applied and that since the "instant case was filed March 25, 1997 . . . all alleged encroachments occurring prior to March 25, 1995 are barred by the statute of limitations." Id. at 1101-02 (Dist. Ct. Order, filed June 7, 2002, at 5.). As discussed below, we affirm this conclusion.
Regarding Group 3, the district court found that all properties on which McAlester was serving water to customers as of the beginning of the period (all but one of the properties at issue) "do not fall within [Pitt-7's]§ 1926(b) protected territory." Id. at 1101 (Dist. Ct. Order at 5). The district court reasoned that "[w]hen a municipality is serving water to a property prior to a rural water district's F[M]HA loan date, the rural water district has no right to serve water to that property, and thus [is entitled to] no 1926(b) protection." Id. at 1101. In addition, the district court held that "[a]pplication of Section 1926(b) protection to customers that were served by the City prior to the June 1994 loan date would constitute an unconstitutional taking." Id.
The Supreme Court has applied the Rooker-Feldman jurisdictional bar to two categories of claims, those (1) actually decided by a state court, see Rooker v. Fid. Trust Co., 263 U.S. 413, 415 (1923); or (2) "inextricably intertwined" with a state court judgment, see Dist. of Columbia Ct. of App. v. Feldman, 460 U.S. 462, 482 n.16 (1983). Plainly, the merits of Pitt-7's claims for relief based on alleged violations of federal water rights law under 7 U.S.C. § 1926 and federal antitrust law were not actually decided by the Oklahoma district court, which performed no merits analysis and dismissed Pitt-7's appeal due to defective service of process. Whether Pitt-7's federal court claims are "inextricably intertwined" with the Oklahoma state court's judgment is the question that we must resolve.
Pitt-7's challenge to the district court's statute of limitations ruling is correct in part. As we now discuss, the district court's ruling that the claims based on the Group 1 customers (those first served by McAlester from July 3, 1967 to February 24, 1989) are time-barred was not inconsistent with Sequoyah; however, the ruling that § 1926 claims based on sales to Group 3 customers are time-barred was error under Sequoyah.
In contrast, the district court's ruling on claims based on sales to Group 3 customers was problematic. The district court held that "[w]hen a municipality is serving water to a property prior to a water district's F[M]HA loan date, the rural water district has no right to serve water to that property, and thus, no 1926(b) protection." Aplt's App. at 1101. However, faced with claims identical in structure to the continuing violation claims at issue here (i.e., claims that the municipality violated § 1926 by continuing to provide service during the protected period), Sequoyah authorized a cause of action by a water district that became indebted on an FMHA loan against a municipality where two conditions are satisfied. To prevail under Sequoyah, a water district must demonstrate for the property in question that during the protected period, it (1) was in debt to the federal government through a loan administered by the FMHA and (2) made service available. Sequoyah, 191 F.3d at 1201-05 (analyzing § 1926(b)). Sequoyah held that there existed disputed issues of material fact on the second prong of § 1926 and remanded the case. The fact that a municipality had provided service to those properties prior to the FMHA loan was no bar in Sequoyah to claims arising out of a city's service during the period of indebtedness.
URL: http://ca10.washburnlaw.edu/cases/2003/10/02-7080.htm.