Opinion ID: 722554
Heading Depth: 2
Heading Rank: 1

Heading: the violation issues:

Text: 12 We review a judgment on the merits of a nonjury civil case applying the usual standards of review. 7 Thus, we review conclusions of law de novo and findings of fact for clear error. 8 If the district court's account of the evidence is plausible in light of the record viewed in its entirety, we may not reverse even if we are convinced that, had we been sitting as the trier of fact, we would have weighed the evidence differently. 9
13 The initial issue in this appeal centers around Section 1926(b). 10 That section provides in pertinent part: 14 The service provided or made available through any such [indebted water] association shall not be curtailed or limited by the inclusion of the area within the boundaries of any municipal corporation or other public body, or by the granting of any private franchise for similar service within such area during the term of said loan.... 11 15 The service area of a federally indebted water association is sacrosanct. Every federal court to have interpreted § 1926(b) has concluded that the statute should be liberally interpreted to protect FmHA-indebted rural water associations from municipal encroachment. 12 16 In City of Madison, Miss. v. Bear Creek Water Ass'n Inc., 13 we held that § 1926(b) indicates a congressional mandate that local governments not encroach upon the services provided by such [water] associations, be that encroachment in the form of competing franchises, new or additional permit requirements, or similar means. We explained that the history behind this section indicates two congressional purposes: (1) to encourage rural water development by expanding the number of potential users of such systems, thereby decreasing the per-user cost, and (2) to safeguard the viability and financial security of such associations (and FmHA's loans) by protecting them from the expansion of nearby cities and towns. With this background, we turn to the violation issue. 14 17
18 To secure the protections of § 1926(b) the Utility must establish that (1) it has a continuing indebtedness to the FmHA, and (2) the City has encroached on an area to which the Utility made service available. 15 As of the end of 1993, the Utility owed the FmHA approximately $12,000,000. The City does not contest that the first, indebtedness element is satisfied. Instead, it contends that the Utility failed to establish the second, made service available element. We disagree. 19 Under Texas law, the Certificate gives the Utility the exclusive right to serve the area within its CCN and obligates it to serve every consumer within its certified area and ... render continuous and adequate service within the area or areas. 16 We hold that the Utility's state law duty to provide service is the legal equivalent to the Utility's making service available under § 1926(b). 17 When confronted with a similar issue, other courts have reached the same result, holding that when state law obligates a utility to provide water service, that utility has, for the purposes of § 1926(b), made service available. 18 20 In the alternative, the district court found as a factual matter that the Utility had made service available. 19 Specifically, the district court made three findings of fact relevant to this conclusion: (1) The Utility currently provides water service to subdivisions adjacent to the disputed areas; (2) the Utility has lines and adequate facilities to provide service to the disputed areas; (3) the Utility has not refused service to anyone who has requested service within the Certificated Area. These findings of fact are not clearly erroneous. Accordingly, on the strength of these alternative legal and factual determinations, we affirm the district court's conclusion that the Utility had made services available to the disputed areas. As a result, we also agree with the holding of the district court that the City violated § 1926(b). 21
22 Before turning to the issues of remedy, we pause to address the City's constitutional challenge to § 1926(b). For the first time on appeal, the City insists that § 1926(b) represents an illegitimate exercise of the Congress' power under the Spending Clause. 20 We will not consider an issue that a party fails to raise in the district court, absent extraordinary circumstances. 21 Extraordinary circumstances exist when the issue involved is a pure question of law and a miscarriage of justice would result from our failure to consider it. 22 Such extraordinary circumstances do not exist here. As this court has previously addressed a similar constitutional challenge (and resolved it contrary to the City's position), 23 we follow our general forfeiture rule and decline to consider the issue.