Court Opinion

ID: 8375575
Source: CourtListenerOpinion
Date Created: 2022-10-24 15:02:29.951653+00
Date Added: 2024-06-11T16:46:33.308902
License: Public Domain

United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 21-3618
                        ___________________________

          Public Water Supply District No. 1 of Greene County, Missouri

                                     Plaintiff - Appellant

                                        v.

                          City of Springfield, Missouri

                                    Defendant - Appellee
                                 ____________

                     Appeal from United States District Court
                for the Western District of Missouri - Springfield
                                 ____________

                         Submitted: September 20, 2022
                            Filed: October 24, 2022
                                ____________

Before GRUENDER, MELLOY, and ERICKSON, Circuit Judges.
                         ____________

ERICKSON, Circuit Judge.

      Public Water Supply District No. 1 of Greene County, Missouri (“PWSD”)
and the City of Springfield, Missouri (the “City”) filed cross motions for summary
judgment, and the district court 1 granted summary judgment in favor of the City.

      1
      The Honorable Stephen R. Bough, United States District Judge for the
Western District of Missouri.
The district court also denied PWSD’s subsequent motion to alter or amend the
judgment under Rule 59(e) of the Federal Rules of Civil Procedure. PWSD appeals
these decisions. We affirm.

I.    BACKGROUND

      The parties’ focus on appeal is the statutory interpretation of 7 U.S.C. § 1926.
Broadly speaking, § 1926(a)(1) authorizes the United States Department of
Agriculture (“USDA”) to issue loans to “associations” for various purposes,
including “to provide for . . . the conservation, development, use, and control of
water . . . .” 7 U.S.C. § 1926(a)(1). Section 1926(b) provides:

      The service provided or made available through any such association
      shall not be curtailed or limited by inclusion of the area served by such
      association 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 such loan; nor shall the
      happening of any such event be the basis of requiring such association
      to secure any franchise, license, or permit as a condition to continuing
      to serve the area served by the association at the time of the occurrence
      of such event.

Id. § 1926(b). While the parties debate the precise breadth of the statute’s protection,
they agree that § 1926(b) generally insulates qualifying associations from at least
certain forms of municipal competition. See Pub. Water Supply Dist. No. 3 v. City
of Lebanon, 605 F.3d 511, 514-15 (8th Cir. 2010). We have recognized the primary
purposes of § 1926(b) are to promote water development and safeguard the
economic security of USDA-indebted water districts. See Rural Water Sys. No. 1
v. City of Sioux Ctr., 202 F.3d 1035, 1038 (8th Cir. 2000).

      Here, PWSD is a public water supply district that provides water service to
residents within its legally-defined service area. PWSD has received three loans
from the USDA (or its predecessor), it has fully satisfied two of these loans, and the

                                          -2-
remaining loan is outstanding. PWSD has been continuously indebted to the USDA
since 1965.

       The City is a municipality in Greene County, Missouri, operating a utility
service known as City Utilities, which provides water and other utility services to
residents of the City. Missouri law permits the City to supply water beyond its
corporate limits. See Mo. Rev. Stat. § 91.050. Under § 91.050, the City provides
water service to subdivisions that are outside its corporate limits but within PWSD’s
service areas (the “Disputed Subdivisions”). The Disputed Subdivisions are: (1)
Monta Vista Heights: platted in August 1971; (2) Teton Estates: platted in September
1972; (3) Teton Estates, First Addition: platted in April 1974; (4) Abbey Lane:
platted in November 1991; (5) Abbey Lane, First Addition: platted in December
1992; and (6) Abbey Lane, Second Addition: platted in August 1994. The parties
agree these dates are close in time to the dates the City began serving each of the
Disputed Subdivisions; though, the exact dates the City initiated service are
unknown.

      PWSD filed this action in October 2020, alleging several claims and seeking
declaratory, injunctive, and monetary relief. Specifically, PWSD asserted 42 U.S.C.
§ 1983 claims against the City on grounds that the City deprived PWSD of its right
under 7 U.S.C. § 1926(b) to be protected from curtailment or limitation of its
provision of water service within its service area. PWSD also asserted various state
law claims.

       In its motion for summary judgment, PWSD argued that the City violated
§ 1926(b) by serving the Disputed Subdivisions because the statute prohibits
competition generally, “no matter what form it might take, whether it be by
annexation, grant of a franchise or otherwise.” PWSD also suggested that
§ 1926(b)’s protection “extends beyond” and is “not limited” to circumstances
involving annexation or franchising. In contrast, the City argued: (1) it did not
violate § 1926(b) because it did not engage in either of the two forms of curtailment
specifically enumerated in § 1926(b); and (2) PWSD’s claims were barred by the
                                         -3-
applicable statute of limitations. Ultimately, the district court granted summary
judgment in favor of the City on the merits, finding § 1926(b) only prohibits
curtailment by the statute’s two enumerated methods and the City had not employed
either method. The court did not reach the City’s alternative arguments for summary
judgment.2

       PWSD then filed a Rule 59(e) motion to alter or amend the judgment,
asserting the two arguments it advances here: (1) the City’s conduct fell within
§ 1926(b)’s first enumerated category of curtailment because curtailment by
“inclusion . . . within the boundaries of any municipal corporation” prohibits a city
from providing any water service to customers within a water district’s service area;
and (2) the City’s conduct fell within § 1926(b)’s second enumerated category of
curtailment because the City had effectively “grant[ed itself a] private franchise” by
providing water service, which is a proprietary function. The district court denied
this motion, reasoning that PWSD’s arguments were new arguments inappropriately
presented for the first time in its Rule 59(e) motion. Alternatively, the court found
the arguments to be meritless. PWSD now appeals the district court’s summary
judgment and Rule 59(e) decisions.

II.   DISCUSSION

       We review a district court’s resolution of a motion for summary judgment de
novo, viewing the evidence and reasonable inferences in favor of the nonmoving
party. LaCurtis v. Express Med. Transporters, Inc., 856 F.3d 571, 576 (8th Cir.
2017) (citation omitted). “Summary judgment is required ‘if the movant shows that
there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.’” Id. at 576-77 (quoting Fed. R. Civ. P. 56(a)).

      2
        In a subsequent order, the district court declined to exercise supplemental
jurisdiction over PWSD’s state law claims. Those claims are not at issue on appeal.
                                         -4-
       We generally review the denial of a Rule 59(e) motion applying an abuse of
discretion standard; although, “where the Rule 59(e) motion seeks review of a purely
legal question,” our review is effectively de novo. See Henley v. Brown, 686 F.3d
634, 639 (8th Cir. 2012) (citation omitted). Here, because PWSD’s Rule 59(e)
motion challenged whether the district court appropriately interpreted § 1926(b), a
purely legal question, we effectively review the district court’s decision de novo.
See id. (citation omitted). We may affirm on any ground supported by the record.
See Dick v. Dickinson State Univ., 826 F.3d 1054, 1058 (8th Cir. 2016) (citation
omitted).

       Even though the district court did not reach the City’s statute of limitations
argument, the City contends this argument provides an alternative ground for
affirmance. Because PWSD asserted its claims under 42 U.S.C. § 1983, Missouri’s
five-year statute of limitations for personal injury actions applies. See Mo. Rev.
Stat. § 516.120(4); Egerdahl v. Hibbing Cmty. Coll., 72 F.3d 615, 618 (8th Cir.
1995) (citation omitted). While state law determines the applicable statute of
limitations for a § 1983 claim, federal law controls when a § 1983 claim accrues.
Rassier v. Sanner, 996 F.3d 832, 836 (8th Cir. 2021). Such a claim accrues “when
the plaintiff has a complete and present cause of action,” that is, “when ‘the plaintiff
can file suit and obtain relief.’” Id. (citation omitted).

       PWSD asserts its claims are timely under the continuing-violations doctrine
because the City continues to provide water to customers within the Disputed
Subdivisions. Under this doctrine, each overt act that is a part of a continuing
violation “starts the statutory period running again, regardless of the plaintiff’s
knowledge of the alleged illegality at much earlier times.” Izaak Walton League of
Am., Inc. v. Kimbell, 558 F.3d 751, 759 (8th Cir. 2009) (citation omitted). However,
“[a]cts that are merely unabated inertial consequences (of a single act)” do not reset
the statute of limitations. Id. (citation omitted); see also Jenson v. Eveleth Taconite
Co., 130 F.3d 1287, 1303 (8th Cir. 1997).

                                          -5-
       Our decision in Humphrey v. Eureka Gardens Public Facility Board, 891 F.3d
1079 (8th Cir. 2018), is somewhat analogous to the instant case, and it elucidates the
distinction between a continuing violation and an inertial consequence from a single
violation. In Humphrey, the plaintiffs alleged that the defendants discriminated
against them by installing a sewer system in their residence, which was more
expensive to maintain relative to systems in other units. 891 F.3d at 1081-82. The
plaintiffs argued their otherwise time-barred claims were timely under the
continuing-violations doctrine based on the plaintiffs’ recurring, more-expensive
maintenance payments. Id. at 1082. We rejected this argument on grounds that the
initial installation of the sewer system was a discrete act and the recurrent
maintenance payments were simply effects of the initial installation. Id. at 1082-83.
Compare Del. State Coll. v. Ricks, 449 U.S. 250, 257-58 (1980) (finding a
professor’s claim for discrimination based on his denial of tenure accrued when he
was denied tenure and his subsequent termination was an effect of his tenure denial),
with Montin v. Estate of Johnson, 636 F.3d 409, 415-16 (8th Cir. 2011) (finding a
civilly-committed offender’s daily unconstitutional restrictions due to his
commitment were continuing violations, but noting that no continuing violation
would have occurred if the offender had challenged the policy that resulted in the
restrictions and not the daily restrictions themselves).

        We also find guidance in this Court’s decision in City of Lebanon. In that
case, the Court stated that any curtailment under 7 U.S.C. § 1926(b) occurs only
when a municipality “initially provides service” and “not when it continues to do
so.” City of Lebanon, 605 F.3d at 516. The Court reasoned that § 1926(b)’s use of
the verbs “curtail” and “limit,” “reinforce[s] the notion that the statute prevents a
city from taking customers served by a rural district, not a city’s passive continuation
of service to its customers.” Id.

       Here, it is undisputed that the City began serving each of the Disputed
Subdivisions in or before 1994. Based on the principles set forth above, a § 1926(b)
violation must occur (and the statute of limitations accrues) when a municipality
begins providing service to a new subdivision, and “not when it continues to do so.”
                                          -6-
See id. Contrary to PWSD’s contention, it is not a continuing violation, and the
statute of limitations does not reset, when a municipality continues to add and
provide service to customers in a subdivision it already serves. This holding
promotes finality and comports with the statute’s purpose of encouraging water
development because a municipality would be less inclined to invest in infrastructure
to provide water service to a subdivision if a rural water district could divest the
municipality of its investment decades later. Any curtailments necessarily occurred
and PWSD’s claims necessarily accrued well outside the five-year limitation period.
The City’s ongoing provision of water service in the Disputed Subdivisions is merely
a consequence of its initial service, not a continuing violation.3

       While PWSD alternatively invites us to apply § 516.100 of Missouri Revised
Statutes, which codifies a version of the continuing-violations doctrine, we decline
to do so as the matter is controlled by federal law rather than state law as noted
above.4

III.   CONCLUSION

       Because PWSD’s claims are time-barred, we affirm the judgment of the
district court.
                   ______________________________

       3
        To the extent PWSD’s knowledge of the City’s curtailment is relevant, ample
evidence demonstrates that PWSD has been aware of the City’s provision of water
service to the Disputed Subdivisions since at least the 1990s. For example, a PWSD
board member testified that members of PWSD’s board of directors knew in the
1970s and 1990s that the City served the Disputed Subdivisions. While PWSD
rejects this board member’s testimony, it cites no evidence supporting its position.
       4
        Because PWSD’s claims are time-barred, we do not reach the merits of the
parties’ arguments as to the breadth of § 1926(b)’s protection or PWSD’s alleged
waiver of its arguments on the merits.
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