Court Opinion

ID: 163428
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:53:25+00
Date Added: 2024-06-11T16:41:09.868867
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                           APR 30 2003
                            FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk

    NORMAN APARTMENT
    ASSOCIATION, and all others
    similarly situated,

                Plaintiff-Appellant,                     No. 02-6269
                                                   (D.C. No. 01-CV-1214-L)
    v.                                                   (W.D. Okla.)

    THE CITY OF NORMAN, a
    Municipal Corporation,

                Defendant-Appellee.

                            ORDER AND JUDGMENT *

Before TACHA, Chief Judge, HARTZ, and O’BRIEN, Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument.

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      Norman Apartment Association (Association) appeals from the district

court’s order dismissing its complaint against the City of Norman, Oklahoma for

lack of subject matter jurisdiction. We affirm.

      The Association’s complaint recites that on or about June 12, 2001, the City

Council of Norman passed an ordinance approving a $5.00 surcharge for each

water and sewer customer, for the purposes of maintaining the City’s sewer

system. The Association notes that each apartment unit is assessed the surcharge

as though it were a separate dwelling. Therefore, it argues, apartment customers

will pay a disproportionate share of the surcharge relative to the actual mileage of

sewer pipe necessitated by apartment dwellings. In its complaint, the Association

seeks a declaratory judgment that this surcharge constitutes a violation of its

members’ rights to equal protection and due process, as guaranteed by the

Fourteenth Amendment to the United States Constitution. It further seeks an

injunction and damages.

      The City of Norman filed a motion to dismiss the Association’s complaint

for lack of subject matter jurisdiction. It contended that this suit was barred by

the Johnson Act, 28 U.S.C. § 1342, which prohibits federal district courts from

enjoining or restraining rate-making by state and municipal public utilities. The

Association responded, inter alia, by contending that the surcharge was not a

“rate” within the meaning of the Johnson Act. The district court rejected this

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argument, along with the Association’s other contentions. It concluded that the

surcharge was included within the rate structure of the City of Norman, and was

protected by the Johnson Act from federal court challenge.

      We review de novo the district court’s dismissal for lack of subject matter

jurisdiction, accepting its jurisdictional fact-finding unless clearly erroneous.

Montoya v. Chao, 296 F.3d 952, 954-55 (10th Cir. 2002). The Johnson Act

provides as follows:

            The district courts shall not enjoin, suspend or restrain the
      operation of, or compliance with, any order affecting rates
      chargeable by a public utility and made by a State administrative
      agency or a rate-making body of a State political subdivision, where:

            (1) Jurisdiction is based solely on diversity of citizenship or
      repugnance of the order to the Federal Constitution; and,

             (2) The order does not interfere with interstate commerce; and,

            (3) The order has been made after reasonable notice and
      hearing; and,

             (4) A plain, speedy and efficient remedy may be had in the
      courts of such State.

28 U.S.C. § 1342.

      “The Johnson Act does not deprive a federal court of jurisdiction unless the

challenge is to an ‘order affecting rates’ and each of the four enumerated

conditions is present. The burden of showing that the conditions are present is on

the party invoking the act.” US West, Inc. v. Tristani, 182 F.3d 1202, 1207 (10th

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Cir. 1999) (citations omitted). On appeal, the Association again contends that the

surcharge is not an “order affecting rates” within the meaning of the Johnson Act,

because the surcharge is not a “rate.” 1

      We are persuaded, however, that the ordinance approving the surcharge at

issue here is an “order affecting rates.” “[T]he Johnson Act proscribes federal

interference not with a ‘rate’ simpliciter but with ‘any order affecting rates.’” Hill

v. Kan. Gas Serv. Co., 323 F.3d 858, 864 (10th Cir. 2003) (quotation omitted).

Our cases have construed the Johnson Act broadly, “to effect a general hands-off

policy relative to state rate making.” US West, 182 F.3d at 1207 (quotations

omitted).

      In Gen. Investment & Serv. Corp. v. Wichita Water Co., 236 F.2d 464 (10th

Cir. 1956), for example, we upheld the dismissal, under the Johnson Act, of a

challenge to an allegedly discriminatory surcharge imposed by a municipal water

company for repayment of a bond issue, characterizing it as a “rate[] fixed by city

ordinance[].” Id. at 466. In Tennyson v. Gas Serv. Co., 506 F.2d 1135 (10th Cir.

1974), we upheld the application of the Johnson Act to a challenge to late charge

assessments imposed by gas and electric companies, rejecting the argument that

the late charge was “interest” rather than a “rate.” Id. at 1139-40.

1
      The Johnson Act prohibits both suits for injunctive relief, and for
declaratory judgment, alone or in combination with a claim for money damages.
Tennyson v. Gas Serv. Co. , 506 F.2d 1135, 1139 (10th Cir. 1974).

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      In similar fashion, we conclude that the surcharge attacked by the

Association was an “order affecting rates” within the meaning of the Johnson Act.

The district court acted properly in dismissing this case for lack of subject matter

jurisdiction. The judgment of the United States District Court for the Western

District of Oklahoma is therefore AFFIRMED.

                                                     Entered for the Court

                                                     Deanell Reece Tacha
                                                     Chief Judge

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