throbber
NOTE: This disposition is nonprecedential.
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`RIO LINDA ELVERTA COMMUNITY WATER
`DISTRICT, SACRAMENTO SUBURBAN WATER
`DISTRICT,
`Plaintiffs-Appellants
`
`v.
`
`UNITED STATES,
`Defendant-Appellee
`______________________
`
`2018-1761, 2018-1762
`______________________
`
`Appeals from the United States Court of Federal
`Claims in Nos. 1:17-cv-00859-RHH, 1:17-cv-00860-RHH,
`Senior Judge Robert H. Hodges, Jr.
`______________________
`
`Decided: July 19, 2019
`______________________
`
`VICTOR MARC SHER, Sher Edling LLP, San Francisco,
`CA, argued for plaintiffs-appellants. Also represented by
`MATTHEW KENDALL EDLING.
`
` KATHERINE WADE HAZARD, Environment and Natural
`Resources Division, United States Department of Justice,
`Washington, DC, argued for defendant-appellee. Also
`
`

`

`2
`
`RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
`
`represented by ERIC GRANT, WILLIAM B. LAZARUS, JEFFREY
`H. WOOD.
` ______________________
`
`Before REYNA, SCHALL, and HUGHES, Circuit Judges.
`HUGHES, Circuit Judge.
`This is a takings case involving water contamination.
`Rio Linda Elverta Community Water District and Sacra-
`mento Suburban Water District filed complaints in the
`United States Court of Federal Claims alleging that, by
`contaminating the water supply in the area surrounding
`the former McClellan Air Force Base with hexavalent chro-
`mium, the United States committed a taking of their usu-
`fructuary interests1 in that water. The Court of Federal
`Claims dismissed the complaints for lack of subject matter
`jurisdiction. It interpreted the complaints as only assert-
`ing a regulatory takings claim and concluded that the com-
`plaints failed to allege the facts necessary to satisfy Article
`III’s case or controversy requirement. We hold that the Wa-
`ter Districts alleged a physical taking, not a regulatory tak-
`ing. Because the Court of Federal Claims failed to address
`the Water Districts’ physical takings claim, we vacate and
`remand for further proceedings.
`I
`The following is alleged in the plaintiffs’ complaints
`and the parties’ briefing on the government’s motion to dis-
`miss:
`
`
`1 A usufructuary interest is the right to use “an-
`other’s property, as far as may be had without causing
`damage or prejudice to the owner.” Usufruct, A Dictionary
`of Modern Legal Usage (2d ed. 1995).
`
`

`

`RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
`
`3
`
`A.
`Rio Linda Elverta Community Water District and Sac-
`ramento Suburban Water District (the Water Districts) are
`public drinking water providers organized under the Cali-
`fornia Water Code. The Water Districts own the usufruc-
`tuary rights to the water within their aquifer, drinking
`wells, and transmission infrastructure which they use to
`supply drinking water. The Water Districts’ service areas
`abut the former McClellan Air Force Base.
`McClellan operated from 1936 through 2001. During
`this time, the base used and disposed of chromate products
`containing hexavalent chromium (Cr6), a metallic element
`linked to health risks such as stomach cancer and gastro-
`intestinal tumors. Cr6 contamination can be caused by hu-
`man activity or natural phenomena. Between 2001 and
`2008, some wells near McClellan that provided water for
`the Water Districts showed elevated levels of Cr6.
`B.
`Under the California Safe Drinking Water Act, the Cal-
`ifornia Water Board enacts standards governing the maxi-
`mum level of contaminants in drinking water. When
`setting a maximum contamination level (MCL), the Water
`Board must balance public health interests with economic
`feasibility. An MCL is legally enforceable, and if a munic-
`ipality exceeds an MCL, the Water Board may suspend or
`revoke its water system operating permit. See Cal. Health
`& Saf. Code §§ 116275(f), 116625.
`Although the Water Board has some discretion in set-
`ting an MCL, the lowest MCL that the Water Board is per-
`mitted to set for a particular contaminant is equal to the
`public health goal for that contaminant. The public health
`goal is set by a separate agency and is based exclusively on
`public health considerations. It represents the level of con-
`tamination that presents no more than a de minimis risk
`to human health. See Cal. Health & Saf. Code § 116365(c).
`
`

`

`4
`
`RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
`
`The public health goal is aspirational. Unlike the MCL,
`the public health goal is not a legally enforceable standard.
`See id. California’s public health goal for Cr6 is 0.02 parts
`per billion (ppb) or less in drinking water. Prior to 2013,
`California did not have an MCL for Cr6.
`In August 2013, the Water Board proposed a Cr6 MCL
`of 10 ppb. After the requisite notice and comment period,
`the Water Board adopted the proposed MCL.
`The Water Districts subsequently employed a hydrolo-
`gist to determine the source of the Cr6 contamination in
`their water supply. The hydrologist concluded that Cr6
`contamination originated from the McClellan base.
`On May 5, 2017, the Superior Court of California for
`the County of Sacramento overturned the Cr6 MCL be-
`cause the Water Board had failed to conduct a proper fea-
`sibility analysis. See Cal. Mfrs. & Tech. Ass’n v. State
`Water Res. Control Bd., No. 34-2014-80001850, slip op. at
`31 (Cal. Super. Ct. May 5, 2017).
`On June 23, 2017, the Water Districts filed complaints
`in the Court of Federal Claims alleging that the United
`States committed a taking of the Water Districts’ usufruc-
`tuary rights by contaminating the Water Districts’ water
`supply with Cr6. The government moved to dismiss for
`lack of subject matter jurisdiction. It argued that the Wa-
`ter Districts failed to allege a takings claim and that the
`court lacked jurisdiction given pending litigation in the
`United States District Court for the Eastern District of Cal-
`ifornia.2
`
`
`2 The district court litigation is ongoing and includes
`Federal Torts Act claims against the United States. See
`Rio Linda Elverta Cmty. Water Dist. v. United States, No.
`2:17-cv-01349 (E. D. Cal. filed June 30, 2017); Sacramento
`
`

`

`RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
`
`5
`
`The Court of Federal Claims concluded that the com-
`plaints did not satisfy the case or controversy requirement
`and dismissed both cases. See Rio Linda Elverta Cmty.
`Water Dist. v. United States, 136 Fed. Cl. 175 (2018); Sac-
`ramento Suburban Water Dist. v. United States, 136 Fed.
`Cl. 173 (2018). The court noted that the California courts
`had overturned the Cr6 MCL and that the state Water
`Board was reexamining the regulation factoring the cost
`benefit of compliance. Because the MCL was no longer en-
`forceable, and because a regulatory takings action cannot
`be based on a speculative regulation, the court reasoned
`that the Water Districts could not establish a legally cog-
`nizable injury.
`
`II
`We review the Court of Federal Claims’ dismissal for
`lack of subject matter jurisdiction de novo. Ont. Power
`Generation, Inc. v. United States, 369 F.3d 1298, 1300 (Fed.
`Cir. 2004). We review findings of jurisdictional fact for
`clear error. Hamlet v. United States, 873 F.2d 1414, 1416
`(Fed. Cir. 1989). When reviewing a decision dismissing a
`complaint for lack of subject matter jurisdiction, “we accept
`as true all undisputed facts asserted in the plaintiff’s com-
`plaint and draw all reasonable inferences in favor of the
`plaintiff.” LaBatte v. United States, 899 F.3d 1373, 1375
`(Fed. Cir. 2018) (internal quotation marks omitted). The
`Court of Federal Claims errs as a matter of law when it
`dismisses a complaint for lack of subject matter jurisdiction
`without addressing the “issue in the complaint on . . .
`which [the complaint] was founded.” Hamlet, 873 F.2d at
`1417.
`The Water Districts argue that, because the Cr6 con-
`tamination on the base physically invaded their water
`
`
`Suburban Water Dist. v. United States, No. 2:17-cv-01353
`(E. D. Cal. filed June 30, 2017).
`
`

`

`6
`
`RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
`
`supply, their complaints alleged a physical, not a regula-
`tory, taking. Thus, they assert that the court misconstrued
`their claims and erroneously determined that there was no
`subject matter jurisdiction. The government makes two ar-
`guments in response.
`First, it argues that even under a physical taking the-
`ory, the Water Districts failed to assert takings claims be-
`cause “[a] taking must be predicated on actions undertaken
`by the United States,” Navajo Nation v. United States, 631
`F.3d 1268, 1274 (Fed. Cir. 2011), and the State of Califor-
`nia—not the United States—promulgated the MCL.
`We reject this argument. It presumes the complaints
`allege that takings claims arise from Cr6 contamination
`exceeding the MCL. But they do not. Instead, they allege
`a physical invasion of the Water Districts’ property rights.
`The MCL is not the injury but the reason the Water Dis-
`tricts discovered the contamination.
`Second, the government argues that, even if the Water
`Districts asserted physical takings claims, the statute of
`limitations precludes relief. Under the Tucker Act, the
`Court of Federal Claims lacks jurisdiction to hear takings
`claims more than six-years after they accrue. See 28 U.S.C.
`§§ 1491, 2501. Because the base closed in 2001, the gov-
`ernment contends that the Water Districts’ claims are un-
`timely.
`A cause of action does not accrue until all events
`needed to affix the liability have occurred and the claimant
`is legally entitled to assert its claims. Catawba Indian
`Tribe v. United States, 982 F.2d 1564, 1570 (Fed. Cir.
`1993). For a claim to accrue, a claimant generally must
`know or have reason to know that the claim exists. Holmes
`v. United States, 657 F.3d 1303, 1317 (Fed. Cir. 2011). We
`may find accrual suspended if a plaintiff “show[s] that de-
`fendant has concealed its acts with the result that plaintiff
`was unaware of their existence or . . . that its injury was
`inherently unknowable at the accrual date.” Martinez v.
`
`

`

`RIO LINDA ELVERTA COMMUNITY v. UNITED STATES
`
`7
`
`United States, 333 F.3d 1295, 1319 (Fed. Cir. 2003) (en
`banc) (internal quotation marks omitted).
`Determining when the Water Districts’ claims accrued
`will require a fact intensive inquiry. Because the Court of
`Federal Claims is more suited to conducting such an in-
`quiry, we remand this case back to the trial court to ad-
`dress this issue in the first instance.
`III
`Because the Court of Federal Claims did not address
`the Water Districts’ physical takings claims, we vacate and
`remand for further proceedings.
`
`
`VACATED AND REMANDED
`
`
`No costs.
`
`
`

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