State of Missouri v. City of Glasgow ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 97-2279
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State of Missouri; Missouri *
Department of Natural Resources, the *
Missouri Clean Water Commission, *
*
Plaintiffs - Appellants, *
* Appeal from the United States
v. * District Court for the
* Western District of Missouri.
City of Glasgow, a Missouri *
Corporation, *
*
Defendant - Appellee. *
*
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Submitted: January 12, 1998
Filed: August 10, 1998
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Before RICHARD S. ARNOLD,1 Chief Judge, and WOLLMAN and HANSEN, Circuit
Judges.
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HANSEN, Circuit Judge.
The State of Missouri (the state) appeals the district court’s order granting
summary judgment to the City of Glasgow, Missouri (Glasgow), claiming that the court
1
The Honorable Richard S. Arnold stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on April 17,
1998. He has been succeeded by the Honorable Pasco M. Bowman II.
erred in failing to grant declaratory and injunctive relief against Glasgow for violations
of the Federal Clean Water Act and in ruling that a state statute requiring Glasgow to
pay permit fees to operate its water treatment facility violates the Missouri Constitution.
The state also claims that the district court improperly ordered it to issue Glasgow a
permit for its water treatment facility. We reverse and remand.
I. Factual and Procedural Background
Glasgow operates a water treatment facility that provides drinking water to its
residents. Glasgow pumps water from the Missouri River into the facility, treats the
water to make it suitable for drinking, and then pumps some water back into the river.
As part of this treatment process, the facility also discharges the precipitated solids
formed during the treatment process, referred to as sludge, back into the Missouri River.
Glasgow’s water treatment facility is regulated by state and federal water
pollution laws. The facility is considered a “point source” under the Federal Clean
Water Act and Missouri state clean water laws because it discharges sludge into the
Missouri River. See 33 U.S.C. § 1362(6),(14) (1994); Mo. Ann. Stat. § 644.016(8), (9)
(West 1998). Under both sovereigns’ laws, a point source (like Glasgow’s facility) is
required to have an operating permit in order to lawfully discharge sludge into a river.
33 U.S.C. §§ 1311(a), 1342; Mo. Ann. Stat. § 644.051.2. In Missouri, a point source
must apply to the Missouri Clean Water Commission for the necessary operating permit
because the state has chosen to administer its own permit program, an option authorized
by federal law. See Mo. Ann. Stat. § 644.026.1(13); 33 U.S.C. § 1342(b). Pursuant
to § 1342(b), the administrator of the federal Environmental Protection Agency
approved Missouri’s submitted plan, and hence the issuance of a Missouri state permit
constitutes compliance with the federal statute’s national pollutant discharge elimination
system. Glasgow had such a permit to discharge sludge into the Missouri River until
1995, when its permit expired. Glasgow then applied for
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a new permit from the state, but refused to pay the enhanced $1,500 annual permit fee
required by an amended state statute. See Mo. Ann. Stat. § 644.052.2(5). Because
Glasgow would not pay the fee, the state refused to issue a permit for Glasgow’s water
treatment facility.
After sending Glasgow notices of its failure to pay the fee and to obtain a permit,
the state filed a complaint in federal district court against Glasgow, alleging: (1) that
Glasgow is violating federal law by discharging sludge from its water treatment facility
into the Missouri River without a permit; and (2) that Glasgow had failed to pay permit
fees required by state law. The state sought injunctive and declaratory relief on its
claim that Glasgow is violating federal law and sought money damages for Glasgow’s
failure to pay permit fees. In its answer, Glasgow admitted the factual allegations in the
complaint regarding its discharge of sludge into the Missouri River and its operation of
the water treatment facility without a permit, but asserted that it did not have to pay the
permit fees because the state statute requiring the fees violated the Hancock
Amendment to the Missouri Constitution. See Mo. Const. art. 10, § 21. Glasgow also
asserted a counterclaim, requesting the district court to order the State to issue it a
permit.
The parties then filed cross-motions for summary judgment. The district court
granted the state’s motion, ruling that the Hancock Amendment did not prevent the state
from charging Glasgow a fee to obtain the permit necessary to operate its water
treatment facility. See Missouri v. City of Glasgow, 932 F. Supp. 243, 245 (W.D. Mo.
1996), vacated on reconsideration, 966 F. Supp. 905 (W.D. Mo. 1997). Glasgow then
filed a motion for reconsideration, arguing that an intervening Supreme Court of
Missouri decision, Missouri Municipal League v. State of Missouri, 932 S.W.2d 400
(Mo. 1996), required the district court to reverse its ruling regarding Glasgow’s
Hancock Amendment defense to the state’s collection of permit fees. The district court
granted the motion, vacated its prior ruling, granted Glasgow summary judgment, and
ordered the state to issue Glasgow a permit for its water treatment facility. See
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Missouri v. City of Glasgow, 966 F. Supp. 905, 907 (W.D. Mo. 1997). The state
appeals, claiming that Glasgow is operating its water treatment facility in violation of
federal law and that the Hancock Amendment does not prevent the state from requiring
Glasgow to pay the permit fees. The state also argues that even if the Hancock
Amendment prevents it from requiring Glasgow to pay the permit fees, the district court
improperly ordered it to issue Glasgow a permit.
II. Analysis
“We review the district court’s grant of summary judgment de novo. Summary
judgment is appropriate when there is no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law.” Bremen Bank & Trust Co. v. United
States, 131 F.3d 1259, 1264 (8th Cir. 1997) (citations omitted). Because the parties
agree that the material facts are not in dispute, our review is limited to the question of
whether the district court correctly applied the law to these facts.
A. The Federal Law Claim
The state first argues that the district court erred in failing to grant declaratory and
injunctive relief on its claim that Glasgow is violating federal law. The state contends
that Glasgow is violating the Federal Clean Water Act by discharging sludge from its
water treatment facility into the Missouri River without an operating permit. We agree.
The state brought this claim as a “citizen” under the “citizen suit” provision of
the Federal Clean Water Act. See J. A. at 6; 33 U.S.C. § 1365(a).2 The state requested
2
Any “person or persons having an interest which is or may be adversely
affected” may sue as a “citizen” under the Federal Clean Water Act. 33 U.S.C. §
1365(g). The definition of the term “person” in the statute includes a state. Id. §
1362(5). Thus, the state can sue Glasgow as a “citizen” under the “citizen suit”
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injunctive and declaratory relief for Glasgow’s alleged violation of federal law. The
State sought relief for this federal law violation separate from its claim for damages
against Glasgow for failure to pay permit fees allegedly required by state law.
It is a violation of the Federal Clean Water Act to discharge a pollutant into a
navigable water without a permit. See 33 U.S.C. §§ 1311(a); 1342. Glasgow admits
that it is discharging sludge from its water treatment facility into the Missouri River and
that it does not have a permit to do so. This sludge is considered a “pollutant” under
federal law. See id. § 1362(6). The water treatment facility is a “point source” under
the statute. See id. § 1362(14). Under the statute, the Missouri River is a “navigable
water.” See id. § 1362(7). Thus, by discharging sludge from its water treatment facility
into the Missouri River without a permit, Glasgow is clearly violating federal law.
Glasgow’s only defense to this violation is that the Hancock Amendment to the
Missouri Constitution prevents the state from charging it the enhanced fee contained in
the amended state statute to obtain a permit for its water treatment facility. But this
state constitutional law defense works (if at all) only to prevent the state from charging
an increased fee to obtain a permit in order to comply with the state’s own water
pollution law. The Supremacy Clause of the federal Constitution dictates that a state
law (whether a statutory or constitutional provision) cannot prevent the administration
and execution of a federal statute. See Sola Elec. Co. v. Jefferson Co., 317 U.S. 173,
176 (1942) (“It is familiar doctrine that the prohibition of a federal statute may not be
set at naught, or its benefits denied, by state statutes or state common law rules.”);
Quinones v. City of Evanston, 58 F.3d 275, 277 (7th Cir. 1995) (city’s adherence to
state law that conflicts with federal civil rights law provides no defense to liability under
the federal law). In our view, the state constitutional provision cannot excuse
provision of the Federal Clean Water Act.
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Glasgow’s operation of its water treatment facility without a permit in violation of
federal law. Given Glasgow’s admissions, we reverse the district court’s judgment on
Count I, and we remand for the issuance of an immediate order declaring Glasgow to
be in violation of the federal statute and enjoining Glasgow from discharging any sludge
from its water treatment facility into the Missouri River until such time as a permit has
been issued allowing it to do so. Our remand instructions do not prevent the district
court from granting such other and further relief to the state as that court deems merited
and proven under the claims asserted in Count I of the complaint upon remand.
B. The Collection of Permit Fees
In Count II of its complaint, the state sought to collect the enhanced annual permit
fee which Glasgow had not paid together with its attorney’s fees and costs, all pursuant
to the Missouri clean water statute. The district court ruled that the Hancock
Amendment prevented the state from requiring the city to pay an enhanced fee to obtain
a permit, and the state appeals. The resolution of this issue requires the interpretation
of Missouri law. We review the district court’s interpretation of state law de novo.
Salve Regina College v. Russell, 499 U.S. 225, 231 (1991). We are bound by the
decisions of the Supreme Court of Missouri in interpreting Missouri law. B.B. v.
Continental Ins. Co., 8 F.3d 1288, 1291 (8th Cir. 1993). Because the Supreme Court
of Missouri has not yet addressed this precise issue, we must determine what that court
would probably hold if it were called upon to decide the issue. Id. “In making this
determination, a federal court may consider relevant state precedents, analogous
decisions, considered dicta, scholarly works, and any other reliable data tending
convincingly to show how the highest court in the state would decide the issue.” Id.
(internal quotation omitted).
Missouri state law, like the Federal Clean Water Act, provides that it is unlawful
to “operate, use or maintain” a water pollution “point source,” such as Glasgow’s water
treatment facility, unless the point source obtains a permit issued by the Missouri
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Clean Water Commission. See Mo. Ann. Stat. § 644.051.2. In order to obtain a permit,
Missouri law requires a point source to pay a fee to the state. See id. § 644.052. State
law provides that a city-owned water treatment facility with operating volume in the
range of Glasgow’s facility shall pay an annual fee of $1,500. See id. § 644.052.2(5).
The annual permit fee requirements for municipal water treatment facilities
contained in section 644.052.2 became law in 1990. See 1990 Mo. Legis. Serv., Act
of July 9, 1990, S.B. 582 (West). Until 1990, Missouri law required cities to pay a
“filing fee” of $75 each time they applied for a five-year permit. See Mo. Stat. Ann. §
644.051.9 (West 1989). This filing fee of $75 existed prior to the passage of the
Hancock Amendment to the Missouri Constitution. See Mo. Stat. Ann. § 204.051
(West 1973). The filing fee was repealed in 1990 when section 644.052.2 was enacted.
See 1990 Mo. Legis. Serv., Act of July 9, 1990, S.B. 582, § A. Thus, the 1990 change
in state law substantially increased the cost to Glasgow for obtaining a permit for its
water treatment facility—from $75 every five years to $1,500 each year.
The Hancock Amendment to the Missouri Constitution was passed by the voters
of Missouri on November 4, 1980. See Missouri Mun. League, 932 S.W.2d at 401.
The provisions of this amendment are set out in sections 16 through 24 of article 10 of
the Missouri Constitution. Id. When a Missouri statute conflicts with the Missouri
Constitution, the statute is invalid. Labor’s Educ. and Political Club Indep. v. Danforth,
561 S.W.2d 339, 343 (Mo. 1977).
The district court ruled that the permit fee in section 644.052.2 is rendered invalid
by the following provision of the Hancock Amendment:
The state is hereby prohibited from reducing the state financed
proportion of the costs of any existing activity or service required of
counties and other political subdivisions. A new activity or service or an
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increase in the level of any activity or service beyond that required by
existing law shall not be required by the general assembly or any state
agency of counties or other political subdivisions, unless a state
appropriation is made and disbursed to pay the county or other political
subdivision for any increased costs.
Mo. Const. art. 10, § 21 (emphasis added). The court based its Hancock Amendment
analysis on the first sentence of this section. City of Glasgow, 966 F. Supp. at 906.
The court ruled that although Glasgow is not required by state law to operate a water
treatment facility, the permit fees in section 644.052.2 are “required” under the Hancock
Amendment as that term was interpreted by the Supreme Court of Missouri in Missouri
Municipal League. Id. at 907. The court determined that the state had fully funded the
administration of the permit program prior to the passage of the Hancock Amendment
and that after the enactment of the section 644.052.2 permit fee requirements, the permit
program was now funded, at least in part, by cities. Id. Thus, the court ruled that the
permit fees were unconstitutional because “there has been a reduction in the state
financing” of the permit program in violation of the Hancock Amendment. Id.
The state first claims that the permit fees are not “required” under state law and
therefore do not violate the Hancock Amendment. The opinion in Missouri Municipal
League requires us to reject this argument. In Missouri Municipal League, a group of
cities claimed that a state statute that required them to pay a fee to have their drinking
water tested by a state lab violated the Hancock Amendment. 932 S.W.2d at 402. The
state argued that because the provision of drinking water was a “discretionary activity”
for a city, it was not “required” by state law and, therefore, the Hancock Amendment
did not bar the state from charging local governments a fee to have their drinking water
tested. Id. The Supreme Court of Missouri rejected this argument, explaining that it
would “thwart the purpose of the Hancock Amendment” to allow such a distinction
between services and activities that a local government must provide for its residents
under state law and those that it provides at its discretion. Id. at 402-03.
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The court stressed that “[o]nce the state imposes a requirement on a political
subdivision, it makes no difference whether the underlying service is one traditionally
performed by the government.” Id. at 403. Thus, the court held that the drinking water
testing fee was “required” under the Hancock Amendment. Id.
Under Missouri Municipal League, it is irrelevant to the Hancock Amendment
analysis that the operation of Glasgow’s water treatment facility is not required by state
law. Section 644.052.2 states that municipalities “shall” pay the operating permit fee,
and section 644.055 provides penalties for those cities that do not pay the fee. The
permit fees are “required” by the state for purposes of the Hancock Amendment.
The state next argues that section 644.052.2 does not violate the Hancock
Amendment because the permit fees are part of the State’s implementation of federal
requirements. We disagree. The state is not required to administer its own permit
program under federal law, but it may elect to do so. See 33 U.S.C. § 1342(b)
(providing that a state may voluntarily administer its own permit program after receiving
approval from federal authorities). Federal law does not require the state to charge a
fee for obtaining a permit. Thus, the permit fees at issue here are simply requirements
of Missouri state law and therefore “must conform to the requirements of the Missouri
Constitution.” Missouri Mun. League, 932 S.W.2d at 403.
Finally, the state argues that the district court erred in ruling that permit fees in
section 644.052.2 violate the Hancock Amendment because Glasgow has failed to
prove that the state decreased its proportion of funding for the administration of the
permit program, citing Fort Zumwalt School District v. State of Missouri, 896 S.W.2d
918, 922 (Mo. 1995). In Fort Zumwalt, the plaintiffs claimed that the Hancock
Amendment required the state to maintain the same proportion of funding for state-
mandated special education services in each school district as it provided prior to the
passage of the Hancock Amendment. 896 S.W.2d at 922. The Supreme Court of
Missouri agreed and held that the Hancock Amendment “requires the state to
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appropriate funds for financing special education in local school districts in amounts
sufficient to keep the state’s contribution to the cost of special education in the school
districts at the same ratio as existed in fiscal year 1980-81,” the time of the Hancock
Amendment’s passage. Id. The court further explained that the “state’s liability is
limited to the state’s mandated activity and the state financed proportion of the cost of
that activity in effect in 1980-81.” Id. at 923. The court then remanded the case to the
trial court to determine this ratio for each school district. Id.
As explained above, at the time Missouri voters passed the Hancock Amendment,
the state charged cities a filing fee of $75 to obtain a permit to operate a water treatment
facility. See Mo. Ann. Stat. § 644.051.9 (West 1989). Missouri law provided that
these filing fees were to be used to fund the administration and enforcement of the
state’s water pollution laws. Id. Similarly, under current Missouri law, the permit fees
collected from cities pursuant to section 644.052.2 “shall” be used “solely for the
administration of” the state’s water pollution laws. Mo. Ann. Stat. § 644.054 (West
1998).
Under Fort Zumwalt, we must determine if the state has decreased its proportion
of funding for the administration of the state water pollution laws by increasing the fees
charged to cities to obtain a permit to operate a water treatment facility. To make this
determination, we must first find the state-funded proportion of the costs of
administering the state water pollution laws in fiscal year 1980-81, the time of the
Hancock Amendment’s passage. See Fort Zumwalt, 896 S.W.2d at 922. Second, we
must find the state-funded proportion of the costs of administering the state water
pollution laws today. Id. Finally, we must compare these two proportions to see if the
state has unlawfully decreased its proportion of funding for the costs of administering
the state water pollution laws. Id.
The district court erred in applying the first of these three steps when it implicitly
ruled that the state had funded all of the costs of administering the state water pollution
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laws prior to the Hancock Amendment’s passage. As shown above, the filing fees
charged to cities prior to the passage of the Hancock Amendment were used by the state
to fund at least some of the costs of administering the state water pollution laws. This
case is therefore unlike Missouri Municipal League, in which the state had funded 100
percent of the costs of the drinking water testing program prior to the passage of the
Hancock Amendment. In that case, any fee charged to cities for the drinking water
testing program represented a decrease in the state-funded proportion of the program.
See 932 S.W.2d at 401. In this case, the state has never funded 100 percent of the costs
of administering the water pollution laws—the state has always charged cities some
type of fee to obtain a permit to operate a water treatment facility and has used the fees
to fund at least some of the costs of administering the state water pollution laws. Thus,
Fort Zumwalt, rather than Missouri Municipal League, controls here. The state may
lawfully increase the fees charged to cities for operating permits so long as the state
continues to fund the costs of administering the state water pollution laws in the same
proportion as existed at the time of the Hancock Amendment’s passage. However, if
the state funding proportion has decreased, then the amount of the permit fees that
represent a decrease in that proportion violates the Hancock Amendment.
The record before us does not contain the evidence necessary to determine if any
of the permit fees in section 644.052.2 represent a decrease in the state-funded
proportion of the costs of administering the state water pollution laws. We therefore
reverse the district court’s ruling that section 644.052.2 violates the Hancock
Amendment, and we remand to the district court for a determination of whether the state
has unlawfully decreased its proportion of funding for the costs of administering the
state water pollution laws by charging Glasgow operating permit fees pursuant to
section 644.052.2. See Fort Zumwalt, 896 S.W.2d at 922-23.
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C. Ordering the State to Issue Glasgow a Permit
Because we remand the case for a determination of whether the permit fees in
section 644.052.2 represent an unlawful decrease in the state-funded proportion of the
costs of administering the state water pollution laws, we also reverse the district court’s
ruling ordering the state to issue Glasgow a permit to operate its water treatment facility.
III. Conclusion
We reverse the district court’s judgment and remand for the issuance of an order
declaring Glasgow to be in violation of federal law and enjoining Glasgow from
discharging sludge from its water treatment facility into the Missouri River without
obtaining an operating permit. We also remand for a determination of whether the
operating permit fees in section 644.052.2 represent a decrease in the state-funded
proportion of the costs of administering the state water pollution laws in violation of the
Hancock Amendment to the Missouri Constitution. Finally, we reverse the district
court’s ruling ordering the state to issue Glasgow a permit to operate its water treatment
facility.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS. EIGHTH CIRCUIT.
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