Petition for Writ of Certiorari — Alisal Water Water Corp. v. United States (No. 05-1185)

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over federal question claims or suits brought by

the United States, we conclude that the district

court had subject matter jurisdiction over this

suit and that federal jurisdiction to permit EPA

enforcement under the SDWA’s statutory scheme

is concurrent with that of state regulators.

App. 9-10.

In response to appellants’ motion for reconsideration,

the Court of Appeals added a footnote stating that “the

district properly concluded that the [Spath] letter was a

specific request by the appropriate state agency sufficient

for the EPA to bring an action. Appellant’s contention that

the letter was insufficient for subject matter jurisdiction

under § 300g-3(b)(2) is without merit.” App. 10, n. 2.

s ¢

REASONS FOR GRANTING THE PETITION

A. The Condition In 42 U.S.C. § 300g-3(b), Requiring

The Proper State Official To Request Federal

Enforcement Before EPA May Bring An En-

forcement Action, Is Jurisdictional.

EPA may bring a civil enforcement action under the

SDWA “if requested” by “the chief executive officer of the

State” or “the agency of such State which has jurisdiction

over compliance by public water systems in the State with

national primary drinking water regulations or State

drinking water regulations.” 42 U.S.C. § 300g-3(b)(2).°

* EPA also may bring a civil enforcement action if it first gives

notice of non-compliance and offers technical assistance. See §§ 300g-

3(b\ 1), 300g-3(aX1). Because EPA did not give notice and technical

assistance before bringing this action, these provisions are not relevant

to this petition except as they illustrate Congress’ intention to limit

(Continued on following page)

Congress thus structured the SDWA to compel federal

enforcers to respect state autonomy in this area of tradi-

tional state regulation and enforcement by requiring the

proper state authority first to request federal enforcement.

As this case illustrates, requesting federal enforce-

ment cedes important state regulatory authority to the

federal executive and judiciary, including decisions to

impose substantial civil penalties on a state utility and its

owners, order far-reaching and expensive remedial meas-

ures, and even require the sale of a public utility to third

parties recommended by the federal receiver and selected

by the federal court. When a state official cedes state

enforcement authority to the federal government, the state

inevitably surrenders important prerogatives, spelled out

in state law and carefully preserved in federal law, to

regulate local drinking water systems.

The Ninth Circuit held that the District Court prop-

erly entertained this action under its “general” jurisdiction

over federal questions pursuant to 28 U.S.C. § 1331 and

its jurisdiction to hear suits brought by federal agencies

under 28 U.S.C. § 1345. App. 6-10. The Court of Appeals

construed the prerequisites of § 300g-3(b)(2) as mere

“limitations on the government’s authority to bring this

suit” that do not divest the District Court of genera!

federal jurisdiction over federal enforcement actions. EPA’s implement-

ing regulations state that “(t]he Administrator shall notify a State and

the appropriate supplier of water” if it finds that a water supplier is not

in compliance, and shall “provide advice and technical assistance to

such State and public water system as may be appropriate to bring the

system into compliance by the earliest feasible time.” 42 C.F.R. § 142.30

emphasis added. In other words, the agency’s own regulatory interpre-

tation of §300g-3(b) requires it to give state authorities an opportunity

to act before bringing a federal enforcement action.

jurisdiction. App. 9. This conclusion conflicts with Su-

preme Court precedent and with the reasoning of prece-

dent from the Court of Appeals for the District of

Columbia Circuit.

In Hallstrom v. Tillamook County, 493 U.S. 20, 29

(1989), the plaintiff sought to bring an enforcement action

under the citizen-suit provisions of the Resource Conser-

vation and Recovery Act (“RCRA”), 42 U.S.C. § 6972,

without first satisfying the 60-day notice requirement in

§ 6972(b)(1).° The Supreme Court held that the 60-day

notice requirement was an express prerequisite to any

citizen cause of action under the statute, and that the

district court erred in entertaining the suit. Although the

Hallstrom court declined to decide whether or not the 60-

day notice provision of RCRA and other environmental

statutes “is jurisdictional in the strict sense of the term”

(td. at 31), lower courts, including the Ninth Circuit, have

unanimously assumed that failure to give timely notice

constitutes a jurisdictional bar on suit — a bar that may

therefore be raised at any point in the litigation. E.g.

Covington v. Jefferson County, 358 F.3d 626, 636 (9th Cir.

2004).

The statutory limitations on citizen enforcement suits

preclude reliance on-28-GS-€-§ 1331 to establish jurisdic-

tion. In Middlesex County Sewerage Authority v. National

Sea Clammers Ass’n, 453 U.S. 1, 13-21 (1981), this Court

held that the comprehensive enforcement provisions in the

Clean Water Act, including the citizen suit provisions,

* The 60-day notice provision exists in virtually every federal

environmental statute, including the Safe Drinking Water Act. See 42

U.S.C. § 300)-8(b)\(1)(A).

preclude private suits brought under either 28 U.S.C.

§ 1331 or 42 U.S.C. § 1983 for violations of the Act. That

is, the District Court’s jurisdiction is limited by the par-

ticular prerequisites (if any) set forth in the statute under

which the suit is brought.‘ As this Court put it, “‘it is an

elementary canon of statvtory construction that where a

statute expressly provides a particular remedy or reme-

dies, a court must be chary of reading others into it.’” Jd.

at 14-15, quoting Transamerica Mortgage Advisors, Inc. v.

Lewis, 444 U.S. 11, 19 (1979).

Indeed, the Ninth Circuit itself has previously recog-

nized that 28 U.S.C. § 1331 is an inappropriate basis for

asserting subject matter jurisdiction in a Clean Water Act

case. In City of Las Vegas, Nevada v. Clark County, Ne-

vada, 755 F.2d 697 (9th Cir. 1985), the Ninth Circuit held

that a city challenging a consent decree in a Clean Water

Act (CWA) case could not invoke the district court’s “gen-

eral” federal jurisdiction to state a claim under the CWA.

As the court put it:

The Supreme Court in Middlesex... , concluded

that Congress intended to limit access to federal

court to enforce the CWA to the express enforce-

ment provisions of the Act. This precludes suits

brought under 28 U.S.C. § 1331 and 42 U.S.C.

§ 1983. Las Vegas [the plaintiff] is limited to a

cause of action brought under, and conforming to

* Congress, of course, has authority to define the subject matter

jurisdiction of the lower federal courts. Finley v. United States, 490 U.S.

545, 548 (1989). Once Congress has drawn the jurisdictional lines,

“limits upon federal jurisdiction ... must be neither disregarded nor

evaded.” Keene Corp. v. United States, 508 U.S. 200, 207 (1993) (quoting

Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978)).

the requirements of, CWA § 505 [the CWA citi-

zen-suit provisions].

Id. at 703 emphasis added.

Nor did the District Court have jurisdiction under 28

U.S.C. § 1345. That section provides that a district court

has general jurisdiction over federal questions “/e/xcept as

otherwise provided by an Act of Congress.” Emphasis

added. In this instance, Congress has provided otherwise

by expressly limiting the circumstance under which EPA

may bring a lawsuit under the SDWA. EPA may bring an

enforcement action only

if -

(1) authorized under paragraph (1) or (2) of

subsection (a) of this section, or

(2) if requested by (A) the chief executive officer

of the State in which is located the public water

system which is not in compliance with such

regulation or requirement, or (B) the agency of

such State which has jurisdiction over compli-

ance by public water systems in the State with

national primary drinking water regulations or

State drinking water regulations.

42 U.S.C. § 300g-3(b), emphasis added. >

Just as a district court has no jurisdiction to hear an

SDWA citizen enforcement action unless the plaintiff has

satisfied the statutory prerequisites for such a suit (see,

e.g., 42 U.S.C. § 300)-8(b)(1)(A) (60-day notice)), it has no

jurisdiction to hear an EPA enforcement action unless EPA

has met the statutory criteria to make itself a plaintiff.

There is no distinction, for jurisdictional purposes, be-

tween a citizen-plaintiff’s failure to satisfy the statutory

prerequisites to bring an enforcement suit under an

environmental statute, and EPA’s failure to meet the

prerequisites to bring its own enforcement suit. In both

instances, Congress has set limitations on enforcement

suits in order to ensure that other important considera-

tions are protected.

The decision below also undermines important pru-

dential and constitutional considerations implicit in

§ 300g-3(b)(2). Because of the states’ traditional authority

to regulate both utilities and drinking water safety, Con-

gress strictly circumscribed the circumstances under

which federal enforcers may intervene — 1.e., when the

state government has, after notice, failed to remediate an

identified problem (42 U.S.C. § 300g-3(b)(1)), or when the

state government has expressly and properly requested

EPA’s assistance (42 U.S.C. § 300g-3(b)(2)). By holding

that EPA may bring a lawsuit notwithstanding its failure

to meet the statutory preconditions for such a suit, the

Ninth Circuit ignored the congressional scheme.

The Ninth Circuit’s holding, if allowed to stand, would

encourage EPA in future cases to disregard the restrictions

set forth in § 300g-3(b)\(1) and § 300g-3(b)(2). If EPA may

invoke § 1331 or § 1345 to establish federal jurisdiction to

bring an SDWA enforcement action, it need never wait for

the state’s request, and Congress’ careful delineation of the

circumstances under which EPA may bring an SDWA

action would be rendered meaningless.

There is an incoherency at the heart of the Ninth

Circuit’s analysis. The court below acknowledged that

Congress specifically intended that there should be “limi-

tations on the government’s authority to bring ... suit”

under the SDWA, but it also held that those explicit

limitations have no bearing on the District Court’s author-

ity to hear the suit. App. 9. As the Court of Appeals for the

District of Columbia Circuit explained in a case raising

similar issues, ignoring statutory restrictions on an

agency’s ability to commence regulatory action or bring

suit is inconsistent with Congressional intent because “we

see no reason to be at all skeptical that Congress meant

what it said.” Harbor Gateway Commercial Property

Owners’ Ass’n v. EPA, 167 F.3d 602, 606 (D-C. Cir. 1999).

-Indeed, the decision below directly conflicts with the

reasoning of the Harbor Gateway decision. In that case,

the plaintiffs/petitioners challenged EPA’s decision to add

a site in Los Angeles to the National Priorities List under

Comprehensive Environmental Response, Compensation

and Liability Act, 42 U.S.C. § 9601 et seg. The Omnibus

Consolidated Rescissions and Appropriations Act of 1996,

Pub. L. No. 104-134, 110 Stat. 1321-297 to 299 (1996)

provided that EPA could not act “unless the Administrator

receives a written request to propose for listing or to list a

facility from the Governor of the State in which the facility

is located.” Id. at 604. The deputy director of the California

Department of Toxic Substances Control sent a letter to

EPA stating that the Department, “on behalf of the Wilson

Administration [the California governor at the timel,

concurs with your agency’s proposal to list the Del Amo

Superfund site on the National Priority [sic] List.” The

Court of Appeals held the letter inadequate under the

statute, thereby rendering EPA’s proposal “null and void.”

Id. at 607. The court recognized that “[w|hether or not

EPA officials actually considered themselves to be in

compliance with the Appropriations Act” was irrelevant

because “[w]Je refuse to ignore the plain language of the

Act in order to avoid potential costs which would not have

arisen had EPA complied with the statute’s language in

the first instance.” Jd. at 606. -

Similarly, EPA here cannot avoid the statutory limita-

tions imposed by the releva:. statute. Where Congress has

specifically limited the circumstances under which an

agency may act, it is inconsistent with congressional

intent to allow a District Court to assume jurisdiction

where the agency has not followed the congressionally

mandated procedures.

B. The Spath Letter Did Not Meet The Require-

ments Of 42 U.S.C. § 300g-3(b)(2).

The government contended below that it properly

followed the statutorily required steps in this case because

a 1996 letter from David Spath, the Chief of the Division

of Drinking Water and Environmental Management at the

California Department of Health Services, asked EPA to

initiate this federal enforcement action. App. 4. Spath,

however, did not have authority under state law to ask

EPA to bring this action. Because EPA brought this action

without first complying with § 300g-3(b)(2), the District

Court did not have subject matter jurisdiction. !

* In its initial opinion, the Ninth Circuit held that petitioners had

waived their right to attack the statutory basis for the EPA’s lawsuit

because, as a non-jurisdictional limitation, the argument regarding

EPA’s right to bring the lawsuit should have'been raised by a motion to

dismiss under Fed. R. Civ. B Rule 12(b)(6). App. 40, n. 2. After petition-

ers pointed out in their petition for rehearing that they had, in fact,

raised this issue in the District Court, the Ninth Circuit amended its

opinion to state that the District Court had “properly concluded” that

the letter was sufficient under the statute. See App. 10, n. 2. For the

reasons described in the text, the District Court’s bare assertions on

this matter (App. 66, 121-123) are plainly incorrect.

Under California law, regulatory authority over

compliance with drinking water regulations is assigned to

the Department of Health Services. See Cal. Health and

Safety Code § 116325. No statute delegates the authority

of the Director of Health Services to the Chief of the

Division of Drinking Water and Environmental Manage-

ment (i.e., David Spath). It is equally undisputed that the

Director has not delegated any of his or her authority to

the Chief of that Division.

The California Supreme Court has made clear that

delegation of discretionary authority may not be implied

under California law. See California School Employees

Ass'n v. Personnel Commission, 3 Cal.3d 139, 144 (1970)

(“As a general rule, powers conferred upon public agencies

and officers which involve the exercise of judgment or

discretion are in the nature of public trusts and cannot be

surrendered or delegated to subordinates in the absence of

statutory authorization”); Bagley v. City of Manhattan

Beach, 18 Cal.38d 22, 24-25 (1976) (absent statutory au-

thority, a city council may not delegate its statutory

responsibility to set employees’ salaries); Webster v. Board

of Education, 140 Cal. 3381, 332 (1903) (absent statutory

authority, a school board member may not delegate his or

her duties to a deputy); Civil Service Ass'n v. Redevelop-

ment Agency, 166 Cal.App.3d 1222, 1225-26 (1985) (vacat-

ing a dismissal decision because the deputy executive

director did not have express statutory authority to

conduct a hearing resulting in dismissal). If a lower-level

official exercises authority that was not properly dele-

gated, the official’s action is void. Civil Service Ass’n, 166

Cal.App.3d at 1227. ‘3

Thus, Spath had no statutory or delegated authority

to request federal enforcement. Once Congress has said

that a particular state official must request federal assis-

tance before a federal agency may bring suit, the question

whether the proper official has made such a request is a

matter to be determined under state law. The District

Court ignored the California policy requiring specific,

statutory delegation of authority before the state could

cede its discretionary powers in this instance.

The Spath letter did not satisfy requirement in

§ 300g-3(b)\(2) that the Environmental Protection Agency

first receive a request from “the agency of such State

which has jurisdiction over compliance by public water

systems ir: the State with national primary drinking water

regulations or State drinking water regulations.” Accord-

ingly, the District Court was without subject matter

jurisdiction.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

JOSEPH A. HEARST MARC P. FAIRMAN

PMB 525 (Counsel of Record)

1563 Solano Avenue LAW OFFICE OF

Berkeley, CA 94707 Marc P. FAIRMAN,

Telephone: (510) 528-6863 PROFESSIONAL CORPORATION

: 2 Embarcadero Center,

JOHN P. DWYER 18th Floor

DWYER & BIGGS

1550 California Street,

No. 6-201

San Francisco, CA 94109

Telephone: (415) 294-7760

San Francisco, CA 94111

Telephone: (415) 732-1704

Counsel for Petitioners

Alisal Water Corporation, Toro Water Service, Inc.,

North Monterey County Water Service, Inc.,

Moss Landing Water Service, Inc., Robert T: Adcock

and Natholyn P. Adcock

_ App. 1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

ALISAL WATER CORPORATION; TORO

WATER SERVICE, INC.; NORTH

MONTEREY COUNTY WATER

SERVICE, INC.; Moss LANDING

WATER SERVICE, INC.; NATHOLYN P.

ADCOCK; ROBERT T. ADCOCK,

Defendants-Appellants.{

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

Vv.

ALISAL WATER CORPORATION; TORO

WATER SERVICE, INC.; ROBERT T.

AbDcCOcK; NORTH MONTEREY COUNTY

WATER SERVICE, INC.; Moss

LANDING WATER SERVICE, INC.;

NATHOLYN P. ADCOCK,

Defendants-Appellants,

and

PATRICIA ADCOCK; BRUCE PIERSON;

DAVID M. SIMCHO,

Defendants,

JOHN W. RICHARDSON,

Receiver.

No. 02-15907

D.C. No.

CV-97-20099-JF

No. 04-16210

D.C. No.

CV-97-20099-JF

ORDER

AMENDING

OPINION AND

DENYING

PETITION FOR

PANEL

REHEARING :

AND

AMENDED

OPINION

App. 2

Appeal from the United States District Court

for the Northern District of California

Jeremy Fogel, District Judge, Presiding

Argued and Submitted

June 13, 2005 — San Francisco, California

Opinion Filed October 13, 2005

Amended December 14, 2005.

Before: Richard C. Tallman, Jay S. Bybee, and

Carlos T. Bea, Circuit Judges

Opinion by Judge Tallman

COUNSEL

Marc P. Fairman, San Francisco, California, for the defen-

dants-appellants.

Lori Jonas, Department of Justice, Washington, D.C., for

the plaintiff-appellee.

ORDER

The Opinion filed on October 13, 2005, slip opinion

at 14045, is amended by the opinion filed concurrently

with this order. With these amendments, the panel has

voted to deny the petition for panel rehearing.

The petition for panel rehearing is DENIED. No

further petitions for panel rehearing or petitions for

rehearing en banc will be entertained.

OPINION

TALLMAN, Circuit Judge:

Appellants Robert and Natholyn Adcock and various

private water systems they owned and operated in Monterey

App. 3

County, California, violated various public health and

safety regulations under the federal Safe Drinking Water

Act (“SDWA”), 42 U.S.C. §§ 300f-300j. They appeal the

district court’s orders requiring divestiture of all except

the largest water system and imposing financial penalties.

We have jurisdiction under 28 U.S.C. §§1291 and

1292(a)(2) and affirm.

Prior to this litigation, the Adcock family water

system business was organized into four corporations. The

largest, Alisal Water Corporation (“Alisal”), owned and

operated several public water systems, some of which are

named as defendants: Alco Water Service (“Alco”), Salinas

Division, Blackie Road Water System #18, Pine Canyon

Division of Alco Water Service, Buena Vista Water System,

Wildwood Water System, San Jerardo Water System,

Vierra Canyon Water System, Vierra Estates Water

System, and Langley/Valle Pacifico Water System. Alisal

also wholly owned two subsidiary corporations: Moss

Landing Harbor District, which operated the Moss Land-

ing public-water system, and North Monterey County

Water Service, Inc. (“NORMCO”), which operated

NORMCO public water system. The Adcocks held 82.5

percent ownership in Alisal. The fourth corporation was

Toro Water Service (“Toro”), which owned and operated a

public water system of the same name ana was wholly

owned by the Adcocks.’

' Appellants represent that, as of 2001, these water systems

collectively served approximately 28,000 people, of which Alco served

the majority, approximately 25,000 people. The other systems served

(Continued on following page)

App. 4

The United States commenced this civil enforcement

action in January 1997 on behalf of the United States

Environmental Protection Agency (“EPA”) against the

Appellants. Numerous violations of SDWA regulations

were asserted, including exceeding total coliform Maxi-

mum Contaminant Levels (“MCL”), failing to monitor for

lead and copper, failing to take required monitoring

samples, failing to give required agency and public notices,

failing to report and falsifying monitoring reports, and

failing to keep proper records. The action was initiated in

response to an August 1996 written request from Dr.

David Spath, Chief of the Division of Drinking Water and

Environmental Management, California Department of

Health Services (“DHS”). Twelve counts of multiple regu-

latory violations (totaling 232 violations) and one count of

fraudulent conveyance were alleged.

The district court granted summary judgment to the

government on the first nine counts in August 2000. See

United States v. Alisal Water Corp., 114 F. Supp. 2d 927,

939 (N.D. Cal. 2000) (“Alisal 7’). After trial, the district

court again ruled for the government on the tenth count

(fraudulent conveyance). In November 2002, the district

court granted summary judgment against the corporate

defendants, but not against Robert and Patricia Adcock

individually, on the remaining three counts, eleven to

thirteen. As to the regulatory violations, the Appellants

significantly fewer people: Blackie Road Water System (66), San

Jerardo Water System (194), Vierra Canyon Water System (150),

Langley/Valle Pacifico Water System (95), Buena Vista Water System

(528), Moss Landing Harbor District (550), NORMCO (682), and Toro

(1100). Alisal has restructured since the onset of this civil action and

Wildwood Water System and the Pine Canyon Division were reorgan-

ized into the other divisions.

App. 5

challenge on appeal only the partial summary judgment

on counts eleven and twelve against Moss Landing and

Vierra Canyon.

The district court found that the proliferation of small

water systems had stretched the Adcocks beyond their

ability to manage effectively and remedy the continuing

health violations, endangering their customers. To remedy

the underlying violations the district court initially or-

dered that all of the smaller water systems, including

NORMCO and Toro (collectively-the “Small Utilities”), be

placed in receivership and directed the receiver to investi-

gate and make recommeations about selling the Small

Utilities. See United States v. Alisal Water Corp., 326 F.

Supp. 2d 1010, 1028-32 (N.D. Cal. 2002) (“Alisal IT’). The

Adcocks were permitted to remain in control of only the

largest individual water system, Alco, and they were

ordered to implement substantial improvements that had

been recommended in a previously compiled consultant’s

report and to allow monitoring by the receiver. Jd. at 1030-

31. The district court denied the Appellants’ motion to stay

the order, and a prior panel of our court affirmed the

denial of a stay. During this time, the district court held

extensive formal hearings regarding the Appellants’

stewardship and their course of dealings with federal and

state health officials. See id. at 1019-22 (summarizing

findings). The district court also held two public meetings

(in August and December 2003), where utility customers

were allowed to speak about their concerns, and the judge

invited the public to send written suggesticns.

In November 2003, the receiver filed his report and

the district court subsequently adopted the recommended

sale of the Small Utilities. The court ordered that most of

the systems be sold to the highest bidders, but ordered

App. 6

three of the systems to be sold to a non-profit public entity,

the Pajaro/Sunny Mesa Community Services District

(““PSMCSD”). See United States v. Alisal Water Corp., 326

F. Supp. 2d 1032, 1038-39 (N.D. Cal. 2004) (“Alisal II”).

PSMCSD did not have the highest bid, but the district

court found that sale to PSMCSD would best serve the

public interest. Jd. at 1037 n.6. The district court denied

the Appellants’ motion to stay the sale order, and we

affirmed the denial of a stay.

The district court also imposed monetary penalties

against the Appellants. For purposes of determining the

appropriate penalty amount, the district court appointed

accountant Richard Pierotti to assess the liquidation value

of all of the water utilities and the Adcocks’ personal

assets. The Appellants hired Dr. Joel Berk to review

Pierotti’s valuation methodology; Dr. Berk concluded that

Alco was of substantially less value than Pierotti had

found. The district court struck Dr. Berk’s report as

cumulative to evidence previously introduced by the

Appellants. Jd. at 1037-38. The district court imposed a

penalty of $500,000, but then credited the Appellants

$300,000 as an offset for the shortfall from not accepting

all of the high bids on the sale of the Small Utilities,

leaving a $200,000 total penalty due. Jd. at 1038-39. The

Appellants challenge the order appointing a receiver (No.

02-15907) and the order authorizing sale of the utilities

and imposing penalties (No. 04-16210).

The Appellants also challenge the district court’s

jurisdiction over this entire eight-year litigation. They

assert for the first time on appeal that the district court

App. 7

lacked subject matter jurisdiction because the controlling

statute states that a federal EPA enforcement action must

be requested by “the chief executive officer of the State” or

“agency of [the] State which has jurisdiction over compli-

ance by public water systems.” 42 U.S.C. § 300g-3(b)(2).

They challenge as legally insufficient Dr. Spath’s request

letter to demonstrate that the proper state agency re-

quested EPA enforcement because: (1) Dr. Spath is not the

head of the DHS, which they assert is the agency with

primary jurisdiction over public water systems; and (2)

there is nothing in the record establishing that DHS

delegated such authority to him. See Cal. Health & Safety

Code § 116325 (granting DHS the authority to enforce

state drinking water regulations).

“The existence of subject matter jurisdiction is a

question of law reviewed de novo.” Opera Plaza Residen-

tial Parcel Homeowners Ass’n v. Hoang, 376 F.3d 831, 833

(9th Cir. 2004). “[District courts] are courts of limited

jurisdiction. They possess only that power authorized by

Constitution and statute.” Exxon Mobil Corp. v. Allapattah

Serus., Inc., 125 S. Ct. 2611, 2616, (June 23, 2005) (inter-

nal quotation marks and citation omitted). As a general

matter, federal courts have subject matter jurisdiction

over civil actions “arising under the Constitution, laws, or

treaties of the United States.” See 28 U.S.C. § 1331. By

this principle, suits seeking compliance with, or remedies

for, violations of federal water quality statutes and regula-

tions present federal questions. Cf. Chasse v. Chasen, 595

F.2d 59, 61 (1st Cir. 1979) (citation omitted) (“It is beyond

dispute that validly issued administrative regulations ...

may be treated as ‘aws of the United States’ under

§ 1331(a).”).

App. 8

This general grant of federal question jurisdiction is

not limitless - Congress may negate district court jurisdic-

tion “[b]y virtue of ... a specific reference or assignment.”

ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513, 519 (3d Cir.

1998); see, e.g., Staacke v. United States Sec’y of Labor, 841

F.2d 278, 280 (9th Cir. 1988) (“[Flederal question jurisdic-

tion [is] subject . . . to preclusion-of-review statutes created

or retained by Congress.”) (internal quotation marks and

citation omitted); La Voz Radio de la Communidad v. FCC,

223 F.3d 313, 319 (6th Cir. 2000). However, absent statu-

tory direction to the contrary, a district court validly

exercises its jurisdiction over actions “arising under”

federal laws.

In addition to general federal question jurisdiction,

“district courts shall have original jurisdiction of all civil

actions, suits or proceedings commenced by the United

States, or by any agency or officer thereof expressly

authorized to sue by Act of Congress,” except as otherwise

provided by Congress. 28 U.S.C. § 1345. Any exception to

the general rule of § 1345 must be clear. See Colorado

River Water Conservation Dist. v. United States, 424 U.S.

800, 808-09 (1976) (“When there are statutes clearly

defining the jurisdiction of the courts the force and effect

of such provisions should not be disturbed by a mere

implication flowing from subsequent legislation.”) (quoting

Rosecrans v. United States, 165 U.S. 257, 262 (1897)).

Therefore, under either 28 U.S.C. § 1331 or § 1345,

the inquiry here rests on whether the SDWA contains any

special limits or exceptions to the district court’s general

statutory subject matter jurisdiction. Various provisions

reflect congressional intent to confer subject matter

jurisdiction over SDWA actions to federal district courts.

See, e.g., 42 U.S.C. § 300g-3(b) (granting the government ~

App. 9

authority to “bring a civil action in the appropriate United

States district court” to enforce compliance with agency

orders); § 300j-7(a)(2) (requiring a petitioner to file a

petition for review of agency action “in the circuit in which

the petitioner resides or transacts business which is

directly affected by the action”); § 300j-8(a) (granting

district courts jurisdiction over qualified citizen’s civil

actions). Indeed, “[w]henever any civil penalty sought by

the [government] ... for a violation of an applicable

requirement exceeds $25,000,” as in the case at bar, the

government is statutorily required to bring a civil action in

“the appropriate United States district court.” Jd. § 300g-

3(g3)(C).

The SDWA statutory scheme also creates certain

narrow exceptions to the district court’s jurisdiction, see,

e.g., id. §§ 300g-1(b)(1(B)GIID & 300h-2(c)(7), but there

is no express statutory negation of the district court’s

federal question jurisdiction over enforcement of the

SDWA under 42 U.S.C. § 300g-3(b), the provision at issue

here. Congress’s express identification of particular as-

pects of SDWA litigation and agency action that are not

subject to judicial review demonstrates that Congress was

well aware of its power to limit the scope of the district

court’s subject matter jurisdiction over certain SDWA

claims.

The Appellants argue that 42 U.S.C. § 300g-3(b)(2)

divests the district court of jurisdiction, but we disagree.

Rather than creating a special exception to the district

court’s jurisdictional authority to hear this suit, the

statute reflects only the limitations on the government’s

authority to bring this suit. The statute states that the

federal government “may bring a civil action” in district

court “if” so requested (or if authorized under conditions

App. 10

not relevant here), 42 U.S.C. § 300g 3(b)(2); it says nothing

to limit the district court’s jurisdiction over such an action

if the government was not acting pursuant to an author-

ized request from the state. We will not assume that

Congress intended to deprive the court of subject matter

jurisdiction over enforcement of federal laws where Con-

gress has refrained from doing so and where there is no

evidence of such intent. Because the SDWA includes no

special provision limiting jurisdiction over federal question

claims or suits brought by the United States, we conclude

that the district court had subject matter jurisdiction over

this suit and that federal jurisdiction to permit EPA

enforcement under the SDWA statutory scheme is concur-

rent with that of state regulators.

Iil

On appeal, the Appellants concede that they commit-

ted the majority of the SDWA regulatory violations found

by the district court and challenge the adverse summary

judgment only on counts eleven and twelve against Moss

Landing and Vierra Canyon. The government demon-

strated that Moss Landing and Vierra Canyon committed

eight violations of total coliform MCL regulations in 2000

and 2001. The Appellants argue that judgment was

impermissibly based on “special” samples taken by the

Appellants to investigate anomalous results provided by

* The Appellants contend that Dr. Spath’s request letter was

insufficient to grant enforcement power to the federal government.

However, the district court properly concluded that the letter was a

specific request by the appropriate state agency sufficient for the EPA

to bring an action. The Appellants’ contention that the letter was

insufficient for subject matter jurisdiction under § 300g-3(b) is without

merit.

App. 11

the state. The district court found that the samples were

“routine” and that the only thing that made these samples

“special” was that the Appellants labeled them as such.

“We review the grant of summary judgment de novo.”

Buono v. Norton, 371 F.3d 543, 545 (9th Cir. 2004). The

question we must answer is whether the government

demonstrated through appropriate means that these

water systems violated total coliform MCLs. By regula-

tion, a water system which collects fewer than 40 samples

per month in accordance with its routine monitoring

program is in compliance with total coliform MCL if no

more than five percent of samples in a given month are

total coliform-positive. 40 C.F.R. § 141.63(a)(1). A total

coliform MCL violation is based on “routine” and “repeat” ee

samples, id. § 141.21(a)(5)-(6), (b)(7), and may not be based

on samples that have been invalidated, § 141.21(c), or on

“|s]pecial purpose samples,” § 141.21(a)(6).

The regulation details the requirements for a “routine

monitoring plan,” which requires collection of “total

_coliform samples at sites which are representative of

water throughout the distribution system according to a

written sample siting plan.” 7d. §141.21(a). But the

regulation does not expressly define “routine samples” for

purposes of establishing a violation. The Appellants

interpret 40 C.F.R. § 141.21 as requiring that only samples

taken as part of a routine monitoring plan be considered

“routine.” The government acknowledges that only “rou-

tine” and “repeat” samples may be relied upon, and that

the samples at issue here were not “repeat” samples or

taken as part of a routine monitoring plan. However, the

government asserts, and the district court concluded, that

“routine” samples are any samples which are not “special”

_ under the regulation and are representative of water

App. 12

throughout the system. Therefore, the operative question

is what constitutes a “routine” sample.

An agency is entitled to interpret its own regulation

and “ordinarily its construction will be affirmed if it is not

clearly erroneous or inconsistent with the regulation.” Pac.

Coast Med. Enters. v. Harris, 633 F.2d 123, 131 (9th Cir.

1980) (citations omitted). However, because neither party-

introduced evidence of an official agency definition of a

“routine” sample for purposes of establishing a violation

under the regulation, we do not necessarily defer to the

government's position. See, e.g., Bowen v. Georgetown

Univ. Hosp., 488 U.S. 204, 212 (1988) (noting that defer-

ence does not extend to “agency litigating positions that

are wholly unsupported by regulations, rulings, or admin-

istrative practice”). Such deference may still be appropri-

ate, however, when there is “no reason to suspect” that an

agency interpretation introduced only through a legal brief

“does not reflect the agency’s fair and considered judgment

on the matter.” Auer v. Robbins, 519 U.S. 452, 462 (1997).

We need not decide precisely how much deference the

EPA is due here because we conclude that the only reason-

able interpretation of 40 C.F.R. § 141.21(a) is the one

espoused by the government; we therefore agree that any

sample that is representative of water throughout the

system and not a “special purpose sample” or otherwise

invalidated is “routine” and may suffice to establish a

regulatory violation. The Appellants’ interpretation of the

regulation is untenable. Precluding reliance on accurate

water quality samples simply because they were not taken

according to a preset plan would prevent the government

from identifying and remedying total coliform MCL

violations in a variety of contexts, such as where the water

utility itself submitted only negative samples under its

App. 13

routine monitoring schedule. This effectively could insu-

late a violator from judgment in cases where the water

utility purposefully conceals excessive coliform test results

in its routine monitoring plan reporting or fails to keep

accurate records of testing, as the Appellants did here. See

Alisal I, 114 F. Supp. 2d at 934. Interpreting the regula-

tion to allow reliance on only samples submitted under a

routine monitoring plan would clearly undermine the

effectiveness of the reporting requirements and threaten

public health and safety, and so we reject this unreason-

able interpretation of the statute. Cf SEC v. Edwards, 540

U.S. 389, 395 (2004) (addressing securities law and declar-

ing that the “[Supreme] Court will not read into the ...

laws a limitation not compelled by the language that

would so undermine the laws’ purposes.”).

Moreover, our interpretation is consistent with the

overall regulatory scheme. When interpreting a regula-

tion, we must avoid an interpretation that would render

another regulation superfluous. See, e.g., Dodd v. United

States, 125 S.Ct. 2478, 2490 (2005) (Stevens, J., dissenting).

As noted, the regulation expressly requires reliance on

routine and repeat samples, see 40 C.F.R. § 141.21(a)(5)-(6),

(b\(7), and expressly precludes reliance on “special purpose

samples,” § 141.21(a)(6), and samples that have been

invalidated, § 141.21l(c). If an MCL violation could be

established only on the basis of routine monitoring sam-

ples, then there would be no need for regulators to identify

specific types of samples, unrelated to routine monitoring,

that are not the proper basis for such violations. We

therefore conclude that reliance on “routine” samples

necessarily includes reliance on any samples that are not

“special purpose samples” or otherwise invalidated.

App. 14

The next question is whether the samples here were

“special purpose samples;” otherwise, they are properly

considered “routine” and the district court could therefore

rely on them.’ See id. § 141.21(a)(6). “Special purpose

samples” are defined by example as “those taken to deter-

mine whether disinfection practices are sufficient follow-

ing pipe placement, replacement, or repair.” Jd. This

definition clarifies that “special purpose” samples are

those taken at a time when the system has been altered in

some way, or there are unusual circumstances, such that

the sample taken may not be indicative of the water

quality in general unaltered use. This is also consistent

with the regulatory approach to routine monitoring

samples which must be taken “at sites which are represen-

tative of water throughout the distribution system.” Id.

§ 141.21(a)(1).

The samples on which the district court relied in

counts eleven and twelve are not “special purpose sam-

ples” under this definition. There is no suggestion here

that the samples were tainted by recent changes to the

system, and, as the district court found, “[nJothing in the

record suggests that the subject samples were less accu-

rate or probative than other ‘routine’ or ‘repeat’ samples.”

There is also no suggestion here that the samples were

otherwise invalid or unreliable, so it was reasonable and

consistent with the regulation to rely upon them. We

therefore conclude that the samples in question were

“routine” and we affirm summary judgment on counts

eleven and twelve.

* Neither party suggests that these samples were invalid under the

regulation or compliant with total coliform MCL requirements.

The remainder of the Appellants’ claims on appeal

center on the district court’s choice of remedy and the

process by which the remedy was determined. The Appel-

lants argue that the district court abused its discretion in

ordering divestiture because the court did not closely tailor

injunctive relief to address the threat of future harm or

exercise the least possible power adequate to achieve the

proposed end. Their argument in summary is that the

district court: (1) erred in reacting to past violations and

not considering the current status because the facts show

a “sharp reduction in violations after 1994” in the Small

Utilities; and (2) erred in not considering each utility

separately, specifically referring to Toro, which has been in

regulatory compliance since 1994.

The Appellants assert that the district court exceeded

its statutory authority in ordering divestiture of the Small

Utilities. The Appellants base their claim on the argument

that the court may not order such a remedy because

Congress failed to list divestiture expressly as a possible

remedy under the SDWA.* However, the court will not

generally infer restrictions on inherent judicial authority

* The Appellants raise this issue for the first time on appeal and so

we could consider it waived. See Carlson, 900 F.2d at 1349. The

Appellants were well aware that the government was seeking complete

divestiture and that the district court had proposed partial divestiture,

see Alisal II, 326 F.Supp.2d at 1027, and they fail to explain why they

did not or could not challenge the district court’s authority at that time.

However, this is a pure question of law and the record is sufficient to

review the issue on appeal. We therefore conclude that the government

will not be prejudiced if we reach the issue here. See Carlson, 900 F.2d

at 1349.

App. 16

from congressional silence: “[U]nless a statute in so many

words, or by a necessary and inescapable inference,

restricts the court’s jurisdiction in equity, the full scope of

that jurisdiction is to be recognized and applied.” Owner

Operator Indep. Drivers Ass’n v. Swift Transp. Co., 367

F.3d 1108, 1112 (9th Cir. 2004) (quoting Porter v. Warner

Holding Co., 328 U.S. 395, 398 (1946)). Where the public

interest is involved, “equitable powers assume an even

broader and more flexible character than when only a

private controversy is at stake.” Porter, 328 U.S. at 398

(citation omitted).

Here, the SDWA gives the district court authority to

enter “such judgment as protection of public health may

require.” 42 U.S.C. § 300g-3(b). There is no limiting

language, so the statute incorporates the full panoply of

the court’s equitable powers. Cf. United States v. Mass.

Water Res. Auth., 48 F. Supp. 2d 65, 71-72 (D. Mass. 1999)

(concluding that the SDWA enforcement provision does not

“strip the courts of their equitable powers”). We therefore

conclude that ordering partial divestiture was not outside

of the district court’s authority.”

* In a related argument, the Appellants assert that the district

court impermissibly encroached on the power of the California Public

Utility Commission (“CPUC”), which has some jurisdiction over public

drinking water. See Hartwell Corp. v. Superior Court, 38 P.3d 1098,

1108-12 (Cal. 2002) (discussing the complex overlap in authority over

drinking water regulation between DHS and the CPUC). They advance

no legal basis to explain how the fact that CPUC has some authority

over water systems negates the district court’s broad authority to

enforce federal laws through exercise of its equitable powers. Moreover,

as the government points out, the sales are necessarily subject to

approval by the CPUC. See Alisal II, 326 F. Supp. 2d at 1029. The

Appellants’ argument is without merit.

App. 17

“We review a district court’s decision to issue a per-

manent injunction for abuse of discretion, but we review

any determination underlying the court’s decision by the

standard that applies to that determination.” United

States v. Hovsepian, 359 F.3d 1144, 1156 (9th Cir. 2004)

(en banc) (citing Silver Sage Partners, Ltd. v. City of Desert

Hot Springs, 251 F.3d 814, 826 (9th Cir. 2001)). The

district court’s choice of remedies is reviewed for an abuse

of discretion. See Stone v. City & County of San Francisco,

968 F.2d 850, 861 (9th Cir. 1992). Review of the scope of

injunctive relief is also for an abuse of discretion. Jdaho

Watersheds Project v. Hahn, 307 F.3d 815, 823 (9th Cir.

2002). The Appellants do not allege that there were any

clearly erroneous findings of fact,” so we may only reverse

if we find that the district court misapplied the law or

“rule[d] in an irrational manner.” Chang v. United States,

327 F.3d 911, 925 (9th Cir. 2003) (quoting United States v.

Sherburne, 249 F.3d 1121, 1125-26 (9th Cir. 2001)).

In arguing that the district court was reacting only to

past conduct and not considering recent improvements,

the Appellants mischaracterize the record. The district

court expressly considered the Appellants’ overall im-

provements in compliance subsequent to initiation of this

enforcement suit, but found (and it is not challenged) that

* The Appellants do assert in a footnote of their brief to this Court

that their son, Thomas Adcock, was qualified to manage the water

systems. This could be construed as challenging the district court’s

finding that the Appellants lacked sufficient managerial competence to

comply with the SDWA. See Alisal II, 326 F. Supp. 2d at 1014, 1023-25.

However, the issue is not squarely presented, and regardless is without

merit. The district court specifically outlined Thomas Adcock’s short-

comings with respect to managing the family business. See id. at 1023-

25. We conclude that these findings are not clearly erroneous.

App. 18

Appellants continued to violate reporting requirements,

and produce “inaccurate test results and unreasonable

delay in addressing incidences of contamination . . . through

and including the time of trial.” Alisal IJ, 326 F. Supp. 2d at

1018; see id. at 1026. There are extensive factual findings

demonstrating Appellants’ continued noncompliance,

which did not cease after initiation of this litigation. Jd. at

1018-21. Moreover, the district court found and recounted

the Appellants’ continued unwillingness to work with the

government, which suggests that ongoing compliance

would continue to be problematic. See Alisal III, 326 F.

Supp. 2d at 1036-37; Alisal I7, 326 F. Supp. 2d at 1022-23.

Given the Appellants’ unwillingness or inability to comply

in an accurate and timely manner while under the close

supervision of the EPA and the district court, it was

rational to conclude that the Appeliants’ behavior would

not improve once this litigation ends.

Similarly, Appellants’ argument that Toro should not

have been sold because it has been compliant since 1994 is

not persuasive. The district court based its partial divesti-

ture order on the rationale that Appellants could not meet

their regulatory obligations given the number of water

systems they controlled and the pervasive scope of the

problems involved with the various systems. See Alisal II,

326 F. Supp. 2d at 1024, 1026 (noting that evidence

showed lack of “managerial resources and expertise to

manage effectively the numerous water systems ... ,

especially the smaller ones”). The district court’s decision

reflects its well-supported belief that the Appellants’

efforts were spread too thinly, both financially and admin-

istratively, across the various systems and that they were

not capable of handling more than one system in a manner

compliant with all regulatory requirements. See id. at

App. 19

1028. This is not an irrational conclusion given the Appel-

lants’ poor overall performance history, and is a valid

concern in fashioning an appropriate remedy.

“In issuing an injunction, the court must balance the

equities between the parties and give due regard to the

public interest.” Idaho Watersheds Project, 307 F.3d at 833

(citing Amoco’ Prod. Co. v. Village of Gambell, 480 U.S.

531, 542 (1987)). Clearly, the Adcocks have an under-

standable personal interest in maintaining their family

business and a property interest in their ownership of the

various systems. On the other hand, there is no question

that the public interest at stake here, the quality of public

drinking water and the health and safety of the consum-

ers, is fundamental.

The record reflects that the district court adopted a

reasonable compromise in fashioning appropriate relief

and tailored a remedy that took into consideration both

the substantial public interest and the Adcocks’ personal

interest. The government originally asked for a complete

divestiture; the Appellants asked only to have to imple-

ment recommended system upgrades (which the record

shows they could not afford to finance). The district court

did not order sale of the largest water system, Alco. There,

the district court only ordered implementation of the

recommended improvements.

The district court’s remedy allows the Appellants to

control operations and service for approximately 90

percent of their original customer base in a very stream-

lined fashion, thereby “giving [Appellants] a clear oppor-

tunity to demonstrate that they can operate at least one

water system in compliance with the law.” Alisal II, 326 F.

Supp. 2d at 1028. The Appellants themselves admit that

App. 20

most of the compliance problems occurred in the Small

Utilities (other than Toro). The Appellants have proven

through their service history and throughout this litiga-

tion that they were unable to manage effectively the

several water systems in order to serve the public health.

Simply put, they now have the opportunity to prove that

they can safely manage just one.

The Appellants argue that letting them continue to

own and operate Alco shows that the court was acting

inconsistently, but we think that it demonstrates that the

district court was balancing the competing interests of the

public and the Appellants, despite the egregious nature of

their prior course of conduct. Alisal IT, 326 F. Supp. 2d at

1028-29 (concluding that while full divestiture was fully-

justified, partial divestiture was a “less drastic remedy”

and required under principles of equity). While other

appropriate remedies are conceivable, our review is

limited to whether the district court erroneously applied

the law or acted irrationally in imposing the remedy it did.

We conclude that the Appellants’ personal interests in

maintaining ownership over the Small Utilities is substan-

tially outweighed by the profound public interest at stake

here. The regulatory violations that the Appellants com-

mitted were numerous and significant. They were en-

trusted with safeguarding the health and welfare of the

thousands of individuals who rely on these water systems,

and they have not effectively responded to the water

quality problems. Furthermore, the record supports the

district court’s conclusions that the Appellants have acted

in a manner inconsistent with an appreciation for the

importance of their obligation to the public. We conclude

the district court fashioned a rational remedy that fairly

App. 21

took into consideration the competing interests. There was

no abuse of discretion in the means employed.

The Appellants assert next that the district court

violated their due process rights by: (1) conducting the

receivership bidding process in secret; and (2) improperly

considering and giving weight to public comments and

letters not part of the record, not taken under oath, and

not subject to cross-examination. However, the Appellants

waived their due process claim regarding the receivership

bidding process by failing to raise it in the district court.

They state that they “repeatedly complained” that they

were not being informed about the bidding and sales

process. However, their only support in the record is that

they once told the district judge that they did not know the

status of the sales and requested additional information,

and the court immediately ordered that the receiver make

sales-related documents available as part of his duties.

This single evidentiary proffer is hardly evidence of

repeated complaints. It does not demonstrate that the

receiver willfully withheld information (or even that the

Appellants had ever requested the information before or

after that day). Additionally, it does not rise to the stature

of a “due process” violation. Thus, the Appellants do not

demonstrate through the record how thei participation

was unjustly limited, and we therefore will not consider

the claim. See, e.g., Los Angeles News Serv. v. Reuters

Television Int'l, Ltd., 149 F.3d 987, 996 (9th Cir. 1998) (“We

will not take up an issue not properly raised below unless

necessary to prevent manifest injustice.”) (citation omit-

ted).

App. 22

As to the public hearings, the Appellants argue that

they were not allowed to “question” the process, but thev

did not object to the process as it occurred. On appeal, the

Appellants admit they did not object to the district court’s

holding the public hearings, so this issue is waived. Nor

did the Appellants object to the lack of evidentiary formal-

ity in conducting the hearings. No objections were timely

raised that the speakers were not sworn and were not

subject to cross-examination. However, they did object to

the district court’s considering the statements and letters

gathered through the hearing process in the divestiture

~ proceedings, so this aspect, of the claim is properly before

us.

As the Supreme Court acknowledges, “due process” is

difficult to define. See Lassiter v. Dep’t of Soc. Servs., 452

U.S. 18, 24-25 (1981). The process that is due varies

according to the nature of the right and the type of pro-

ceedings. Mathews v. Eldridge, 424 U.S. 319, 334 (1976)

(“[D]ue process is flexible and calls for such procedural

protections asthe particular situation demands.”) (quoting

Morrissey v. Brewer, 408 U.S. 471, 481 (1972)) (alteration

in original). At its core, due process requires that a party

have adequate notice and opportunity to be heard. See

Dusenbery v. United States, 534 U.S. 161, 167 (2002);

LaChance v. Erickson, 522 U.S. 262, 266 (1998). In consid-

ering whether a district court accorded adequate due

process, appellate courts “must look at the actual sub-

stance, not the name or form, of the procedure to see if the

claimants’ interests were adequately safeguarded.” SEC uv.

Elliott, 953 F.2d 1560, 1567 (11th Cir. 1992) (discussing

summary receivership proceedings and citing SEC uv.

Wencke, 783 F.2d 829, 836 (9th Cir. 1986)).

App. 23

We conclude that there was no due process violation in

the district court considering the information obtained

through the public hearings. Importantly, there is no

suggestion that the Appellants were denied the basic

elements of due process — adequate notice and opportunity

to be heard. This is not a situation where a party was

unaware of an adverse proceeding or the district court

denied a party forms of process to which they had ex-

pressly asserted a right. The Appellants were well aware

of the contemplated hearing process and their counsel

attended the hearings. There is no showing that they were

in any way limited in their ability to participate in the

hearings or to refute any testimony presented, or that

their interests were prejudiced or marginalized in this

process. Accordingly, we do not see how the Appellants’ due

process rights were denied. See Guenther v. Comm’r, 939

F.2d 758, 760 (9th Cir. 1991) (explaining that a party’s due

process rights would be infringed if they were “unfairly

prejudiced” by ex parte communication).

Although the form of this process was not typical for

the courts, and we do not endorse such a practice in

routine civil enforcement actions, the substance of the

evidence adduced at the hearings is similar to that which

could have been introduced by the government through

affidavits or testimony. See, e.g., FTC v. Amy Travel Serv.,

Inc., 875 F.2d 564, 576 (7th Cir. 1989) (holding that, where

defendants were found to have committed deceptive trade

practices in a nationwide telemarketing operation, the

trial court did not abuse its discretion in admitting affida-

vits from consumers who had purchased travel vouchers ~

from the defendants). In a case of this magnitude, directly

affecting public health, evidence of the views of the indi-

viduals affected by the outcome was relevant to the district

App. 24

court’s choice of remedy. The Appellants have pointed to no

legal authority that would bar the district court from

proceeding in a public-hearing forum and they did not

timely object to proceeding in such a fashion. We recognize

that “a district court’s power to supervise an equity receiv-

ership and to determine the appropriate action to be taken

in the administration of the receivership is extremely

broad,” SEC v. Hardy, 803 F.2d 1034, 1037 (9th Cir. 1986),

and the hearing process was an efficient and direct way for

the district court to consider the views of the interested

public, which had a manifest and significant stake in the

proceedings.

Nor do the Appellants point to authority that would

require the district court to conduct a remedy-phase

hearing in the same manner or under the same eviden-

tiary standards that it conducts a trial. In the context of a

civil suit “cross-examination is not, in every instance, a

sine qua non of due process. It all depends on the situa-

tion.” David v. City of Los Angeles, 307 F.3d 1143, 1147

(9th Cir. 2002), rev’d on other grounds, 538 U.S. 715

(2003); see U.S. Steel, LLC, v. Tieco, Inc., 261 F.3d 1275,

1287 n.13 (11th Cir. 2001) (noting that “[o]f course, the

Confrontation Clause is not applicable to civil cases”). In

Federal Trade Commission v. Figgie International, Inc.,

994 F.2d 595 (9th Cir. 1993), for example, we allowed the

district court to base its calculation of the maximum

amount of redress for which the defendant might be liable

on the agency’s summation of 127 letters of complaint that

it had received from private citizens. Jd. at 608-09 (deter-

mining that admission of the letters fell into the residual

App. 25

hearsay exception).’ Similarly, the district court here

considered evidence of unsworn public comment not to

demonstrate the violations that the Appellants committed,

but for the limited purpose of fashioning a remedy for the

violations.

In concluding that there was no due process violation

in this case, we also rely substantially on the fact that the

Appellants’ primary complaints against the evidence

adduced at the public hearings — the lack of sworn testi-

mony and cross-examination — are the direct result of their

own failure to object to the district court holding such

hearings and their failure to timely object to the manner

in which the hearings were held and in which the evidence

was introduced. They assert that they were “never al-

lowed” to address the public letters and comments, but

they fail to point out where in the record they ever asked

to do so, despite the fact that counsel was present at the

hearings. Had the Appellants timely objected to the

proceedings or requested that the hearings be conducted

in a more formal way, the district court could have modi-

fied the process and cured any potential defect. See United

States v. Odom, 736 F.2d 104, 114 (4th Cir. 1984) (noting

that “li]t is well settled” that a party waives a challenge to

failure to swear in a witness by failing to raise the point

” The Figgie International court relied on its analysis of whether

the complaint letters were admissible under the Federal Rules of

Evidence. See 994 F.2d at 608-09. The Appellants have not raised such

an argument here on appeal, although their “due process” claim could

properly be characterized as an unpreserved challenge to the district

court’s admission of such evidence. Because the Appellants did not raise

an evidentiary objection to the district court or on appeal, we consider it

waived.

App. 26

during the witness’s testimony, when it could have been

corrected).

We hold that the Appellants’ due process rights were

not violated by the district court’s fashioning a remedy for

regulatory violations by relying in part on evidence intro-

duced through public hearings where: (1) the Appellants

failed to object to the district court’s conducting such

hearings; (2) the Appellants failed to object to the wit-

nesses’ not being sworn or subject to cross-examination;

and (3) the Appellants failed on appeal to show how they

were prejudiced by admission of the evidence.”

The Appellants argue next that the court-ordered sale

of the Small Utilities was confiscatory because the sale

prices realized were not indicative of their true value, and

they seek just compensation under the Fifth Amendment’s

takings clause. The government points out that the tak-

ings clause issue was not raised below and should there-

fore be waived. In response, the Appellants contend that

they raised a takings claim below in their comments to the

Pierotti report. They cite to two places in the record. First,

in the context of disputing the method of valuation, they

argued before the district court only that “[wJhere [they

are] forced to sell the utility for less than its rate base, as

the [rjeceiver recommends here, there is a taking that

violates the Constitution.” And second, they prefaced a

feasibility argument with: “in light of the constitutional

* We emphasize that our holding is extremely narrow. Had the

Appellants made timely objections to this unusual procedure or

demonstrated prejudice, our analysis might be different.

App. 27

issues about confiscation. ...” These are the only refer-

ences to a takings claim in the record covering years of

litigation.

These references were brief, conclusory statements

made with no supporting legal argument and so are

insufficient to preserve a takings claim for appeal. See,

e.g., Broad v. Sealaska Corp., 85 F.3d 422, 430 (9th Cir.

1996) (“To have been properly raised below, the argument

must be raised sufficiently for the trial court to rule on it.”)

(internal quotation marks and citation omitted); Banks v.

Rockwell Int'l N. Am. Aircraft Operations, 855 F.2d 324,

326 (6th Cir. 1988) (holding that a “vague reference” to an

issue before the district court was insufficient to preserve

that issue on appeal). We therefore consider the Appel-

lants’ takings claim waived.

The Appellants challenge the overall monetary pen-

alty imposed on the basis that the district court did not

consider the report of Dr. Berk that they submitted. The

report challenged the valuation findings of the court-

appointed accountant, Pierotti. The Appellants contend

that Alco was substantially overvalued and that the

resulting penalty was excessive. The substance of their

argument is that the district court initially suggested that

they would be allowed to object to the Pierotti report at the

penalty hearing, but then had a “change of heart” and

refused to consider the information.

The district court’s decision to exclude expert testi-

mony is reviewed for an abuse of discretion. Kumho Tire

Co. v. Carmichael, 526 U.S. 137, 152 (1999). Prior to

seeking to introduce Dr. Berk’s report, the Appellants had

App. 28

already introduced an expert witness, Carl Danner, who

testified as to valuation of the water systems. After re-

viewing the evidentiary proffer of Dr. Berk’s report, the

district court noted that when it said it would consider

further evidence, it had expected evidence about “any

changes in circumstances that might affect Mr. Pierotti’s

analysis.” The court concluded that Dr. Berk’s report was

instead simply cumulative of the Danner testimony and

“[vjiewed as a whole, Dr. Berk’s opinions concern[ed] facts

known to and litigated by the parties at trial.” Alisal LIT,

326 F. Supp. 2d at 1037.

The Appellants fail to show how Dr. Berk’s report was

new or different from the evidence they had introduced at

trial, and thus they fail to show how the district court

abused its discretion in dismissing the report as cumula-

tive. We affirm the exclusion of the proffered evidence. The

Appellants raise no other argument as to why the penalty

was excessive and so we also affirm the penalty as im-

posed.”

* The penalty imposed was well below the maximum penalty

allowed by statute, which states, in part, that:

{Ilf the court determines that there has been a violation of the

regulation or schedule or other requirement with respect to which

the action was brought, the court may, taking into account the se-

riousness of the violation, the population at risk, and other ap-

propriate factors, impose on the violator a civil penalty of not to

exceed $25,000 for each day in which such violation occurs.

42 U.S.C. § 300g-3(b); id. at § 300g-3(g)(3)(A). The Appellants commit-

ted 232 violations, many of which could be considered as extending over

multiple days, which the district court concluded would result in a

maximum civil penalty range from $17 million to $400 million. Alisal

III, 326 F. Supp. 2d at 1035. The government argued that a penalty of

$3 million to $5 million dollars was appropriate. As noted, the district

court ultimately imposed a penalty of $500,000 with a $300,000 offset

(Continued on following page)

App. 29

Vil

In its receivership order, the district court enjoined

not only the named defendant individuals, Robert and

Natholyn, but also their children, Thomas and Lynette,

from “acquir[ing] any new interest, financial or otherwise,

in any ‘public water system’ ... without the express

permission of [the] Court.” Alisal IT, 326 F. Supp. 2d at

1032. The Appellants do not claim that the substantive

injunctive limitation is overly broad or otherwise challenge

the scope of the injunction but argue that the injunction is

simply not valid against Thomas and Lynette because they

were not parties named in the lawsuit. The Appellants

specifically seek a ruling that would invalidate the injunc-

tion under Federal Rule of Civil Procedure 65(d). However,

we cannot reach this issue.

Although not specifically mentioned in Appellants

briefs,” Federal Rule of Appellate Procedure 3(c) requires

the notice of appeal to:

[S]pecify the party or parties taking the appeal by

naming each one in the caption or body of the no-

tice, but an attorney representing more than one

party may describe those parties with such terms

as “all plaintiffs,” “the defendants,” “the plaintiffs

A, B, et al.,” or “all defendants except X”....

FED. R. App. P. 3(c)(1)(A) (emphasis added). Non-parties to

the original action may appeal where they are “bound by

the order from which they were seeking to appeal.” Devlin

for the receiver’s acceptance of bids that were not the highest bids on

three water systems. Id. at 1038-39.

** “Jurisdictional issues must be raised by this court sua sponte.”

MacKay v. Pfeil, 827 F.2d 540, 542 (9th Cir. 1987).

App. 30

v. Scardelletti, 536 U.S. 1, 8 (2002). But non-parties must

also pass through the ordinary “jurisdictional threshold” of

Rule 3(c), which requires that they be named in the notice

of appeal. Torres v. Oakland Scavenger Co., 487 U.S. 312,

315 (1988). Moreover, the Appellants are bound by the

ordinary time-constraints imposed upon parties and non-

parties alike by Federal Rule of Appellate Procedure

4(a)(1), which requires that a notice of appeal be filed

within 30 days after judgment. See FED. R. App. P. 4(a)(1).

Here, Thomas and Lynette were not named as defen-

dants in the notice of appeal. The notice of appeal named

the following defendants: Alisal Water Corporation; Toro

Water Service, Inc.; North Monterey County Water Ser-

vice, Inc.; Moss Landing Water Service, Inc.; Robert T.

Adcock; and Natholyn P. Adcock. Because Thomas and

Lynette were not included in the first notice of appeal,

they were required to file a separate appeal within 30 days

of judgment. They failed to do so. Moreover, it is not

objectively clear from the notice of appeal that they in-

tended to appeal. Cf. Retail Flooring Dealers of Am., Inc. v.

Beaulieu of Am., LLC, 339 F.3d 1146, 1149 (9th Cir. 2003)

(holding that when a party’s intent to appeal is objectively

clear, that party is not prevented from going forward

under Federal Rule of Appellate Procedure 3(c)); Simo v.

Union of Needletrades, Indus. & Textile Employees, 322

F.3d 602, 610 (9th Cir. 2003) (same). Consequently, we do

not have jurisdiction to consider their challenge to the

injunction.

VIII

We conclude that the district court had subject matter

jurisdiction over this SDWA civil enforcement action and

App. 31

did not abuse its discretion or violate the Appellants’ due

process rights in fashioning the remedy imposed.

AFFIRMED.

App. 32

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

Vv.

ALISAL WATER CORPORATION; TORO WATER

SERVICE, INC.; NORTH MONTEREY COUNTY

WATER SERVICE, INC.; Moss LANDING

WATER SERVICE, INC.; NATHOLYN P.

ADCOCK; ROBERT T. ADCOCK,

Defendants-Appellants.

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

ALISAL WATER CORPORATION; TORO WATER

SERVICE, INC.; ROBERT T. ADCOCK; NORTH

MONTEREY COUNTY WATER SERVICE, INC.;

Moss LANDING WATER SERVICE, INC.;

NATHOLYN P. ADCOCK,

Defendants-Appellants,

and

PATRICIA ADCOCK; BRUCE PIERSON;

DAVID M. SIMCHO,

Defendants,

JOHN W. RICHARDSON,

Receiver.

No. 02-15907

D.C. No.

CV-97-20099-JF

No. 04-16210 ~

D.C. No.

CV-97-20099-JF

OPINION

App. 33

Appeal from the United States District Court

for the Northern District of California

Jeremy Fogel, District Judge, Presiding

Argued and Submitted

June 13, 2005 — San Francisco, California

Filed October 13, 2005

Before: Richard C. Tallman, Jay S. Bybee, and

Carlos T. Bea, Circuit Judges

Opinion by Judge Tallman

COUNSEL

Marc P. Fairman, San Francisco, California, for the defen-

dants-appellants.

Lori Jonas, Department of Justice, Washington, D.C., for

the plaintiff-appellee.

OPINION

TALLMAN, Circuit Judge:

Appellants Robert and Natholyn Adcock and various

private water systems they owned and operated in Mon-

terey County, California, violated various public health

and safety regulations under the federal Safe Drinking

Water Act (“SDWA”), 42 U.S.C. §§ 300f-300j. They appeal

the district court’s orders requiring divestiture of all

except the largest water system and imposing financial

penalties. We have jurisdiction under 28 U.S.C. §§ 1291

and 1292(a)(2) and affirm.

App. 34

Prior to this litigation, the Adcock family water

system business was organized into four corporations. The

largest, Alisal Water Corporation (“Alisal”), owned and

operated several public water systems, some of which are

named as defendants: Alco Water Service (“Alco”), Salinas

Division, Blackie Road Water System # 18, Pine Canyon

Division of Alco Water Service, Buena Vista Water System,

Wildwood Water System, San Jerardo Water System,

Vierra Canyon Water System, Vierra Estates Water

System, and Langley/Valle Pacifico Water System. Alisal

also wholly owned two subsidiary corporations: Moss

Landing Harbor District, which operated the Moss Landing

public water system, and North Monterey County Water

Service, Inc. (““NORMCO”), which operated NORMCO

public water system. The Adcocks held 82.5 percent owner-

ship in Alisal. The fourth corporation was Toro Water

Service (“Toro”), which owned and operated a public water

system of the same name and was wholly owned by the

Adcocks.’

The United States commenced this civil enforcement

action in January 1997 on behalf of the United States

Environmental Protection Agency (“EPA”) against the

’ Appellants represent that, as of 2001, these water systems