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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2005

## Text

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)

8

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.

9

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).

10

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)).

11

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

12

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

os

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

13

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

14

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.

15

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

16

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.

17

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,
Vs

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.{

iy

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.

I

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).

II

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.

B

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.”

V

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.

VI

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,

V.

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

I

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
collectively served approximately 28,000 people, of which Alco served
the majority, approximately 25,000 people. The other systems served
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. 35

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 I”). 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
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

App. 36

placed in receivership and directed the receiver to investi-
gate and make recommendations 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 suggestions.

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
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 IIT’).
PSMCSD did net 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.

App. 37

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).

II

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
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)

App. 38

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
Servs., Inc., 125 S. Ct. 2611, 2616 (June 23, 2005) (internal
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 ‘laws of the United States’ under
§ 1331(a).”).

This general grant of federal question jurisdiction is
not limitless - Congress may negate district court jurisdic-
tion “(bly 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) (“[FJederal 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

App. 39

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) (¢, anting the government
authority to “bring a civil action in ~he 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

App. 40

“the appropriate United States district court.” Jd. § 300g-
3(g)(3)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)@UID & 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 aspects
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 govern-
ment “may bring a civil action” in district court “if” so re-
quested (or if authorized under conditions 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 authorized request from the state.

* The Appellants could certainly have raised the issued of whether Dr.
Spath’s request letter was sufficient to grant enforcement power to the
federal government by moving to dismiss for the government's “failure to
state a claim upon which relief can be granted” under Federal] Rule of Civil
Procedure 12(b\6), but they did not. Because the record is insufficient to
answer that question on appeal and the Appellee’s would be substantially
prejudiced if we reached this issue so late in the proceedings, we must
conclude that the claim has been waived. See United States v. Carlson,
900 F.2d 1346, 1349 (9th Cir. 1990).

App. 41

We will not assume that Congress intended to deprive the
court of subject matter jurisdiction over enforcement of
federal laws where Congress 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 concurrent with that of state regulators.

Ill

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 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

App. 42

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”
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.” Jd. § 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
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

App. 43

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
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 unreasonable

App. 44

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., dissent-
ing). 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, § 141.21(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.

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

* Neither party suggests that these samples were invalid under the
regulation or compliant with total coliform MCL requirements.

App. 45

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 monjtoring
samples which must be taken “at sites which are represen-
tative of water throughout the distribution system.” Jd.
§ 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 fourd, “[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.

IV
A

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

a,

App. 46

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
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

* 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. 47

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 prevision 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.”

“We review a district court’s decision to issue a per-
manent injunction for abuse of ciscretion, 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

* 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. 48

injunctive relief is also for an abuse of discretion. Idaho
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
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 IT, 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 unwilling-
ness to work with the government, which suggests 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 IT, 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. 49

ongoing compliance would continue to be problematic. See
Alisal III, 326 F.Supp. 2d at 1036-37; Alisal II, 326
F. Supp. 2d at 1022-23. Given the Appellants’ unwilling-
ness 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
Appellants’ 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
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

App. 50

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 IT, 326
F. Supp. 2d at 1028. The Appellants themselves admit that
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

App. 51

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 I, 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
took into consideration the competing interests. There was
no abuse of discretion in the means employed.

B

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

App. 52

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 their 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).

As to the public hearings, the Appellants argue that
they were not allowed to “question” the process, but they
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 1n conducting the hearings. No objections were timely
raised that the speakers were not sworn and were not
subject to cross-é¢xamination. However, they did object to
the district court’s considering the statements and letters

App. 53

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 as the 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 v.
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)).

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
elemenis 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

App. 54

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 dis-
trict 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

App. 55

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. /d. at 608-09 (deter-
mining that admission of the letters fell into the residual
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.

* 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. 56

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 “[i]t is well settled” that a party waives a challenge to
failure to swear in a witness by failing to raise the point
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;

App. 57

and (3) the Appellants failed on appeal to show how they
were prejudiced by admission of the evidence.”

V

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 “[w]here [they
are] forced to sell the utility for less than its rate base, as
the [rleceiver recommends here, there is a taking that
violates the Constitution.” And second, they prefaced a
feasibility argument with: “in light of the constitutional
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.”)

* 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. 58

(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.

Vi

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
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

App. 59

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

VII

In its receivership order, the district court enjoined
not only the named defendant individuals, Robert and
Natholyn, but also their children, Thumas and Lynette,
from “acquir[ing] any new interest, financial or otherwise,

* The penalty imposed was well below the maximum penalty
allowed by statute, which states, in part, that:

[I]f the court determines that there has been a violation of
the regulation or schedule or other requirement with re-
spect to which the action was brought, the court may, taking
into account the seriousness of the violation, the population
at risk, and other appropriate 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
ITI, 326 F. Supp. 2d at 1035. The governinent 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
for the receiver’s acceptance of bids that were not the highest bids on -
three water systems. 7d. at 1038-39.

App. 60

in any ‘public water system’ ... without the express
permission of [the] Court.” Alisal JJ, 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”. .. .

Frp. 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
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

** “Jurisdictional issues must be raised by this court sua sponte.”
MacKay v. Pfeil, 827 F.2d 540, 542 (9th Cir. 1987).

App. 61

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 t

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0600%3A1. Public record. Not legal advice.