Opposition Brief — City of Danville v. Kentucky River Authority

% Supreme Com, U.S.

¥

gt Mga ag

No. 96-1303 MAR 17 1997

IN THE CLERK

SUPREME COURT OF THE UNITED STATES :

October Term, 1996

CITY OF DANVILLE, KENTUCKY - -_ Petitioner

versus

KENTUCKY RIVER

AUTHORITY, Et Al. - - - - Respondents

On Petition for a Writ of Certiorari to the

Supreme Court of Kentucky

BRIEF IN OPPOSITION

JACK B. BATES

Counsel of Record

DONALD 8S. DOTT, JR.

SUSAN ROSE GREEN

Natural Resources and Environmental

Protection Cabinet

Office of Legal Services

5th Floor, Capital Plaza Tower

Frankfort, Kentucky 40601

(502) 564-5576

Counsel for Respondents

March 17, 1997

WESTERFIELD-BONTE CO., 619 W. KENTUCKY-P.O. BOX 3251, LOUISVILLE, KY.

i

COUNTERSTATEMENT OF THE

QUESTIONS PRESENTED

Statutes and regulations of the Kentucky River Au-

thority (“the Authority”) provide inter alia that users of

the Kentucky River basin’s waters shall pay water use fees

which fund the Authority, its projects, and watershed man-

agement and protection programs.

ie

The questions presented are:

Whether the Kentucky Court of Appeals decision up-

holding the Authority’s water use fees is based on inde-

pendent and adequate state ground thus precluding

this Court’s certiorari jurisdiction.

Whether the Authority, a legislatively created water-

shed management and protection agency, may lawfully

impose water use fees upon the petitioner which actu-

ally withdraws from and discharges into the waters of

the Kentucky River basin.

Whether specia! assessments law or the 5th and 14th

Amendments are applicable to this case in lieu of the

state rule of Curtis v. Louisville and Jefferson County

Metropolitan Sewer District, Ky., 311 S.W.2d 378 (1958).

li

TABLE OF CONTENTS

PAGE

COUNTERSTATEMENT OF QUESTIONS

RE AE TET i

TABLE OF CONTENTS o0..0scssscssscssssessecssseesseeesssess ii

TABLE OF AUTHORITIES ..0.-...:sc:scsccssveesseessseees iii—v

OPINIONS AND ORDERS BELOW .........-....---+- 2

, ME kan as i 2 }

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED .......--ssessscsssessseeessees: 3 |

COUNTERSTATEMENT OF THE CASE .......... 3- 8 |

REASONS FOR DENYING WRIT ...0....-:scsssee000+: 8-20

oummteainey ee a 20

ae ee la

iil

TABLE OF AUTHORITIES

PAGE

Cases:

Michigan v. Long, 463 U.S. 1082, 103 S.Ct. 3469,

FG RE FPR CIID vacciviintadenceescéaccecueceesesase 2, 8,17

International Longshoremen’s Association,

AFL-CIO v. Davis, 476 U.S. 380, 106 S.Ct.

1904, 90 L.Ed.2d 389 (1986)..............ccccccceeeeee 2,8, 12

Curtis v. Louisville and Jefferson County

Metropolitan Sewer District, Ky., 311 S.W.2d

PE ME ceitsaccastchintsiinmisoreonnunbiesss i, 5, 6, 8, 14, 15, 19

Village of Norwood v. Baker, 172 U.S. 269,

19 S.Ct. 187, 43 L.Ed. 443 (1898) ............0... 6, 13, 14,

18, 19, 20

Barfield v. Gleason, 111 Ky. 491, 63 S.W. 964

TRENDS SRE to on aa Re ee 6, 19

Casey v. Richland County Council, 282 S.C. 387,

et SE A RUINED ciicecincssncnvectoncnincevnenesoncese 6, 19

City of Trenton v. New Jersey, 262 U.S. 182,

43 S.Ct. 534, 67 L.Ed. 937 (1923) ..... ee. 7

California v. United States, 438 U.S. 645,

98 S.Ct. 2985, 57 L.Ed.2d 1018 (1978) .......... 7

Michigan- Wisconsin Pipe Line Co. v. Calvert,

347 U.S. 157, 74 S.Ct. 396, 98 L.Ed.

RR esc RIS ace tc 8

Hammerstein v. Superior Court of California,

341 U.S. 491, 71 S.Ct. 820, 95 L.Ed. 1135

ENS ERE RS ect PS 8

Coleman v. Thompson, 501 U.S. 722, 111 S.Ct.

2546, 115 L.Ed.2d 640 (1991)......000... ee. 9,12

Kentucky v. Stincer, 482 U.S. 730, 107 S.Ct.

2658, 96 L.Ed.2d 631 (1987).......................00.. 9,12

New York v. Class, 475 U.S. 106, 106 S.Ct. 960,

I in canes 9,12

ASARCO, Inc. v. Kadish, 490 U.S. 605,

109 S.Ct. 2037, 104 L.Ed2d 696 (1989) ......... 9,12

Commonwealth, ex rel. Armstrong v. Collins,

Ky., 709 S.W.2d 437 (1986) .............sccccccssssces. 9

Long Run Baptist Association, Inc. v. Louisville

and Jefferson County Metropolitan Sewer

District, Ky., 775 S.W.2d 520 (1989)..... 10, 15, 16, 19

iv

Cases (continued): PAGE

Skidmore v. City of Elizabethtown, Ky.,

, JE £ 8 | SERRE RS reo eon 11, 18

Portwood v. Falls City Brewing Company, Ky.,

Ue Os FE ce SO CD hdceecicnesadsncsitinarisnreseseceis 11, 18

Woolsley v. Big Reedy Creek Watershed, Ky.,

SES Gh. We ee RP CIGD wisicccs cis dnckbiccsdabascioneess 11, 14, 19

Kentucky Milk Marketing and Antimonopoly

Commission v. Kroger Co., Ky., 691

ae ee ee eA ipenichcnediclin atechintdthictaitiliinnians 11

Braxton v. U.S., 500 U.S. 344, 111 S.Ct. 1854,

Re Ee ED Sethe padcnenencsnvirintoneens 13

Teter v. Clark County, 104 Wash.2d 227, |

FRRe a AEF 8 Ee visited 16

Roe v. Commonwealth, Ky., 405 S.W.2d 25

TE a seieehiik oxcisdspnisdiiabsonsaietiaiiacia da eipimiapicdaniiibastibaadatinasius 16 |

Statutes: |

Be Re FT ssicietinsknteceideiandamaaitaiinainianieletcakin 2,8

Kentucky Revised Statutes (KRS)

FE SEE iss niiseictnentinnsionsdbiisbiacuebieathinibaanaenadbens 3

Ee a tdvoigiicicbnnaiadeidskiansaumensie aaadabmisbietens 3

ee Fee Sa nish ctechoviicniiebiecthinonsehaiatdincodaiabwadiadiclndaeiandlans 3, 4

PE i Sh kotitevedniniadsenenicichindeantctnisetahsintcbevielltis 3, 5,7

Be I IE iicacdisscicatcsaninaannbbciduscnasiinndedaniuamiatodaiiada 3

ee Se ita coinisinesccveusncckueccdedauebamccasienialeiouiies 3

ee BE I eiahcssci ds vonienshnccocsh ntesdcda beaieaabnemouennbaens 3

STEEDS 3 iinies-hcsinesnatindaicinnindascicnaanepnseinkaonenaneb 3

Constitutional Provisions: |

Kentucky Constitution § 2 0.0... cccccseeessseeeeeees 3, 11

Kentucky Constitution § 27 .0...........ccessseeseeeeeees 10 |

Kentucky Constitution § 28 .00............ccscssseeseeeeees 10

U.S. Constitution, Commerce Clause .................. 45 if

U.S. Constitution, Supremacy Clause ............ ee) Bei

U.S. Constitution, 14th Amendment................ i, 3, 9, 13,

14, 17,19

U.S. Constitution, 5th Amendment ........... i, 9, 18, 14, 19

Regulations:

Kentucky Administrative Regulations (KAR)

IIIT cs «-cndsinnchsibeeitiilinastacnienniiethilhiniahie 3

I i iiikvisitiicteiiiinntenitciccdnsiatiianinimnmaciibicsiitens 3

I ics sri ctenciet csieeinsnlesdbbndinmcamenmaatoniekis 3

Ee EE sitctiistninbethcneuniiccianciinisigebmisastilciitadininai 3, 4

OE i sicciinscenscniiaiahinilanniinaaienadeinmilionianiens 3

Other Authorities: PAGE

Wright, Miller & Cooper, Federal Practice

and Procedure: Jurisdiction 2d § 4020 .......... 12

ie | ARs eae e ND IPR 12

Sas TO. Ses UE BOIS discvesninsnchascnndiebatccstebisbtianken 7

No. 96-1303

SUPREME COURT OF THE UNITED STATES

October Term, 1996

CITYOFDANVILLE,KENTUCKY - - . Petitioner

versus

KENTUCKY RIVER AUTHORITY,

PHILLIP J. SHEPHERD,

CHARLES W. CARR,

TOM DORMAN,

JUDGE W. NEAL CASSIDY,

DR. DONALD C. HANEY,

MARTIN HOWARD LOWRY,

EDWARD FOREE,

GREG GINTER,

THOMAS M. JONES,

RALPH E. MCCLANAHAN, and

BETTYF.WHITAKER, - - - . . Respondents

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Respondents, Kentucky River Authority, et al., (“the

Authority”) respectfully request that the petition for writ

of certiorari be denied for the reasons set forth herein.

Reasons for denial include lack of certiorari jurisdiction.

2

OPINIONS AND ORDERS ENTERED

1. An Order Denying Discretionary Review was en-

tered by the Kentucky Supreme Court in City of Danville

v. Kentucky River Authority, et al., No. 96-SC-214-D, on

November 13, 1996. The text is reprinted at page 1a of the

petition appendix (“Pet. App.”).

2. An Opinion Reversing and Remanding was entered

by the Kentucky Court of Appeals in Kentucky River Au- 4

thority v. City of Danville, Ne. 95-CA-000064-MR, on Feb-

ruary 16, 1996. The text is reprinted at Pet. App., pages

2a through 7a. The opinion was published as Kentucky

River Authority v. City of Danville, Ky. App., 932 S.W.2d

374 (1996).

3. An Order Denying Transfer was entered by the Ken-

tucky Supreme Court in Kentucky River Authority, et al. v.

City of Danville, No. 95-SC-52-T, on March 14, 1995. The

fext is reprinted herein at page ia of the Respondents’

Appendix (“Resp. App.”).

4. An Opinion and Order was entered by the Boyle

Circuit Court, in City of Danville v. Kentucky River Au-

thority, et al., Civil Action No. 94-CI-00278, on December

9, 1994. The text is reprinted at Pet. App., pages 8a through

lla.

JURISDICTION

The petition claims to invoke this Court’s certiorari

jurisdiction under 28 U.S.C. § 1257(a). However, the writ

should be denied because the Kentucky Court of Appeals

decision is based on independent and adequate state ground.

Michigan v. Long, 463 U.S. 1032, 103 S.Ct. 3469, 77 L.Ed.2d

1201 (1983); International Longshoremen’s Association,

AFL-CIO v. Davis, 476 U.S. 380, 106 S.Ct. 1904, 90 L.Ed.2d

389 (1986). The adequacy and independence of state law

is clear from the face of the opinion. Granting a writ

therefore would violate this Court’s jurisdictional prohibi-

tion.

aaa rineeiiiiniiniiiieiiiiiiiils

3

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS INVOLVED

1. Kentucky Revised Statutes (KRS): 151.700 - 151.730

and 151.990. The approximate texts are reprinted at Pet.

App., pages 12a through 23a.

2. Kentucky Administrative Regulations (KAR): 420

KAR 1:010, 420 KAR 1:020, 420 KAR 1:030, 420 KAR 1:040,

and 420 KAR 1:050. The approximate texts are reprinted

at Pet. App., pages 24a through 49a.

3. Kentucky Constitution § 2: Absolute and arbitrary

power denied. - Absolute and arbitrary power over the lives,

liberty and property of freemen exists nowhere in a repub-

lic, not even in the largest majority.

4. 14th Amendment, U.S. Constitution. The approxi-

mate text is reprinted in part at page 2 of the petition.

COUNTERSTATEMENT OF THE CASE

The Kentucky River basin is a watershed which

encompasses all geographic areas of the Commonwealth of

Kentucky that are drained by the Kentucky River and its

tributaries, including surface water and groundwater. 420

KAR 1:010 Section 1(17). The Kentucky River basin is

located wholly within the state of Kentucky. The peti-

tioner withdraws water from a major tributary of the ba-

sin, namely the Dix River at an impoundment known as

Lake Herrington. Both Herrington and the Dix are waters

of the Commonwealth and are part of the Kentucky River

watershed. KRS 151.120(1). Also, the petitioner discharges

from its waste water treatment plant into the Kentucky

River basin. Thus, under the statute and the regulations,

the petitioner “uses” the Kentucky River basin’s waters.

KRS 151.720(5); KRS 151.723; 420 KAR 1:010, Section 1(40).

Pursuant to the statutes and regulations, the Au-

thority charges water use fees for the use of the Kentucky

River basin’s waters. KRS 151.720(5); 151.723; 420 KAR

4

1:040, Section 2. The water use fees charged to the peti-

tioner and other water users are calculated based upon the

actual quantities of water withdrawn from the basin. 420

KAR 1:040, Section 2(2). The petitioner, for example, with-

draws over 3 million gallons of water daily, consumes or

sells the withdrawn water, and discharges its treated waste

water back into the watershed. The fee rate charged to

the petitioner has been set by administrative regulation at

2.2 cents per 1,000 gallons of water withdrawn. 420 KAR

1:040, Section 4. In the previous legislative biennium state

budget, the initial fee rate was 2.8 cents per 1,000 gallons.

Id. The statute allows the petitioner to “pass on” the fees

to its water customers. KRS 151.720(5).

The fees are used to fund the Authority, its projects to

enhance the water supply in the basin, and for watershed

protection. The fees are used for no other purpose. The

Kentucky River watershed is eastern and central

Kentucky’s largest water resource.

Since the Authority began collecting water use fees in

1994, the petitioner has continued to resist the Authority’s

statutes and regulations and refuses to pay the fees. In

fact, the petitioner initiated this litigation to challenge those

fees. In its factual statement, the Kentucky Court of Ap-

peals succinctly summarized this case:

The controversy in this case arises from the Authority’s

interpretation of its enabling statute Ky. Rev. Stat.

(KRS) 151.720, which was enacted in response to con-

tinuing problems and potential depletion of a valued

natural resource, the Kentucky River. In 1990, the

General Assembly enacted KRS 151.720 which man-

dates that the Authority protect the Kentucky River

basin through watershed management. In 1993, the

Authority enacted administrative regulations to imple-

ment the statutes including a two-tier fee schedule by

which it charged the users of water from the river

basin. Tier II fees are collected from entities with-

5

drawing water directly from the main stem of the Ken-

tucky River and are used by the Authority to finance

specific capital construction projects designed to en-

hance the water available for the basin. Tier I fees,

which Danville is designated to pay, apply to entities

withdrawing water from anywhere in the basin,

whether from groundwater or tributaries. These fees

are used for projects benefiting the entire basin and

are assessed at a uniform rate based upon use of the

Kentucky River basin. They are not used for the gen-

eral fund’ but only for Kentucky River basin manage-

ment.

Danville withdraws no water directly from the Ken-

tucky River but does from Lake Herrington on the Dix

River which is a Kentucky River tributary. It also

discharges water from its waste water treatment plant

into a Kentucky River tributary.

Opinion, Pet. App., pp. 2a - 3a. In reaching its decision

upholding the fees, the court followed an unbroken line of

state case law which began with Curtis v. Louisville and

Jefferson County Metropolitan Sewer District, Ky., 311

S.W.2d 378 (1958). The court directly quoted the rule of

Curtis:

The fee in this case is based upon the actual use by

the city of the Kentucky River water basin. Despite

the city’s contention that it does not need the services

of the Authority, the General Assembly recognized a

potential depletion of one of this state’s most valued

natural resources and took efforts to preserve the Ken-

tucky River basin. The interest of the Commonwealth

'The term “general fund” refers to the Commonwealth of

Kentucky’s treasury. The Authority is self-sustaining and wholly

independent of the general fund. The water use fees collected by

the Authority are placed into a restricted funds account for use

only by the Authority for its watershed management and protec-

tion programs. KRS 151.723(3).

6

in protectirg Eastern Kentucky’s largest water re-

source is beyond question. An adequate and clean

water resource is essential to all it serves. In Curtis

v. Louisville and Jefferson County Metropolitan Sewer

District, Ky., 311 S.W.2d 378 (1958), the court rejected

the contention that a statute was unconstitutional be-

cause it conclusively presumed that all land within a

designated area would benefit from a surface drain-

age improvement.

We think thet in the case of a surface drainage

improvement area, any property that geographically

is a part of the watershed or drainage basin may

properly be considered to be benefited by the project

through the general enhancement of conditions of

health, comfort and convenience in the area and

the resulting general enhancement of values in the

area.

Id. at 382.

Opinion, Pet. App., pp. 5a - 6a. Under the rule of Curtis

the Court of Appeals reversed the local trial court which

had ruled that the Authority’s fees were unconstitutional

as lacking in special benefits to the petitioner. The peti-

tioner and the trial court believed that special benefits

were required pursuant to special assessments law and

due process, as in the special assessments cases of Village

of Norwood v. Baker, 172 U.S. 269, 19 S.Ct. 187, 43 L.Ed.

443 (1898), Barfield v. Gleason, 111 Ky. 491, 63 S.W.2d

964 (1901), and Casey v. Richland County Council, 282

S.C. 387, 320 S.E.2d 443 (1984). The Kentucky Court of

Appeals, however, rejected the notion that special benefits

law applied to this water use fee case. Rather, under

Curtis sufficient general benefit inured to the petitioner as

a matter of Kentucky law. In following Curtis the court

stated:

Preservation of the Kentucky River basin is a benefit

which obviously accrues to all within its boundaries.

axe

7

We therefore hold to be clearly erroneous the trial

court's finding that no benefit to the City of Danville

exists. Yount v. Calvert, Ky. App., 826 S.W.2d 833

(1992).

Opinion, Pet App., p. 6a. It is from the Kentucky Court of

Appeals’ application and adherence to the state rule of

Curtis that the petitioner complains. The only federal ques-

tions determined by the court appear at the end of its

opinion and relate to the petitioner's Commerce Clause

and Supremacy Clause arguments. Therein the court sum-

\ marily stated:

We find no merit in Danville’s contention that the

Commonwealth cannot claim ownership to the waters

of the Kentucky River because of the Supremacy

Clause and the Commerce Clause of the United States

Constitution. A state has power to control and con-

serve its water resources, and unless Congress ex-

pressly invokes the navigational servitude, the state

has authority to control its internal waters. City of

Trenton v. New Jersey, 262 U.S. 182, 43 S.Ct. 534, 67

L.Ed. 937 (1923); California v. United States, 438 U.S.

645, 662, 98 S.Ct. 2985, 2994, 57 L.Ed. 1018 (1978).

Opinion, Pet. App., p. 7a. These issues, however, are

not raised in the petition.”

” * .

“Pursuant to Rule 15.2, the Authority notes certain inaccu-

racies in the petition. For example, the statement that the Au-

thority “agreed” that the fees are a “special ‘assessment’ or ‘user

fee’ for which a commensurate or proportional benefit must be

conferred” is erroneous. Pet. Br.., p. 22. Also, the Authority is

not a watershed management district. Pet. Br., p. 4. Tier I fees

are not merely “assessed for the purpose of funding administra-

tive expenses.” Pet. Br., p. 4. The Kentucky General Assembly

determines the Authority’s budget and oversees the setting of

the fee rates under KRS 151.723. Pet. Br., p.5. And, the peti-

tioner is not assessed fees “based solely on its geographic loca-

tion.” Pet. Br., p. 12.

8

Presently pending before the state trial court is the

Authority’s motion for entry of a judgment consistent with

the Kentucky Court of Appeals opinion.

REASONS FOR DENYING THE WRIT

I. THE KENTUCKY COURT OF APPEALS

DECISION IS BASED ON INDEPENDENT AND

ADEQUATE STATE GROUND AND UNDER

MICHIGAN V. LONG THIS COURT HAS NO

CERTIORARI JURISDICTION.

As to the issues claimed by the petitioner, the Ken-

tucky Court of Appeals decision is based on independent

and adequate state substantive law.* The most pivotal

state authority on which the decision is based is the rule of

Curtis v. Louisville and Jefferson County Metropolitan

Sewer District, Ky., 311 S.W.2d 378 (1958), quoted above.

The petitioner's claim that the court decided an “important

federal question” is erroneous. Rather, the court correctly

applied and followed state law.

The law is clear that where independent and adequate

state ground for the decision plainly exist this Court has

no jurisdiction. Michigan v. Long, 463 U.S. 10382, 1041,

103 S.Ct. 3469, 3476, 77 L.Ed.2d 1201 (1983); Interna-

tional Longshoremen’s Association, AFL-CIO v. Davis, 476

’The petition is procedurally misdirected. Under 28 U.S.C. §

1257, the petition should not be directed to the Kentucky Su-

preme Court but rather to the Kentucky Court of Appeals. More-

over, the petitioner requests this Court to issue a writ to the

Kentucky Supreme Court for its refusal to grant discretionary

review. Such refusal is clearly not reviewable. See Michigan-

Wisconsin Pipe Line Co. v. Calvert, 347 U.S. 157, 160, 74 S.Ct.

396, 397, 98 L.Ed. 583 (1954); Hammerstein v. Superior Court of

California, 341 U.S. 491, 492, 71 S.Ct. 820, 821, 95 L.Ed. 1135

(1951).

9

U.S. 380, 387, 106 S.Ct. 1904, 1910, 90 L.Ed.2d 389 (1986).

See also Coleman v. Thompson, 501 U.S. 722, 729-730,

111 S.Ct. 2546, 2553-2554, 1152 L.Ed.2d 640 (1991). The

Kentucky Court of Appeals decision indicates clearly and

expressly that the issues in the case were decided on state

substantive law. Indeed, from the face of the state court

opinion it is plainly clear that no federal issue as claimed

in the petition played any role in the court’s decision. Cf:

Kentucky v. Stincer, 482 U.S. 730, 735, 107 S.Ct. 2658,

2662, n. 1, 96 L.Ed.2d 631 (1987) (certiorari granted where

the 6th Amendment was expressly interwoven in the Ken-

tucky court’s decision, comparable to the presence of Terry

v. Ohio and the 4th Amendment in Michigan v. Long);

New York v. Class, 475 U.S. 106, 109-110, 106 S.Ct. 960,

963-964, 89 L.Ed2d 81 (1986) (certiorari granted where

the state court opinion cited and discussed federal and

state law and the opinion lacked the requisite “plain state-

ment” under Michigan v. Long that the decision rested on

state grounds); and ASARCO, Inc. v. Kadish, 490 U.S. 605,

625, 109 S.Ct. 2037, 2049, 104 L.Ed2d 696 (1989) (certio-

rari granted where the Arizona court opinion focused on

federal statutes and “did not divorce the state constitu-

tional issue from the questions of federal law.”)

As to the petitioner’s claimed 5th and 14th Amend-

ment issues, no federal law is discussed or even cited by

the Kentucky Court of Appeals. Instead, the only federal

law discussed in the opinion relates to the Commerce Clause

and Supremacy Clause arguments by the petitioner which

were summarily found to have “no merit” by the court.

Opinion, Pet. App., p. 7a. Those issues, however, are not

part of the petitioner’s concerns.

The Kentucky Court of Appeals opinion is replete with

references to state authority. For example, the Kentucky

Court of Appeals’ reliance on Commonwealth, ex rel.

Armstrong v. Collins, Ky., 709 S.W.2d 437 (1986), stands

10

for the fundamental rule under the Kentucky constitution

that the legislature is vested with the authority to amend

its statutes through its appropriations power. Relying on

this state rule, the court properly rejected the petitioner’s

claim that the legislature could not amend the Authority’s

statutes by using the state budget bill to specifically direct

some of the water use fees toward establishment of an

operational staff to carry out the Authority’s duties and

responsibilities.

The only other specific constitutional matters, cited by

the court were Sections 27 and 28 of the Kentucky Consti-

tution. Those sections provide that taxation is an exclu-

sively legislative function for raising revenue for the state’s

general fund and cannot be undertaken by an administra-

tive body of the executive branch of government. This

state principle is echoed in Long Run Baptist Association,

Inc. v. Louisville and Jefferson County Metropolitan Sewer

District, Ky., 775 S.W.2d 520 (1989), which is cited in the

court’s opinion.

Indeed, taxation is a legislative function which if del-

egated to MSD would violate Sections 27 and 28 of

the Kentucky Constitution. Therefore, if MSD’s drain-

age charge is determined to be a tax, it must be ad-

judged to be illegal.

Id., at 522. The Court of Appeals reliance on established

state law principles in Long Run underscores the court’s

construction under Kentucky law that the Authority is not

a legislatively created taxation district and that the

Authority’s fees cannot be equated with taxes.

The fees imposed by the Authority for the purpose of

fulfilling the statutory mandates cannot be equated

with taxes. The funds generated from the fees are to

be used for the specific purpose of conserving and con-

trolling the waters in the Kentucky River basin and

are incidental to the statute.

11

Opinion, Pet. App., p. 5a. An additional demonstration of

the Kentucky Court of Appeals’ reliance on state law is

shown by the court’s citations to three other Kentucky

cases.

Assessments and fees charged without a relationship

to a benefit received by the payor are arbitrary and

capricious and violate due process and the constitu-

tional prohibition against the taking of private prop-

erty without just compensation. See Skidmore v. City

of Elizabethtown, Ky., 291 S.W.2d 3 (1956), Portwood

v. Falls City Brewing Company, Ky., 318 S.W.2d 535

(1958), and Woolsley v. Big Reedy Creek Watershed,

Ky., 383 S.W.2d 135 (1964).

Opinion, Pet. App., p. 5a. These cases reflect the court’s

reliance on established Kentucky law that fees having a

reasonable relationship to benefits received are not arbi-

trary and capricious and therefore not unconstitutional.

Where a reasonable relationship exists, as in the case at

bar, the fees do not violate equal protection, due process or

the prohibition against taking private property without just

compensation. Although not expressly articulated by the

court’s opinion, the concept of “arbitrary and capricious” is

a fundamental Kentucky legal principle which is rooted in

Section 2 of the Kentucky Constitution. Moreover, Section

2 “is broad enough to embrace the traditional concepts of

both due process of law and equal protection.” Kentucky

Milk Marketing and Antimonopoly Commission v. Kroger

Co., Ky., 691 S.W.2d 898, 899 (1985). It would also appear

from Woolsley v. Big Reedy Creek Watershed, supra, at

137, that Kentucky’s highest court views the state consti-

tution as encompassing the concept of takings.

Nevertheless it is indeed plainly clear from the Ken-

tucky Court of Appeals decision that it is based indepen-

dently and adequately on state law and does not involve

the federal constitutional issues which are trumpeted by

the petitioner. Nowhere in the court’s decision is any fed-

12

eral law discussed or even referenced, except as to the

Supremacy and Commerce Clause arguments which the

court summarily rejected as having “no merit” and which

the petitioner does not contest. Opinion, Pet. App., p. 7a.

Nor are there any federal questions as claimed by the peti-

tioner that are interwoven in the decision as they were in

Kentucky v. Stincer, supra, New York v. Class, supra, or

ASARCO, Inc. v. Kadish, supra. Nor is there any indica-

tion that the court has attempted to thwart this Court’s

certiorari jurisdiction by sanitizing the alleged federal is-

sues and improperly basing its ruling only upon state law.

Surely this Court should defer to the state substantive

grounds of the court’s decision. See Wright, Miller & Coo-

per, Federal i ractice and Procedure: Jurisdiction 2d § 4020.

Clearly, lack of a federal question determination is fa-

tal to certiorari jurisdiction and the writ therefore should

be denied. Moreover, even if the Commerce and Supremacy

Clause arguments which were rejected by the Kentucky

Court of Appeals could be construed as invoking certiorari

jurisdiction, the Kentucky Court of Appeals decision rests

on state law ground that is nonetheless independent of the

federal questions and clearly adequate to support the judg-

ment. See Coleman v. Thompson, supra, at 729-730. Nor

does this Court “review federal issues that can have no

effect on the state court’s judgment.” International

Longshoremen’s Association, AFL-CIO v. Davis, supra, at 387.

II. NO COMPELLING REASONS EXIST FOR THIS

COURT'S REVIEW, NO IMPORTANT FEDERAL

QUESTIONS WERE DECIDED, AND NO

CONFLICT IN FEDERAL LAW EXISTS.

U.S. Sup. Ct. Rule 10 states that the granting of a

petition is discretionary and ordinarily will be granted only

for compelling reasons. However, there certainly are no

compelling reasons in this case. With respect to the issues

claimed by the petition, no important federal questions

ET eT eee a

13

were decided by the Kentucky Court of Appeals. Rather,

state substantive law was construed, applied and followed

by the Kentucky Court of Appeals decision.

Not only does the Kentucky Court of Appeals decision

lack any conflict with the opinions of this Court, the deci-

sion clearly does not determine the federal question for

which the petition seeks a writ. Indeed, a principal pur-

pose for this Court’s use of certiorari jurisdiction is to re-

solve conflicts among the federal circuits and state courts

concerning the meaning of provisions of federal law.

Braxton v. U.S., 500 U.S. 344, 111 S.Ct. 1854, 500 U.S.

344, 114 L.Ed.2d 385 (1991). The purpose of this Court’s

certiorari jurisdiction is not merely to change the outcomes

of state cases having no federal impact. There is no con-

flict in this case despite the petitioner’s persistent

misreliance upon an inapplicable body of law, namely spe-

cial assessments for special benefits.

The petitioner attempts to create conflict and federal

question jurisdiction where there is none. For example,

the petitioner erroneously criticizes the Kentucky Court of

Appeals decision as disobeying 5th and 14th Amendment

due process, equal protection and takings considerations.

The vehicle that the petitioner uses for these assertions is

Village of Norwood v. Baker, 172 U.S. 269, 19 S.Ct. 187, 43

L.Ed. 443 (1898), an Ohio special assessment street con-

struction case which held that special assessments require

special benefits. The petitioner then argues that the Ken-

tucky Court of Appeals decision conflicts with the special

benefits requirements of Village of Norwood. Despite the

petitioner’s misreliance on special assessments and special

benefits law, it is obvious that Village of Norwood and the

Sth and 14th Amendments do not appear in the Kentucky

Court of Appeals decision. Moreover, Village of Norwood

and special assessments law are wholly inapplicable to

this case. Nor was a 5th or 14th Amendment discussion

necessary to the court’s decision since ample state law ex-

14

isted for the court to follow, particularly the established

state rule of Curtis, supra. Clearly, state substantive law

controlled-the outcome of this case, not the issues of Vil-

lage of Norwood or the 5th or 14th Amendments. In con-

struing the Authority’s statutes and regulations, there |

simply was no reason for the Kentucky Court of Appeals to |

engage in a determination of federal constitutional law or |

to discuss whether the Authority’s fees may violate Village

of Norwood or any other special assessments law. More-

over, the Kentucky Court of Appeals decision lacks any

national or federal significance worthy of this Court’s lim-

ited resources. |

Ill. THE KENTUCKY COURT OF APPEALS COR-

RECTLY RELIED UPON AN UNBROKEN LINE |

OF STATE AUTHORITY AND PROPERLY DE- |

CIDED THE CASE.

The petitioner erroneously equates the Authority’s wa-

ter use fees with special assessments for special benefits,

as in neighborhood street construction cases. In following

an unbroken line of state case law, however, the Kentucky

Court of Appeals properly held that the water use fees are

valid under the state’s police power.

Since 1958 the law in Kentucky is that an area which

lies within a watershed derives benefits from watershed

projects through the general improvement of conditions or

health, comfort and convenience and the resulting general

enhancement of values in the area. Curtis, supra, 311

S.W.2d at 382.

In 1964 the Curtis rule was followed in Woolsley v.

Big Reedy Creek Watershed, supra, wherein the court con- |

strued state watershed conservation statutes enacted in

the 1950’s by the Kentucky legislature.4 The court re-

‘Contrary to the petitioner’s assertions, watershed manage-

ment concepts have existed in Kentucky at least four decades as

evidenced by the state legislature’s enactments of watershed con-

servancy statutes. Such statutes were involved in Woolsley v

Big Reedy Creek Watershed, supra.

ee re

15

jected the plaintiffs’ claim that a watershed project could

not benefit them.

[T]hey do not show that their property will not be

benefited through a general enhancement of values in

the district, which benefit has been held to be a suffi-

cient basis for imposing a share of the cost of a water-

shed improvement project. See Curtis v. Louisville &

Jefferson County Metropolitan Sewer District, Ky., 311

S.W.2d 378. aa

Id., 383 S.W.2d at 137. In 1989, the Curtis rule was fol-

lowed in Long Run Baptist Association, supra, 775 S.W.2d

520, 522 (1989).

[A]ppellants argue that there are some property own-

ers who receive no benefit from the [water drainage]

plan because they constructed their own system or

because the storm water run off drains from their

property directly into the Ohio River. However, simi-

lar arguments were presented in and rejected in Curtis

v. Louisville and Jefferson County Metropolitan Sewer

District, 311 S.W.2d 378 (1958), where property own-

ers argued that KRS 76.260 (which was later repealed)

was unconstitutional because it established a conclu-

sive presumption that all land within a designated

surface drainage area would receive some benefit. Be-

cause some property was at an elevation high enough

to provide a vested right to the free flow of surface

water, property owners argued that such property

could not be benefited by the improvement. The court

disagreed.

We think that in the case of a surface drainage

improvement, any property that geographically is a

part of the watershed or drainage basin may prop-

erly be considered to be benefited by the project

through the general improvement of conditions of

health, comfort and convenience in the area and

the general enhancement of values in the area. The

circuit court held that all property in the area could

aii: |

16

be deemed to be benefited, and we affirm that hold-

ing. :

Id. at 382. |

In correctly applying the common law rule of these

state cases, the Kentucky Court of Appeals concluded that

the petitioner’s actual use of the basin’s watershed and its

discharge into it was a sufficient basis under state law for

assessment of the water use fees. Moreover, contrary to

the petitioner’s claim, Kentucky is not the only state to

adopt user fees to pay for watershed management and

protection and to hold that the fees are not to be viewed as

special assessments requiring special benefits. In Teter v. |

Clark County, 104 Wash.2d 227, 704 P.2d 1171 (1985), the

Washington Supreme Court similarly held that under the

state’s police powers a water management department may

properly be funded by user fees despite assertions that

properties do not receive “special benefits” as may be re-

auired under a special assessments case. The court cor-

rectly noted that under a police power analysis “[t]he special

benefit idea does not enter into the picture at all.” Jd. at

1176. Indeed, the Authority has long maintained that its

fees are based on a valid exercise of its police powers.

Such police power is an essential attribute of government.®

Roe v. Commonwealth, Ky., 405 S.W.2d 25, 27 (1966). There

is little reason for this Court to review the Commonwealth’s

valid exercise of its police powers, particularly where the

Kentucky Court of Appeals decision did not determine any

federal law issues.

5The petitioner erroneously claims that the Authority as-

sembled police power arguments in support of the fees “[a]s an

apparent afterthought, subsequent to the trial court opinion....”

Pet. Br., p. 22. However, the police power was expressly argued

by the Authority in the trial court as evidenced by pages 40 - 41

of its trial court brief, entitled “The Tier I Fees Are a Valid

Exercise of the Authority's Police Powers.”

17

IV. EVEN IF FEDERAL QUESTION JURISDICTION

EXISTED, THE ISSUES IN THIS CASE LACK

SUFFICIENT IMPORTANCE TO WARRANT

THIS COURT'S REVIEW.

Aside from the jurisdictional defect under the rule of

Michigan v. Long, supra, that the state court decision lacks

the federal question alleged by the petitioner, the issues in

the case lack any importance which would warrant this

Court’s investment of its valuable and limited judicial re-

sources. Kentucky's highest court has twice rejected this

case by declining transfer of the case (see Resp. App., p.

la) and denying discretionary review. Even if there were

bona fide federal issues in this case, which there are not, it

would seem anomalous for this Court to accept the case

when the Kentucky Supreme Court has itself twice de-

clined review. Certainly, this case which was decided on

independent and adequate state ground cannot be more

important to this Court than to the Kentucky Supreme

Court. Moreover, the only federal question determinations

in the Kentucky Court of Appeals decision are those deal-

ing with the petitioner’s Commerce and Supremacy Clause

arguments to which the court stated “[w]e find no merit.”

Opinion, Pet. App., p. 7a. Neither of those issues is in-

cluded in the petition and the law on those issues is never-

theless well settled.

V. THE PETITIONER'S ARGUMENTS MISCON-

STRUE THE KENTUCKY COURT OF APPEALS

OPINION.

The petitioner claims that the “Supreme Court of Ken-

tucky” [sic] denied petitioner the right to question the fees

and benefits. Pet. Br., p. 12. To the contrary, the peti-

tioner initiated this state court action and has had nearly

three years of involvement in litigating the issues. The

petitioner has simply lost on the merits and the Kentucky

Supreme Court denied the petitioner’s motion for discre-

tionary review. Also, the petitioner erroneously asserts

that the Kentucky Court of Appeals’ opinion “establishes”

18

law. Pet. Br., p. 12. However, the Court of Appeals deci-

sion properly followed state precedent and determined

that the petitioner was responsible for payment for its ac-

tual use of the water resources of the Kentucky River ba-

sin under the Authority's statutes and regulations.

Contrary to what the petitioner claims, the fees charged

to the City for its use of the basin’s waters are not simply a

function of the City’s geographical location within the ba-

sin. Rather, it is undeniable that the petitioner indeed

uses the basin’s water and impacts the basin’s water sup-

ply and quality. On a daily basis the petitioner withdraws

more than 3 million gallons of water from the basin’s wa-

ters and discharges its used water into the basin. It is

reasonable therefore for the petitioner to pay water use

fees which in turn are used for watershed protection and

management. It is anomalous for the petitioner to claim

that no lawful and rational relationship exists between the

fees assessed and the petitioner’s use and discharge into

the river basin. The Court of Appeals construction of the

Authority’s water use fee statutes and regulations shows

that they are reasonably related to the Commonwealth’s

interest of protecting and conserving the water resources

of the Kentucky River basin. See Portwood v. Falls City

Brewing Company, supra, at 536; Skidmore v. City of

Elizabethtown, supra, at 5.

VI. THE PETITION ATTEMPTS TO CREATE

FEDERAL ISSUES AND CONFLICT WHERE

NONE EXIST.

The petitioner attempts to create conflict between fed-

eral and state law. Despite that the state court opinion

rests on independent and adequate state law ground, the

petitioner nonetheless argues that Village of Norwood,

supra, an 1898 special assessment case, conflicts with the

state court’s decision. However, the petitioner makes

meritless arguments to avoid compliance with state law

and to avoid paying legitimate water use fees.

aE Tr emeeT ee

19

The Kentucky Court of Appeals correctly recognized

the inapplicability of the petitioner’s 5th and 14th Amend-

ment arguments and properly decided the case based upon

substantive Kentucky precedents. The rule founded in

Curtis, supra, was followed by Woolsley v. Big Reedy Creek

Watershed, supra and Long Run Baptist Assoc., supra. The

Kentucky Court of Appeals decision correctly applied and

followed this established state rule. Contrary to the

petitioner's claims, the Kentucky Court of Appeals opinion

did not “establish” a rule or conclusive presumption. Pet.

Br., p. 10. Rather, the court correctly applied substantive

state law which has existed in this Commonwealth for 39

years.

Clearly, the law of special assessments for special ben-

efits does not apply to this case in lieu of Curtis. The fees

in this case are based upon the Authority’s exercise of its

legislatively granted police powers. The special assess-

ments case of Village of Norwood does not change this

result nor is it in conflict with the Kentucky Court of Ap-

peals decision. In Norwood the property of an abutting

landowner was levied upon for street construction improve-

ments. However, it is plainly obvious that no such facts

exist in this case. Moreover, it is inconsequential that a

Kentucky special assessments case following Norwood like-

wise held that public street construction could lead to spe-

cial assessments on adjoining and benefited property.

Barfield v. Gleason, 111 Ky. 491, 63 S.W.2d 964 (1901). It

too does not alter the outcome of this case. The third case

erroneously relied upon by the petitioner is Casey v.

Richland County Council, 282 S.C. 387, 320 S.E.2d 443

(1984), which under the South Carolina constitution held

invalid on equal protection grounds a county water and

sewer charge where the plaintiff already was being ser-

viced and charged by the City of Columbia and could not

use the county’s system. Since the plaintiff was not in the

county system and could not use the county system, the

20

South Carolina court viewed the county’s charge as gen-

eral revenue raising and therefore an impermissible tax.

However, this case is likewise inapplicable. Unlike the

plaintiff in Casey, the petitioner herein actually uses the

waters of the Kentucky River basin.

The case at bar is not one involving special assess-

ments for special benefits, nor does it involve taxes. Nei-

ther Village of Norwood nor any other cases cited by the

petitioner are applicable. Nor does the Kentucky Court of

Appeals decision in any way involve the petitioner’s as-

serted federal constitutional] concerns. There is no basis

for certiorari jurisdiction in this case.

* * .

CONCLUSION

For the foregoing reasons the petition for a writ of cer-

tiorari should be denied.

Respectfully submitted,

Jack B. Bates, Counsel of record

Donan S. Dorr, JR.

Susan Rose GREEN

Natural Resources and Environmental

Protection Cabinet

Office of Legal Services

5th Floor, Capital Plaza Tower

Frankfort, Kentucky 40601

(502) 564-5576

Counsel for Respondents

APPENDIX

Oe Bay TPO aA” Ser i tana!

De ane 1 Fl Ri Ae ral

la

SUPREME COURT OF KENTUCKY

95-SC-52-T

KENTUCKY RIVER AUTHORITY,

PHILLIP J. SHEPHERD,

CHARLES W. CARR,

TIM DORMAN,

JUDGE W. NEAL CASSITY,

DR. DONALD C. HANEY,

MARTIN HOWARD LOWRY,

EDWARD FOREE,

GREG GINTER,

THOMAS M. JONES,

RALPH E. MCCLANAHAN, and

BETTYE F. WHITAKER

v.

CITY OF DANVILLE, KENTUCKY

Boyle Circuit Court

Movants

Respondent

Hon. Stephen M. Shewmaker, Judge

94-CI-278

ORDER DENYING TRANSFER

Movants motion for transfer of the above styled action

from the Court of Appeals of Kentucky to the Supreme

Court of Kentucky is denied.

ENTERED: March 14, 1995

/s/_ Robert F. Stephens

CHIEF JUSTICE