Background
Inland Empire Waterkeeper and Orange County Coastkeeper brought a Clean Water Act citizen suit alleging that Corona Clay Company violated stormwater-permit requirements at its clay-recycling facility near Temescal Creek, a tributary of the Santa Ana River. After an initial defense verdict, the Ninth Circuit ordered a new trial in light of errors concerning monitoring and reporting claims and the Supreme Court’s intervening decision in County of Maui v. Hawaii Wildlife Fund.
At the second trial, Corona did not dispute that Temescal Creek was a “water of the United States,” and the jury was instructed accordingly. The jury found 12,541 permit violations, and the district court imposed more than $1.8 million in penalties. After the verdict, however, the Supreme Court decided Sackett v. EPA, which limited “waters of the United States” to relatively permanent, standing, or continuously flowing bodies of water. Corona then sought dismissal for lack of subject-matter jurisdiction or, alternatively, relief under Federal Rule of Civil Procedure 59.
The Court’s Holding
The Ninth Circuit held that whether Temescal Creek qualifies as a water of the United States concerns the merits of the Clean Water Act claims, not the federal court’s subject-matter jurisdiction. A good-faith allegation of a covered violation was sufficient to invoke federal jurisdiction, even if the plaintiffs ultimately could not prove that the creek fell within the Act. The court therefore affirmed the denial of Corona’s motion to dismiss.
The panel nevertheless held that Corona was entitled to Rule 59 relief. Before Sackett, Ninth Circuit precedent made a challenge to Temescal Creek’s status effectively futile because the creek was a tributary that flowed into an undisputed water of the United States. Because Sackett substantially changed the governing standard and Corona raised the issue at its earliest opportunity while the district court retained jurisdiction, Corona was not bound by its earlier legal admission. The Ninth Circuit reversed the denial of Rule 59 relief and remanded for further proceedings because the existing record did not permit it to determine whether Temescal Creek satisfies Sackett’s standard.
Key Takeaways
- Whether a geographic feature is a “water of the United States” is a merits issue under the Clean Water Act, not a prerequisite to federal subject-matter jurisdiction.
- An intervening change in controlling law may justify a new trial on an issue that a party previously bypassed when binding precedent made the issue futile and the party raises it at the earliest opportunity.
- The Ninth Circuit left it to the district court to determine whether further proceedings should be limited to Temescal Creek’s status under Sackett.
Why It Matters
The decision gives regulated parties a route to post-trial relief when a substantial intervening change in law revives an issue that binding precedent had effectively foreclosed. It also clarifies that references to the Clean Water Act’s regulatory “jurisdiction” do not transform the statute’s coverage requirements into limits on a federal court’s adjudicatory power.
The ruling does not decide whether Temescal Creek is protected by the Clean Water Act or whether Corona ultimately remains liable. Those questions return to the district court for factual development under Sackett’s relative-permanence standard.