969 F.3d 460
5th Cir.2020Background
- Green Valley Special Utility District (a Texas political subdivision) obtained a USDA loan in 2003 for water service and holds CCNs for water and sewer across a rural area east of San Antonio.
- In 2016 the PUC decertified two tracts from Green Valley's sewer CCN after petitions by GVDC (160 acres) and the City of Schertz (405 acres), finding Green Valley lacked facilities or had not provided sewer service there.
- Green Valley sued, invoking 7 U.S.C. § 1926(b) (prohibiting curtailment of "the service provided or made available" through a federally funded association) and seeking injunctive and declaratory relief; it also alleged preemption of certain Texas Water Code provisions.
- The district court, relying on Fifth Circuit panel precedent North Alamo, granted Green Valley summary judgment on § 1926(b) claims; defendants appealed and the court granted en banc review.
- The en banc court resolved jurisdictional issues (standing, mootness, sovereign immunity), held Ex parte Young permits prospective injunctive suits against PUC officials, found GVDC settlement mooted GVDC-related claims (warranting vacatur and dismissal), and overruled North Alamo, adopting a "physical capability" test for § 1926(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge TWC §13.254(a-1) (preemption) | Green Valley: PUC relied on §13.254(a-1) in decertification of Schertz tract, so Green Valley has a concrete injury and standing. | PUC/Schertz: Schertz order relied on §13.255, not §13.254(a-1); no traceable injury from §13.254(a-1). | No standing; district court dismissal modified to without prejudice (affirmed as so modified). |
| Mootness of GVDC-related claims after settlement | Green Valley: settlement still leaves recertification pending so controversy remains live. | Defendants: settlement unambiguously resolves dispute; petition for recertification is routine and unopposed. | GVDC settlement moots GVDC claims; vacatur of district-court orders related to GVDC and remand to dismiss as moot. |
| State sovereign immunity / Ex parte Young | Green Valley: seeks prospective relief to prevent PUC officials from enforcing preempted state rules; Ex parte Young applies. | PUC Officials: relief sought is retrospective (undoing decertification) and thus barred by sovereign immunity. | Ex parte Young permits prospective injunctive relief against PUC officials to stop future enforcement of unlawful state action; purely retrospective relief (voiding past final orders) is barred. |
| Meaning of "provided or made available" in 7 U.S.C. §1926(b) | Green Valley: Fifth Circuit panel precedent (North Alamo) and Texas duty to serve suffice to show service "made available." | Defendants: statutory text requires physical ability/facilities; state-law duty alone is insufficient. | Overrules North Alamo; adopts a two-part "physical capability" test: (1) adequate facilities to provide service to the area within a reasonable time after request, and (2) legal right to provide service. Remand for application. |
Key Cases Cited
- Ex parte Young, 209 U.S. 123 (1908) (permits suits for prospective equitable relief against state officials violating federal law)
- Verizon Maryland Inc. v. Public Service Comm'n of Maryland, 535 U.S. 635 (2002) (injunctive relief barring enforcement of state action inconsistent with federal law satisfies Ex parte Young inquiry)
- North Alamo Water Supply Corp. v. City of San Juan, 90 F.3d 910 (5th Cir. 1996) (per curiam) (panel precedent equating state-law duty to serve with §1926(b)'s "made available" test; overruled)
- Le-Ax Water Dist. v. City of Athens, 346 F.3d 701 (6th Cir. 2003) (articulates the "physical ability" test requiring adequate nearby facilities and legal right to serve)
- Sequoyah County Rural Water Dist. No. 7 v. Town of Muldrow, 191 F.3d 1192 (10th Cir. 1999) (supports capability/pipes-in-ground approach)
- Glenpool Utility Servs. Auth. v. Creek County Rural Water Dist. No. 2, 861 F.2d 1211 (10th Cir. 1988) (interprets physical-proximity/facility factors under §1926(b))
- Public Water Supply Dist. No. 3 v. City of Lebanon, 605 F.3d 511 (8th Cir. 2010) (construed §1926(b) in context of financed service; relevant to scope-of-service debate)
- Chesapeake Ranch Water Co. v. Board of Commissioners, 401 F.3d 274 (4th Cir. 2005) (applies physical-capability analysis)
- Green Valley Special Utility Dist. v. City of Cibolo, 866 F.3d 339 (5th Cir. 2017) (Fifth Circuit panel decision extending §1926(b) protection across service types; discussed but not resolved en banc)