Green Valley Special Utility District v. City of Cibolo
866 F.3d 339
| 5th Cir. | 2017Background
- Green Valley Special Utility District (Green Valley) holds CCNs for water and sewer service in parts of Guadalupe, Comal, and Bexar Counties; it has an outstanding USDA loan secured by its water utility revenues.
- The City of Cibolo applied for a CCN in 2016 to provide sewer service in Cibolo, including areas inside Green Valley’s sewer CCN; the application would strip Green Valley’s right to provide sewer in those areas but would not affect its water service.
- Green Valley sued under 7 U.S.C. § 1926(b), seeking injunctive and declaratory relief, claiming the statute bars municipal encroachment on any service "provided or made available" by a federally indebted utility.
- The City moved to dismiss under Rule 12(b)(6), arguing § 1926(b) protects only services that were financed by the federal loan (here, water only).
- The district court dismissed after Green Valley amended its complaint to confirm the federal loan funded only water service; the Fifth Circuit reversed and remanded, finding the district court’s reading inconsistent with the statute’s plain language.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1926(b) protects only services financed by the federal loan or all services "provided or made available" by a federally indebted utility | § 1926(b) protects any service made available by a federally indebted utility (including sewer), or an integrated water-and-sewer service | § 1926(b) protects only the specific service financed by the federal loan | The plain text does not limit "service" to loan-financed services; statute protects services made available by the federally indebted association (reversed and remanded). |
Key Cases Cited
- N. Alamo Water Supply Corp. v. City of San Juan, 90 F.3d 910 (5th Cir. 1996) (interpreting § 1926(b) to protect federally indebted rural water associations from municipal encroachment)
- Pub. Water Supply Dist. No. 3 v. City of Lebanon, 605 F.3d 511 (8th Cir. 2010) (held § 1926(b) applies only to the type of service financed by the qualifying loan)
- United States v. Uvalle-Patricio, 478 F.3d 699 (5th Cir. 2007) (canon: begin statutory interpretation with plain language)
- United States v. Williams, 400 F.3d 277 (5th Cir. 2005) (statutory construction should harmonize parts of a statute)