Rural Water Sewer & Solid Waste Management, District No. 1 v. City of Guthrie
2011 U.S. App. LEXIS 15279
| 10th Cir. | 2011Background
- Logan-1 and Guthrie dispute which rural provider may serve certain Guthrie-area customers, invoking 7 U.S.C. § 1926(b).
- Logan-1 holds USDA loans; Guthrie allegedly encroaches on Logan-1’s designated service area.
- Logan-1 asks for § 1926(b) protection because it remains indebted on USDA loans since 1976.
- Oklahoma Supreme Court certified a question about § 1926(b) compatibility with the Oklahoma Constitution; it answered in Logan-1’s favor.
- District court granted Logan-1 partial summary judgment on key § 1926(b) issues; Guthrie appeals; district court also dismissed Guthrie’s counterclaims/third-party claims.
- Appeals addressed whether Logan-1 made service available, whether its indebtedness persists, and whether Guthrie may pursue related claims against Logan-1 and the USDA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Logan-1 has continuing indebtedness under USDA loans | Logan-1 remains indebted on USDA loans since 1976. | Logan-1’s indebtedness may be invalid under state law. | Logan-1 has continued indebtedness ( Oklahoma Supreme Court resolution upheld). |
| Whether Logan-1 made water service available to disputed customers | Logan-1 made service available to specific customers; seeks protection for those customers. | Logan-1’s availability cannot be shown for disputed customers or requires broader area-wide proof. | Made service available must be assessed customer-by-customer in this case. |
| Whether fire protection capacity affects § 1926(b) ‘made service available’ analysis | Fire protection capacity is a relevant factor under federal regulations. | Fire protection is not required and should not affect availability. | Fire protection is irrelevant to 'made service available' under § 1926(b); district court erred in giving it weight, though practicability can’t be considered here. |
| Whether Guthrie’s constitutional challenge to § 1926(b) merits dismissal | Oklahoma Constitution bars exclusive rights granted to Logan-1 under § 1926(b). | Oklahoma Supreme Court rejected the merits of the constitutional conflict. | affirmed dismissal on merits; issues remanded with prejudice for final dismissal. |
| Whether the United States’ sovereign immunity bars Guthrie’s graduation-clause claims against the USDA | Graduation-clause claims should be enforceable. | Sovereign immunity bars equitable relief like specific performance. | Sovereign immunity bars these claims; dismissal without prejudice. |
Key Cases Cited
- Pittsburg County Rural Water Dist. No. 7 v. City of McAlester, 358 F.3d 694 (10th Cir. 2004) (liberal § 1926(b) protection for indebted districts; pipes-in-ground framework)
- Sequoyah County Rural Water Dist. No. 7 v. Town of Muldrow, 191 F.3d 1192 (10th Cir. 1999) (integration of 'pipes-in-the-ground' test for service availability)
- Rural Water Dist. No. 1 v. City of Ellsworth, 243 F.3d 1263 (10th Cir. 2001) (application of § 1926(b) to protect indebted districts)
- Glenpool Util. Servs. Auth. v. Creek Cnty. Rural Water Dist. No. 2, 861 F.2d 1211 (10th Cir. 1988) (early interpretation of § 1926(b) scope and protections)
- Moongate Water Co. v. Butterfield Park Mut. Domestic Water Ass'n, 291 F.3d 1262 (10th Cir. 2002) (interpretation of indebtedness and § 1926(b) protections post-OBRA)