IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 5, 2009
No. 08-60152 Charles R. Fulbruge III
Clerk
JIM HOOD, Attorney General, ex rel; STATE OF MISSISSIPPI, Acting for
Itself and Parens Patriae for and on behalf of the People of the State of
Mississippi
Plaintiffs-Appellants
v.
THE CITY OF MEMPHIS, TENNESSEE; MEMPHIS LIGHT GAS & WATER
DIVISION
Defendants-Appellees
Appeal from the United States District Court
for the Northern District of Mississippi
Before HIGGINBOTHAM, BENAVIDES, and STEWART, Circuit Judges.
CARL E. STEWART, Circuit Judge:
In this lawsuit, the state of Mississippi seeks damages from the City of
Memphis and Memphis Light, Gas and Water (“MLGW”) (collectively,
“Memphis”), for the alleged conversion of groundwater in the Memphis Sands
Aquifer (the “Aquifer”). The district court dismissed Mississippi’s lawsuit
without prejudice, holding that Tennessee is an indispensable party to the suit
and that the court was without power to join Tennessee. We AFFIRM.
No. 08-60152
I. BACKGROUND
The Aquifer is located beneath portions of Tennessee, Mississippi, and
Arkansas. There is no interstate compact governing use of the Aquifer’s water,
and thus no specific volumes of groundwater from the Aquifer have been
apportioned to Mississippi, Tennessee, or Arkansas. The Aquifer is the primary
water source for both DeSoto County, Mississippi, and the city of Memphis,
Tennessee, which lies just across the state line from DeSoto County. Mississippi
seeks past and future damages, as well as equitable relief, related to Memphis’s
allegedly wrongful appropriation of groundwater from the Aquifer.1 Mississippi
alleges that part of the groundwater that Memphis pumps from the Aquifer is
Mississippi’s sovereign property and that the state must therefore be
compensated.
MLGW, a division of the City of Memphis, owns and operates one of the
largest artesian water systems in the world. It is responsible for providing gas,
electricity, and water to its residential, business, governmental, and other
customers, who are primarily citizens of Memphis. Although three of its
groundwater well fields are located near the Tennessee border, all of MLGW’s
wells are located within Tennessee, and Memphis and Tennessee contend that
this municipal water program operates under the direction and control of
Tennessee law.2
1
Although there was some dispute between the parties below as to the basis of
jurisdiction, federal question jurisdiction is present both because 28 U.S.C. § 1331(a) includes
suits brought by a state and because federal common law will apply to the dispute. See Illinois
v. City of Milwaukee, 406 U.S. 91, 99 (1972).
2
See, e.g., TENN . CODE ANN . § 68-221-707 (Tennessee Department of Environment and
Conservation exercises supervision over operation of public water systems, including features
of operation that affect quantity of water supplied). Mississippi contends that Memphis’s
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No. 08-60152
Mississippi asserts that MLGW’s groundwater pumping has created an
underground “cone of depression” centered under Memphis and extending into
Mississippi. Mississippi states that this cone of depression causes groundwater
that would otherwise lie beneath Mississippi to flow across the border and into
the cone under Tennessee, and thus become available to be pumped by Memphis.
Mississippi argues that due to the growth of Memphis’s water system the
Aquifer is being drawn down at a higher rate than it is being replenished, thus
causing water levels to drop.
Mississippi filed its first complaint against Memphis in February 2005.
Memphis filed a motion to dismiss on several bases, including that the state of
Tennessee was an indispensable party pursuant to Federal Rule of Civil
Procedure 19. The motion to dismiss was denied in August 2005. Memphis then
moved to “amend” the district court’s order or to certify an interlocutory appeal.
Construing the motion to amend as a motion for rehearing, the district court
denied both motions in September 2005. Memphis filed an answer and
subsequent amended answer. Mississippi filed an amended complaint in
October 2006, eliminating certain claims and clarifying its request for an award
of monetary damages for Memphis’s alleged misappropriation of Mississippi’s
groundwater.
In June 2007, Memphis moved for judgment on the pleadings, again
arguing that Tennessee was an indispensable party to the suit. Memphis also
moved for partial summary judgment on several of Mississippi’s claims. In
September 2007, the court denied the motions.
groundwater pumping is not controlled by Tennessee law, but cites no legal authority for that
conclusion, and neither does it address the provisions of Tennessee law cited in Memphis’s
brief.
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In late January 2008, shortly before the bench trial was to start, the
district court announced that it had decided sua sponte to revisit the issue of
Tennessee’s possible status as an indispensable party and thus the court’s
subject-matter jurisdiction. After briefing from the parties and oral argument,
the district court dismissed the suit for failure to include Tennessee, an
indispensable party.3 Mississippi appeals.
II. DISCUSSION
A. Standard of Review
We review the district court’s decision to dismiss for failure to join an
indispensable party for an abuse of discretion. HS Res., Inc. v. Wingate, 327
F.3d 432, 438-39 (5th Cir. 2003). Determining whether an entity is an
indispensable party is a highly-practical, fact-based endeavor, and “[Federal
Rule of Civil Procedure] 19’s emphasis on a careful examination of the facts
means that a district court will ordinarily be in a better position to make a Rule
19 decision than a circuit court would be.” Pulitzer-Polster v. Pulitzer, 784 F.2d
1305, 1309 (5th Cir. 2006). However, “[a] court abuses its discretion when its
ruling is based on an erroneous view of the law.” Chaves v. M/V Medina Star,
47 F.3d 153, 156 (5th Cir. 1995).
Determining whether to dismiss a case for failure to join an indispensable
party requires a two-step inquiry. First the district court must determine
whether the party should be added under the requirements of Rule 19(a). Rule
3
In its opinion dismissing this suit, the district court directed that the Arkansas
Attorney General should be put on notice of the pendency of this action and any future action
filed in the U.S. Supreme Court, although the court refrained from determining whether
Arkansas is also an indispensable party.
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19(a)(1) requires that a person subject to process and whose joinder will not
deprive the court of subject-matter jurisdiction be joined if:
(A) in that person’s absence, the court cannot accord complete relief
among existing parties; or (B) that person claims an interest
relating to the subject of the action and is so situated that disposing
of the action in the person’s absence may: (i) as a practical matter
impair or impede the person’s ability to protect the interest; or (ii)
leave an existing party subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent obligations because of
the interest.
F ED. R. C IV. P. 19(a)(1). While the party advocating joinder has the initial
burden of demonstrating that a missing party is necessary, after “an initial
appraisal of the facts indicates that a possibly necessary party is absent, the
burden of disputing this initial appraisal falls on the party who opposes joinder.”
Pulitzer-Polster, 784 F.2d at 1309.
If the necessary party cannot be joined without destroying subject-matter
jurisdiction, the court must then determine whether that person is
“indispensable,” that is, whether litigation can be properly pursued without the
absent party. HS Res., 327 F.3d at 439. The factors that the district court is to
consider in making this determination are laid out in Rule 19(b):
(1) the extent to which a judgment rendered in the person’s absence
might prejudice that person or the existing parties; (2) the extent to
which any prejudice could be lessened or avoided by; (A) protective
provisions in the judgment; (B) shaping the relief; or (C) other
measures; (3) whether a judgment rendered in the person’s absence
would be adequate; and (4) whether the plaintiff would have an
adequate remedy if the action were dismissed for nonjoinder.
F ED. R. C IV. P. 19(b).
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No. 08-60152
Mississippi contends that the district court misapplied Rule 19 in holding
that Tennessee is a necessary and indispensable party because its suit does not
implicate any sovereign interest of Tennessee. Mississippi argues that its suit
does not require an equitable apportionment of the Aquifer because the state
owns the groundwater resources of the state as a self-evident attribute of
statehood, and thus there is no interstate water to be equitably apportioned.
Mississippi further argues that it is not seeking relief for damages caused by the
direct actions of Tennessee, and therefore the suit is not an action between
states invoking the original jurisdiction of the Supreme Court.
Memphis responds that the district court correctly determined that the
nature of Mississippi’s claims and asserted ownership of a water resource that
it shares with Tennessee makes Tennessee an indispensable party to suit.
Memphis argues that because Tennessee’s sovereign ownership rights in the
Aquifer water, the same which Mississippi seeks to protect, are implicated, the
case cannot be properly resolved without Tennessee’s participation. Memphis
points to a century of Supreme Court case law addressing the equitable
apportionment of interstate waters among states to argue that the district court
correctly held that joining Tennessee would create a suit between states that
must be filed in the Supreme Court.4
B. Tennessee is a Necessary Party to this Water Ownership Dispute
4
Tennessee, participating in this appeal as amicus curiae, asserts that it has a
sovereign interest in its share of Aquifer water as great as that asserted by Mississippi, and
it therefore is a necessary and indispensable party to any suit over Memphis’s withdrawals
from the Aquifer.
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The district court held that Tennessee was a necessary party under Rule
19(a)(1) because in its absence complete relief could not be accorded between
Memphis and Mississippi. The court explained that it could not determine
whether Memphis had misappropriated water from the Aquifer without
determining what portion of the Aquifer belongs to Mississippi and Tennessee
respectively, and thus an equitable apportionment of the Aquifer between the
states was required. In so holding, the district court rejected Mississippi’s
argument, renewed on appeal, that only Mississippi’s water is at issue.
Mississippi’s fundamental argument as to why Tennessee’s presence in the
lawsuit is unnecessary is that the Aquifer’s water is not an interstate resource
subject to equitable apportionment, and therefore Tennessee’s sovereign
interests are not implicated by the suit.
We find that the district court made no error of law as to the necessity of
equitably apportioning the Aquifer. The Aquifer is an interstate water source,
and the amount of water to which each state is entitled from a disputed
interstate water source must be allocated before one state may sue an entity for
invading its share. See Hinterlander v. La Plata River & Cherry Creek Ditch Co.,
304 U.S. 92, 104-05 (1938). Allocation of an interstate water source is
accomplished through a compact approved by Congress or an equitable
apportionment. Id.
“Equitable apportionment is the doctrine of federal common law that
governs disputes between states concerning their rights to use the water of an
interstate stream.” Colorado v. New Mexico, 459 U.S. 176, 183 (1982). The
Supreme Court has described the applicability of this doctrine in broad terms:
[W]henever . . . the action of one state reaches, through the agency
of natural laws, into the territory of another state, the question of
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No. 08-60152
the extent and the limitations of the rights of the two states
becomes a matter of justiciable dispute between them, and this
court is called upon to settle that dispute in such a way as will
recognize the equal rights of both and at the same time establish
justice between them.
Kansas v. Colorado, 206 U.S. 46, 97-98 (1907). Determining Mississippi and
Tennessee’s relative rights to the Aquifer brings this case squarely within the
original development and application of the equitable apportionment doctrine.
The fact that this particular water source is located underground, as opposed to
resting above ground as a lake, is of no analytical significance. The Aquifer
flows, if slowly, under several states, and it is indistinguishable from a lake
bordered by multiple states or from a river bordering several states depending
upon it for water. See, e.g., Nebraska v. Wyoming, 515 U.S. 1 (1995) (allocation
of North Platte River); Wisconsin v. Illinois, 449 U.S. 48, 50 (1980) (amending
order allocating usage of portions of Lake Michigan).5
Mississippi argues that it owns a fixed portion of the Aquifer because it
controls the resources within its state boundaries, citing to Mississippi and
federal law demonstrating the state’s sovereign rights over the soil, forest,
minerals, etc. Despite Mississippi’s contentions, it is clear that the Aquifer is
not a fixed resource like a mineral seam, but instead migrates across state
5
A handful of Supreme Court cases mention aquifers in the context of interstate water
disputes. See Texas v. New Mexico, 462 U.S. 554, 556-57, n.1, 2 (1983) (discussing role of New
Mexico aquifers feeding the Pecos River, subject of litigation, and possible detrimental effects
of pumping); Wisconsin, 449 U.S. at 50 (court order amending prior decree with requirements
including “to the extent practicable allocations to new users of Lake Michigan water shall be
made with the goal of reducing withdrawals from the Cambrian-Ordovician aquifer”). While
these opinions do not address aquifer allocation directly, the fact that the aquifers were not
treated differently from any other part of the interstate water supply subject to litigation
supports the conclusion that the Aquifer at issue must be apportioned.
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No. 08-60152
boundaries. The Supreme Court has consistently rejected the argument
advanced by different states, and advanced by Mississippi in this lawsuit, that
state boundaries determine the amount of water to which each state is entitled
from an interstate water source.6 See, e.g., Hinterlander, 304 U.S. at 102
(Colorado’s contention that it “rightfully may divert and use . . . the waters
flowing within her boundaries in this interstate stream . . . cannot be
maintained. The river throughout its course in both states is but a single stream,
wherein each state has an interest which should be respected by the other,”
quoting Wyoming v. Colorado, 259 U.S. 419, 466 (1922)).
The Aquifer must be allocated like other interstate water resources in
which different states have competing sovereign interests, and whose allotment
is subject to interstate compact or equitable allocation. Therefore, we find no
error in the district court’s conclusion that Tennessee’s presence in the lawsuit
was necessary to accord complete relief to Mississippi and Memphis. See
Pulitzer-Polster, 784 F.2d at 1309.
C. Tennessee’s Joinder Would Destroy Subject-Matter Jurisdiction
After finding Tennessee to be a necessary party, the district court held
that it was without power to join the state because original and exclusive
jurisdiction over a suit between Mississippi and Tennessee would reside in the
United States Supreme Court. See 28 U.S.C. § 1251(a) (“The Supreme Court
6
Notably, the equitable apportionment doctrine has been used to address other
migratory interstate resources, including the apportionment of fish that make an interstate
migration. See Idaho v. Oregon, 462 U.S. 1017, 1024 (1983) (“Although that doctrine has its
roots in water rights litigation, the natural resource of [migratory salmon] is sufficiently
similar to make equitable apportionment an appropriate mechanism for resolving allocative
disputes.”).
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No. 08-60152
shall have original and exclusive jurisdiction of all controversies between two or
more States.”). Mississippi argues that even if Tennessee’s presence in the suit
is necessary, it does not invoke the Supreme Court’s original jurisdiction, and
the district court could therefore retain jurisdiction over the case. We disagree.
Mississippi argues that the district court has subject-matter jurisdiction
because this suit is only against Memphis, not Tennessee, and would at most be
subject to the Supreme Court’s original but non-exclusive jurisdiction. See 28
U.S.C. § 1251(b)(3) (“The Supreme Court shall have original but not exclusive
jurisdiction of . . . All actions or proceedings by a State against the citizens of
another State.”). The Supreme Court has in the past stated a preference that
such suits be brought in the district court in the first instance. See United States
v. Nevada, 412 U.S. 534, 538 (1973). Mississippi’s argument that its suit is not
against Tennessee hangs on the assertion that only Memphis’s actions, and not
Tennessee’s, are at issue. See Milwaukee, 406 U.S. at 97 (holding that where
Illinois sued Milwaukee for polluting Lake Michigan, not mandatory to sue
Wisconsin as well). However, that contention ignores that, in contrast to
Milwaukee, this suit requires an allocation of water rights between states:
Memphis’s actions are not wrongful unless there is a defined allocation of water
that it is allowed to pump. Tennessee is a necessary party under Rule 19(a) on
that basis, and the suit is thus one between two states.
Mississippi correctly argues that a suit involving interstate water does not
automatically invoke the jurisdiction of the Supreme Court and strip the district
court of jurisdiction. However, the cases to which Mississippi analogizes are
distinguishable. Four cases upon which Mississippi relies most heavily are suits
against the U.S. Army Corps of Engineers (“Corps of Engineers”), not against
other states, and therefore plainly not within the scope of 28 U.S.C. § 1251(a).
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See Alabama v. U.S. Army Corps of Eng’s, 424 F.3d 1117, 1130 (11th Cir. 2005)
(“Alabama II”) (recognizing that Alabama’s suit against the Corps of Engineers
was not a dispute between states, despite intervention of other states as parties,
because the litigation was over how the Corps of Engineers should fulfill its
obligations under federal law); Georgia v. U.S. Army Corps of Eng’s, 302 F.3d
1242, 1254-55 (11th Cir. 2002) (same); Alabama v. U.S. Army Corps of Eng’s, 382
F. Supp. 2d 1301, 1309-12 (N.D. Ala. 2005) (“Alabama I”) (same); also South
Dakota v. Ubbelohde, 330 F.3d 1014, 1025-26 (8th Cir. 2003) (same).
Mississippi also relies heavily on Milwaukee v. Illinois, the case that the
district court identified as the basis for its earlier rulings denying Memphis’s
arguments that Tennessee is an indispensable party. 406 U.S. 91 (1972).
Milwaukee is distinguishable. Milwaukee involved a federal common law
nuisance action to stop alleged pollution of Lake Michigan by the city of
Milwaukee’s sewage disposal practices. The Supreme Court denied Illinois’s
motion for leave to file a bill of complaint against Wisconsin, holding that the
action did not trigger the Supreme Court’s exclusive jurisdiction. The Court
found that, under appropriate pleadings, Wisconsin could be joined as a
defendant, but that it was not a mandatory defendant on the facts of the case.
Id. at 97. The Court concluded that the case fell under 28 U.S.C. § 1251(b)(3),
giving the Supreme Court original but not exclusive jurisdiction over certain
actions, and therefore Illinois could and should file suit in the appropriate
federal district court. Id. at 108.
Mississippi argues that Milwaukee is a more analogous case than the
water-allocation cases because Mississippi, like Illinois, merely seeks to enjoin
the actions of the city of Memphis and does not have any claim against
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Tennessee as a state. Mississippi’s argument fails, however, because of the
crucial factual difference between the two cases: Milwaukee involved stopping
the pollution of what was agreed to be an interstate water body, while
Mississippi claims sole ownership of a portion of the interstate water at issue.
Mississippi’s suit necessarily asserts control over a portion of the interstate
resource Memphis currently utilizes pursuant to Tennessee law. See, e.g., T ENN.
C ODE A NN. § 68-221-707(a)-(b) (“The [Tennessee Department of Environment
and Conservation] shall exercise general supervision over the operation and
maintenance of public water systems throughout the state. . . . [including] all the
features of operation and maintenance which do or may affect the quality or
quantity of the water supplied.”). Tennessee’s water rights are clearly
implicated, even if Mississippi has sued only Memphis. Cf. Colorado v. Kansas,
320 U.S. at 393 (noting that controversy between states over rightful shares of
the Arkansas River “is not to be determined as if it were one between two private
riparian proprietors or appropriators”); Kansas v. Colorado, 206 U.S. at 100
(noting the court must consider the effect that one state’s increased share of
water has on another state in order to determine amount of water each is
entitled to from river).
Tennessee cannot be joined to this suit without depriving the district court
of subject-matter jurisdiction because a suit between Mississippi and Tennessee
for equitable apportionment of the Aquifer implicates the exclusive jurisdiction
of the Supreme Court under 28 U.S.C. § 1251(a).
D. There Was No Abuse of Discretion in Dismissing the Suit
Having concluded that Tennessee is a necessary party whose joinder would
deprive the district court of subject-matter jurisdiction, we turn to whether the
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district court abused its discretion in dismissing the suit under Rule 19(b).
When assessing the Rule 19(b) factors, the relevant inquiry is “whether, in
equity and good conscience, the action should proceed among the existing parties
or should be dismissed.” F ED. R. C IV. P. 19(b); see Pulitzer-Polster, 784 F.2d at
1312 (“[W]e must assess the factors set out in Rule 19(b), seeking to avoid
manifest injustice while taking full cognizance of the practicalities involved.”).
We find no abuse of discretion in the district court’s determination that
Tennessee is an indispensable party and that in equity and good conscience the
suit should be dismissed. Clearly a judgment rendered in Tennessee’s absence
would be enormously prejudicial to Tennessee’s sovereign interest in its water
rights. The specter of a determination of Tennessee’s water rights without the
its participation in the suit is itself sufficiently prejudicial to render the state an
indispensable party. Cf. Hinterlider, 304 U.S. at 106-07 (noting that judicial
apportionment of water from an interstate stream is binding on all water
claimants from each state); New Jersey v. New York, 283 U.S. 336, 346 (1931)
(“[A river] offers a necessity of life that must be rationed among those that have
power over it. . . . Both States have real and substantial interests in the River
that must be reconciled as best they may.”). Further, there was no error in the
district court’s finding that it could not fashion restrictions in the judgment so
as to avoid the threat of prejudice to Tennessee’s sovereign interests or that a
judgment rendered without Tennessee’s participation would be inadequate. Cf.
Idaho v. Oregon, 462 U.S. 1017, 1025 (1983) (“[W]henever . . . the action of one
State reaches through the agency of natural laws into the territory of another
State, the question of the extent and the limitations of the rights of the two
States becomes a matter of justiciable dispute between them. . . .”); Colorado v.
Kansas, 320 U.S. at 392 (“The reason for judicial caution in adjudicating the
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relative rights of states [to shares of interstate water] is that . . . they involve the
interests of quasi-sovereigns, [and] present complicated and delicate questions.
. . .”).
Finally, Mississippi will have an adequate remedy despite this suit’s
dismissal. See 28 U.S.C. § 1251(a). In an equitable apportionment action, the
Supreme Court might take one of several actions, such as concluding that the
existing withdrawals of groundwater from the Aquifer in Tennessee are
appropriate or limiting the total volume of Aquifer water that may be withdrawn
by either party. See Colorado v. Kansas, 320 U.S. at 391; New Jersey, 283 U.S.
at 346.7
III. CONCLUSION
For the foregoing reasons we AFFIRM the judgment of the district court.
7
Of course, the parties might also negotiate an interstate compact allocating the
resource going forward rather than continue litigation. See Colorado v. Kansas, 320 U.S. at
392 (encouraging the parties to seek a negotiated, political solution rather than requiring the
Supreme Court to make a necessarily imperfect determination).
14