City of Des Moines IA looses lawsuit against drainage districts for pollution

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http://www.desmoinesregister.com/story/ ... /97080760/

Environmentalists say ruling could slow water quality efforts
Grant Rodgers and Donnelle Eller , Des Moines Register Published 8:28 a.m. CT Jan. 27, 2017 | Updated 6:55 p.m. CT Jan. 27, 2017


Des Moines Water Works CEO Bill Stowe responds to an Iowa Supreme Court ruling that the utility cannot win damage payments from drainage districts accused of sending fertilizers and other pollution unchecked into the Raccoon River.

Des Moines Water Works CEO Bill Stowe says common ground can be found if people on both sides are willing to compromise.

An Iowa Supreme Court ruling that prevents Des Moines Water Works from getting damages from north Iowa drainage districts over high nitrate levels might take pressure off the state to do something about its flagging water quality, environmentalists said Friday.

The Supreme Court ruling was a blow to the Des Moines utility's controversial lawsuit that claims underground drainage tiles in Sac, Calhoun and Buena Vista counties funnel high nitrate levels from farm fields into the Raccoon River, a source of water for 500,000 central Iowa residents.

Water Works hoped to reverse nearly a century of legal precedent that's given the districts immunity from being sued for damages. The utility argues the protection relieves the drainage districts of responsibility to limit farm runoff into streams and rivers.

It also wants to force drainage districts to seek permits under the federal Clean Water Act. It's a move that would increase regulation for about 3,000 districts statewide, and indirectly farmers across the state and, possibly, the nation. That portion of the lawsuit will still move forward toward a trial, slated for June.

"We're disappointed, but not surprised," said Bill Stowe, CEO of Des Moines Water Works. "The court's ruling today does nothing to clean up Iowa's lakes, rivers and streams."

Des Moines Water Works CEO Bill Stowe responds to an Iowa Supreme Court ruling that the utility cannot win damage payments from drainage districts accused of sending fertilizers and other pollution unchecked into the Raccoon River.

It was a relief to northern Iowa counties, potentially on the hook for the capital’s water-quality problems, and to Iowa farmers and ag groups, who are encouraged that the utility’s remaining claims could be dismissed.

Paying damages would have been "an enormous burden that I don’t know we could have financially survived,” said Colin McCullough, a drainage district attorney for Sac County.

“It would have been devastating," said McCullough, adding that the drainage districts have no assets. Insurance providers have said they would not provide coverage for the lawsuit.

Farm groups celebrated the court's decision to uphold the longstanding precedent. They said it's been a distraction from work to improve water quality.

"It renews hope that the federal district judge will dismiss the case and Des Moines Water Works will abandon its expensive and divisive litigation," said Rolland Schnell, president of the Iowa Soybean Association board.

"It also renews our optimism that the utility will re-engage in a cooperative approach with rural Iowa to make real and long-lasting improvements in water quality," said Schnell, who farms near Newton.

But clean water advocates worried the decision would reduce pressure on lawmakers to create substantial funding for water quality improvements — and efforts to set goals around reducing nitrogen and phosphorus levels.

The lawsuit has added pressure to implement the Iowa Nutrient Reduction Strategy, a voluntary plan to cut nitrogen and phosphorus levels by 45 percent from rural and urban areas. It seeks to reduce Iowa's contribution to the dead zone in the Gulf of Mexico, an area about the size of Connecticut that's unable to support aquatic life each summer.

Iowa also struggles with a growing impaired waters list and toxic blue-green algal blooms that can befoul state lakes in the summer. The state issued a record number of beach advisories last year, warning swimmers against using lakes.

Ralph Rosenberg, director of the Iowa Environmental Council, said the decision doesn’t change Iowans’ need for improved water. “The public can’t swim in their favorite lakes or fish in their favorite rivers,” he said. “The urgency, responsibility and accountability issues remain.”

Environmental and ag groups have pushed for the state to raise the sales tax three-eighths of 1 cent and dedicate that money to improving Iowa's natural resources, including water quality. Several other plans have been proposed, but none have found traction so far with lawmakers.

Des Moines Water Works CEO Bill Stowe speaks during a press conference following an Iowa Supreme Court ruling that the utility cannot win damage payments from drainage districts accused of sending fertilizers and other pollution unchecked into the Raccoon River on Friday, Jan. 27, 2017, in Des Moines. Brian Powers, Brian Powers/The Register

In writing the majority opinion, Justice Thomas Waterman said a lawsuit is not the proper method for the water works to seek repayment for the costs of filtering nitrates from drinking water. That policy should be decided by Iowa lawmakers.

"Ultimately, this case is about who pays for nitrate removal from the drinking water that reaches our kitchen faucets," he wrote. "The DMWW does not claim nitrate levels render the Raccoon River unsafe for swimming or fishing. All parties agree the DMWW removes unsafe levels of nitrates from the water it provides to its customers ... It is for the Legislature to decide whether to reallocate the costs of nitrate reduction."

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The Water Works board filed the lawsuit in 2015, claiming high nitrate levels in the Raccoon River forced the utility to spend millions of dollars to run a removal facility to get clean water for its customers. Unlike factories and cities, drainage districts and farmers have not been required by the federal government to get permits regulating what pollutants they can discharge downstream.

Though the lawsuit was filed in federal court in the Northern District of Iowa, the Iowa justices heard pretrial arguments through a rare procedural move known as a "certified question" in which state supreme courts tackle questions about state law before a federal judge issues a decision.

U.S. District Judge Mark Bennett asked the justices to step in after the three counties requested he dismiss part of the lawsuit, claiming they should be immune from paying damages because of Iowa precedent.

Justice Edward Mansfield and Justice Bruce Zagar joined the majority opinion written by Waterman, while Chief Justice Mark Cady and Justice Brent Appel joined only in part. The chief justice wrote a partial dissent, arguing that drainage district immunity may need to be revisited by the court in the future.
Iowa Supreme Court Chief Justice Mark Cady at the IowaBuy Photo

Iowa Supreme Court Chief Justice Mark Cady at the Iowa State Capitol in Des Moines. (Photo: Michael Zamora/The Register)

"It is abundantly clear that Iowa’s drainage district law did not originate and was not developed over time with the thought that a drainage district could be a polluter," he wrote. "If it had, I am convinced our law would have developed in a way that would have recognized a clear remedy. ... The role and purpose of drainage districts in Iowa is important, but no more important than this state’s enduring role of good stewardship."

Though the chief justice ruled with the majority, Cady's writing still read like a call to action for lawmakers and Iowa residents, said Josh Mandelbaum, a staff attorney with the Environmental Law and Policy Center in Des Moines. "Iowa has serious water pollution problems and there is widespread consensus that agricultural pollution is a significant contributor to those problems,” he said.

The case law that gave drainage districts immunity developed at the outset of the 20th century when clearing water from fields was viewed by lawmakers and the court as protecting public welfare and health. The Iowa Drainage District Association argued before the court that any changes to Iowa law that would alter the protection should be made by lawmakers.

Iowa Agriculture Secretary Bill Northey called the decision "a significant loss for Des Moines Water Works."

The utility's "failed strategy seeks to circumvent well-established Iowa law with more than 100 years of precedent," Northey said in a statement.

"Unfortunately, it has already cost Des Moines Water Works ratepayers more than $1 million in lawyer fees that could be better spent improving their infrastructure and serving their customers," said Northey, who farms near Spirit Lake.

Des Moines Water Works' board agreed to spend up to $1.35 million to pursue the lawsuit, but the utility has only spent about $821,000 so far. Several ag groups have contributed about $1 million to help the counties defend themselves against the lawsuit, officials have said.

"While Iowans have continued to take on the challenge of improving water quality and investing in additional conservation practices, the lawsuit has been a needless distraction from our collaborative, research-based approach that is working with Iowans in rural and urban areas across the state to improve water quality,” Northey said.

The three counties have argued in court filings that they add a relatively small amount of nitrates to the Raccoon River and make up less than 1 percent of its watershed north of Des Moines. Agriculture leaders have also questioned the practicality of regulating drainage districts, which cover about a quarter of the 36 million acres that make up Iowa.

Learn the basics about the lawsuit Des Moines Water Works filed against three Iowa counties because of high nitrate levels in the Raccoon River. Kelsey Kremer/The Register

Kurt Hora, president of the Iowa Corn Growers Association board, said the ruling is "good news for farmers," but the remaining questions in the lawsuit still threatens the industry.

"The legal issues in this lawsuit could restrict our ability to farm, both practically and economically," said Hora, who farms near Washington, Ia. "A favorable outcome in the lawsuit will allow us to continue to try new ways of improving soil and water conservation."