Harris v. Henry Miller Reclamation District No. 2131

District Court, E.D. California·Decided January 24, 2022·No. 1:21-cv-00882·Unknown

Opinion

F. RUSSELL HARRIS, et al., CASE NO. 1:21-cv-00882-AWI-EPG

Plaintiffs, ORDER GRANTING MOTION TO

DISMISS v.

DISTRICT NO. 2131, et al., Defendants. (Doc. No. 15)

Plaintiffs F. Russell Harris (“Harris”) and Harris Farms, LP (“Harris Farms”) contend that the San Luis Canal Company (“SLCC”), Henry Miller Reclamation District No. 2131 (“HMRD”) and persons controlling those entities (together with SLCC and HMRD, “Defendants”) violated the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment by blocking a water reuse plan. They also seek judicial declarations and writs of mandate clearing the way for implementation of the plan. Defendants move to dismiss the Complaint and to strike a prayer for punitive damages as to HMRD. For the reasons set forth below, the motion to dismiss will be granted and the motion to strike will be denied as moot. Defendant SLCC is a private mutual water company established in 1913 that owns water rights on behalf of its shareholders and that is charged with ensuring delivery of water to its shareholders in Merced County and Fresno County. Doc. No. 1 at 3:23-25.1 SLCC is governed by

1 Unless otherwise indicated, page citations to documents on the electronic docket for this case are to the page s even directors elected to one-year terms. Id. ¶ 5. Defendant HMRD is a water reclamation district. Doc. No. 1 ¶ 6. As alleged, HMRD is “a p ublic and governmental agency” overseen by a seven trustees elected to four-year terms. Id. SLCC formed HMRD in 1999 “to deliver the water supplied by [] SLCC to the farmland within SLCC’s district, as well as perform canal maintenance and operate drainage facilities.” Id. ¶ 17. HMRD took “ownership and control of a unique district boundary that included [] the canals, ditches and drains owned by the SLCC,” but “the ownership of water rights and responsibility to provide water to customers remained with SLCC.” Id. ¶¶ 17-18. HMRD and SLCC “have merged so thoroughly over the past two decades that they are nearly indistinguishable.” Id. at 4:1-2. For example, they operate from the same office, share the same website, and have identical controlling boards and the same employees. Id. at 4:2-6. SLCC and HMRD “operate as a single, unified unit, when it benefits them, or as distinct entities to take advantage of the public and private protections respectively afforded to them.” Id. ¶ 19. Defendant John Wiersma is general manager of SLCC and HMRD. Doc. No. 1 ¶ 14. Each of the other individual Defendants (namely, James Nickel, Cannon Michael, David Pruitt, Robert McDonald, Douglas Goodman, David Carlucci and Michael Palazzo) is both an SLCC trustee and an HMRD director.2 Id. ¶¶ 7-13. Harris is a lifelong Central Valley farmer, with a “large, vertically integrated farming operation specializing in almonds,” who “owns, leases, or otherwise operates real property served by [] SLCC and HMRD.” Doc. No. 1 at 4:7-10. Harris is also the general manager of Harris Farms, which is a California limited partnership that owns real property served by SLCC and HMRD.3 Id. ¶¶ 3-4. Harris has managed and farmed almonds on property served by SLCC and HMRD for the past four years. Id. ¶ 21. In February 2021, Harris became a shareholder in SLCC through the purchase of property. Id. Harris presented to the SLCC and HMRD boards a plan to reuse water on his land using his own water collection and distribution system (the “Project”). Doc. No. 1 ¶ 22. To implement 2 Wiersma, Nickel, Michael, Pruitt, McDonald, Goodman, Carlucci and Palazzo are referred to collectively herein as the “Individual Defendants.” t he Project, reused water would have to cross under a drain at the intersection of Mint Road and F airfax Road (“Mint/Fairfax”) and under a drain east of Fairfax Road (“San Juan Drain #3”), in a ddition to crossing the Temple-Santa Rita Canal in two locations. Id. ¶ 22. As alleged in the Complaint, “HMRD operates and maintains Mint/Fairfax and San Juan Drain #3 through recorded, non-exclusive easements for its benefit” and “is the fee title owner of the Temple-Santa Rita Canal.” Id. There was no “formal application process for the Project,” but Defendants declined to provide licenses for the ditch and canal crossings required for the Project and “exploited their dual positions with HMRD and SLCC to institute a series of procedural and financial obstacles” to the Project as a result of “personal animus” toward Harris. Doc. No. 1 ¶¶ 27-28, 41, 52, 129.c., 139.c.- d. Based on the foregoing allegations, Harris brings claims under 42 U.S.C. § 1983 against all Defendants for violations of the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment, as well as state law claims for declaratory relief and writs of mandate involving property rights, the scope of HMRD’s and SLCC’s authority and other issues bearing on implementation of the Project. Under Federal Rule of Civil Procedure 12(b)(6), a cause of action may be dismissed where a plaintiff fails “to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Dismissal under Rule 12(b)(6)4 may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011); Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121–22 (9th Cir. 2008). In reviewing a complaint under Rule 12(b)(6), all well-pleaded allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Kwan v. SanMedica, Int’l, 854 F.3d 1088, 1096 (9th Cir. 2017). However, complaints that offer no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will n ot do.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Johnson v. Federal Home Loan Mortg. C orp., 793 F.3d 1005, 1008 (9th Cir. 2015). The Court is “not required to accept as true a llegations that contradict exhibits attached to the Complaint or matters properly subject to judicial notice, or allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Seven Arts Filmed Entm’t, Ltd. v. Content Media Corp. PLC, 733 F.3d 1251, 1254 (9th Cir. 2013). To avoid a Rule 12(b)(6) dismissal, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678; Mollett v. Netflix, Inc., 795 F.3d 1062, 1065 (9th Cir. 2015). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678; Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). “Plausibility” is less than probability but “more than a sheer possibility,” and facts that are “merely consistent” with liability fall short of “plausibility.” Iqbal, 556 U.S. at 678; Somers, 729 F.3d at 960. If a motion to dismiss is granted, “[the] district court should grant leave to amend even if no request to amend the pleading was made ....” Ebner v. Fresh, Inc., 838 F.3d 958, 962 (9th Cir. 2016). However, leave to amend need not be granted if amendment would be futile or the plaintiff has failed to cure deficiencies des

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