Reported / Citable
Background
Environmental groups sued Corona Clay Company over stormwater discharges from clay-recycling operations near Temescal Creek. After an initial defense verdict and an appellate remand, the groups prevailed at a second trial under then-existing Clean Water Act law.
The Supreme Court then decided Sackett v. EPA, narrowing which wetlands and waters qualify as “waters of the United States.” Corona promptly sought postjudgment relief, arguing it had never had a meaningful reason to contest the creek’s federal status under the broader law applied at trial.
The Court’s Holding
The Ninth Circuit held that the creek’s covered-water status goes to the merits, not federal subject-matter jurisdiction. The district court therefore properly refused to dismiss the case for lack of jurisdiction.
But the panel reversed the denial of a new trial under Federal Rule of Civil Procedure 59. An intervening change in controlling law can reopen an issue that a party reasonably bypassed because a solid wall of authority had foreclosed it, provided the party raises the issue at its first available opportunity while the court retains jurisdiction. The existing record did not permit an appellate finding that Temescal Creek satisfies Sackett, so further proceedings are required.
Key Takeaways
- Whether a discharge reaches a federally covered water is an element of a Clean Water Act claim, not a prerequisite to the court’s power to hear it.
- A major intervening decision can justify Rule 59 relief on an issue not contested under the former legal regime.
- Admissions made against the backdrop of superseded law may not bind a party when the relevant factual test materially changes.
- On remand, proceedings may be limited to Temescal Creek’s status under Sackett.
Why It Matters
California businesses and environmental plaintiffs should preserve evidence about a water body’s permanence, continuity, and connection to traditional navigable waters even when current law appears settled. A regulatory assumption accepted at one trial may become the decisive factual dispute after a change in Supreme Court doctrine.
The opinion also separates merits defects from jurisdictional ones, reducing the risk that a late coverage challenge automatically erases the entire federal action.