Reported / Citable
Background
Environmental groups sued Corona Clay Company under the Clean Water Act, alleging stormwater-permit violations from clay-recycling operations near Temescal Creek. Corona won the first trial, but the Ninth Circuit ordered a second after the Supreme Court changed the standard for indirect discharges. The environmental groups then prevailed at the second trial.
After that judgment, the Supreme Court decided Sackett v. EPA, substantially narrowing which wetlands and waters count as “waters of the United States.” Corona promptly argued that Temescal Creek might fall outside the Act. It sought dismissal for lack of subject-matter jurisdiction or, alternatively, a new trial under Federal Rule of Civil Procedure 59, even though it had not disputed the creek’s covered status in either earlier trial.
The Court’s Holding
The Ninth Circuit held first that whether Temescal Creek is a water of the United States is an element of the Clean Water Act claim, not a limit on the federal court’s adjudicatory power. The district court therefore retained subject-matter jurisdiction and correctly refused to dismiss the action on jurisdictional grounds.
But the panel ordered further proceedings under Rule 59. Before Sackett, contesting the creek’s status was foreclosed or practically unavailable under controlling law; the intervening decision made the issue viable, and Corona raised it at the first meaningful opportunity. The existing record did not allow the appellate court to decide whether Temescal Creek meets Sackett’s new test. Corona was therefore entitled to litigate that merits issue in a new trial.
Key Takeaways
- Whether a particular water is covered by the Clean Water Act is a merits issue, not a subject-matter-jurisdiction issue.
- An intervening change in controlling law can justify a new trial on an issue that a party did not litigate when prior law effectively foreclosed it.
- The party seeking relief should raise the newly viable issue at the earliest opportunity and explain why the existing record cannot resolve it.
- Clean Water Act litigants should reassess factual proof of continuous surface connections and covered waters under Sackett.
Why It Matters
California businesses, regulators, and environmental organizations continue to face major uncertainty about federal water jurisdiction after Sackett. This decision provides a procedural path for applying that new rule in pending cases while clarifying that a failure of coverage defeats the claim on the merits rather than stripping the court of power. Parties should develop hydrological and geographic evidence early rather than treating coverage as an assumed jurisdictional fact.