Water War Part 2: How City Lost Suit Against Fairfax County

In the spring of 2007 the City of Falls Church and the Fairfax County Water Authority, unable to amicably resolve their differences, met on the field of battle. No bayonets gleamed in the sunlight. No drums beat or trumpets sounded. No cannons roared. But at the end of the day the City, which had sought the engagement, withdrew from the field, defeated as surely as Lee at Gettysburg. So ended the first major battle of the Water War.

The venue was the United States District Court in Alexandria, Senior Judge Claude M. Hilton presiding. After hearing arguments presented by the opposing counsels, the judge dismissed the City’s complaint in an opinion rendered on May 15.

Four Claims of Exclusivity

Falls Church based its claim to exclusive water rights on the theory that federal law takes precedence over state law. The City cited four Acts of Congress as sufficient to “preempt” Virginia law and so prevent Fairfax Water from “poaching” in Falls Church’s system.

Local and Commonwealth laws clearly allow both parties to operate water systems outside their jurisdictional boundaries. The Falls Church’s Charter authorizes it to maintain and operate a “water works” system both “within and without the City.” Under Virginia’s Authorities Act, Fairfax Water has the power to construct and operate a water system “within, outside, or partly within and partly outside one or more of the localities which created the authority.” The only exception would be service to Falls Church City, which would require the authorization of the City Council.

Three Types of Preemption

Under the Supremacy Clause of the Constitution there are three circumstances under which Congress (through specific Acts) can preempt or displace state law. These are (1) through explicitly stating that its enactment displaces state law, (2) by occupying an entire field of regulation to the exclusion of any state law, or (3) through preemption due the state law actually being in conflict with federal law.

In his 15-page opinion, Judge Hilton found no grounds in the Acts to sustain the City’s claim of federal preemption under any of the circumstances.

He first noted that the Supreme Court has admonished lower courts to apply a strong presumption against preemption, particularly in areas traditionally regulated by states. He further stated that in areas of traditional state regulation, there is a presumption that a federal statute has not supplanted state law unless Congress has stated a “clear and manifest” intent. He then proceeded to reject the City’s claims that the Acts demonstrated such an intention to establish an exclusive federal service enclave.

The Acts Unpersuasive

Judge Hilton quickly dismissed the Acts of 1859, which established Washington Aqueduct, and 1926, which authorized the sale of water to Arlington, noting neither Act mentioned Falls Church or provided for an exclusive service territory in Fairfax County.

He found no exclusivity in the 1947 Act either, observing only that it made drinking water available to Northern Virginia residents, provided that all expense was borne by the (then) town of Falls Church, or such other communities requesting such services.

He rejected any claim based on the 1996 Act, stating “The fact that Congress desired to see the federal government exit the water supply business altogether [through selling the Washington Aqueduct] cannot be read as an intention to create an exclusive federal service area in Fairfax County in which the City of Falls Church was granted the lone franchise. [Emphases in the original text]

No Basis for Preemption

Based on these findings, Judge Hilton rejected the City’s claim to the first two types of federal preemption, noting “There is simply no basis to conclude that Congress (1) expressly preempted the ability of one local political subdivision in Virginia, like Fairfax Water, to supply drinking water to residents in Fairfax County, or that Congress (2) intended to occupy the field of local water supply.”

The judge found the City’s claim to the third type of preemption, conflict with federal law, equally unpersuasive. Such preemption would apply if a party were unable to comply with both state and federal requirements or if a state law obstructs the execution of the full objectives of Congress.

Falls Church argued that Section 306 of the 1996 Act authorized the Corps of Engineers to borrow money from the United States for capital improvements and required the City to repay a pro-rata share of the principal and interest. It contended that competition in its service area might undercut its ability to repay its obligations in accordance with the Act, potentially putting it in conflict with federal law.

Judge Hilton first observed that Congress had repealed Section 306 in 2002, but if it had not, the City’s claim still would not stand. He noted that even if the City had entered into a contract with the Corps requiring it to fund a pro-rata share of operations, its charter grants it the power to set rates and charges for water services as the City sees fit. Even assuming that the Aqueduct secured a loan and entered into a repayment contract with the City, he ruled that fact alone would fail to show that Congress intended to grant Falls Church an exclusive service area in Fairfax County.

Case Dismissed

Concluding his opinion, Judge Hilton wrote “Fairfax Water’s attempt to supply ‘interface areas’ that could also be served by the City in no way conflicts with . . . federal purpose. The City cannot overcome the presumption that Congress does not intend to supplant state law and for these reasons this case should be dismissed.”

So it was, and all that remained was to carry the news of the defeat home to Falls Church.

Part Three of this series will continue next week with an account of local reaction to the judge’s opinion and the City’s subsequent appeal of his finding.

Part 1: A Tale of Two Lawsuits