Iowa Supreme Court Rejects Water Utility’s Effort Against Drainage Districts

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A divided Iowa Supreme Court on Jan. 27 upheld a legal doctrine going back 100 years that protects agriculture drainage districts against lawsuits.

The ruling presents an obstacle for the Des Moines Water Works, which is pursuing a lawsuit in federal court in Sioux City filed in March 2015.

The water utility for 500,000 Iowans alleges the three counties that oversee 10 agricultural drainage districts should be required to obtain federal water pollution discharge permits and pay the utility the more than $1.4 million it has spent to remove nitrates from the water supply.

The decades-old rules that govern drainage systems — first established in Article 1 of the Iowa Constitution and updated periodically by the Legislature — have largely been untouchable in the agriculture-heavy state. But attorneys for the utility say agriculture has changed dramatically in the last 100 years and that the health implications of farm chemicals in water are clearer, justifying a fresh look by the courts.

The majority concluded that changes in environmental laws have not undermined the basis for the drainage districts’ immunity, because the districts have limited purposes for existing and limited governmental power.

“While attitudes toward the environment may differ today from when the first drainage tiles were placed generations ago, tort claims based on alleged pollution are nothing new,” the court said.

The court said Iowa law “immunizes farmers who comply with fertilizer label instructions from liability for nitrate contamination, including money damage claims or cleanup costs. We defer to the legislature whether to reassess that policy choice.”

The court concluded that the cost of removing nitrate from the water is about one cent per day for Des Moines customers and it is up to lawmakers to decide whether the costs should be shifted back to the farmers.

The opinion is written by Thomas Waterman and fully supported by Edward Mansfield and Bruce Zager. Chief Justice Mark Cady and Brent Appel said they believe Water Works likely has some avenues to pursue action against the drainage districts.

Appel said in a dissenting opinion that the lawsuit should be allowed to proceed and Water Works should be able to sue at least for compensation for the cost of cleaning up the water.

Cady agreed.

“One of the fundamental principles of law is for remedies to be available when we discover wrongs. Pollution of our streams is a wrong, irrespective of its source or its cause,” he said.

Justices David Wiggins and Daryl Hecht did not participate in the opinion.

U.S. District Judge Mark Bennett, who initially oversaw the case, decided to ask the Supreme Court to clarify the issue of immunity for drainage districts concluding the novel legal issues presented in the case haven’t been directly addressed by Iowa’s highest court or federal courts.

The case returns to federal court for further proceedings. If the judge dismisses the state claims based on the court’s opinion Water Works still has federal claims to pursue which include seeking to have the districts obtain federal water pollution permits.

The ruling is a victory for farmers because it means the court holds that they cannot be held financially responsible for pollution they may send downstream.

“By adhering to the law the court helped avoid potential catastrophe for Iowa’s farm economy,” said Mike Reck, an attorney for the drainage districts.

Water Works officials and their attorneys had no immediate comment.