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Stew Farm, Ltd. v. Natural Res. Conservation Serv.

United States Court of Appeals, Sixth Circuit

August 25, 2014

STEW FARM, LTD., Plaintiff-Appellant,
v.
NATURAL RESOURCES CONSERVATION SERVICE; PICKAWAY COUNTY SOIL AND WATER CONSERVATION DISTRICT; WATERSHED MANAGEMENT, LLC; CARL HAMMAN, Defendants-Appellees

Argued August 8, 2014.

Page 555

[Copyrighted Material Omitted]

Page 556

Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 2:12-cv-00299--George C. Smith, District Judge.

ARGUED:

Richard T. Ricketts, RICKETTS CO., LPA, Pickerington, Ohio, for Appellant.

Aaron M. Glasgow, ISAAC WILES BURKHOLDER & TEETOR LLC, Columbus, Ohio, for Appellee Pickaway County.

John J. Stark, UNITED STATES ATTORNEY'S OFFICE, Columbus, Ohio, for Federal Appellee.

Scott E. Williams, HAMMOND SEWARDS & WILLIAMS, Columbus, Ohio, for Watershed Management Appellees.

ON BRIEF:

Richard T. Ricketts, RICKETTS CO., LPA, Pickerington, Ohio, for Appellant.

Aaron M. Glasgow, Mark Landes, ISAAC WILES BURKHOLDER & TEETOR LLC, Columbus, Ohio, for Appellee Pickaway County.

John J. Stark, UNITED STATES ATTORNEY'S OFFICE, Columbus, Ohio, for Federal Appellee.

Scott E. Williams, HAMMOND SEWARDS & WILLIAMS, Columbus, Ohio, for Watershed Management Appellees.

Before: MOORE, SUTTON, and ALARCÓ N, Circuit Judges.[*]

OPINION

Page 557

KAREN NELSON MOORE, Circuit Judge.

STEW Farm, Ltd. brought this suit against a number of defendants involved in the building of grass waterways on property that STEW Farm now owns. STEW Farm alleged that the grass waterways were improperly designed and built and do not conform to federal law. All defendants moved to dismiss the suit on a variety of grounds, including lack of federal subject-matter jurisdiction. The district court concluded that the suit sounded in state tort law with no federal subject-matter jurisdiction and granted the motions dismissing the case. STEW Farm appeals. Because STEW Farm can point to no statute providing an express or implied right of action for its suit, we AFFIRM the district court judgment.

I. BACKGROUND

STEW Farm is the owner of a 300-acre farm in Pickaway County, Ohio. R. 39 (First Am. Compl. ¶ 21) (Page ID #706). The Natural Resources Conservation Service (" NRCS" ) is an agency within the United States Department of Agriculture. 7 U.S.C. § 6962. Watershed Management, LLC and Carl Hamman (collectively, " Watershed" ) are a private corporation and one of its owners. Pickaway County Soil and Water Conservation District (" PCSWCD" ) is a political subdivision created pursuant to Ohio state law which shares office space with NRCS and whose employees are supervised by NRCS. R. 39 (First Am. Compl. ¶ 3) (Page ID #703). Defendant Doug Kohli is an employee of PCSWCD and supervised the projects at issue in this case. Id. ¶ 4 (Page ID #703).[1] STEW Farm seeks money damages and declaratory relief alleging that grass waterways were improperly installed on the farm it now owns.

STEW Farm purchased the land from John Neff, who originally contracted with Watershed to have the waterways built and who received a federal subsidy from the NRCS for building the grass waterways. Id. ¶ ¶ 22-25 (Page ID ##706-07). Neff and Watershed created an oral contract for the installation of grass waterways. Id. ¶ 25 (Page ID #707). Neff would pay to Watershed the amount that Neff would be reimbursed by NRCS for installing the waterways. Kohli designed the waterways, which Watershed installed. After installation, Kohli examined and certified that the waterways were designed and constructed properly. Id. ¶ ¶ 43-44, 49 (Page ID #710, 711). After receiving Kohli's certification, NRCS certified the waterways as well, which allowed Neff to receive the federal reimbursement. Id. ¶ 49 (Page ID #711). Neff, however, failed to pay Watershed because he believed there was a lip or ridge along the edge of the grass waterways that prevented proper draining.

Page 558

In April 2009, Watershed filed a breach of contract action against Neff in state court. Neff counterclaimed for breach of contract and breach of warranty. See Watershed Mgmt. LLC v. Neff, 2012-Ohio-1020, 2012 WL 832829, at *2-3 (Oh. Ct. App.). Neff had by then sold the property to STEW Farm (and, according to STEW Farm, assigned all of his rights and claims to STEW Farm). 2012-Ohio-1020, [WL] at *3. The state court granted summary judgment against Neff because he failed to present evidence of any damages. Id. Around the same time as Neff filed his counterclaims, STEW Farm moved to intervene, but the state court denied this motion. Id.

STEW Farm claims that the waterways were improperly constructed, inspected, and certified. R. 39 (First Am. Compl.) (Page ID #702-21). STEW Farm contends that each defendant violated applicable federal law with respect to its participation in the project. Id. Watershed, according to STEW Farm, was a Technical Service Provider (" TSP" ) under the NRCS, which is directly responsible to the landowner for its work, and NRCS and PCSWCD are responsible for supervising and certifying that the project does not violate federal law. Id. ¶ 10 (Page ID #704).

After motions to dismiss and for judgment on the pleadings were filed and briefed, the district court granted the motions to dismiss of all defendants. It reasoned that, as to NRCS, the money damages claim failed because STEW Farm " has not identified a separate source of substantive law which mandates the federal government to compensate a landowner for alleged damages stemming from the grassed waterway design and construction." R. 49 (Opinion & Order at 10) (Page ID #1008). As to the declaratory relief against the NRCS, the district court concluded that STEW Farm " failed to meet its burden of establishing a waiver of sovereign immunity under which its claims against [NRCS] can be brought" because there are no " clear guidelines" which show that the NRCS actions were not committed to agency discretion by law. Id. at 12-13 (Page ID ##1010-11). As to Watershed, the district court concluded that there is no federal cause of action nor do the state claims implicate significant federal issues. Id. at 13-14 (Page ID ##1011-12). Similarly, the district court concluded that as to PCSWCD, STEW Farm has alleged only state-law claims that lack a federal cause of action and do not implicate significant federal issues. Id. at 14 (Page ID #1012). Moreover, as to PCSWCD, the claims are time barred under Ohio's two-year statute of limitations. Id. at 15-16 (Page ID ##1013-14). Finally, the claims against Kohli were dismissed as time barred. Id. at 16-17 (Page ID ##1014-16).

This appeal timely ...


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