As Corrected June 22, 2015.
Appeal from the Iowa District Court for Clarke
County, Sherman W. Phipps, Judge. Landowners appeal district court's declaratory
judgment under Iowa Code section 6A.24(2).
David L. Brown of Hansen, McClintock & Riley, Des Moines, for appellants.
Ivan T. Webber of Ahlers & Cooney, P.C., Des Moines, for appellee.
WATERMAN, Justice. All justices concur except Wiggins, J., who dissents.
This appeal presents two interrelated questions of first impression. The first question is whether a joint public-private commission organized under Iowa Code chapter 28E (2013) may exercise eminent domain powers. The second question is whether a declaratory judgment of public use under Iowa Code section 6A.24(2) obtained by such an entity may be affirmed on mootness grounds after the private members withdrew from the commission during the appeal. In this case, the Clarke County Reservoir Commission (the Commission) filed a declaratory judgment action seeking a ruling that its proposed project to build a public reservoir for drinking water was a public use that would allow the Commission to condemn private land. Landowners whose property was to be condemned for the project challenged the Commission's authority to proceed because the Commission included private members that lacked eminent domain authority. The district court rejected the landowners' challenge and entered judgment declaring the project is for a public use. The landowners appealed. The Commission argues the appeal was rendered moot when the private members withdrew.
The sovereign power to take private property from citizens without their consent is limited by our State and Federal Constitutions and legislative enactments. Property owners are entitled to strict compliance with legal requirements when a government entity wields the power of eminent domain. These legal requirements help protect against abuse of the eminent domain power. We strictly construe statutes delegating the power of eminent domain and note the absence of a clear legislative authorization for a joint public-private entity to condemn private property.
For the reasons elaborated below, we hold a 28E commission with members lacking the power of eminent domain cannot itself exercise the power of eminent domain or serve as an acquiring agency seeking a declaratory judgment under section 6A.24(2). We determine the postjudgment withdrawal of the private members did not render this appeal moot because the district court erred by entering judgment in favor of an improper acquiring agency. We therefore reverse the district court's declaratory judgment that the Commission, as then constituted, was a proper acquiring agency and remand the case for further proceedings.
I. Background Facts and Proceedings.
On March 7, 2003, six agencies located in Clarke County filed a 28E agreement with the Iowa Secretary of State, creating the Clarke County Reservoir Commission. The initial members of the Commission were the Osceola Waterworks Board of Trustees; the Southern Iowa Rural Water Association; Clarke County; and the cities of Osceola, Murray, and Woodburn. Section II(a) of the 28E agreement describes the purpose of the Commission:
To make decisions in the locating, planning, and design of a new reservoir and regional recreation facility in Clarke County, Iowa. Multiple sites . . . will be investigated and pursued for feasibility and funding as multi-purpose reservoirs for flood control, erosion control, recreation and water supply purposes as agreed by the Commission.
The agreement also gave the Commission the power and responsibility to acquire funds for the new reservoir, pay any necessary expenses, and manage the new reservoir after its creation.
The Commission requested a report from H.R. Green, a professional engineering and technical consulting company, to determine the future water needs for the Clarke County area from 2008 to 2058. Mark Duben, a professional engineer, certified the results of that report to the Commission on March 6, 2008. The study showed that the area would require three million gallons per day (mgd) by 2037 and 4.4 mgd by 2058. At the time, the Iowa Department of Natural Resources rated the area's current water source, West Lake, for a capacity of 1.37 mgd. The study evaluated the feasibility of four alternative construction projects to meet the projected water shortfall: (1) a new reservoir, (2) a pipeline to buy water from the Des Moines Waterworks, (3) a pipeline to buy water from the Rathbun Regional Water Association, and (4) a groundwater well field.
In August, the Commission amended its 28E agreement to add three additional organizations to its membership: the
Clarke County Conservation Board, the Clarke County Soil and Water Conservation District, and the Clarke County Development Corporation. The Clarke County Development Corporation is a section 501(c)(6) corporation, a private entity that lacks the power of eminent domain. The amendment also modified the language of section V(e), giving the Commission the power
to acquire by purchase, gift, lease, use of eminent domain powers or otherwise real property and easements to be held in the name of the Commission, to hold and use for the purposes of the Commission and to dispose of property in the same manner as a city when no longer needed for the Commission. The Commission may acquire real property in its own name or the Commission may request a Sponsor having the power of eminent domain to bring an eminent domain action to acquire real property on behalf of or for the use of the Commission, which the Sponsor shall do, provided, however, the Commission shall fully reimburse the Sponsor for all costs of acquisition including not only damages paid to the property owner but also all other administrative and related costs incurred by the Sponsor to complete acquisition through use of eminent domain.
The amendment further created section XI(a) of the agreement, which states:
The Commission shall acquire all necessary real, personal, and intangible property necessary for the public purposes set forth in this Intergovernmental Agreement, which shall be held in the name of the Clarke County Reservoir Commission. Such property may be acquired by sale, exchange, or by the exercise of the power of eminent domain as provided above.
H.R. Green updated its study in 2010 and again in 2014 to address regulatory changes that downgraded West Lake's rated capacity to .9 mgd and adjust for expected development that had not occurred. The updated studies concluded that Clarke County's water needs would remain approximately 3 mgd by 2037. The 2014 study called for development of new sources of water with a capacity of 2.2 mgd to meet needs and comply with state and federal regulations. After considering the feasibility of all the alternatives H.R. Green presented, the Commission decided to move ahead with plans to build a new reservoir.
The Commission held a public hearing regarding its intent to go forward with the reservoir by condemning land needed for the project. On December 6, 2012, the Commission adopted a " Resolution Authorizing Public Improvement Which May Require Acquisition of Agricultural Land," Resolution No. 2012-3. On March 5, 2013, the Commission filed a declaratory judgment action in the district court for Clarke County, seeking a declaration of public use, public purpose, or public improvement under Iowa Code section 6A.24(2). The Commission served notice on the owners of fifty-four tracts of land required to complete the project.
On March 27, defendant, Edwin D. & Deloris A. Robins Revocable Trust (Robins Trust), owner of one of the parcels of land to be condemned, filed an answer to the petition. The Robins Trust filed an amended and substituted answer on May 22. The amended answer alleged eleven affirmative defenses, including that the
" [p]laintiff does not have the legal authority to initiate this condemnation proceeding under Iowa Code Section 6A.4." The amended answer also alleged the " [p]laintiff's real or intended purpose of the proposed lake is primarily for recreational use. The plaintiff's allegation of the proposed lake's purpose as a drinking water source is a false artifice." On January 10, 2014, the Robins Trust filed a motion for summary judgment on grounds that the Commission lacks the power of eminent domain because one of its members, the Clarke County Development Corporation, is a private entity lacking that power. The Commission filed a resistance, responding that the 28E agreement contemplated that the Commission would exercise eminent domain power directly. On March 3, 2014, the district court denied the motion for summary judgment and ruled that although the Clarke County Development Corporation lacked the power of eminent domain, the 28E agreement granted the Commission itself the power of eminent domain.
The case proceeded to a two-day bench trial commencing March 10 on the issue of whether the reservoir was a public use. The Commission called four witnesses. Duben testified about the report he prepared with H.R. Green verifying the water needs of the Clarke County area. He testified that the site was selected to provide the greatest capacity while keeping adequate distance from a confined animal feeding operation and a prairie remnant located in the watershed. He also testified that the Commission modified the Clarke County Water Supply Plan on September 12, 2013, to remove all plans for recreational activities. Without recreation areas, the 2013 water supply plan cost six million dollars less than the 2011 plan and required less land to complete. A financing expert, Scott Stevenson, testified that funding the project was feasible. Dan Lovett, an environmental engineer, testified that the Commission considered and rejected alternatives to the reservoir because of their greater environmental impact and expense. Finally, David Beck, project manager for the Commission, testified regarding the Commission's attempts to notify all landowners and plans to pay for the reservoir. The landowners called no witnesses. On April 8, the district court ruled for the Commission, concluding the project qualified as a public use within the meaning of Iowa Code section 6A.22(2).
The Robins Trust filed its notice of appeal on May 6 and its appellate proof brief on July 24. The sole issue raised on appeal was that the district court erred by ruling the Commission with private members had eminent domain powers. On August 22, the Commission filed a motion to supplement the record and dismiss the appeal as moot. Attached to the motion is the " Amended and Restated Intergovernmental Agreement" filed with the Secretary of State on August 18 showing that the Clarke County Conservation Board, the Clarke County Development Corporation, and the Clarke County Soil and Water Conservation District had withdrawn as members of the Commission. Based on this reorganization, all current members of the Commission are public entities with the power of eminent domain. The Robins Trust resisted the motion to dismiss on legal grounds, but did not dispute the fact that the Commission no longer included any private members. We retained
the appeal and ordered the motion to dismiss submitted ...