W. S. Dickey Clay Manufacturing Company, a Delaware corporation, owns a stock farm of 300 acres lying near the sewage disposal plant of the city of Harrisonville, Mo. A small, meandering, intermittent stream called Town creek flows through a detached portion of the farm, consisting of 100 acres, devoted solely to pasturage. Since 1923, a drain pipe has discharged into the creek, at a point in the pasture, the effluent from the disposal plant of the city's general sewage system. In 1928, the company brought, in the federal court for western Missouri, this suit against the city, alleging injury to the property through drainage of the effluent from the disposal plant and seeking both damages and an injunction. The land was acquired by the company in 1925 and has been leased ever since. Prior to 1925 it was owned by W. S. Dickey, the president and majority stockholder of the company, who is a resident of Missouri. Jurisdiction of the federal court is based solely on diversity of citizenship. No federal question, constitutional or statutory, is involved.
The disposal plant consists of an Imhoff tank and the drain. It was installed by the city in 1923, after conference with the public health department of the state; and has since been in continuous use. The tank is a primary method of sewage disposal which removes only 60 per cent. of the putrescible organic matter. An additional plant for further treatment of the sewage, which would have removed 30 per cent. more of such matter, could have been installed in 1923. But such additional treatment was not then common in Missouri; nor was it then recommended by the health department. In 1928, additional treatment of the sewage was recommended by it; but was not required. The population of the city is 2,000; but only about 1,400 of the inhabitants are served by the general sewage system. The cost of the general sewage system and disposal plant was about $60,000. The cost of a secondary disposal plant would be $25,000 to $30,000. It is asserted by the city that it cannot erect such a plant now because it has no surplus revenues and its borrowing capacity is nearly exhausted.
The District Court found that the detached portion of the company's land used for pasturage is seriously affected by the pollution of Town creek; that the aggregate loss in rental for the five years during which it owned the land had been $500; and that it would cost $3,500 to restore the creek to the condition existing prior to the nuisance. The court, therefore, awarded damages in the sum of $4,000. It held, also, that the company was entitled to an injunction; but allowed the city six months within which to abate the nuisance by introducing some method that would prevent the discharge of putrescible sewage into the creek. Upon an appeal by the city, the Circuit Court of Appeals modified the decree by eliminating therefrom the item of $3,500 damages. As so modified the decree was affirmed. 61 F.(2d) 210. The company acquiesced in the modification; and in this court the city did not question the propriety of the award of $500 damages. But, on the ground that the injunction should have been denied, it petitioned for a writ of certiorari, which was granted. 288 U.S. 594, 53 S.Ct. 319, 77 L.Ed. --.
The city contends that the injunction should not issue, because, according to the law of Missouri, the sewer system and disposal plant constitute a permanent nuisance; that in granting the injunction instead of requiring the company to seek damages for the depreciation of the property, the federal courts acted in direct conflict with the law of the state; and that since the question involved is in essence the extent of rights incident to ownership of real property, the state law is controlling. The company denies that under the decisions of the state courts the nuisance is to be deemed a permanent one; and insists that for this continuing nuisance the remedy of damages is inadequate.