WESTLANDS WATER DISTRICT, a California water district, Plaintiff-Appellant, v. AMOCO CHEMICAL COMPANY, a corporation, formerly known as Amoco Chemicals Co. and/or Amoco Chemical Corp.; Amoco Reinforced Plastics Company; Amoco Reinforced Plastics Company, a corporation; United Technologies Corporation, a corporation, formerly known as United Aircraft Corporation, a corporation, Defendants-Appellees, 953 F.2d 1109

ORDER Request for publication is GRANTED. The memorandum disposition filed September 30, 1991, is hereby redesignated as an authored Opinion by Judge Brunetti. OPINION BRUNETTI, Circuit Judge: Plaintiff-Appellant Westlands Water District (“Westlands”), a California water district, appeals from an order of the district court dismissing Westlands’ claim for punitive damages under Cal.Civil Code § 3294. We reverse. I.

On October 13, 1989, Westlands filed a complaint in federal district court against Defendants-Appellees Amoco Chemical Company, Amoco Reinforced Plastics Company, and United Technologies Corporation (collectively “defendants”). The complaint alleged that, due to misrepresentations made by defendants and/or their predecessors in interest, a defective pipe was used in Westlands’ pipeline distribution system, causing the system to malfunction and cause physical damage to Westlands’ distribution system and other real and personal property.

The complaint asserted causes of action for strict products liability, negligence, breach of express warranty, breach of implied warranty, and fraud, misrepresentation and deceit. The complaint sought $25 million in general damages, and punitive damages. On November 27,1989, defendant Amoco Reinforced Plastics filed a motion to strike the punitive damages claim, in which the other defendants joined. An oral hearing on the motion was held January 29, 1990. On March 6, the district court entered an order striking the punitive damages claim.

On April 17, the district court issued an order certifying the punitive damages issue for interlocutory appeal. We issued an order granting permission to appeal under § 1292(

b) on May 17, 1990, and Westlands filed a timely notice of appeal on May 25, 1990. II. We review the district court’s

interpretation of a state law de novo. See State Farm Fire & Casualty Co. v. Abraio, 874 F.2d 619, 621 (9th Cir.1989); In re McLinn, 739 F.2d 1395, 1403 (9th Cir.1984) (en banc). The question of law before us is subject to the general rule that “[i]n a diversity case, ‘where the state’s highest court has not decided an issue, the task of the federal courts is to predict how the state high court would resolve it.’ ... The decisions of the state’s intermediate appellate courts are data that a federal court must consider in undertaking this analysis.” Air-Sea Forwarders, Inc. v.

Air Asia Co., Ltd., 880 F.2d 176, 186 (9th Cir.1989) (citations omitted), cert. denied, 493 U.S. 1058, 110 S.Ct. 868, 107 L.Ed.2d 952 (1990); see also State Farm Fire & Casualty Co. v. Abraio, 874 F.2d 619, 621 (9th Cir.1989) (state appellate decisions provide “guidance” to this court where supreme court has not ruled). When an intermediate appellate court has ruled on an issue, and the state supreme court has not yet ruled on it, we will follow the intermediate court’s decision “unless there is convincing evidence that the state supreme court would decide differently.” Abraio, 874 F.2d at 621. III.

In City of Los Angeles v. Shpegel-Dimsey, Inc., 198 Cal.App.3d 1009, 244 Cal.Rptr. 507 (1988), the second district of the California Court of Appeal held that a municipality may not recover punitive damages. The city sued the defendant company, which manufactured plastic materials, for the costs of extinguishing a fire at the plastics plant, as well as for damage to the city’s utility poles and other property. The city also sought punitive damages due to defendant’s repeated violations of the city fire code over a ten-year period prior to the fire.

The court’s opinion noted two bases for its holding that punitive damages were not recoverable: (1) because the purpose of punitive damages is to punish a defendant, and because a municipality may punish by the use of its police powers, punitive damages are not a necessary tool for municipal plaintiffs; and (2) because punitive damages may not be recovered from a municipal entity, to allow municipal entities to recover punitive damages would “raise the spectre of a denial of equal protection of the laws.” Westlands argues that the reasoning on both of these grounds is faulty, and that the opinion goes against the plain language of California Civil Code § 3294(a).

A. Statutory Language Westlands argues that the holding of City of Los Angeles is inconsistent with the plain language of Civil Code § 3294. The statute reads in relevant part: In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.

Another California statute defines a “plaintiff” as including “a person who files the complaint or cross-complaint.” Cal.Code of Civ.P. § 481.180. A “person” is “a natural person, a corporation, a partnership or other unincorporated association, and a public entity.” Cal.Code of Civ.P. § 481.170 (emphasis added). Therefore, a water district such as Westlands may, under the language of § 3294, recover punitive damages in appropriate cases. Courts may not rewrite unambiguous statutory language. People v. Skinner, 39 Cal.3d 765, 775, 217 Cal.Rptr. 685, 691, 704 P.2d 752, 758 (1985).

Defendants argue that because § 3294 does not specifically address and include public entities, the conclusion of City of Los Angeles is not contrary to the statutory language. West-lands argues that the use of the term “plaintiff” in § 3294 without any restriction indicates that the recovery of punitive damages in appropriate cases is not limited to private plaintiffs. In construing statutory language and determining legislative intent, the California Supreme Court looks first to the words of the statute, “giving them their usual and ordinary meaning.” Committee of Seven Thousand v.

Superior Court of Orange County, 45 Cal.3d 491, 501, 247 Cal.Rptr. 362, 367, 754 P.2d 708, 713 (1988). The plain language of § 3294 would allow all plaintiffs, both public and private, to recover punitive damages. We find nothing within the statute itself that we believe would lead the California Supreme Court to a contrary conclusion. B. Punishment Under California law, punitive damages are recoverable “for the sake of example and by way of punishing the defendant.” A private party has no means of punishing a tortfeasor other than an award of exemplary damages.

In contrast, a municipality has at its command the full force of its police power. By ordinance, it may impose fines or other penal remedies. City of Los Angeles, 198 Cal.App.3d at 1023, 244 Cal.Rptr. at 514 (quoting Cal.Civ. Code § 3294(a)). However, unlike the city plaintiff in City of Los Angeles, many public entities, including water districts, lack police power to impose criminal sanctions on individuals and corporations.

In fact, the very language of that case makes it clear that a significant difference exists between municipalities and other public entities; although the court of appeal held that public entities could not recover punitive damages, it based that holding on the fact that municipalities such as the plaintiff in the case possess the police powers that make the recovery of punitive damages unnecessary.

Id. at 1025-26, 244 Cal.Rptr. at 515 (“Since a municipality may exercise its police power to punish a wrongdoer by way of example, its failure to do so should not be excused by providing the remedy of punitive damages.”). In the case before us, Westlands is in the same position as any other private party; if at trial defendants are determined to have been guilty of oppression, fraud or malice, they cannot be punished for their actions if Westlands cannot recover punitive damages.

Although water districts do have authority to make rules and regulations regarding the distribution of water, and violation of such rules is punishable as a misdemeanor, Cal.Water Code §§ 35423, 35424, this authority .is not comparable to the authority of a municipality to impose criminal sanctions on behavior which does not comport with penal regulations. The dissent argues that, ,if it chose to do so, the California Legislature could supplement the powers of water districts.

This could be accomplished through either specific rules relating to the suppliers of labor or materials to water districts or a more general grant of authority to water districts which would allow them to police and punish all aspects of water distribution. The California Legislature, however, has not chosen to increase the power or authority of California’s water districts.

We disagree with the dissent’s belief that it is proper to treat as equals municipalities that possess broad-ranging police powers and water districts to whom the state legislature could at some future time grant the authority to enact laws regarding the provision of water. This is a matter for the legislative process, and the California Legislature has clearly made a distinction between the power it has granted to municipalities like the City of Los Angeles and water districts like Westlands. This distinction is one that we must recognize and accept in interpreting § 3294 and City of Los Angeles.

We do not believe that the California Supreme Court would conclude that the very limited rule-making authority granted to public entities such as water districts removes these entities from the purview of § 3294. C. Equal Protection California Government Code § 818 bars any award of punitive damages against a public entity. This

section was upheld as constitutional in McAllister v. South Coast Air Quality Mgmt. Dist., 183 Cal.App.3d 653, 228 Cal.Rptr. 351 (1986). There, the appellate court held: The equal protection clause “does not prohibit legislative classification and imposition of statutory restraints on one class which are not imposed on another.

The classification is constitutionally infirm only if it bears no rational relationship to the achievement of a legitimate state objective_ A statutory discrimination will not be set aside as a denial of equal protection of the laws if any state of facts reasonably may be conceived to justify it.” Id. at 659, 228 Cal.Rptr. at 355 (citations omitted) (emphasis deleted).

The court held that the distinction between public and private tortfeasors had a rational relationship to a legitimate government goal; to allow punitive damages against a public entity would punish the general public, which is the group ultimately intended to be benefited by the punishment. Id. at 659-60, 228 Cal.Rptr. at 355. Because a rational basis exists for the distinction between allowing public entities to recover punitive damages while denying recovery of punitive damages from public entities, we believe that the California Supreme Court would find no equal protection problem.

Preventing punishment of the general public through the imposition of punitive damages against a public entity, and allowing a public entity which lacks traditional police powers to punish wrongdoings of defendants which injure the general public are both legitimate state objectives. The statutory scheme which restricts the award of punitive damages against all public entities, but allows those entities to recover punitive damages bears a rational relationship to the state objectives, and therefore would withstand an equal protection claim. IY.

We are cognizant of the fact that, as the dissent notes, punitive damages are never recoverable as a matter of right under California law, and that they should be awarded only in the clearest of cases. Nevertheless, we do not believe that the California Supreme Court is as resistant to the principle of punitive damages as the dissent would intimate.

It is true that the concept of punitive damages has been criticized; but unless at this late date we were to hold [§ 3294] unconstitutional — a proposition that has been frequently rejected ... we cannot usurp the Legislature’s determination that such damages should be recovered in cases in which the statutory prerequisites are fulfilled. [Egan v. Mutual of Omaha Insur. Co., 24 Cal.3d 809, 819-20, 620 P.2d 141, 146, 169 Cal.Rptr. 691, 696 (1979), cert. denied and appeal dismissed, 445 U.S. 912, 100 S.Ct. 1271, 63 L.Ed.2d 597 (1980) (footnote and citations omitted) ].

In California, punitive damages have been awarded and upheld in cases of products liability, Grimshaw v. Ford Motor Co., 119 Cal.App.3d 757, 174 Cal.Rptr. 348 (1981), and fraud, Nevada Nat’l Leasing Co. v. Hereford, 36 Cal.3d 146, 203 Cal.Rptr. 118, 680 P.2d 1077 (1984), both of which causes of action were pleaded by Westlands. Our decision today neither awards punitive damages in favor of Westlands nor holds in any way that Westlands is entitled to recover such damages.

We hold only that the rationale of City of Los Angeles should not be applied to water districts, and reverse the order of the district court dismissing Westlands’ claim for punitive damages under Cal.Civ.Code § 3294. REVERSED. . After the appeal was calendared in this court, defendant United Technologies reached a settlement with plaintiff, and was dismissed with prejudice from the case. Therefore, United Technologies did not take

part in the argument of the case. . The dissenting opinion notes that the City of Los Angeles decision states that "there is no California authority whatsoever expressly permitting a public entity to seek the recovery of punitive damages,” and, moreover, that, with only one exception, "no other United States jurisdiction expressly permits ... recovery [of punitive damages by public entities].” City of Los Angeles, 198 Cal.App.3d at 1023, 244 Cal.Rptr. at 513.

Clearly, the City of Los Angeles court, in denying a municipality’s right to recover punitive damages, was doing so because the municipality had the ability under its police power to punish the defendant, while a private party must resort to punitive damages as a means of punishing the defendant. Id. 244 Cal.Rptr. at 513-14.

We disagree with the dissent's assertion that this policy discussion suggests that the California Supreme Court would be most reluctant to do "what no other state permits with one exception.” The California statute must be read for its plain meaning and not by what other states may or may not do with their statutory schemes.