Warren E. Burger: We'll hear arguments next in County of Imperial, California, v. Munoz. Mr. Harmon, I think you may proceed when you are ready.
James H. Harmon: Thank you. Mr. Chief Justice, and may it please the the Court: The issue in this case is whether it is permissible, consistent with principles of res judicata and the Anti-Injunction Act, for the federal court to enjoin enforcement of a ground water exportation restriction in Mr. McDougal's use permit when the California Supreme Court earlier ruled the restriction enforceable. If I may, before going to the facts of the case, I would like to briefly address the geographical setting for this case. In this Court's recent opinion in Bryant v. Yellen, the Court described the Imperial Valley as an area located south of the Salton Sea in southeastern California. It lies below sea level and is an arid desert in its natural state. That case, the 160-acre limitation case, dealt with lands in Imperial County which are within the irrigation district boundaries and are irrigated. Mr. McDougal's parcel, however, lies on the West Mesa of Imperial County, an area totally dependent on ground water supplies. Going to the facts of the case, the California Supreme Court found Mr. McDougal estopped from challenging, and thereby bound by the export restriction in his use permit based on facts which showed that his predecessor, with counsel, agreed to the imposition of the export restriction, abided by it, and benefited from the limited permit as issued. Further, Mr. McDougal when he purchased the property was aware of the restriction. When Mr. McDougal went to the County officials and demanded removal of the export restriction, he was informed that he should make application for a new conditional use permit. Instead of applying for a use permit, Mr. McDougal simply defied the County authorities, entered the subject brokerage contract with respondent Munoz and immediately as many as 44 tank trucks carrying 250,000 gallons a day began export of water to Mexicali, Mexico. One of the major allegations of the respondent's complaint is that enforcement of the subject export restriction will cause economic hardship to them by requiring them to go eight miles farther north in the County, to the so-called Clifford well, to buy water for export. It is alleged that the price of water is higher at the Clifford well, also in the County eight miles north.
Potter Stewart: How far away is Mexicali from this well?
James H. Harmon: Approximately, I would say, six miles, Your Honor. The well site--
Potter Stewart: So it would be more than twice as far to the other well?
James H. Harmon: --The well is on Highway 98, which kind of parallels the Border, and the Ocotillo well is eight miles north on Highway 98. I believe that the res judicata issue is the major issue in the case. The 9th Circuit Court of Appeals, of course, rejected the County's argument on res judicata by concluding that the McDougal decision is not a final judgment on the merits as to the respondents' cause of action. That's fundamentally incorrect.
Byron R. White: Well, it was an estoppel judgment though, wasn't it?
James H. Harmon: Yes, it was an estopped judgment, and I've indicated what the facts were substantiated in that estoppel.
Byron R. White: And your res judicata argument is that not Mr. McDougal should continue to be bound by that judgment but his vendees--
James H. Harmon: Exactly.
Byron R. White: --should also be bound by that estoppel judgment.
James H. Harmon: Exactly. And Justice White, I will get to the privity question in a moment, if I may. But importantly--
Byron R. White: Well, you have to, I suppose.
James H. Harmon: --Yes, indeed. Importantly, recognize that the 9th Circuit did not even reach the privity issue. It simply concluded that this is not a final judgment on the merits as to the respondents' action. That can't be true, it seems to me.
Byron R. White: You could say it was true, but still the estoppel judgment shouldn't stand against these people.
James H. Harmon: I will get to that. Importantly, the issue of the enforceability of the export restriction was the central issue in the McDougal case. After five years of litigation, finally the California Supreme Court ruled it was enforceable. Indeed, the decision is based on--
Byron R. White: Yes, it affirmed the injunction.
James H. Harmon: --Affirmed that portion of the injunction. Now, on the issue of what is a final judgment on the merits, for purposes of res judicata, Professor Moore indicates that a test is where there is a measure of identity so that the different judgment in a second action would destroy or imperil rights or interest established by the first judgment. Here, Your Honors, the injunction issued by the District Court robs the California Supreme Court's decision of all of its vitality and meaning. In one case we've got the California Supreme Court concluding that the export restriction is enforceable, now the District Court is telling the County officials that the export restriction must be enjoined. It seems to me that it's clear that the focal point made by the 9th Circuit is erroneous and requires reversal. Now, going to the issue of privity, may I again remind the Court that the 9th Circuit did not address, did not even reach the issue of privity. The last page of the Circuit Court of Appeals decision there is a statement that indicates that assuming that the respondents are in privity, they would not be bound because of the prior conclusion on the cause of action issue. The record, however, establishes relationships between McDougal and the respondents which I believe make it clear they should be regarded as being in privity with McDougal. First of all, there is the contractual relationship between respondent Munoz and McDougal. Munoz has been an integral part of the McDougal operation since its inception. A verified complaint in the federal action indicates that Munoz is the broker for sale of water to bottling companies in Mexicali.
William H. Rehnquist: Well, don't many courts disagree with the 9th Circuit's rather limited definition of res judicata as limited to issues that have been litigated on their merits and say that it's any issue that was litigated or might have been litigated?
James H. Harmon: I think that's correct. Certainly in the reading I've done, the thrust of many writers' opinions is that you're to look at the substance, not just the form of the situation, and if there has been a meaningful relationship between the parties and those who would also be bound by the preclusionary rule, where they've had the opportunity to intervene and litigate the case, they should likewise be bound.
Byron R. White: Well, Mr. Harmon, didn't... weren't those other issues, though, presented in the state litigation? It's just that the state court didn't decide them. They were presented and tendered, and the state court decided the case on estoppel.
James H. Harmon: That's correct.
William H. Rehnquist: But isn't estoppel itself a substantive ground?
James H. Harmon: Yes, it is. The leading case there is Enterprise Irrigation.
Byron R. White: And the Court of Appeals for the 9th Circuit said it wasn't. So... but that certainly is a fair issue.
James H. Harmon: The cases clearly establish that estoppel is an independent and adequate ground for--
Byron R. White: Well, I guess McDermott, I suppose, at least, or McDougal, or whatever his name is.
James H. Harmon: --I'm further suggesting that the respondents are in privity with McDougal. I've alluded to the contractual relationship. Furthermore, if I can draw the Court's attention to page 16a of the Appendix, specifically paragraph 4 of the complaint, the last phrase of that paragraph. I'm referring to roman numeral iv on page 16a. The last phrase reads, i.e., Martinez and de Leon... "herein are third party beneficiaries of the contract between Guillermo Gallego Munoz and the defendant Donald Courtney McDougal, Sr.. " So I think that there are interwoven interests here which are established in the record and for purposes of privity those relationships should suffice, with other things. Now, additionally, these respondents actually had the opportunity to intervene in the state court litigation and/or participate, and in fact, respondent Munoz did participate in the state court proceedings and he argued as an amicus curiae before the California Supreme Court.
Byron R. White: Could you have named him a party to your lawsuit?
James H. Harmon: I think the County might have, but the problem with that, Your Honor, is conceivably there are hundreds of people who might have been named parties; namely--
Byron R. White: But you think... that bind all of McDougal's customers on the privity theory.
James H. Harmon: --On the facts of this case, yes. Now, the other major issue, I think, that bears on the privity issue is the fact that we're talking about the same piece of property and the identical rights. The respondents have not applied for a conditional use permit themselves. They are instead simply trying to challenge the export restriction in Mr. McDougal's permit. In reading Professor Vestal's law review article in the Iowa Law Review, cited in my brief, he talks about still another ground for binding non-parties, which is, I suppose, separate and apart from res judicata and that involves a situation where these third parties' rights are derivative of the party to the lawsuit. Here rights to sell water commercially from the well depend on the issuance of a permit to McDougal. Respondents' rights to purchase from McDougal for export are necessarily derivative of McDougal's, it seems to me.
John Paul Stevens: Mr. Harmon, would you make the same argument if some new person in Mexico who formed a water brokerage business, was not involved previously as a customer of this well, came in and said, I'd like to attack the zoning ordinance. Could you defeat his claim?
James H. Harmon: There is not a zoning ordinance here in effect.
John Paul Stevens: I understand.
James H. Harmon: Vis-a-vis use permit, I think that... yes, Your Honor, I think that the underlying--
John Paul Stevens: So you really don't rely at all on the prior relationship between the Mexican broker and the property owner?
James H. Harmon: --I rely extensively on the contractual relationship between McDougal and his broker, Munoz.
John Paul Stevens: But you said the same argument would apply to someone who had no prior contractual relationship?
James H. Harmon: I think so. Going to the Anti-Injunction Act--
Byron R. White: You say it isn't a... just to make it clear... this isn't a zoning ordinance, this is a restriction on the sale of water, as the Supreme Court said?
James H. Harmon: --This is a land use permit. That is, we're talking about--
Byron R. White: But it's a restriction on the sale of water?
James H. Harmon: --Right. But it applies... what I was going to say is, it applies to a single parcel of property. There is no county-wide ordinance which restricts the application of water or any other product, for that matter. That's indicated, it seems to me, by the pleadings which indicate the respondents can go eight miles north and purchase water from a well there.
Warren E. Burger: Would it make any difference to your case if there were a county-wide restriction?
James H. Harmon: If there were a county-wide restriction which the respondents were individually affected by, I would certainly believe under that set of circumstances they could have standing to challenge the restriction. One of the cases cited by the Court of Appeals and the District Court is Hale v. Bimco for the proposition that third party strangers are not barred by reason of a state court adjudication from subsequently challenging in the federal courts a statute that's arguably unconstitutional. If the County had an ordinance which had county-wide application preventing export, an adjudication against McDougal, I don't think, would bind third party strangers separately and individually affected by that ordinance. Here, though, this permit rose with a particular parcel of land, the McDougal parcel. I think that under all of the circumstances taken into consideration, the California litigation has got to once and for all under the theory underlying res judicata adjudicate the rights that flow from that piece of property. Were the County to purport to enact an ordinance which says, no, there will be simply no export, then I would think any number of individuals might achieve standing to challenge it. The Anti-Injunction Act, of course, prohibits the federal court from granting an injunction or staying... to stay proceedings in a state court except where expressly authorized by Congress or when necessary to aid in its jurisdiction. The Court of Appeals indicated that the Anti-Injunction Act did not have application because there were no proceedings pending, and further it, relying on Hale v. Bimco, indicated that if there were proceedings pending, nothing would prevent a third party stranger from challenging a statute. Your Honors, I think that the California Supreme Court injunction contemplates ongoing jurisdiction in the court and inherent authority in the court to enforce the injunction. As subsequently there has actually been a contempt proceeding, a contempt judgment, by the trial court judge against McDougal for having willfully violated the terms of the trial court injunction as affirmed by the California Supreme Court. I therefore think that the preliminary injunction issued by the District Court likewise violates the spirit of the Anti-Injunction Act. I think this Court's recent decision in Vendo is analogous. That case along with others... Hill v. Martin... make it clear that the Anti-Injunction Act's prohibition is broad and to be strictly construed, and that it applies to any stage of a state court's proceeding, from the time of final judgment through enforcement.
Byron R. White: Was McDougal held in contempt?
James H. Harmon: Yes, he was held in contempt.
Byron R. White: But then the judgment was stayed, wasn't it?
James H. Harmon: The execution of the judgment was stayed, Your Honor.
Byron R. White: And depending on how the Court of Appeals came out, it was stayed permanently?
James H. Harmon: That's correct; execution was.
Byron R. White: Well, now, so what does that mean about the injunction?
James H. Harmon: Well, it certainly doesn't indicate to me that the state courts have deferred making a determination, as for example was the case in Hale v. Bimco, where the Florida State Supreme Court before ever getting to final judgment said--
Byron R. White: Well, what if the state court was at least saying as to McDougal, this injunction doesn't mean anything; he can violate it if he wants to.
James H. Harmon: --The state court was aware, I think, Your Honor, that cross-contempt proceedings were also going on in the Federal District Court, and--
Byron R. White: Well, I know, but they stayed it pending the outcome of this case.
James H. Harmon: --Stayed execution of the contempt judgment against McDougal.
Byron R. White: And if McDougal won this... or if Munoz won this case and McDougal was off the hook, then McDougal was off the hook. Right?
James H. Harmon: I think that's correct.
Byron R. White: So what does the injunction mean?
James H. Harmon: The injunction or the--
Byron R. White: Against McDougal.
James H. Harmon: --The injunction against McDougal is clearly a final judgment, by the California Supreme Court.
Byron R. White: Well, but it's been rendered... it certainly isn't the creature that it was, if McDougal can violate it at will.
James H. Harmon: Well, I think the final judgment of the California Supreme Court has been all but emasculated by the preliminary injunction issued by the Superior Court. --Excuse me; the District Court.
Byron R. White: The Superior Court is the one who issued the injunction in the beginning.
James H. Harmon: That's right. And its judgment has been affirmed by the California Supreme Court--
Byron R. White: Well, that doesn't keep the Superior Court from setting it aside.
James H. Harmon: --The Superior Court, Your Honor, has shown no intention to set aside its judgment; to the contrary.
Byron R. White: Except insofar as it tells McDougal he doesn't need to obey it.
James H. Harmon: Except insofar as it has withheld execution of the contempt judgment against McDougal until a final determination by the United States Supreme Court. Finally, the Court of Appeals directed that the 9th Circuit should determine the v. Oklahoma. We contend that there is no export question before the Court and that the judgment of the California Supreme Court, based as it was on estoppel, furnished an independent, adequate, state court basis for the judgment. But assuming arguendo that there is some standing in the respondents, we wish to point out that Hughes v. Oklahoma should not have application because, first of all, Hughes v. Oklahoma involved a direct appeal challenging an Oklahoma statute to this Court. There were neither res judicata nor anti-injunction action issues in that case. Finally, we have cited the Hudson County Water Company case wherein Justice Holmes upheld a New Jersey statute which did prevent diversion of a stream from outside the state and we think that that might be analogous here. If the Court were to ever get to the actual issue and the merits of the export restriction, we think that Hudson v. Hudson County Water presents an independent ground for sustaining an export restriction situation.
Potter Stewart: The merits are not really before this Court in this posture of the case, are they?
James H. Harmon: I believe not. Your Honors, I would like to reserve some time for rebuttal.
Warren E. Burger: Mr. Kronberger.
William H. Kronberger, Jr.: Mr. Chief Justice, and may it please the Court: I think that we have to keep a couple of things in mind at the very outset of this case. The respondents are three citizens of the Republic of Mexico who have gone into a Federal District Court with a straightforward question to that Federal District Court. The Federal District Court... there's an export ban that says that after McDougal has acquired water, pumped it from the ground, stored it in his storage tanks, McDougal cannot sell that water to me, a Mexican citizen, because in granting a conditional use permit for no reasons relating to land use, intensity of use or anything, the County of Imperial has simply decided to ban the export of that water from that particular parcel.
Potter Stewart: Would there be any question of the standing of these plaintiffs to bring a suit, quite apart from the question of res judicata?
William H. Kronberger, Jr.: I don't believe so. I believe you might be hinting at the question as to whether or not a foreigner, non-citizen of the United States might bring an action--
Potter Stewart: Are these just three of probably thousands if not millions of potential buyers?
William H. Kronberger, Jr.: --Well, I would suggest that in our allegations we have pointed out that these particular plaintiffs are lawfully within the United States, and once you are lawfully within the United States, it seems to me that the Constitution talks in terms of persons are protected, and it doesn't say, citizens of this country, and it seems to me that a person--
Potter Stewart: Well we're talking about the Commerce Clause of the Constitution.
William H. Kronberger, Jr.: --That's correct, and I believe that a person lawfully in this country exercising the right as a purchaser ought to be able to invoke the basic fabric of this nation, the Commerce Clause, in a Federal District Court.
William H. Rehnquist: Well, Mr. Kronberger, what if your clients had litigated the precise same issue that you say they are now seeking to litigate here in the Federal District Court up through the California state court system, saying that this violates the Federal Constitution, the Supreme Court of California had ruled against them, certiorari denied here. Would you say that they would have the right to start all over again in the district court?
William H. Kronberger, Jr.: I think that that question is answered by the principles of res judicata, and if res judicata would apply because they were in those proceedings, then I would agree with your statement. However, I am somewhat concerned that, for example, I believe in one opinion of this Court... I believe it was Huffman v. Pursue, Ltd. , there was some language to the effect that a litigant in a state court might come back in a federal court and challenge, but that was a very limited statement in that decision--
Speaker: But you weren't in the state--
William H. Kronberger, Jr.: --and I don't believe that I would press that point here.
Byron R. White: --You weren't in the state proceedings?
William H. Kronberger, Jr.: No, we weren't; that was my next comment. My clients... and this is something, I wish I could start over in this case. Instead of labeling it "Guillermo Gallego Munoz" as the first party, I would have put Juan de Leon in because Juan de Leon wasn't even in business when these state court proceedings were going forward, and my point is, my clients, these respondents have never had a day in a court, be it a state court or a federal court. They've raised an issue; at some point it has to be answered. And turning--
John Paul Stevens: Mr. Kronberger, could I return for a moment to Justice Stewart's question? Supposing instead of a total restriction on export, there had been a restriction on, say, you can only pump for four hours a day, something that's on a... less clearly directed at a person in your capacity, would a vendee have standing to come in before the County and challenge that kind of restriction on the ground that if he produced more water, maybe I could buy more?
William H. Kronberger, Jr.: --No, I don't think so because I subscribe to the view that there is a legitimate police power in local and state government to regulate land use. Now, I think that what makes this case so unique is the direct, explicit holding of the California Supreme Court that this particular restriction is not land use or--
John Paul Stevens: No, my question didn't go to the merits, it goes to standing, whether a customer of the property owner would have standing to say, I want to complain about this because it affects my business? It's the standing question that I think we're seeking to answer.
William H. Kronberger, Jr.: --I would think that if that customer were raising it under the Commerce Clause, I believe he would have standing, and I would just revert to my position: that is, if you are in this country lawfully discharging a business, you have a right to invoke the protections afforded in the Constitution to raise it.
Potter Stewart: Well, could anybody who lives in Mexico be a potential plaintiff in this suit?
William H. Kronberger, Jr.: I think you're going to have to show some interest--
Potter Stewart: Or anybody who lives in Canada?
William H. Kronberger, Jr.: --I think you'd have to show some interest in the outcome of the litigation. This Court has held--
Potter Stewart: The interest would be I want to buy water, or I may want to buy water sometime.
William H. Kronberger, Jr.: --Well, I think, arguably, yes. Let's put it in another light. What if I am driving from California to Texas and I have an old-type automobile with a radiator and I want to stop in at the McDougal well and fill up my radiator; McDougal says, no. You're taking the water outside of the County. It seems to me--
Potter Stewart: And then could you be a plaintiff in the federal court?
William H. Kronberger, Jr.: --It seems to me that I would have the right to bring that, because I have been directly harmed by a regulation of a governmental entity that has said--
Potter Stewart: Well, then, anybody who alleges that he now wants to or may in the future want to buy water is a potential plaintiff in the federal court, is that it?
William H. Kronberger, Jr.: --Well, I don't know that I would read it that far.
Potter Stewart: That is, anybody who does not live in the United States?
William H. Kronberger, Jr.: I think that somebody who can show a relationship--
Potter Stewart: Or does not live in the Imperial Valley, rather, in this county?
William H. Kronberger, Jr.: --Correct. I would say that someone who can allege and show that they have an interest in raising the issue can raise it. I don't think you could some into the federal court and say, well, I might want to purchase water sometime.
Potter Stewart: That's his interest. He wouldn't be in the federal court if he weren't interested.
William H. Kronberger, Jr.: That's correct.
William H. Rehnquist: Well, doesn't that open the door to Mr. McDougal to just find somebody, kind of a straw man to go into Federal District Court and relitigate what he's a already lost in the Supreme Court of California?
William H. Kronberger, Jr.: I don't think the issue was lost in the Supreme Court of the State of California. I think the Supreme Court of the State of California specifically refused to rule on the issue. And I think that if we are going to assert that McDougal went out and found straw men and somehow manufactured a lawsuit, that that is an element of proof in the trial. And I have to point out, we're here on a preliminary injunction. There is nothing in this record to show any connection between these plaintiffs and McDougal save three isolated acts.
Thurgood Marshall: What about 16a that was read to us before, paragraph iv? You say there's no connection. But they do say there is a connection.
William H. Kronberger, Jr.: I point out to you that that is in the second cause of action wherein Munoz is seeking specific performance of his agreement with McDougal, and in that sense--
Thurgood Marshall: Is that a true statement?
William H. Kronberger, Jr.: --That is a true statement. For purposes of res judicata, though, I don't think that we can say, because I am going to be the buyer I have automatically been foreclosed because the seller has somehow been foreclosed in a state proceeding which did not reach the issue. I think we open a dangerous door if we tell government, local government, that it may grant and deny land use permits or any kind of permits for reasons wholly unrelated to the local purpose land use, and if a seller is somehow estopped to raise or challenge that issue, that the whole world is barred from ever challenging it. I would suspect that that would open doors to novel methods of discrimination against international commerce, state commerce, and a host of other things that I think are protected activities. If I might--
Potter Stewart: Well, the Commerce Clause doesn't by its terms protect any activities, it just gives the Congress of the United States the power to regulate commerce among the several states or international commerce or commerce with the Indian tribes, period.
William H. Kronberger, Jr.: --That's correct.
Potter Stewart: It doesn't say anything about persons or protections or anything else.
William H. Kronberger, Jr.: And in its self-executing form, the way restrictions imposed by state and local governments are raised, they are raised by those who are harmed, and that recognizes, I think, that a state has a right to regulate in an area that may impact interstate and foreign commerce. As this Court pointed out in Hughes v. Oklahoma, if you're going to regulate in that area, then you'd better do it in a manner that is not discriminatory or overly burdensome on interstate and foreign commerce. Here we've got a flat, outright--
Potter Stewart: In Hughes v. Oklahoma, it was a person who wanted to take the minnows out of the State who was the plaintiff, wasn't it?
William H. Kronberger, Jr.: --That's correct.
Potter Stewart: So, in other words, he was in the shoes of McDougal in this case?
William H. Kronberger, Jr.: No, he would be in the shoes of perhaps Munoz.
Potter Stewart: No, no, he wasn't the purchaser. He was a person who wanted to take the minnows out of the State, wasn't he? Wasn't that Hughes?
William H. Kronberger, Jr.: Correct. What about Altus, Oklahoma v. Carr? It was the purchaser there who wanted to take the water out of Texas. And I think that decision stands for the proposition that the State of Texas could not enforce an export ban and the residents of Altus, Oklahoma, brought that suit. I think in reviewing this decision, it is very important to keep in mind than these parties in this case have not had their day in court. They have not had an opportunity to participate in the state proceedings. One of them didn't even exist in the business. And it seems to me that in order to have res judicata in this case we have to have two things: one, a final judgment on the merits which, when the California Supreme Court says it's not going to decide the issue, in my view does not constitute a decision on the merits. And the next thing we've got to have is some relationship between the parties and the party that appeared in the California court in order to hold him and bind them as privies. Now, privy is kind of a shorthand method of saying simply that we think there's enough connection between these people that they ought to be bound by the judgment.
William H. Rehnquist: Well, Mr. Kronberger, let me get back to your definition of res judicata. Supposing in the California state court litigation Mr. McDougal thought of the Commerce Clause argument but his lawyer told him that this just is too much of a long shot to raise. We won't bother with it right now. And the thing went all the way to the state Supreme Court and many issues were decided but that one wasn't. And then there was a petition for rehearing and the Supreme Court of California said, no, you're too late. Would you say that issue is not res judicata?
William H. Kronberger, Jr.: It would be as to McDougal, who participated in that litigation. I think that with respect to parties who were not party to the state litigation, we're talking about collateral estoppel and we're talking about issues that were actually decided, issues that we might use as a sword or a shield against those non-parties and for purposes of collateral estoppel it seems to me that the only items that might be asserted for that purpose are issues that were actually decided. And I come back to the central issue that the question presented to the Federal District Court, i.e. and to wit, the ban on the export of water, has never been decided by any court. At some point in time, I think it's fair to say that third parties who have never been in a court proceedings ought to have the right to have the question decided either for them or against them, unless we can say that those parties were so close to the proceedings in California that they ought to be bound, and that somehow McDougal stood in their shoes. I would point out, how could McDougal stand in the shoes of the three Mexicans, when the very issue that they were concerned with was the one that he's estopped to raise?
Byron R. White: Are you going to argue the anti-injunction issue?
William H. Kronberger, Jr.: Yes, sir, if I might.
Byron R. White: Because I wonder why... the federal court's judgment did do away with the state court injunction. Isn't that true? Didn't it?
William H. Kronberger, Jr.: Not really. There were other things that the County of Imperial could have done.
Byron R. White: Well, didn't it... yes, but, the injunction was lifted. It was rendered unenforceable by the judgment.
William H. Kronberger, Jr.: It was rendered unenforceable in the sense that the County of Imperial was restrained from enforcing the regulation. It seems to me that McDougal's duties--
Byron R. White: Why do you say that doesn't violate the Anti-Injunction Act?
William H. Kronberger, Jr.: --Well, okay, I rest on Hale v. Bimco, number one. I think the holding in Hale v. Bimco in this Court is that third parties simply are not bound by 2283. This Court in Mitchum v. Foster said that the test to determine the applicability of 2283 is to look back at the law as it existed before Toucey v. New York. Mr. Justice Frankfurter wrote Toucey v. New York and Hale v. Bimco, as well as footnoted Hale v. Bimco.
Byron R. White: Well, they may not be bound, they may not... perhaps the injunction doesn't apply to them, but that doesn't mean the injunction shouldn't continue to apply to the person to whom it applies, namely, McDougal.
William H. Kronberger, Jr.: Well, that's exactly what happened, though, in Hale v. Bimco. Hale v. Bimco is on all fours with this case. The State of Florida sued Hale and said, enforce this interstate regulation. It went to the Florida Supreme Court and the Florida Supreme Court after demur said, yes, that's constitutional. Bimco Trading Company, third parties, come in, sue Hale, say, don't enforce that; I want an injunction barring you from enforcing it. The Federal District Court issues it, the Florida courts stay proceedings as have the courts in California, in deference to a final determination of the federal issue. And in that decision the Court held, in Hale v. Bimco, that third parties are not bound by the provisions of the anti-injunction statute and proceeded to render unconstitutional the particular regulation in question and said that they found it very hard to do so after it had been decided constitutional by the highest state court of Florida, but they felt that they had to do it. I would say that--
Byron R. White: It's at least clear that the result of this federal judgment is that the state court injunction is unenforceable against McDougal.
William H. Kronberger, Jr.: --It's unenforceable to the extent that McDougal has commenced selling of water, and I'm not sure what the status of that injunction is anymore, after the somewhat delphic contempt order issued by the state courts.
Byron R. White: Well, what exception to the Anti-Injunction Act do you think this falls under?
William H. Kronberger, Jr.: I've said, first of all, the anti-injunction statute doesn't apply because of Hale v. Bimco and the policies of federalism underlying that. Secondly, though, if we are going to say that the anti-injunction statute applies we have pled this case in the context of a civil rights proceeding. I believe that in that sense that Mitchum v. Foster provides the exception there. I think that to hold 2283 applicable in this case we're going to have to seriously diminish the holding in Hale v. Bimco, or overrule it. And I would submit that the principles of federalism that this Court has announced in a series of cases don't warrant it in this particular fact. One of the principles that we look at in the question of enjoining a state court, when we say, you shouldn't, is we want to allow the state courts to try the cases before them free from interference by federal courts. There is no proceeding pending in a state court of California wherein this constitutional issue is going to be interfered with by any Federal District Court. The state courts have deferred to the federal courts with respect to the issue. They have not interfered, so that particular policy does not require 2283 to be applied in this case.
William H. Rehnquist: But in Hale, didn't the Supreme Court of Florida stay all further proceedings in the state courts pending determination by this Court?
William H. Kronberger, Jr.: Yes, it did, and I think that that's exactly what happened in this case. First of all, the Superior Court, as I said, in a delphic order it said to McDougal, McDougal, you're ordered to stop selling water 30 days after the 9th Circuit judgment against you becomes final, and if the County loses in the 9th Circuit the thing is stayed until resolution on appeal.
William H. Rehnquist: But the Supreme Court of California never said that?
William H. Kronberger, Jr.: It went to the Court of Appeals because McDougal filed a writ of mandate when he was found in contempt. It went up to the District Court of Appeals in California and the District Court of Appeals has stayed any proceedings with respect to the contempt against McDougal, pending the outcome of this decision in this Court, so far as even citing the case. And it seems to me that the two courts in California have specifically deferred.
William H. Rehnquist: But not the highest court?
William H. Kronberger, Jr.: Well, in order to get a deferrence from the highest court, the Court of Appeals would have had to turn down McDougal's writ of mandamus and then he would have gone to the state court. The Florida thing is a little different in Hale v. Bimco because you were dealing in a situation of original jurisdiction in Florida. The original action was brought in the Florida Supreme Court by virtue of some statutes in Florida which allowed initial proceedings in the Supreme Court there. We couldn't... McDougal could not get to the California Supreme Court, absent denial of relief at the Court of Appeals level, and he was granted that relief. It seems to me that the policy that we talk about is when we're in doubt about issuing an injunction we're to resolve that doubt in favor of allowing the state court proceedings to proceed in an orderly manner to a final decision on the merits. There are no state court proceedings proceeding anywhere with respect to getting us a decision on the merits of the simple question provided by these three Mexican nationals: is the export ban constitutional or not? It's not proceeding in any court in the State of California. And I think that when we look at 2283, it uses the word "pending proceedings". And I think that those phrases have to have some meaning of currency, something in the present tense that must be occurring. In this case there is no California court contending that the regulation is constitutional or unconstitutional. It's not before any California court. The only parties contending that the regulation is a constitutional exercise is the County of Imperial. It seems to me that we have not violated any principles of federalism when a third party comes in under this Court's decision in Hale v. Bimco and there is no decision or proceeding going forward in the state court, we simply have not violated those principles of federalism on which 2283 rests.
William J. Brennan, Jr.: Was there any proceeding pending in the Florida courts?
William H. Kronberger, Jr.: I'm sorry, I didn't hear that.
William J. Brennan, Jr.: Was there a proceeding pending in the state courts in Hale?
William H. Kronberger, Jr.: Yes, there was. In fact, in Hale... well, pending in the sense that it was commenced and in Hale the Florida Supreme Court stayed those proceedings, awaiting result on the constitutional issues from this Court. So in that sense I think it was pending. They had brought a suit in Florida to specifically enforce the regulation in question.
William J. Brennan, Jr.: But your argument here is there's not even that much of a proceeding pending in the California courts?
William H. Kronberger, Jr.: No California court is considering the constitutionality of the ban in question. The California Supreme Court has just simply said, we're not going to decide it. And then they footnote us to Altus, Oklahoma, v. Carr, which seems to say that the particular export ban is unconstitutional. They hint at it; they don't come out and say it. I think we have a policy underlying 2283 of avoiding duplication of legal proceedings when a single suit could satisfy the interests of the parties and all the issues could be resolved. There is only one single suit in which the interests of the parties can be resolved and the questions answered, and that's the suit that is here today.
William H. Rehnquist: Well, res judicata avoids duplication of legal proceedings too, does it not?
William H. Kronberger, Jr.: I think I would agree with you on that. As a matter of fact, the more I thought about the 2283 issue, the more I came to believe that when you're dealing with third parties 2283 is not applicable and you're dealing with principles of res judicata because the analysis that you would go through in res judicata ought to answer most of the questions that deal with 2283. So that that would reinforce in my view this Court's holding in Hale v. Bimco, that 2283 does not apply to third parties. Because when we have third parties, I think we're talking about res judicata. I would agree with that.
Potter Stewart: Did you say earlier, Mr. Kronberger, did I understand you to say, correctly, that you've cast your lawsuit as a 1983 lawsuit?
William H. Kronberger, Jr.: We couched our lawsuit in civil rights terms indicating--
Potter Stewart: I see a reference here to 1981.
William H. Kronberger, Jr.: --I was getting to that. It says, 1981, there. I think the rule the federal courts is notice pleading, and I think that as we have spelled it out in that cause of action it can be read as a civil rights cause of action under 1983--
Potter Stewart: Because you talked about the applicability of the doctrine of Mitchum v. Foster.
William H. Kronberger, Jr.: --That's correct, and had I to do it over again today, I would like to change the 1> ["] to a 3> ["] to make that point more explicit. But you're correct; it says 1> ["] in the pleadings, but the pleadings are couched in the terms, I think, of the Civil Rights Act and I do believe the courts have held pleaders to specific numbers when dealing with civil rights actions. We have alleged that there is much more to this than meets the eye. In that fact, I would just turn your attention to page 90, 91 of the Appendix, so that we can see what kind of local interests are involved. The minutes of the hearing, when the particular export ban was placed on the property, the attorney for the predecessor in interest, Mr. Sands, he says, Mr. Sands--
Potter Stewart: You're talking about the footnote here?
William H. Kronberger, Jr.: --Yes, 91a. Those are the minutes of the proceedings before the Board of Supervisors and the Planning Commission. "Mr. Sands questioned if he would be in favor of a limited period of time as previously requested, up to 12-31-68. " That's to allow the continuation of sale of water to Mexico, and a statement that it would not increase the amount of water exported from The County of Imperial; it would be the same amount of water. Response: "Chairman Kilgore stated that in regard to a temporary period of time five minutes would be too much. " Yes, we have alleged civil rights allegations in this case, so that it is more than simple interstate commerce. And if we are going to apply 2283, I believe we're within an exception to that. I think that, 2283, the final outcome of 2283 being applied in this case is simply going to be to divest Federal District courts of diversity jurisdiction in this circumstance. You are going to be saying, go to the state courts.
Byron R. White: Well, it isn't diversity jurisdiction. If you really mean what you say, you're raising... it's a federal question case.
William H. Kronberger, Jr.: It's a federal question case and the ultimate result of 2283's application would be to tell a plaintiff such as the plaintiffs here, the respondents, to bring these questions in a state court because--
Byron R. White: Well, that's what--
William H. Kronberger, Jr.: --2283 would bar you from injunctive relief.
Byron R. White: --That's what the Anti-Injunction Act does in cases to which it applies, that... it says if you want to get the injunction set aside, go raise your federal issues in the state court. Which issued the injunction. And you could have done that, you know; you still could.
William H. Kronberger, Jr.: Well, we could go to a state court but I think the parties--
Byron R. White: To the, to the Superior Court and say-- --The court that issued the injunction.
William H. Kronberger, Jr.: --Well, we would have had to have brought a new lawsuit. The result of that would be 2283 does not say, thou shalt continue your pending lawsuits. It says, thou shalt leave federal court and just start a new lawsuit.
Byron R. White: What did the Superior Court, how did the Superior Court rule on your claims originally?
William H. Kronberger, Jr.: I have no claims... we have never been in the Superior Court.
Byron R. White: Well, where did you start... did you start the case... where did you start the case?
William H. Kronberger, Jr.: I started this case in the Federal District Court.
Byron R. White: No, no. Where did McDougal litigate?
William H. Kronberger, Jr.: McDougal was hit with an injunctive and declaratory relief by the County of Imperial from the Superior Court.
Byron R. White: But he defended on constitutional grounds, didn't he?
William H. Kronberger, Jr.: And the Superior Court said, no, the export ban is not with respect to interstate and foreign commerce.
Byron R. White: So the views of the State Superior Court are well known?
William H. Kronberger, Jr.: Yes, the State Superior--
Byron R. White: So, if you went to the state court, you know what the judgment would be in the Superior Court, but then you may not be bound in the State Supreme Court?
William H. Kronberger, Jr.: --That's correct but I would just for the record say, my clients don't want to be in the state court. They have a right to access to the federal court and for a variety of reasons choose not to be in the state court. Following the line of what happened, McDougal was first told that the restriction was land use oriented and did not burden interstate commerce. It got to the Court of Appeals and this California Court of Appeals said, it's patently unconstitutional, it burdens interstate commerce, and they declared the entire conditional use permit void. And McDougal was left with nothing. McDougal appealed to the California Supreme Court, which sidestepped the issue of what happens in California with respect to a conditional use permit which has an unconstitutional condition attached to it, it sidestepped it by saying, you're estopped. And that makes, I think, a good deal of sense, because there are thousands of restrictions on conditional use permits in the State of California, very few of which probably rise to the dignity of a constitutional challenge, and I don't think California courts wanted to open their courts to those kinds of challenges.
William H. Rehnquist: Did McDougal petition for certiorari to this Court?
William H. Kronberger, Jr.: Yes, he did and this Court determined that the estoppel was an independent state grounds upon which the judgment might rest. Yes, he did. I would like to just, briefly at the end, say that the federal policies that would be thwarted by application of 2283... and I think the implicit overruling of Hale v. Bimco, will be to tell plaintiffs that 2283 may be used as a forum shopping tool by the respondent or defendant. All they need do is raise 2283 to a third party and that third party who has never been in a state court... he's told, gee, you should have started your lawsuit in a state court when we had a federal question with diversity jurisdiction. In conclusion, I would suggest that to apply 2283 to third party non-litigants would elevate the provisions of that section against the basic fundamental notion and concept that parties ought to be given their day in the court of their choice and with respect to federal questions they ought to be able to bring federal questions to a federal court to litigate it. I don't think that Congress ever intended that parties who were not participating in state court proceedings should ever be denied injunctive relief in a federal court when it is properly brought before that court. Thank you.
Warren E. Burger: Do you have anything further, Mr. Harmon?
James H. Harmon: Briefly, Mr. Chief Justice. I do wish to dispute counsel's assertion that he has pled a 1983 action. I've reviewed the pleading carefully. I only find one reference to the Civil Rights Act, and that starts at page 19. That cause of action is the cause of action pled against McDougal, as I read it, for breach of contract. There is no reference whatsoever to 1983 as a possible exception to the Anti-Injunction Act. Furthermore, at page 121 of the Appendix the Court may notice that a notice of reliance on a broader claim was filed by the respondents here. I guess that's kind of an amendment to the pleading. Neither was 1983 mentioned in that notice of reliance on a broader claim.
Speaker: That's a 1> ["].
Thurgood Marshall: Had they at any time tried to change the 1> ["] to a 3> ["]--
James H. Harmon: No, sir.
Thurgood Marshall: --until just now?
James H. Harmon: No, Your Honor, they have not.
Warren E. Burger: Thank you, gentlemen. The case is submitted.