Opinion ID: 358214
Heading Depth: 2
Heading Rank: 1

Heading: The Inverse Condemnation Claim.

Text: 21
22 Appellants' theory of recovery against the United States 4 for deprivation of property without just compensation rests on the fifth amendment of the United States Constitution, which provides in pertinent part that 23 private property (shall not) be taken for public use, without just compensation. 24 The district court dismissed this claim against the United States because 25 the law is clear in Missouri and Illinois that plaintiffs do not have a constitutionally protected property right in traffic. Thus, the diversion of traffic is not a compensable taking under the due process requirements of the Illinois, Missouri and United States constitutions. Kansas City v. Berkshire Lumber Co., 393 S.W.2d 470 (Mo.1965); State v. Brockfeld, 388 S.W.2d 862 (Mo. en banc 1965); Department of Public Works and Buildings v. Wilson & Co., 62 Ill.2d 131, 340 N.E.2d 12 (1975); County of Winnebago v. Rico Corp., 11 Ill.App.3d 882, 296 N.E.2d 867 (1973). Cf. Charles River Bridge v. Warren Bridge, 36 U.S. (11 Peters) 420, 9 L.Ed. 773 (1837). 26 Most of these cases deal with abutting landowners to highway systems and not bondholders. However, this does not change the basic premise that there is no property right or vested interest in a continuing flow of traffic. Plaintiffs have cited no cases even remotely supporting their position. Defendants' motions to dismiss Count I will be granted. 5 (Jackson Sawmill Co. v. United States, 428 F.Supp. 555, 558 (E.D.Mo.1977).) 27 In support of the argument that the district court improperly dismissed the inverse condemnation claim against the United States, appellants contend that the court misconstrued the issue as a question of law rather than as a question of fact. Appellants view the issue as not whether diversion of traffic constitutes a compensable taking but rather whether diversion of traffic caused direct damage to their vested property rights. As such, according to appellants, the question is factual rather than legal. Appellants cite for support of their contention United States v. Central Eureka Mining Co., 357 U.S. 155, 168, 78 S.Ct. 1097, 1104, 2 L.Ed.2d 1228 (1958), where the Supreme Court stated: 28 Traditionally, we have treated the issue as to whether a particular Governmental restriction amounted to a constitutional taking as being a question properly turning upon the particular circumstances of each case. (Emphasis added.) 29 Finally, appellants argue that the district court completely failed to address their contentions that they possessed at least four other property interests: an exclusive franchise, an easement, a lien, and various vested contract rights. 30 Although it is true that whether a particular government restriction amounts to a constitutional taking normally turns on the facts of each case, here the government action did not restrict. The federal government simply helped build and finance a new bridge. It took nothing, directly or indirectly, that belonged to the appellants. The fifth amendment 31 has always been understood as referring only to a direct appropriation, and not to consequential injuries resulting from the exercise of lawful power. It has never been supposed to have any bearing upon, or to inhibit laws that indirectly work harm and loss to individuals. (Legal Tender Cases, 79 U.S. (12 Wall.) 457, 551 (1870).) 32 In this case, appellants possessed no constitutionally protected interest in a monopoly over traffic travelling between St. Louis and East St. Louis. Whether they choose to label their interest a franchise, an easement, a lien, or simply as a contract right matters little. Under no interpretation of the facts, no matter how we strain to be favorable to their claim, do appellants have anything more than two covenants issued by the City of East St. Louis. The covenants entitle them to an exclusive right to revenues from the King Bridge and stipulate that the City will not voluntarily permit the construction of a bridge that interferes with appellants' revenue rights. The United States acquired no property interest from appellants entitling them to compensation regardless of the label attached to the appellants' contract rights with the City. 33
34 Appellants' inverse condemnation claim against the States of Illinois and Missouri was premised on the fourteenth amendment's absorption of the Just compensation clause of the fifth amendment. The district court dismissed the claim against both states relying on the eleventh amendment bar: 35 The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State. 36 Analyzing the district court's ruling requires a three-tiered approach: First, we must determine which of the various defendant-government entities qualify as a state or an alter-ego of the state; second, we must decide whether or not the eleventh amendment applies to the cause of action brought by the bondholders; and third, we must assess whether affected defendants have waived the eleventh amendment immunity. 37
38 By its terms, the eleventh amendment only applies to suits against a state by citizens of another state. 6 In addition to the States of Missouri and Illinois, however, several state officials and agencies are named as defendants. 7 Appellants argue that the district court erred by giving the officials and agencies the same eleventh amendment immunity applicable to the states. In particular, appellants note that the district court failed to consider any of the several factors customarily used to determine if a particular state agency should be entitled to share the state's eleventh amendment immunity. They cite Fitzpatrick v. Bitzer, 519 F.2d 559, 564-65 (2d Cir. 1975), Rev'd on other grounds, 427 U.S. 455, 96 S.Ct. 2666, 49 L.Ed.2d 614 (1976): 39 In determining whether a separate state agency or institution shares the Eleventh Amendment shield as an alter ego of the state, a court must look to numerous factors, no one of which is conclusive, see Krisel v. Duran, 258 F.Supp. 845, 848-49 (S.D.N.Y.1966) (Weinfeld, J.), Affd. per curiam, 386 F.2d 179 (2d Cir. 1967), Cert. denied, 390 U.S. 1042, 88 S.Ct. 1635, 20 L.Ed.2d 303 (1968); Zeidner v. Wulforst, 197 F.Supp. 23 (E.D.N.Y.1961); cf. State Highway Comm'n v. Utah Const. Co., 278 U.S. 194, 199, 49 S.Ct. 104, 73 L.Ed. 262 (1929). The most important, of course, is whether, in the event plaintiff prevails, judgment will have to be paid out of the state treasury. Whitten v. State University Const. Fund, 493 F.2d 177, 180 (1st Cir. 1974) (Moore, J.); Gordenstein v. University of Delaware, 381 F.Supp. 718, 721 (D.Del.1974); Bowen v. Hackett, supra; Krisel v. Duran, supra, 258 F.Supp. at 849; see Edelman v. Jordan, supra, 415 U.S. at 663, 94 S.Ct. 1347. Also to be considered is whether the entity sued is performing a governmental or proprietary function, whether it has been separately incorporated, whether it has the power to sue and be sued and enter into contracts, the degree of autonomy over its operations, and whether the state has immunized itself from responsibility for the agency's operations. See Whitten v. State University Const. Fund, supra, 493 F.2d at 179-80; Gordenstein v. University of Delaware, supra; Krisel v. Duran, supra. 40 Although the district court did not explicitly discuss this issue in its memorandum decision, we are convinced that it was correct in assuming, Sub silentio, that the various state agencies and officials were entitled to share in the states' eleventh amendment immunity, if any. 8 The key, of course, is who will pay for any judgment rendered in favor of appellants. (W)hen the action is in essence one for the recovery of money from the state, the state is the real, substantial party in interest   . Ford Motor Co. v. Department of Treasury of Indiana, 323 U.S. 459, 464, 65 S.Ct. 347, 350, 89 L.Ed. 389 (1945). In this case, it is beyond dispute that the states will pay for any judgment rendered against defendant state officials and agencies. 9 41
42 On its face, the eleventh amendment appears to bar any suit in law or equity commenced against a state by citizens of another state. In Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), however, the Supreme Court ruled that the eleventh amendment does not bar a suit to enjoin enforcement by state officers of an unconstitutional state statute. In reaching this result, the court relied on the legal fiction that a state officer acting illegally is deemed to act without the authority of the state and therefore outside its shield of sovereign immunity. 43 In Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974), the Court further clarified the distinction it introduced in Ex parte Young. There the Court ruled that the eleventh amendment bars any suit seeking a retroactive award of monetary damages payable out of the state treasury as compensation for a past breach of legal duty. The Court did note, however, that actions seeking injunctive relief are permissible even if they require the state to expend some public funds in implementing relief and thus even if the award has an ancillary effect on the state treasury. Id. at 668, 94 S.Ct. at 1358. 44 In the present case, the district court held that: 45 The relief sought in this case is like the retroactive payments in Edelman. An order requiring defendants to condemn the MLK Bridge would result in the purchase of defendants' bonds by the states. This would clearly be a payment of funds by the states to plaintiffs to compensate for past acts. 46 We agree and in doing so reject appellants' argument that deciding whether relief is either permitted by Ex parte Young or barred by Edelman cannot be done without full development of the case at trial. In this case, the answer plainly hinges on the prayer for relief in appellants' complaint. They are seeking 47 an order declaring that said enactments, appropriations and actions constitute an unconstitutional impairment of plaintiffs' entitlement to the obligation of a contract; and for an order compelling defendants to condemn the MLK Bridge and to compensate the bondholders thereof, and to take over and to integrate said MLK Bridge into the interstate traffic needs of the cities of St. Louis and East St. Louis and the surrounding areas in the State of Illinois and Missouri; or in the alternative for damages suffered as a result of defendants' actions in the sum of the principal and interest owed as of the date of judgment; and for an order for reasonable attorney's fees and costs of court. 48 The prayer for relief in part asks for damages for past wrongful actions and, as we have already noted, the eleventh amendment expressly bars that remedy. It also appears to ask for equitable relief an injunction or mandamus directing the defendants to condemn the King Bridge, acquire it, and pay off the bondholders. This is but another verbalization of the claim for damages, however, and does not fall under the Edelman exception for injunctive relief. Appellants are asking for nothing more than that the defendants buy their claims, which consist of the sums owed them by the bankrupt bridge. The Edelman proscription of retroactive damage payments would become a Reductio ad absurdum if this action were permitted. 49
50 Even though we have ruled that the state defendants are entitled to eleventh amendment protection, the law is well settled that a state may waive its immunity. See Clark v. Barnard, 108 U.S. 436, 447, 2 S.Ct. 878, 27 L.Ed. 780 (1883). The district court found no waiver by any of the state defendants: 51 Recent cases construing the waiver doctrine have limited it to cases where a clear congressional intent to limit a state's sovereign immunity can be shown. Employees of the Department of Public Health and Welfare of Missouri v. Department of Public Health and Welfare of Missouri, supra. The doctrine has no application to the facts of this case. The threshold fact of congressional authorization to sue a class of defendants which literally includes states is wholly absent. Edelman v. Jordan, 415 U.S. at 672, 94 S.Ct. 1347, 39 L.Ed.2d 662. 52 This case is clearly distinguishable from Petty v. Tennessee-Missouri Bridge Commission, 359 U.S. 275, 79 S.Ct. 785, 3 L.Ed.2d 804 (1959), cited by plaintiffs. In that case Congress had approved a compact between the defendant states authorizing suits against the bridge authority. No such congressional action is present here. In sum, the Illinois and Missouri defendants must be dismissed from this action. This reasoning also applies to the individual defendants who are officials of the state. 53 Again, we agree with the district court. It is true that 54 when a State leaves the sphere that is exclusively its own and enters into activities subject to congressional regulation, it subjects itself to that regulation as fully as if it were a private person or corporation. (Parden v. Terminal Railway of the Alabama State Docks Department, 377 U.S. 184, 196, 84 S.Ct. 1207, 1215, 12 L.Ed.2d 233 (1964).) 55 In order for waiver to occur, however, more than mere operation of an interstate bridge must occur. There must be some clear indication of congressional intention to condition state entry into the field upon waiver of immunity. For example, the Supreme Court in Petty v. Tennessee-Missouri Bridge Commission, 359 U.S. 275, 79 S.Ct. 785, 3 L.Ed.2d 804 (1959), found an express waiver of immunity in the language of an interstate compact read in combination with a condition attached by Congress when it approved the compact. In Employees of the Department of Public Health and Welfare of Missouri v. Department of Public Health and Welfare of Missouri, 411 U.S. 279, 93 S.Ct. 1614, 36 L.Ed.2d 251 (1973), the Supreme Court found no waiver after carefully reviewing the applicable federal legislation. As the court in Intracoastal Transportation, Inc. v. Decatur County, 482 F.2d 361, 365 (5th Cir. 1973) stated: 56 It is no longer sufficient merely to show that a State has entered a federally regulated sphere of activity and that a private cause of action is created for violating the applicable federal provision, but in addition the private litigant must show that Congress expressly provided that the private remedy is applicable to the States. 57 None of the statutory provisions cited by appellants 10 even remotely suggest that participating states waive their eleventh amendment immunity to lawsuits such as the present one. 11 See, e. g., Daye v. Commonwealth of Pennsylvania, 483 F.2d 294 (3d Cir. 1973), Cert. denied, 416 U.S. 946, 94 S.Ct. 1956, 40 L.Ed.2d 298 (1974); Red Star Towing and Transportation Co. v. Department of Transportation of the State of New Jersey, 423 F.2d 104 (3d Cir. 1970). 58 In sum, we find that, at least insofar as the inverse condemnation claim goes, the state defendants have retained their eleventh amendment immunity and the district court properly dismissed that action against the states. 59
60 The district court, after noting that the eleventh amendment did not apply to the City and its mayor, William Mason, dismissed the inverse condemnation claim against these defendants on the same grounds that it had relied on in dismissing the United States as a defendant: failure to establish a constitutionally protected interest. For the reasons set out in part II(A)(1) of this opinion, we affirm this ruling by the district court. 12 61