Court Opinion

ID: 3051722
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:37:13.891711+00
Date Added: 2024-06-11T11:49:26.128675
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

SEVEN UP PETE VENTURE, an              
Arizona general partnership dba
Seven Up Pete Joint Venture;
CANYON RESOURCES CORPORATION, a
Delaware corporation; JEAN MUIR;
IRENE HUNTER, Doctor; DAVID
MUIR; ALICE CANFIELD; TONY
PALAORO; JUNE E. ROTHE-
BARNESON; AMAZON MINING                      No. 06-35384
COMPANY, a Montana partnership;
PAUL ANTONIOLI; STEPHEN                       D.C. No.
                                           CV-00-00013-CCL
ANTONIOLI; JAMES E. HOSKINS,
              Plaintiffs-Appellants,          OPINION
                v.
BRIAN SCHWEITZER, Governor of
the State of Montana; RICHARD
OPPER, Director of the Montana
Department of Environmental
Quality,
             Defendants-Appellees.
                                       
        Appeal from the United States District Court
                for the District of Montana
        Charles C. Lovell, District Judge, Presiding

                 Argued and Submitted
          November 7, 2007—Seattle, Washington

                    Filed April 21, 2008

    Before: William C. Canby, Jr., Susan P. Graber, and
            Ronald M. Gould, Circuit Judges.

                            4157
4158   SEVEN UP PETE VENTURE v. SCHWEITZER
            Opinion by Judge Canby
4160           SEVEN UP PETE VENTURE v. SCHWEITZER

                              COUNSEL

Sean Connelly, Reilly, Pozner & Connelly, LLP, Denver,
Colorado, for the plaintiffs-appellants.

Anthony Johnstone, Assistant Attorney General, Helena,
Montana, for the defendants-appellees.

                              OPINION

CANBY, Circuit Judge:

  The primary question before us is whether the Eleventh
Amendment precludes federal jurisdiction over an action
seeking compensation under the Fifth and Fourteenth Amend-
ments for a taking of property by a State.

   The factual setting of this case is simple enough; the proce-
dural context is more complicated. Seven Up Pete Venture
(“the Venture”) and other plaintiffs acquired leases of Mon-
tana state property for the purpose of mining gold, silver and
other trace minerals.1 Subsequently, voters of Montana
  1
    Except in the “Factual History” section of this opinion, all references
to “the Venture” include the other plaintiffs as well as Seven Up Pete Ven-
              SEVEN UP PETE VENTURE v. SCHWEITZER                  4161
enacted Initiative 137 (“I-137”), which banned open-pit min-
ing for gold or silver by the cyanide heap leaching process.
The Venture then brought this reverse condemnation action in
federal district court against the Governor of Montana and the
Director of the Montana Department of Environmental Qual-
ity in their official capacities. The Venture contended that I-
137 effected a regulatory taking of their property, for which
the State of Montana must pay just compensation under the
Fifth and Fourteenth Amendments of the United States Con-
stitution. At the same time, the Venture brought a reverse con-
demnation action in Montana state court. The Venture then
obtained a stay of the federal proceedings pending resolution
of the state claims. After the Montana Supreme Court rejected
the Venture’s claims, the district court dismissed the federal
takings claims under the Eleventh Amendment and, in the
alternative, under the doctrine of issue preclusion. The Ven-
ture now appeals that dismissal.

   We join a number of our sister circuits and hold that the
Eleventh Amendment bars a reverse condemnation action
brought in federal court against state officers in their official
capacities. We therefore affirm the district court’s dismissal
of the Venture’s takings claims on that ground without reach-
ing the question of issue preclusion.

                         BACKGROUND

  I.   Factual History2

  In 1991, the Venture acquired six leaseholds (“the Mineral
Leases”) of state-owned mineral estates in the vicinity of Lin-

ture.
    2
      Because the Montana Supreme Court recited the facts underlying this
litigation in some detail in a published opinion, we provide only a brief
summary of the events. See Seven Up Pete Venture v. State, 114 P.3d 1009
(Mont. 2005).
4162         SEVEN UP PETE VENTURE v. SCHWEITZER
coln, Montana. The lands encompassed by the Mineral Leases
comprise an area known as the “McDonald Project.” Accord-
ing to feasibility studies, the McDonald Project contains more
than 9 million ounces of gold and 20 million ounces of silver.
Approximately half of these minerals could be recovered
profitably through open-pit extraction combined with cyanide
leaching of the ore. In addition to its interest in the McDonald
Project, the Venture owns surface leases as well as other sur-
face and mineral interests in two other areas also located east
of Lincoln, Montana. These areas are designated as “Keep
Cool Prospect” and “Seven Up Pete Project.” The remaining
plaintiffs own surface or mineral interests in the general vicin-
ity of Lincoln, Montana.

   Throughout the mid-1990s, the Venture and the State of
Montana engaged in discussions regarding the environmental
impact and viability of mining in the McDonald Project. Nei-
ther the Venture nor any other plaintiff ever obtained a permit
to begin mining operations, as required by Montana Code
Annotated section 82-4-335(1), and no mining has in fact
taken place to date in the Project.

  In November 1998, Montana became the first state to pro-
hibit open-pit mining using cyanide heap leaching. It did so
by passing ballot initiative I-137, which, as codified, pro-
vides:

    (1) Open-pit mining for gold or silver using heap
    leaching or vat leaching with cyanide ore-processing
    reagents is prohibited except as described in subsec-
    tion (2).

    (2) A mine described in this section operating on
    November 3, 1998, may continue operating under its
    existing operating permit or any amended permit that
    is necessary for the continued operation of the mine.

Mont. Code Ann. § 82-4-390.
             SEVEN UP PETE VENTURE v. SCHWEITZER            4163
   According to the complaint, there are no gold or silver
recovery processes other than open-pit mining and cyanide
leaching that will allow economically viable production of the
gold and silver in the McDonald Project. In late 1999, the
Montana Department of Environmental Quality informed the
Venture that, in light of the passage of I-137, it had halted its
review of the Venture’s pending application for a mining per-
mit. The Montana Department of Natural Resources and Con-
servation later informed the Venture that the six Mineral
Leases terminated of their own accord due to the Venture’s
failure to “diligently pursue acquisition of a permit under
Montana’s Metal Mine Reclamation Act.” Seven Up Pete
Venture, 114 P.3d at 1015.

  II.   Procedural History

   In April 2000, the Venture filed a complaint in federal
court alleging, among other things, that I-137 worked a taking
of their property without just compensation in violation of the
Fifth and Fourteenth Amendments. On the same day, the Ven-
ture also filed a complaint in state court, which alleged,
among other things, that I-137 effectuated a regulatory taking
of its property rights without just compensation under Mon-
tana law.

   In the state complaint, the Venture advised the court that it
“reserve[d] [its] federal claims” for a separate federal action,
but was notifying the state court of its “federal claims so that
Plaintiffs’ state claims may be considered and adjudicated in
light of those claims, and not for determination by [the state]
Court of [its] federal claims.”

   The federal district court dismissed the federal Fifth
Amendment claim without prejudice on the ground that the
suit for compensation was not ripe under Williamson County
Regional Planning Commission v. Hamilton Bank of Johnson
City, 473 U.S. 172, 186 (1985), because the Venture had not
finished pursuing the procedures Montana provides for
4164           SEVEN UP PETE VENTURE v. SCHWEITZER
obtaining just compensation. The district court also concluded
that the Venture had preserved its right, pursuant to England
v. Louisiana State Board of Medical Examiners, 375 U.S. 411
(1964), to “return to federal court at the conclusion of the
state court proceedings if it remains necessary to litigate their
reserved federal claims.” Accordingly, the district court dis-
missed the Venture’s taking claims without prejudice and
granted its motion to stay the case pending resolution of the
state court proceedings.

   The Montana trial court subsequently granted summary
judgment in favor of the state in the state court proceedings,
and the Montana Supreme Court affirmed. The Montana
Supreme Court held that the Venture was not entitled to just
compensation because “[t]he guarantees of the Fifth and Four-
teenth Amendments apply only when a constitutionally pro-
tected property interest is at stake.” Seven Up Pete Venture,
114 P.3d at 1017 (alterations and internal quotation marks
omitted). The Court reasoned that the Venture’s “ ‘opportu-
nity’ to seek a permit, which required convincing the State
that this cyanide leaching project was appropriate, did not
constitute a property right. The State had wide discretion to
reject the Venture’s permit application, even without the
enactment of I-137.” Id. at 1019.

   The United States Supreme Court denied the Venture’s
petition for certiorari to review the state court judgment. The
Venture timely notified the district court and filed a motion to
reopen the case and reinstate the federal takings counts. The
district court reopened the case but dismissed the Venture’s
takings claims with prejudice. It held that the Eleventh
Amendment barred the Venture’s takings claims because they
seek monetary relief against state officials in their official
capacities. In the alternative, the district court held that it was
required to accord issue-preclusive effect to the Montana
Supreme Court’s decision.3 The Venture appeals both grounds
for dismissal.
  3
   Although the district court had earlier observed that the Venture had
preserved its right under England to return to federal court for adjudica-
               SEVEN UP PETE VENTURE v. SCHWEITZER                      4165
                             DISCUSSION

   [1] The Eleventh Amendment has been authoritatively con-
strued to deprive federal courts of jurisdiction over suits by
private parties against unconsenting States.4 See Seminole
Tribe v. Florida, 517 U.S. 44, 54 (1996). This jurisdictional
bar remains effective, if a bit less absolute, in cases like this
where state officials, instead of the State itself, are the sub-
jects of suit. Generally speaking, “a suit [brought] against a
state official in his or her official capacity is not a suit against
the official but rather is a suit against the official’s office. As
such, it is no different from a suit against the State itself.” Will
v. Mich. Dep’t. of State Police, 491 U.S. 58, 71 (1989) (cita-
tion omitted). If, however, the plaintiffs seek prospective
injunctive relief against the state official for a violation of fed-
eral law, the Eleventh Amendment does not bar the action. Ex
parte Young, 209 U.S. 123 (1908); Edelman v. Jordan, 415
U.S. 651, 664 (1974).

   These general principles guide our analysis of the two
issues that we decide in this case: 1) whether the Takings
Clause occupies a unique place among constitutional protec-
tions in that, by virtue of its built-in remedy of just compensa-
tion, it overrides Eleventh Amendment immunity and 2) if
not, whether the doctrine of Ex parte Young applies to permit
this suit against the state officials. Before turning to the merits
of the first issue, we satisfy ourselves that this court has not
already considered and decided it.

tion of the federal constitutional issues, the court held that the intervening
Supreme Court decision in San Remo Hotel L.P. v. City & County of San
Francisco, 545 U.S. 323, 340-48 (2005), required the district court to give
issue-preclusive effect to the Montana decision.
   4
     “Immunity under the Eleventh Amendment is a question of law that we
review de novo.” Yakama Indian Nation v. Wash. Dep’t. of Revenue, 176
F.3d 1241, 1245 (9th Cir. 1999).
4166         SEVEN UP PETE VENTURE v. SCHWEITZER
  I. Broughton and Stare Decisis

   [2] This court upheld the dismissal of a reverse condemna-
tion action on Eleventh Amendment grounds in Broughton
Lumber Co. v. Columbia River Gorge Comm’n, 975 F.2d 616,
620 (9th Cir. 1992). One might well assume that Broughton
thus ends the matter and controls this case, but Broughton was
directed at a different argument. In Broughton, the plaintiff
pursued a reverse condemnation action in federal court alleg-
ing that Washington and Oregon effected an unconstitutional
regulatory taking of its property by failing to issue a land use
permit. Id. at 618. The plaintiff’s argument assumed that the
Eleventh Amendment ordinarily applied in reverse condemna-
tions actions, but asserted that Congress had abrogated the
immunity of Washington and Oregon in the statute approving
the Columbia River Gorge Compact. Id. at 619. The court
found no such abrogation in the statute, and accordingly held
the suit to be barred by the Eleventh Amendment. Id. at 619-
20. The argument presented in today’s case — that the self-
executing nature of the Takings Clause itself defeats Eleventh
Amendment immunity — was neither raised nor discussed.

   [3] Because Broughton did not directly address the latter
issue, it does not control our decision. It is true that “where
a panel confronts an issue germane to the eventual resolution
of the case, and resolves it after reasoned consideration in a
published opinion, that ruling becomes the law of the circuit,
regardless of whether doing so is necessary in some strict log-
ical sense.” United States v. Johnson, 256 F.3d 895, 914 (9th
Cir. 2001) (en banc) (per curiam). But Broughton involved no
such reasoned consideration of the issue before us. Reconsid-
eration of an issue may be appropriate “where the later panel
is convinced that the earlier panel did not make a deliberate
decision to adopt the rule of law it announced.” Id. at 915.
That is the situation here: we are convinced that Broughton
made no deliberate decision rejecting the proposition that the
self-executing nature of the Takings Clause overcame Elev-
               SEVEN UP PETE VENTURE v. SCHWEITZER                 4167
enth Amendment immunity. In deciding that question today,
we are not constrained by Broughton.5

  II.      Self-Execution and the Eleventh Amendment

      A.    Self-Execution

   [4] The Supreme Court has long recognized that the just
compensation clause of the Fifth Amendment is self-
executing: “ ‘the right to recover just compensation . . . [i]s
guaranteed by the Constitution’ ” and “ ‘[s]tatutory recogni-
tion [i]s not necessary.’ ” First English Evangelical Lutheran
Church v. County of Los Angeles, 482 U.S. 304, 315 (1987)
(emphasis omitted) (quoting Jacobs v. United States, 290 U.S.
13, 16 (1933)). From this fact, the Venture argues that the
constitutional right to compensation overcomes the state’s
Eleventh Amendment immunity. We reject this contention;
we conclude that the constitutionally grounded self-executing
nature of the Takings Clause does not alter the conventional
application of the Eleventh Amendment.

   [5] The Supreme Court’s reverse condemnation cases have
not spoken directly to our question. Neither First English, a
suit against a county, nor City of Monterey v. Del Monte
Dunes at Monterey, Ltd., 526 U.S. 687 (1999), a suit against
a municipality, controls the Eleventh Amendment analysis,
for both cases involved state entities not protected by the
Amendment. See, e.g., Lake Country Estates, Inc. v. Tahoe
Regional Planning Agency, 440 U.S. 391, 401 & n.19 (1979)
(“[T]he Court has consistently refused to construe the Amend-
ment to afford protection to political subdivisions such as
counties and municipalities, even though such entities exer-
  5
    At least two cases decided since Broughton contained dicta suggesting
that it was an open question in this circuit whether reverse condemnation
actions could be brought against an unconsenting State in federal court.
See Spoklie v. Montana, 411 F.3d 1051, 1058 (9th Cir. 2005); Taylor v.
Westly, 402 F.3d 924, 936 (9th Cir. 2005).
4168           SEVEN UP PETE VENTURE v. SCHWEITZER
cise a ‘slice of state power.’ ”).6 In sum, First English
expounds the self-executing character of the Takings Clause
and the resulting obligation by the states to provide a specific
remedy for takings in their own courts, but does not directly
address its interplay with the Eleventh Amendment. See Rich-
ard H. Seamon, The Asymmetry of State Sovereign Immunity,
76 Wash. L. Rev. 1067, 1072-80 (2001). This is the issue to
which we now turn.

      B.   Eleventh Amendment and Sovereign Immunity

   [6] The Supreme Court addressed the interplay of sovereign
immunity and another “self-executing” constitutional provi-
sion in Reich v. Collins, 513 U.S. 106 (1994), a case address-
ing the remedy required under the Due Process Clause for
unconstitutionally levied taxes. The Court concluded that a
state court could not wholly deny a remedy, stating that “ ‘a
denial by a state court of a recovery of taxes exacted in viola-
tion of the laws or Constitution of the United States by com-
pulsion is itself in contravention of the Fourteenth
Amendment,’ the sovereign immunity States traditionally
enjoy in their own courts notwithstanding.” Id. at 109-10
(quoting Carpenter v. Shaw, 280 U.S. 363, 369 (1930)). The
Court also observed parenthetically that, although the State
could not invoke its sovereign immunity to avoid refunding
an unconstitutional tax, the Eleventh Amendment neverthe-
less ordinarily barred such actions from federal court. Id. at
110. If sovereign immunity may not stand in the way of
recovery in state court for unconstitutionally levied taxes
because of the “self-executing” character of the Due Process
  6
   Unsurprisingly, then, the First English Court did not place any analyti-
cal weight on sovereign immunity, mentioning the term only once and,
even then, only to paraphrase the government’s argument. First English,
482 U.S. at 316 n.9 (“The Solicitor General urges that the prohibitory
nature of the Fifth Amendment, combined with principles of sovereign
immunity, establishes that the Amendment itself is only a limitation on the
power of the Government to act, not a remedial provision.” (citation omit-
ted)).
              SEVEN UP PETE VENTURE v. SCHWEITZER                 4169
right at stake, it follows that the state courts must also be
available to adjudicate claims brought under the federal Tak-
ings Clause, which is also self-executing. And, as Reich
states, this constitutionally enforced remedy against the States
in state courts can comfortably co-exist with the Eleventh
Amendment immunity of the States from similar actions in
federal court.

   [7] It is not surprising, then, that every court of appeals to
have faced this question has expressly or implicitly applied
the Reich rationale and held that the Eleventh Amendment
bars Fifth Amendment reverse condemnation claims brought
in federal district court. See DLX, Inc. v. Kentucky, 381 F.3d
511, 526-28 (6th Cir. 2004) (“[The State] enjoys sovereign
immunity in the federal courts from [a] federal takings claim
. . . .”); John G. & Marie Stella Kenedy Mem’l Found. v.
Mauro, 21 F.3d 667, 674 (5th Cir. 1994) (“[A] Fifth Amend-
ment inverse condemnation claim brought directly against the
State . . . is . . . barred by the Eleventh Amendment.”); Robin-
son v. Ga. Dep’t of Transp., 966 F.2d 637, 640 (11th Cir.
1992) (same); Citadel Corp. v. Puerto Rico Highway Auth.,
695 F.2d 31, 33 n.4 (1st Cir. 1982) (per curiam) (same); Gar-
rett v. Illinois, 612 F.2d 1038, 1040 (7th Cir. 1980) (same).
At least one commentator has agreed. See Richard H. Sea-
mon, supra, at 1080-87.7

   There is one additional wrinkle that must be added to the
analysis, however. Five years after its decision in Reich, the
Supreme Court decided Alden v. Maine, 527 U.S. 706 (1999).
Alden held that the immunity of the States from suit without
their consent was a fundamental aspect of sovereignty, which
  7
   Some earlier articles, written before the Supreme Court’s decision in
Reich, took a different view. See Vicki C. Jackson, The Supreme Court,
the Eleventh Amendment, and State Sovereign Immunity, 98 Yale L.J. 1,
115 n.454 (1988); Jack M. Beermann, Government Official Torts and the
Takings Clause: Federalism and State Sovereign Immunity, 68 B.U. L.
Rev. 277, 338-39 (1988).
4170         SEVEN UP PETE VENTURE v. SCHWEITZER
the States enjoyed before the adoption of the Constitution and
retained thereafter “except as altered by the plan of the [Con-
stitutional] Convention or certain constitutional Amend-
ments.” Id. at 713. Accordingly, Congress lacked the power
under Article I of the Constitution to enact legislation subject-
ing the States to suit in state courts. See id. at 712. The Elev-
enth Amendment was simply a recognition of a two-part
presupposition underlying the Constitution: (1) that each State
is sovereign, and (2) that immunity from suit without the
State’s consent is inherent in sovereignty. Id. at 729.

   From this formulation, the Venture draws some interesting
arguments. First, the Venture assumes, justifiably enough,
that there must be some forum in which the self-executing
constitutional guarantee of just compensation for taking of
property may be enforced. Thus, the Takings Clause must be
capable of overcoming State sovereignty. Alden, however,
makes it clear that Eleventh Amendment immunity is not
unique, but is simply one expression of the total sovereign
immunity of the States, applicable equally in federal and state
court. Therefore, the Venture reasons, the self-executing dom-
inance of the Takings Clause over State immunity applies
equally in state and federal court.

   We decline to adopt the Venture’s “forum-neutral” concep-
tion of sovereign immunity for several reasons. First, although
the Court in Alden viewed the Eleventh Amendment as a rec-
ognition of, rather than the origin of, sovereign immunity of
the States, it nowhere commanded that the immunity be
treated exactly the same for all purposes in both federal and
state courts. It certainly did not purport to repudiate the com-
mand of the Eleventh Amendment precluding suits by private
parties against unconsenting States in federal court. More-
over, the Court discussed Reich with approval, noting that the
remedy against the State in Reich arose “from the Constitu-
tion itself; Reich does not speak to the power of Congress to
subject States to suits in their own courts.” Alden, 527 U.S.
at 740. Nothing in this passage suggests or requires a change
              SEVEN UP PETE VENTURE v. SCHWEITZER                  4171
in the regime addressed in Reich: that the State may be sued
in its own courts (but not in federal court) for damages arising
from violation of a self-executing constitutional clause.

   [8] We therefore conclude that the Eleventh Amendment
bars reverse condemnation actions brought in federal court
against state officials in their official capacities.8 In reaching
this conclusion, we join the only sister circuit to have
addressed the interplay of the Takings Clause and the Elev-
enth Amendment since Alden. See DLX, Inc., 381 F.3d at 528
(quoting Alden, 527 U.S. at 712).

  III.   Applicability of Ex parte Young

   [9] As its last resort, the Venture contends that the stric-
tures of the Eleventh Amendment may be avoided by viewing
its suit as one seeking injunctive relief against state officers
to force them to adhere to the Constitution, as in Ex Parte
Young. The applicability of the Ex parte Young exception
turns on whether federal takings actions are properly charac-
terized as seeking prospective or retrospective relief. A rem-
edy for past injury, even if it purports to be an injunction
against state officers requiring the future payment of money,
is barred because relief “inevitably come[s] from the general
revenues of the State . . . , and thus . . . resembles far more
closely [a] monetary award against the State itself,” which is
forbidden under the Eleventh Amendment. Edelman, 415 U.S.
at 665. “In determining whether the doctrine of Ex parte
Young avoids an Eleventh Amendment bar to suit, a court
need conduct only a ‘straightforward inquiry into whether the
complaint [1)] alleges an ongoing violation of federal law and
[2)] seeks relief properly characterized as prospective.’ ”
Verizon Md., Inc. v. Pub. Serv. Comm’n, 535 U.S. 635, 645
(2002) (alteration omitted) (quoting Idaho v. Coeur d’Alene
  8
   The Venture does not contend that the Montana state courts have failed
to provide adequate procedures to adjudicate its just compensation claim.
4172         SEVEN UP PETE VENTURE v. SCHWEITZER
Tribe, 521 U.S. 261, 296 (1997) (O’Connor, J., concurring in
part and concurring in judgment)).

   [10] It is impossible to characterize the relief sought by the
Venture as prospective. A reverse condemnation action seeks,
“in a strict sense[,] . . . not just compensation per se but rather
damages for the unconstitutional denial of such compensa-
tion.” Del Monte Dunes, 526 U.S. at 710. From a remedial
perspective, then, “just compensation” is on all fours with tra-
ditional monetary damages, which are the quintessential form
of retrospective relief. Thus, reverse condemnation actions
cannot qualify as claims for prospective relief, and Ex parte
Young consequently does not apply.

                        CONCLUSION

   The Eleventh Amendment bars the Venture’s reverse con-
demnation action brought in federal court against Montana’s
officials in their official capacities. We affirm the district
court’s dismissal of the Venture’s action on this ground and
do not reach the question of issue preclusion.

  AFFIRMED.