Court Opinion

ID: 9494458
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:38:17.065844+00
Date Added: 2024-06-11T17:56:25.422046
License: Public Domain

LAY, Circuit Judge,
dissenting.
I respectfully dissent. I respectfully submit the majority opinion fails to fully address the jurisdictional issues necessary to a correct decision in this case.
It is this court’s responsibility to consider questions of subject matter jurisdiction, in the first instance. In Minnesota, condemnation proceedings are unique, in that they are considered as in rem proceedings, rather than full-fledged civil actions. See Antl v. State, 220 Minn. 129, 19 N.W.2d 77, 79 (Minn.1945); State v. Werder, 200 Minn. 148, 273 N.W. 714, 715-16 (Minn.1937). A Minnesota state court presiding over a condemnation proceeding is a court of limited jurisdiction. See City of Mankato v. Hilgers, 313 N.W.2d 610, 612 (Minn.1981) (“[W]hen the district court is reviewing a commissioners’ award in the form of a trial de novo before a jury, its jurisdiction is appellate and the only issue is the amount of damages necessary to make just compensation.”). Specifically, a jury empaneled to review the decision of appointed commissioners has very limited jurisdictional authority. All that jury is authorized to do is review the commissioners’ compensation decision, which, in turn, is the commissioners’ only responsibility. See State v. Prow’s Motel, Inc., 285 Minn. 1, 171 N.W.2d 83, 85 (Minn.1969) (“[T]he sole function of lay commissioners appointed by the court ... is ‘to ascertain and report the amount of damages that will be sustained ... on account of such taking ....’”) (citations omitted). Thus, I respectfully submit the state court in this case lacked subject matter jurisdiction to decide the fraud question.
The majority tentatively agrees with this conclusion. See Maj. Op. at 567 (“We acknowledge that a condemnation proceeding ordinarily does not decide issues of fraud .... ”). However, it states that this case proves to be an exception to the rule because the parties consented to the condemnation jury deciding the fraud issue. Id. The MCDA urges there was not consent; I would agree. However, the presence or absence of consent is irrelevant, as consent cannot confer subject matter jurisdiction where it is lacking. See Smith v. Ashland, Inc., 250 F.3d 1167, 1172 (8th Cir.2001); In re Grand Jury Subpoenas Duces Tecum, 78 F.3d 1307, 1310 (8th Cir.1996); Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 671 (8th Cir.1986). The Minnesota state courts also abide by this rule. See Minn. R. Civ. P. 12.08(c) (“Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the *570court shall dismiss the action.”); Herubin v. Finn, 603 N.W.2d 133, 137 (Minn.Ct.App.1999) (“Subject matter jurisdiction cannot be conferred upon the court by consent of the parties.”) (citing Hemmesch v. Molitor, 328 N.W.2d 445, 447 (Minn.1983)).
Because the jury lacked jurisdictional authority to decide fraud as an ultimate issue, its decision on that issue cannot be given collateral estoppel effect. See Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979) (“Under collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation.”) (emphasis added) (cited in City of Bismarck v. Toltz, King, Duvall, Anderson & Assocs., Inc., 767 F.2d 429, 430-31 (8th Cir.1985)). See also 46 Am.Jur.2d Judgments § 571 (1994) (“[I]n order that a judgment may operate as a conclusive determination of a cause of action, or of issues litigated in a previous action, it is necessary that it should have been rendered by a court of competent jurisdiction .... ”). A valid judgment is an absolute prerequisite to application of the collateral estoppel doctrine. See In re Miera, 926 F.2d 741, 743 (8th Cir.1991) (“It is well settled under the collateral estoppel doctrine that four elements must exist to bar relitigation ... (3) the issue must have been determined by a valid and final judgment ....”) (emphasis added); Restatement (Second) of Judgments § 27 (1982) (“When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.”).
In response to the foregoing analysis, defendants respond that, even if the jury did not have authority to decide the fraud question as such, deciding that issue was necessary to determining the propriety of the condemnation award. The majority agrees, holding that the MCDA proffered fraud as an affirmative defense, and, therefore, the state condemnation court properly put the question of fraud to the jury. See Maj. Op. at 567, 568. Thus, they hold the jury properly determined the fraud issue regardless of its limited authority. I respectfully disagree; it should be clear that characterization of the fraud issue as an “affirmative defense” is erroneous.
For a prior judgment to have preclusive effect and prevent relitigation of issues decided therein, that issue must have been actually litigated in the prior proceeding and necessary to that judgment. See Boudreau v. Wal-Mart Stores, Inc., 249 F.3d 715, 719 (8th Cir.2001) (citing Arkansas law); In re Miera, 926 F.2d at 743 (“It is well settled under the collateral estoppel doctrine that four elements must exist to bar relitigation ... (2) the issue must have been litigated in the prior action [and] (4) the determination must have been essential to the prior judgment.”); Lane v. Sullivan, 900 F.2d 1247, 1250 (8th Cir.1990); Haavisto v. Perpich, 520 N.W.2d 727, 731 (Minn.1994) (“The doctrine of collateral es-toppel mandates that ‘once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits, based on a different cause of action, involving a party to the prior litigation.’ ”) (emphasis added) (cited in Popp Telcom v. Am. Sharecom, Inc., 210 F.3d 928, 939 (8th Cir.2000)).
I would agree that the issue of fraud was actually litigated in the condemnation proceeding, for the reasons set forth in the majority opinion. However, I submit the *571crux of the issue is whether such a determination was necessary for the resolution of the condemnation dispute. If not, the jury’s determination is due no deference. See Restatement (Second) of Judgments § 27(h) (“If issues are determined but the judgment is not dependent upon the determinations, relitigation of those issues ... is not precluded. Such determinations have the characteristics of dicta, and may not ordinarily be the subject of an appeal by the party against whom they were made. In these circumstances, the interest in providing an opportunity for a considered determination, which if adverse may be the subject of an appeal, outweighs the interest in avoiding the burden of relit-igation.”).
It is clear that the determination of the question of fraud was not essential to the jury’s decision. The jury’s opinion as to whether Golden Spike or the individual defendants had submitted a fraudulent claim, as opposed to merely a losing claim, could not have made a legitimate difference in its determination of the damages issue, which was the only “ultimate issue” the jury actually had before it. The trial judge presiding over the condemnation proceedings agreed. Although he recited the jury’s findings in their entirety, he properly rendered his judgment solely on the basis of the finding that Golden Spike had failed to establish ownership.2
In fact, the irrelevance of the fraud question posed to the jury would have been true regardless of how the jury came out on the question of ownership. As the condemnation judgment actually unfolded, the jury found that Golden Spike did not own the bookstore at '10 South Ninth Street. That was the only finding necessary for the jury to deny compensation. Subsequent to that finding, precisely what the defendants did or what their mental state was in submitting the claim had absolutely no bearing on the outcome of the case.
Nor could the question of fraud had any bearing if the jury had come out the other way on the question of ownership. An affirmative decision on ownership would have likewise ended the inquiry. If the jury found that Golden Spike owned the building, the MCDA would have lost even if Golden Spike’s owners had possessed fraudulent intent. Under the law of eminent domain,- Golden Spike, as owner of condemned property, would have been due compensation regardless of how “bad” its owners were.3
Under any conceivable scenario, including the jury’s actual findings, the question of fraud was absolutely superfluous to the judgment the jury was required to render. The MCDA is quite right to say, in retrospect, that the question should have been deleted entirely. This is not to say that it is this court’s responsibility to save the MCDA from the consequences of its own error at trial. Rather, it is to recognize *572that all courts have a duty to enforce their own jurisdictional limits regardless of the consequential effect on parties.
In this case, the state condemnation court had no authority to decide the fraud question. It also had no authority to decide the question ancillary to its decision on damages; determining fraud, as opposed to merely lack of ownership, was not necessary to decide the damages issue. Therefore, preclusive effect cannot be given to the decision of the state condemnation court. Notwithstanding the majority’s reasoned analysis of the four collateral estoppel factors, its analysis should not have proceeded beyond the jurisdictional question. Regardless of the respect generally due state court judgments by federal courts, see Haberer v. Woodbury County, 188 F.3d 957, 961 (8th Cir.1999), the state condemnation court did not have subject matter jurisdiction to decide the fraud question. Thus, the state court’s “resolution” of that question was not binding on any subsequent court. The district court’s order should be reversed and the case remanded for consideration of the fraud issue by a competent court.

. Indeed, the judge would have erred had he based his final judgment on any other grounds. The majority, by attributing legal authority to his recitation of the jury’s findings in their entirety, impliedly attributes such an error to him. I cannot agree with this conclusion.

. Characterizing the fraud question as an affirmative defense, as the majority does, is erroneous. Characterizing something as an affirmative defense implies that a defending party will successfully defend against a claim if the defense is accepted. As noted above, establishment of the independent elements of fraud, notably scienter in this case, could have had no legitimate impact on the outcome. Perhaps the jury and the trial court could have nullified the state law of eminent domain by refusing compensation because the owners were "bad,” but this would have been an unjustifiable error rather than grounds on which to declare fraud an affirmative defense.