Court Opinion

ID: 2785753
Source: CourtListenerOpinion
Date Created: 2015-03-12 16:01:02.062947+00
Date Added: 2024-06-11T11:04:05.601427
License: Public Domain

FILED
                                                 United States Court of Appeals
                    UNITED STATES COURT OF APPEALS       Tenth Circuit

                           FOR THE TENTH CIRCUIT                        March 12, 2015

                                                                     Elisabeth A. Shumaker
                                                                         Clerk of Court
MARK C. HAIK,

             Plaintiff - Appellant,

v.                                                        No. 14-4074
                                                  (D.C. No. 2:13-CV-01051-TS)
SALT LAKE COUNTY BOARD OF                                   (D. Utah)
HEALTH,

             Defendant - Appellee.

                            ORDER AND JUDGMENT*

Before KELLY, BALDOCK, and MORITZ, Circuit Judges.

      Mark C. Haik brought this action in state court, alleging that the Salt Lake

County Board of Health (Board) violated his state and federal due process rights.

The Board removed the case to federal court and moved to dismiss under Federal

Rule of Civil Procedure 12(b)(6), arguing that Mr. Haik’s claims were barred by the

doctrine of issue preclusion because he had twice previously litigated the underlying

*
      After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
dispute. Mr. Haik moved to remand to state court, claiming his complaint raised

issues primarily of state law, but the district court denied his motion and summarily

dismissed the case.

       We now reverse. We conclude that Mr. Haik’s complaint fails to present a

substantial question of federal law because his claims are devoid of merit and the

dispositive issue has been previously decided by this court. We therefore vacate the

district court’s dismissal on the merits and remand with instructions to remand this

case to the state court for lack of federal subject-matter jurisdiction.

                                             I

       Mr. Haik has had a long running water dispute with Salt Lake City, Utah

(SLC) and the Town of Alta, Utah. In 1994, Mr. Haik and Raymond A. Haik

purchased four lots in a subdivision above the Alta and Snowbird ski resorts. The

Haiks sought to develop the property, but Alta denied them building permits because

the appurtenant water rights were insufficient to meet the Board’s requirements of

access to 400 gallons of water per day. Mr. Haik sought to have water service

extended to the property, but under the terms of an intergovernmental water-supply

agreement, Alta could not extend service without the consent of SLC, and SLC

declined consent. Consequently, Mr. Haik has been unable to develop his property.

       The dispute has twice come before this court. The Haiks’ first action, which

was filed in state court in 1997, alleged (among other claims not relevant here) that

Alta had taken and damaged the property by refusing to extend municipal services

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and denying them a building permit in violation of the Utah Constitution, Article I,

Section 22. See Haik v. Town of Alta, 1999 WL 190717, at *1 (10th Cir. 1999)

(unpublished) (“Haik I”). After Alta and SLC removed the case to federal court, the

district court granted their motion for summary judgment. Id. at *1-2 & n.1. We

affirmed, ruling that under the Utah Constitution, the Haiks could not “maintain a

taking claim because they did not have a protectable interest in property that was

taken or damaged by Alta’s denial of a building permit. Alta’s denial of a building

permit was based on the health department requirement of 400 gallons of water

per day per unit, which the Haiks did not meet.” Id. at *7.

      In 2012, the Haiks initiated a second suit in federal court based on new factual

allegations that the State Engineer had approved SLC’s provision of water to the

subdivision where the Haiks’ property was located. See Haik v. Salt Lake City Corp.,

567 F. App’x 621, 625-26 (10th Cir. 2014) (“Haik II”). In addition to other claims,

the Haiks brought substantive and procedural due process claims against SLC.

Id. at 626. The district court dismissed those claims, “believ[ing] that nothing of

significance had changed since Haik I and that the majority of the Haiks’ claims had

already been decided.” Id. Again we affirmed, explaining that the due process

claims were barred by the doctrine of issue preclusion because the determinative

issue—“whether the denial of the development permits deprived [the Haiks] of a

protected property interest”—was already resolved against them in the context of

their taking claim in Haik I. Id. at 628-29. We acknowledged that the issue arose

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within the context of different claims against different parties: the taking claim

alleged that Alta deprived them of the asserted interest by denying the building

permits, while the due process claims alleged that SLC deprived them of the interest

by interfering with the permitting process. Id. at 628. But we explained that “[t]he

very same question remains: Do the Haiks have any protected interest in the building

permits, or, to put a finer point on it, in the water on which those permits depend?

We said ‘no’ before and are not inclined to give the Haiks a second opportunity to

litigate this issue.” Id. at 628-29.

       Now in this third action, which was originally filed in state court, Mr. Haik

repeats his allegation from Haik II that he reapplied for the necessary building and

septic permits based on the State Engineer’s approval of a diversion to the

subdivision where his property is located. Aplt. App. at 16. He also alleged that the

Utah Supreme Court adjudicated other water rights in his favor. See Haik v. Sandy

City, 254 P.3d 171, 174, 180 (Utah 2011) (quieting title to a water right appurtenant

to an adjacent lot in Mr. Haik and others). Additionally, Mr. Haik alleged that after

conferring and meeting with the Salt Lake Valley Health Department, his

applications for building permits were denied. Aplt. App. at 17, 25-26. As a result,

he requested a hearing, which was scheduled before hearing officer Langdon Owen.

Id. at 26-29. Mr. Haik sought to disqualify Owen due to an alleged conflict involving

Owen’s law partner, but Owen declined to recuse and ultimately ruled against

Mr. Haik. Id. at 29, 45. This prompted Mr. Haik to seek further review by the

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Board, which granted him ten minutes of oral argument but refused to accept any

new evidence. Id. at 48. Mr. Haik objected, claiming he was entitled to a “plenary

hearing by the Board as provided by Utah Code § 26A-1-121,” id., but the Board

denied plenary review in the exercise of its discretion and affirmed Owen’s adverse

decision, id. at 50.

       Based on these allegations, Mr. Haik’s first claim, entitled, “Error of Law and

Denial of Due Process,” alleged violations of his due process rights under the Utah

Constitution and the Fourteenth Amendment based on the denial of a “plenary

hearing as authorized by Utah Code § 26A-1-121(2)(a).” Id. at 52.1 His second

claim, entitled, “Disqualified Hearing Officer,” alleged that Owen should have been

disqualified and the Board’s failure to provide a qualified hearing officer violated his

due process rights under the Utah Constitution and the Fourteenth Amendment. Id. at

53-54. Last, Mr. Haik’s third claim, entitled, “Arbitrary and Capricious and Contrary

to Law,” id. at 55, alleged that the Board acted arbitrarily and capriciously and

contrary to the law by adopting Owen’s decision and denying Mr. Haik “an

evidentiary hearing and meaningful opportunity to be heard,” id. at 58.

1
       Utah Code Ann. § 26A-1-121(2)(a) states:
       A person aggrieved by an action or inaction of the local health department
       relating to the public health shall have an opportunity for a hearing with the
       local health officer or a designated representative of the local health
       department. The board shall grant a subsequent hearing to the person upon
       the person’s written request.

                                            -5-
      The district court summarily dismissed these claims on the merits, ruling that

Mr. Haik’s claims failed “[f]or substantially the same reasons stated by” the courts

that had previously considered this water dispute. Id. at 191. On appeal, Mr. Haik

maintains that the district court lacked jurisdiction to dismiss his claims because his

complaint raises issues primarily of state law. Thus, he contends that removal was

improper and this case should be remanded to state court. We review the propriety of

removal de novo, Lovell v. State Farm Mut. Auto. Ins. Co., 466 F.3d 893, 897

(10th Cir. 2006), and agree that removal was improper, though not because

Mr. Haik’s construction of the complaint as primarily one of state law is persuasive,

but because his federal claims are completely devoid of merit and foreclosed by our

prior decisions.

                                           II

      “A case originally filed in state court may be removed to federal court if, but

only if, federal subject-matter jurisdiction would exist over the claim.” Firstenberg

v. City of Santa Fe, 696 F.3d 1018, 1023 (10th Cir. 2012) (internal quotation marks

omitted). “The party invoking federal jurisdiction has the burden to establish that it

is proper, and there is a presumption against its existence.” Salzer v. SSM Health

Care of Okla. Inc., 762 F.3d 1130, 1134 (10th Cir. 2014) (internal quotation marks

omitted). To invoke subject-matter jurisdiction, a well-pleaded complaint must

present a substantial federal claim. Hagans v. Lavine, 415 U.S. 528, 536-38 (1974).

Federal courts lack subject-matter jurisdiction “when the claim is so insubstantial,

                                          -6-
implausible, foreclosed by prior decisions of this Court, or otherwise completely

devoid of merit as not to involve a federal controversy.” Steel Co. v. Citizens for a

Better Env’t, 523 U.S. 83, 89 (1998) (internal quotation marks omitted); see Harline

v. DEA, 148 F.3d 1199, 1203 (10th Cir. 1998) (“A constitutional claim in this context

is not colorable if it is immaterial and made solely for the purpose of obtaining

jurisdiction or is wholly insubstantial or frivolous.” (ellipsis and internal quotation

marks omitted)); accord Maroney v. Univ. Interscholastic League, 764 F.2d 403, 405

(5th Cir. 1985) (“Jurisdiction purporting to be premised on the presence of a federal

question attaches only if the complaint itself states a substantial federal claim. Thus,

we must dismiss for want of jurisdiction if the federal claim presented is frivolous or

is foreclosed by prior authoritative decisions.” (citations omitted)).

      Contrary to Mr. Haik’s characterizations, his complaint plainly seeks to raise

issues of federal law. Removal was nevertheless improper, however, because none of

his claims present a substantial question of federal law. Indeed, his claims all

purport to challenge the Board’s alleged deprivations of due process in denying his

applications for building permits and water service. But this court has twice already

affirmed district court rulings that Mr. Haik does not have a protected property

interest in those permits so as to support his due process claims. See Haik II,

567 F. App’x at 628-29; Haik I, 1999 WL 190717, at *7. The district court clearly

recognized this because it summarily dismissed the claims “[f]or substantially the

same reasons stated by” the courts that had previously considered Mr. Haik’s actions.

                                           -7-
Aplt. App. at 191. Yet because the claims were so facially insubstantial as to

preclude federal question jurisdiction, in light of the prior decisions of this court, the

district court lacked subject-matter jurisdiction to render a merits dismissal under

Rule 12(b)(6). See Muscogee (Creek) Nation v. Pruitt, 669 F.3d 1159, 1167-68

(10th Cir. 2012) (discussing the different standards that apply to a dismissal for lack

of subject matter jurisdiction and a dismissal for failure to state a claim, which

operates as a judgment on the merits).2 Consequently, we vacate the district court’s

dismissal and remand with instructions to remand this case to state court for lack of

federal subject-matter jurisdiction. See Topeka Hous. Auth. v. Johnson, 404 F.3d
1245, 1247-48 (10th Cir. 2005) (“When the federal court lacks subject-matter

jurisdiction over a removed case, the court must remand the case to the state court.”

(citing 28 U.S.C. § 1447(c))).

                                            III

       The judgment of the district court is reversed and its dismissal is vacated. This

case is remanded to the district court with instructions to remand to the state court for

2
       Of course, “‘[j]urisdiction is not defeated by the possibility that the averments
might fail to state a cause of action on which petitioners could actually recover.’”
Pruitt, 669 F.3d at 1167 (ellipses omitted) (quoting Bell v. Hood, 327 U.S. 678, 682
(1946). But as the Court reiterated in Steel Company, there are exceptions when “the
claim ‘clearly appears to be immaterial . . . or . . . wholly insubstantial and
frivolous.’” 523 U.S. at 89 (quoting Bell, 327 U.S. at 682-83). Mr. Haik’s complaint
falls within the scope of these exceptions.

                                           -8-
lack of federal subject-matter jurisdiction. Mr. Haik’s motion to certify questions of

state law to the Utah Supreme Court is denied.

                                               Entered for the Court

                                               Paul J. Kelly, Jr.
                                               Circuit Judge

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