United States v. Sid-Mars Restaurant & Lounge, Inc.

Case: 09-30869 Document: 00511512144 Page: 1 Date Filed: 06/17/2011

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

June 17, 2011

No. 09-30869 Lyle W. Cayce

Clerk

UNITED STATES OF AMERICA,

Plaintiff - Appellee

v.

SID-MARS RESTAURANT & LOUNGE, INC.,

Defendant - Appellant

Appeal from the United States District Court

for the Eastern District of Louisiana

Before DENNIS, OWEN, and SOUTHWICK, Circuit Judges.

LESLIE H. SOUTHWICK, Circuit Judge:

Sid-Mar’s Restaurant filed suit in state court demanding compensation

from the State of Louisiana for the commandeering of its real property following

Hurricane Katrina. While the state court litigation was pending, the United

States initiated condemnation proceedings involving part of the same property

in the United States District Court for the Eastern District of Louisiana. To

avoid potentially conflicting judgments, the United States sought a stay of the

state court proceeding. The district court entered a stay, and Sid-Mar’s

appealed.

We AFFIRM.

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BACKGROUND

From 1967 until destroyed by Hurricane Katrina on August 29, 2005, Sid-

Mar’s Restaurant & Lounge in Metairie, Louisiana was owned and operated by

the Burgess family. Sid-Mar’s was adjacent to the 17th Street Canal and just

outside of the Lake Pontchartrain Hurricane Protection Levee System. After

Hurricane Katrina, the Burgesses desired to rebuild in the same location.

In the aftermath of Katrina, the Department of the Army and the Orleans

Levee District entered into a Cooperation Agreement. Among other terms, the

state agreed to provide the federal government with a right of entry to all lands

deemed necessary for various rehabilitation projects. On January 27, 2006, a

supplement to the Cooperation Agreement was executed. It provided for the

construction of “interim gated closure structures and integrated pumping

capacity near the confluence of Lake Pontchartrain with the 17th Street Outfall

Canal.” This was followed on February 10, 2006, by then-Governor Kathleen

Blanco’s executive order commandeering the use of specific real property for the

project. Among the real property commandeered was the land on which Sid-

Mar’s formerly stood. The federal government first entered the commandeered

property in March 2006 to begin the construction project. It has occupied the

property since this time.

On June 2, 2006, the Burgesses and Sid-Mar’s (collectively referred to as

“Sid-Mar’s”) filed a lawsuit in state court against the State of Louisiana seeking

just compensation for the taking of its real property. The United States was not

named as a defendant.

On June 3, 2009, three years and one day after the state suit was filed and

while it was still pending, the United States filed two Complaints in

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Condemnation in federal district court. One was on a .088 acre tract, the other

on a .166 acre tract. Those suits were later consolidated. The entities said to

have interests in the property were Sid-Mar’s, the Sheriff as ex-officio Tax

Collector for Jefferson Parish, the State of Louisiana, and certain unknown

owners. These parcels were among those subject to Sid-Mar’s state court action.

The United States simultaneously filed a Declaration of Taking and deposited

in the registry of the court the sum it estimated to be just compensation. The

declaration and the deposit vested title in the United States to the real property

it sought to condemn. See 40 U.S.C. § 3114(b).

Two days after the federal condemnation proceedings began, Sid-Mar’s

filed for a partial summary judgment in state court. Sid-Mar’s argued it had

acquired title by adverse possession and was the sole owner when the State of

Louisiana commandeered the property in 2006. The State responded in part by

arguing that Sid-Mar’s title was unclear. A hearing was set for July 21, 2009.

The day before the scheduled hearing, the United States filed a motion in

the condemnation suit to stay the state court proceedings. It argued that a stay

was necessary to aid and protect the federal court’s jurisdiction. The district

court agreed and on July 21 enjoined the defendants from prosecuting the state

court suit until authorized by a later order of the federal court. Sid-Mar’s timely

filed an interlocutory appeal. See 28 U.S.C. § 1292(a)(1).

DISCUSSION

Sid-Mar’s makes two claims on appeal: the Anti-Injunction Act precluded

the issuance of this stay, and even if not prohibited, the issuance of a stay was

not proper on the facts of this case. We will consider both arguments.

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A. Applicability of Anti-Injunction Act

The Anti-Injunction Act prohibits federal courts from enjoining state court

proceedings. 28 U.S.C. § 2283. Congress enacted the prohibition in 1793, in part

“to work out lines of demarcation between” the independent court systems of the

national government and of each state. Atlantic Coast Line R.R. Co. v. Bhd. of

Locomotive Eng’rs, 398 U.S. 281, 286 (1970).

There are three statutory exceptions that permit the issuance of an

injunction. See 28 U.S.C. § 2283. None of them apply here. The Supreme Court

has interpreted the Anti-Injunction Act to allow the United States to obtain a

stay even when it cannot meet any of the exceptions. Leiter Minerals, Inc. v.

United States, 352 U.S. 220, 225-26 (1957). The Court held that Congress did

not intend the Anti-Injunction Act to apply “when it is the United States which

seeks a stay to prevent threatened irreparable injury to a national interest.” Id.

An injunction is not automatically proper, though, merely because the United

States seeks it. We will discuss this point in the last section of our opinion.

The district court issued a stay in reliance on Leiter Minerals. It concluded

that the federal suit was the only one that “can finally determine the basic issue

in the litigation,” which was the amount and recipients of compensation. The

court also noted that the summary judgment motion pending in the state court

sought to have Sid-Mar’s found to be the owner of the property. Were that

finding made, it would “undermine[] this Court’s ability to determine to whom

compensation should be paid as part of the federal takings procedure.”

Consequently, a stay was proper.

Sid-Mar’s argues that the district court erred by holding that the Leiter

Minerals doctrine applies when the United States is the party seeking a stay.

Instead, Sid-Mar’s asserts that for Leiter Minerals to apply, there must be a

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federal interest that predates the state court litigation and requires protection

from irreparable injury. The federal interest, Sid-Mar’s argues, did not exist

until the United States brought its condemnation suit three years after the state

court litigation. We will explain why we place an earlier date on the federal

interest. Sid-Mar’s also argues Leiter Minerals does not control because state

interests predominate over federal ones; the federal government’s title to

property is not at issue in the state suit; there is no risk of inconsistent

judgments in the two suits; the state litigation was pending for three years

before the federal condemnation action was commenced; and the relevant flood-

control project combines local, state, and federal interests.

Sid-Mar’s identifies distinctions that can be made between the facts of the

present case and those in Leiter Minerals. We consider Sid-Mar’s arguments

regarding the reasons Leiter Minerals should not apply at all as relevant to the

question of whether the district court erred in concluding that the circumstances

of this case justified the stay.

B. Propriety of Stay in These Circumstances

The Supreme Court in Leiter Minerals acknowledged that even when the

United States is the party who has obtained a stay of state court proceedings, it

still must be decided whether “an injunction was proper in the circumstances of

this case.” Id. at 226. Sid-Mar’s articulates the issue slightly differently. It

argues that even if the Anti-Injunction Act does not apply, the court “must also

assess whether principles of comity and federalism counsel restraint.” Regions

Banks of La. v. Rivet, 224 F.3d 483, 495 (5th Cir. 2000) (citations omitted). We

have stated that when a district court rules on whether to enjoin state court

proceedings, we review that determination for an abuse of discretion. United

States v. Billingsley, 615 F.3d 404, 408-09 (5th Cir. 2010). Regardless of the

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precise articulation of our appellate task, we must answer whether the stay was

proper considering the facts of the particular case.

We review the circumstances that justified a stay in Leiter Minerals. In

1949, the United States granted leases on mineral rights it allegedly owned in

Louisiana. Leiter Minerals, Inc. v. United States, 224 F.2d 381, 383 (5th Cir.

1955), modified and affirmed, Leiter Minerals, 352 U.S. at 230. In 1953, Leiter

Minerals brought suit in state court against the mineral lessees, i.e., it did not

join the United States as a defendant. Leiter Minerals, 352 U.S. at 221. It

sought a declaration that it owned the mineral rights, and the United States had

by operation of state law never acquired title. Id. After the state court suit was

filed, the United States brought suit in federal district court to quiet title to the

mineral rights. Id. at 222-23. The Supreme Court held that only the federal suit

could “finally determine the basic issue” of whether title was in the United

States because “title to land in possession of the United States under a claim of

interest cannot be tried as against the United States by a suit against persons

holding under the authority of the United States.” Id. at 226 (citing United

States v. Lee, 106 U.S. 196 (1882)). Further, even if the state court sought to

avoid as much conflict with the federal court as possible, its judgment could

result in confusion because the basic issue of title could not be resolved by the

state court. Id. at 226-27. Finally, the United States was seeking to protect the

possession of the persons to whom it granted leases by quieting title in federal

court. Id. at 227-28. The action was largely defensive, and the court held that

the government should be allowed to choose its forum. Id. at 228.

Leiter Minerals also presented an alternative reason there should be no

stay. It moved to dismiss the United States’ complaint in federal court “on the

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ground that the state court had already assumed jurisdiction over the property

in question . . . .” Id. at 223. Leiter Minerals relied on a case where the

Supreme Court would not allow the United States to enjoin an ongoing state

court proceeding in federal court because “the state court had obtained

jurisdiction over the [property] first and . . . the litigation should be resolved in

that court.” Id. at 227 (citing United States v. Bank of N.Y. & Trust Co., 296

U.S. 463 (1936)). The United States, in Bank of New York, attempted to recover

funds over which it claimed ownership that were subject to a state court

liquidation. Bank of N.Y. & Trust Co., 296 U.S. at 470. The basis of the

government’s claim was that the property at issue in the state suit had been

assigned to it before the liquidation occurred. Id. The Court would not enjoin

the proceeding because the state court asserted its control over the property

first. Id. at 475-76.

The Court in Leiter Minerals was unswayed by this argument, finding the

situation different than what was before the Court in Bank of New York. See

Leiter Minerals, 352 U.S. at 227. The United States in Bank of New York was

acting “like any private claimant” trying to acquire property “it never possessed

and that [was] in the hands” of a party appointed by the state court to liquidate

an insurance company. Id. at 227-28. In Leiter Minerals, the United States, as

mentioned above, was in a defensive posture, “seeking to protect . . . possession

and quiet title by a federal court proceeding.” Id. at 228. Speaking directly to

Leiter Minerals’ argument that the government could not enjoin the state court

litigation because the state court had been the first to acquire jurisdiction over

the property, the Court wrote that the United States should be able to choose its

forum “even though the state litigation has the elements of an action

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characterized as quasi in rem.” Id. (emphasis added). Leiter Minerals

contemplated the government’s ability to enjoin state court litigation when its

interest in the subject property went beyond a claim that could be asserted by

a private creditor. See id.

This part of the Leiter Minerals reasoning evokes but did not elaborate on

a doctrine that is sometimes called the “prior-exclusive-jurisdiction rule,”

helpfully discussed at some length in a key treatise on federal court practice.

See 13F Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal

Practice and Procedure § 3631 (3d ed. 2009). The authors write that “when a

state or federal court of competent jurisdiction has obtained possession, custody,

or control of particular property, that authority and power over the property may

not be disturbed by any other court[,]” and cite an array of Supreme Court cases

for this proposition. Id. (collecting cases). The “prior-exclusive-jurisdiction rule”

applies even when the United States is a party. Id. N either party in the

present appeal has discussed this doctrine, though the focus on Leiter Minerals

at least tangentially touches on it. We will briefly explore the doctrine.

The Supreme Court, principally in cases that predate Leiter Minerals,

frequently referred to the principle “that the court first assuming jurisdiction

over property may maintain and exercise that jurisdiction to the exclusion of the

other . . . .” Princess Lida of Thurn and Taxis v. Thompson, 305 U.S. 456, 466

(1939); see also Farmers’ Loan & Trust Co. v. Lake St. Elevated R.R. Co., 177

U.S. 51, 61 (1900); Freeman v. Howe, 65 U.S. 450, 459 (1860). The primary

reason for this rule is “one of necessity to prevent unseemly conflicts between the

federal and state courts and to prevent the impasse which would arise if the

federal court were unable to maintain its possession and control of the property,

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which are indispensable to the exercise of the jurisdiction it has assumed.”

Mandeville v. Canterbury, 318 U.S. 47, 49 (1943).

Wright and Miller make no allowance for a situation where, as in Leiter

Minerals, the government’s attempted federal lawsuit is largely defensive and

attempts to mitigate the possible effect state court litigation might have on the

government’s rights, including avoidance of conflict with a later-filed federal

lawsuit. See Leiter Minerals, 352 U.S. at 227-28. Leiter Minerals squarely

addressed the petitioner’s attempted application of this rule and identified a set

of facts that allow a government-filed action to take precedence over this

longstanding principle. Id.

In this arena, Leiter Minerals has a limited but powerful impact. Where

the United States is a party, and it asserts a claim of right to a piece of property

that is subject to ongoing litigation in state court, the government will be able

to enjoin that litigation to protect its interests if certain conditions are met.

Leiter Minerals identified several factors that could allow the government to

take this step: the state court’s inability to make a complete determination of the

basic issue in the litigation, confusion that could be caused by inconsistent

judgments, and a claim of right or interest in the property that precedes the

state court litigation. See id. at 226-28. Therefore, the “prior-exclusive-

jurisdiction rule” must be read in light of the principles supporting Leiter

Minerals.

In the years following the Leiter Minerals decision, courts of appeals have

had few opportunities to apply its holding to cases involving the United States

as a party. One case deserves our focus because a sister circuit applied the

“prior-exclusive-jurisdiction rule” to deny the United States’ request to enjoin

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a state court proceeding in which the government claimed an interest in the

property subject to litigation. See United States v. Certified Indus., Inc., 361

F.2d 857 (2d Cir. 1966). In Certified Industries, a sub-contractor filed a

mechanic’s lien against a contractor in New York state court to recoup unpaid

fees and later attempted to foreclose on the lien. Id. at 859. The United States,

seeking unpaid taxes from the same contractor, later filed an action in federal

district court, asserting a state-law claim to impose a trust on funds owed to the

contractor. Id. The district court granted the government a preliminary

injunction which enjoined the state court suit. Id.

The Second Circuit reversed, concluding that the principles of Leiter

Minerals were inapplicable. Id. at 860. The subcontractor’s assertion of the lien

in state court was not, in the court’s view, “a direct or an indirect challenge to

the right of the United States to retain funds or title to property in its

possession at the commencement of the state proceeding.” Id. at 861.

Therefore, Certified Industries presented facts more closely akin to Bank of New

York than Leiter Minerals. See id. at 861-62. The Second Circuit applied the

“prior-exclusive-jurisdiction rule” and vacated the injunction. See id.

Certified Industries is part of a line of cases that apply the “prior-

exclusive-jurisdiction rule” to factual scenarios where the concerns that

prompted Leiter Minerals are not present. The facts in today’s case, however,

are more closely aligned with those in Leiter Minerals than either Certified

Industries or Bank of New York. In Certified Industries, the court focused on

the government’s lack of possession of the property at issue in the state court

suit when that suit was filed to find the “prior-exclusive-jurisdiction rule”

should preclude enjoining the state proceedings. See id. at 861.

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Here, beginning in March 2006, the interest of the United States, as

asserted by the State of Louisiana’s commandeering, has been clear. Indeed,

it was the government’s delay in pursuing its claims that, according to Sid-

Mar’s, led Sid-Mar’s to file its own state court suit. We discuss later the nature

of the interest the United States gained. We also will discuss that the precise

interest gained either by Louisiana or the United States by the act of

commandeering is unclear, but what is beyond question is that Louisiana acted

in concert with the United States in taking control of this property prior to the

state court litigation. This prior assertion of control distinguishes our

circumstances from those in Certified Industries or Bank of New York, where

the government had no control over or title in the property involved in the state

court suits they attempted to enjoin in federal court. See id.; Bank of N.Y. &

Trust Co., 296 U.S. at 470, 475-77.

In our case, the United States claimed the state court litigation could

interfere with the federal condemnation because the suits involved some of the

same property and there was a risk of inconsistent judgments. The federal

condemnation action required the United States to pay the former owner of the

property from whom title had been taken by the Declaration of Taking. In the

state court suit, Sid-Mar’s sought to have itself determined to be the owner and

to receive compensation from the State of Louisiana. The United States argued

that Louisiana had not taken the subject property. Because Sid-Mar’s had not

joined the federal government as a party, the United States could not remove the

suit to federal court. Finally, the United States argued it was entitled to have

its rights and interests in the property resolved in federal court.

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The parties agree on appeal about one error in the district court’s stay

order. In its summary of facts, the district court stated the federal court

condemnation suit was filed at the same time as Sid-Mar’s state court suit. In

fact, the state court action predates the federal suit by three years. The parties

do not agree on the importance of the error. As will be discussed, we find none.

Sid-Mar’s denied there was any risk of inconsistent judgments or any

burdens of the rights of the United States. Its explanation starts with describing

what occurred prior to the federal condemnation. The property was

commandeered on February 10, 2006. The authority for the seizure was the

Louisiana Homeland Security and Emergency Assistance and Disaster Act. La.

Rev. Stat. § 29:721. According to the governor’s executive order, Louisiana

“commandeer[ed] the use” of about ten acres. The commandeering was at the

request of the Army Corps of Engineers and was for levee and floodwall

construction. The executive order also required that the owners be identified

and compensated.

According to Sid-Mar’s, the government was dilatory in identifying and

paying owners of the commandeered property. Thus, in June 2006, Sid-Mar’s

brought suit against the State of Louisiana. The litigation had not been resolved

when in February 2009, a trial date of August 3, 2009 was set. On June 2, the

State sought leave to file a third-party demand against the Corps of Engineers.

The federal government almost immediately removed the suit to federal court.

Within days, the action was remanded, and the Corps was never made a party.

The day after the short-lived removal of the state court suit, the United

States filed this condemnation action. Sid-Mar’s argues there was no need to file

the condemnation action, as the State of Louisiana and the Corps of Engineers

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had possession of the property for over three years, a period beginning with the

Louisiana governor’s order to commandeer the property. Sid-Mar’s argues it

should be allowed to proceed against Louisiana. Only issues of state law will be

involved, Sid-Mar’s says, as it does not challenge the federal government’s right

to condemn the same property.

Sid-Mar’s agrees that the acquisition of title by the United States and the

setting of the compensation it will pay are matters solely for the federal suit.

Sid-Mar’s contends, though, that there is no possibility the state court judgment

would conflict with the federal judgment. It alleges the state and federal courts

will examine who held title to the property during separate time periods, i.e., the

state proceedings will determine who had title when the commandeering

occurred. Sid-Mar’s argues Louisiana must have had title on June 3, 2009, when

the United States took the land. As stated in its brief, “the federal condemnation

proceedings will determine the compensation the Government owes the State,

as the owner of the property at the time of the” Declaration of Taking. In effect,

Sid-Mar’s alleges there have been two seizures of title, first by Louisiana from

Sid-Mar’s, then by the United States from Louisiana. Sid-Mar’s shapes its

argument about title being in the State of Louisiana from 2006 to 2009 into an

impenetrable barrier, preventing the state court suit’s decision on title from

affecting the federal suit’s decision-making.

Having set up the issues in the two suits in this way, Sid-Mar’s then

discusses at some length the case that it argues is most analogous to the present

suit. See Eden Memorial Park Ass’n v. United States, 300 F.2d 432 (9th Cir.

1962). In that case, the United States had agreed to the State of California’s

request to condemn part of a cemetery and then to convey it to the state to

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construct an interstate highway. Id. at 433-34. The request had followed a state

appellate court’s holding that the relevant state agency had no authority to

condemn a cemetery for a highway. Id. at 434. After the federal condemnation

was filed, the cemetery owner filed in state court to enjoin the state agencies

from taking possession of the property condemned by the United States or to

construct a highway across the cemetery. Id. at 435-36. The federal district

court entered a stay. Id. at 436.

The Ninth Circuit held that Leiter Minerals gave federal courts authority

to issue stays against state court suits whenever the applicant was the United

States, but the stay was not proper in the circumstances of that case. Id. at 437-

39. The cemetery owner was not contesting the ownership of the United States

to the land, and thus the federal court did not need a stay to protect its

jurisdiction. Id. at 437. Further, the condemnation suit would fully invest the

United States with title to the part of the cemetery property it sought. Id. at

437-38. Whether state law could thereafter block construction across the

cemetery would not be an issue for the condemnation action. Id. at 438-39.

In contrast, Leiter Minerals had been enjoined from prosecuting its action

against the mineral lessees in state court because the United States might suffer

“irreparable injury in the form of loss of royalties . . . from any temporary,

wrongful dispossession of its lessees by the state court proceedings.” Leiter

Minerals, 352 U.S. at 223. Because the title of the United States to the minerals

could only be finally determined in federal court, there was the potential for

conflicting judgments if the state court proceedings were not stayed. Id. at 228.

Sid-Mar’s argues there is no potential for conflicting judgments here, just

as there was not in Eden and unlike Leiter Minerals. In Sid-Mar’s view, no

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conflict will arise because the federal court may decide title (in the State of

Louisiana) and the compensation amount (presently unknown) without needing

to know the result of the state court suit.

The argument, able as it is, requires our accepting the premise that in

2009, title was in the State of Louisiana. The premise may, however, be false.

The United States concedes that it is uncertain what estate is seized by the act

of commandeering. Determining what property interest Louisiana acquires by

commandeering begins with the relevant statute. Pursuant to the Louisiana

Homeland Security and Emergency Assistance and Disaster Act (the “Act”), the

governor has the authority to “commandeer or utilize any private property”

found necessary to cope with a disaster or emergency subject to applicable

compensation requirements. La. Rev. Stat. § 29:724D(4). The Sid-Mar’s

property was commandeered in order to provide the United States with “right

of entry to all lands, easements, and rights-of-way, including suitable borrow

and dredged or excavated material disposal areas” as needed for the repairs to

the 17th Street Canal. The Executive Order specifically reserved to the private

owners “all such rights and privileges in said land as may be used without

interfering with or abridging the rights hereby acquired” by the commandeering.

In addition, the Cooperation Agreement between the United States and

the State of Louisiana contemplated that the State would commandeer property

such as that involved in this suit. It then provided that the United States would

“obtain a deed or servitude agreement, as appropriate,” to the property. If

necessary, the United States would acquire property in its name through

eminent domain. These terms support the proposition that the act of

commandeering displaced Sid-Mar’s right to use the property, but it was

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understood that the United States would thereafter acquire the interests it

needed through negotiation or by eminent domain.

It is unresolved whether the premise of Louisiana’s ownership from 2006

to 2009 is correct. If Sid-Mar’s or other owners still had title because title was

among “such rights and privileges in said land as may be used without

interfering with or abridging the rights hereby acquired” by the commandeering,

then the condemnation is necessary to establish that title and the compensation

due. There remains a serious issue of who is to receive the compensation in the

federal condemnation suit. To the United States, that uncertainty makes Leiter

Minerals factually similar. There could be conflicting just-compensation awards

that are based on different interpretations of the interests acquired by the act

of commandeering. In addition, if title were not acquired by Louisiana through

commandeering this property, another question will be how compensation for the

loss of use prior to condemnation is to be calculated and who is to pay it. We do

not need to decide the state law issues. Resolving them in the most appropriate

manner that still protects the jurisdiction of the district court for the

condemnation action is a matter to be considered on remand.

The district court was correct about the potential conflict between state

and federal judgments concerning who held title to the property at the time of

the June 3, 2009 taking by the United States, and how the amount of

compensation due. Without deciding the issue of ownership, it is possible the

United States had a claim to the land that preceded the commencement of the

state court lawsuit. Since March 2006, the federal government has been in

continuous possession of the land. Further, the Executive Order that acted to

commandeer the property referred specifically to the Cooperation Agreement

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between the United States and the Orleans Levee District in the section that set

out compensation for the previous owner of the property. That Cooperation

Agreement, as mentioned above, indicated the federal government would later

acquire full ownership rights in the property.

One circuit court, applying Leiter Minerals, has allowed the government

to enjoin state court litigation involving a piece of property because the

government held a future interest in that property. See Alonzo v. United States,

249 F.2d 189, 196-97 (10th Cir. 1957). At the very least, the uncertainty

surrounding the ownership of this property and the extent of the United States’

interest militates in favor of enjoining the state court litigation.

Sid-Mar’s also argues that Leiter Minerals was incorrectly decided. We

understand the argument may be offered in order to preserve it for possible

review by the Supreme Court. Surely all also understand that this court does

not have the authority to overturn a Supreme Court ruling.

Central to the final resolution of the condemnation issues is whether the

State of Louisiana acquired title by the act of commandeering. The Supreme

Court in Leiter Minerals also faced a foundational issue of state law. After

holding that a stay was permissible, it also suggested the need for the federal

court to receive the opinion of the state court on the state law issues.

Before attempting to answer [the state law questions] and to decide

their relation to the issues in the case, we think it advisable to have

an interpretation, if possible, of the state statute by the only court

that can interpret the statute with finality, the Louisiana Supreme

Court. The Louisiana declaratory judgment procedure appears

available to secure such an interpretation, and the United States of

course may appear to urge its interpretation of the statute. It need

hardly be added that the state courts in such a proceeding can

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decide definitively only questions of state law that are not subject to

overriding federal law.

We therefore modify the judgment of the Court of Appeals to

permit an interpretation of the state statute to be sought with every

expedition in the state court in conformity with this opinion.

Leiter Minerals, 352 U.S. at 229-30 (citations omitted).

The Louisiana Supreme Court subsequently ruled on the declaratory

judgment. Leiter Minerals v. California Co., 132 So. 2d 845, 849-50 (La. 1961).

The district court will need to determine the best manner in which to

proceed in reaching an answer to the title questions that arise because of the

commandeering. It might resolve the question itself, lift the stay for the limited

purpose of allowing the state court to determine title, or take other steps to avoid

the potential for inconsistent rulings in the two proceedings.

AFFIRMED.

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DENNIS, Circuit Judge, dissenting:

I respectfully dissent because the majority refuses to apply the “prior

exclusive jurisdiction doctrine” under which the United States is not entitled to

an injunction staying state court proceedings where the state court is the first

court to assume jurisdiction over the subject matter property of an action in rem

or quasi in rem. United States v. Bank of N.Y. & Trust Co., 296 U.S. 463, 477-81

(1936); United States v. Certified Indus., Inc., 361 F.2d 857 (2d Cir. 1966); see

also Penn Gen. Cas. Co. v. Pennsylvania ex rel. Schnader, 294 U.S. 189 (1935).

The majority misapplies the Supreme Court’s decision in Leiter Minerals, Inc.

v. United States, 352 U.S. 220 (1957), by broad, rough analogy and holds that the

prior exclusive jurisdiction doctrine does not apply when the United States

brings suit offensively in federal court to condemn private property. Thus, the

majority sweepingly abrogates the prior exclusive jurisdiction doctrine in this

circuit in respect to subsequently filed federal condemnation suits by allowing

and perhaps compelling federal district courts, at the government’s request, to

enjoin and supersede prior filed state court in rem condemnation proceedings

involving the same property. In my view, however, Leiter Minerals, at most,

creates only a very narrow exception to the doctrine, when the United States

sues defensively to quiet its pre-existing title to property, that does not apply

here. In Leiter Minerals, the Supreme Court indicated that where the United

States’ position is ‘‘defensive’’ it should be able to choose its forum ‘‘even though

the state litigation has the elements of an action characterized as quasi in rem.”

Leiter Minerals, 352 U.S. at 228. However, the position of the United States in

this action is offensive, not defensive; it is not seeking to quiet its title to

property that it already claims to own, as was the case in Leiter Minerals, but

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to supersede the state court’s jurisdiction and acquire title to the property in the

first instance by condemnation. Furthermore, Sid-Mar’s assertion of their state

constitutional rights in an in rem inverse condemnation proceeding against the

state in state court is neither a direct nor an indirect challenge to the right of the

United States to bring a condemnation action against whomever the state court

declares to be the owner of the subject property under Louisiana property law.

The present case is more akin to Bank of New York & Trust Co., in which the

Supreme Court relied on the prior exclusive jurisdiction doctrine “in remitting

the United States to the state court, [because] the Court saw no ‘impairment of

any rights’ or ‘any sacrifice of its proper dignity as a sovereign.’” Leiter Minerals,

352 U.S. at 227 (quoting Bank of N.Y. & Trust Co., 296 U.S. at 480-81).

I.

The United States brought this suit to condemn approximately 0.166 acres

of land abutting Lake Pontchartrain in Jefferson Parish, Louisiana for a federal

hurricane protection and flood control project. Upon the United States’ motion,

the district court asserted jurisdiction over the 0.166 acres and enjoined the

alleged private owners’ pending state court inverse condemnation suit against

the State of Louisiana for taking and ousting them from the same property, in

addition to other parcels. In that state court action, the plaintiffs had alleged

that the State had physically taken 10.2 acres—including the 0.166 acres of their

property that the United States seeks to condemn in the present federal

case—without compensating them for the taking.

A.

Prior to Hurricane Katrina, which struck New Orleans and Jefferson

Parish in August, 2005, Sidney and Marion Burgess, and their Louisiana

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corporation, Sid-Mar’s Seafood Restaurant & Lounge, Inc., (collectively

“Sid-Mar’s”) allegedly maintained and operated a seafood restaurant, on or near

the 0.166-acre res, which was destroyed by the storm. On February 10, 2006, the

Governor of Louisiana, pursuant to Louisiana Revised Statutes § 29:721 et seq.,

commandeered 10.2 acres of land, including the 0.166 acres at issue in this case,

for emergency hurricane protection and flood control purposes. Louisiana

Revised Statutes § 29:721 et seq. authorizes the Governor to take private

property if necessary to cope with a disaster or emergency, subject to any

applicable requirements for compensation; and provides that the amount of

compensation shall be calculated in the same manner as for a taking of property

pursuant to the condemnation laws of Louisiana. See La. Rev. Stat. Ann.

§§ 29:722, 29:724, 29:730.

The Governor’s February 10, 2006 commandeering order declared that a

state of emergency continued to exist after Katrina because of the potential for

future hurricanes to cause severe flooding, damage to private and public

property, and danger to the safety and security of citizens; that the United

States Army Corps of Engineers and numerous state and local officials and

entities had requested that the Governor commandeer the property for the

construction of the Lake Pontchartrain Louisiana and Vicinity Hurricane

Protection Project, 17th Street Outfall Canal Interim Closure Structure, and

necessary appurtenances and clearings, “reserving however, to the landowners,

their heirs and assignees, all such rights and privileges in said land as may be

used without interfering with or abridging the rights hereby acquired”; that the

subject property containing approximately 10.2 acres had been commandeered

as required by the Department of the Army; that the owners of the

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commandeered property shall be identified and compensated in accordance with

the terms of the Cooperation Agreement Between the United States of America

and the Orleans Levee District for Rehabilitation of a Federal Hurricane/Shore

Protection Project executed on October 21, 2005, as supplemented by

Supplemental Agreements Nos. 1 and 2, dated January 27, 2006; and that the

Division of Administration, State Land Office, shall take immediate steps to

grant right of entry to the property commandeered for the above purposes

pursuant to this order.

On June 2, 2006, Sid-Mar’s filed suit against the State of Louisiana,

through the Governor and the Division of Administration, State Land Office, in

the 24th Judicial District of Louisiana in Jefferson Parish, alleging that Sid-

Mar’s were owners of property included within the property taken by the

Governor’s February 10, 2006 commandeering order; that the State of Louisiana

has physically occupied Sid-Mar’s property and deprived Sid-Mar’s of any use of

or access to that property; that on February 13, 2006, construction of the Lake

Pontchartrain Louisiana and Vicinity Hurricane Protection Project, 17th Street

Outfall Canal Interim Closure Structure began on the property; but that the

state has not compensated Sid-Mar’s for the property taken or their resulting

damages; and that Sid-Mar’s were entitled to compensation and damages as a

result of the commandeering or taking of the property and to other legal and

equitable relief pursuant to Louisiana law.1

B.

1

On June 5, 2009, Sid-Mar’s filed a motion for partial summary judgment in their state court

suit, but before any state court decision thereon, the federal district court enjoined the state

proceedings on July 21, 2009 as described below.

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In the present federal case, on June 3, 2009, the United States filed this

action in the United States District Court for the Eastern District of Louisiana

against the 0.166-acre sub-part of the commandeered property involved in Sid-

Mar’s state court suit, seeking to take and condemn that 0.166 acres for the

construction, repair and rehabilitation of a federal project, viz., the Lake

Pontchartrain, Louisiana and Vicinity Hurricane Protection Project, 17th Street

Outfall Canal, Interim Control Structure, Jefferson Parish, Louisiana.2 Sid-

Mar’s and others were named as defendants. The government prayed for

judgment granting it a fee simple title to the land, reserving to the landowners

only the right, title and interest to the underlying minerals.

On July 21, 2009, pursuant to the United States’ motion, the district court

enjoined Sid-Mar’s from further prosecution of their state court inverse

condemnation suit against the State of Louisiana. The federal district court’s

decree stated it had the authority to issue the injunction because the

Anti-Injunction Act, 28 U.S.C. § 2283, does not apply when the United States

seeks to stay state court proceedings, citing Leiter Minerals, Inc. v. United

States, 352 U.S. 220, 226 (1957), for this proposition. Moreover, the district court

concluded that “this case is sufficiently analogous to the factual situation in

Leiter [Minerals], where the Supreme Court held that a stay of state court

proceedings was appropriate,” to warrant an injunction. It explained that similar

to Leiter Minerals, the suit in federal court is “the only one that [can] finally

determine the basic issue in the litigation.” (alteration in original) (quoting

2

This appears to be the same or a similar project for which the Louisiana Governor

commandeered the subject property on February 10, 2006. However, neither the pleadings nor

the parties’ briefs explain whether the state project and the federal project are one and the

same.

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Leiter Minerals, 352 U.S. at 226) (internal quotation marks omitted). “In

addition, currently pending before the state court is a motion for partial

summary judgment. Plaintiffs in that case seek a state court order declaring

plaintiffs the rightful owners of property currently at issue in this federal

matter. Such a finding by the state court specifically undermines this Court’s

ability to determine to whom compensation should be paid as part of the federal

takings procedure. The Court is mindful that although it is rare that a federal

court will enjoin and stay a state court proceeding, the government’s motion fits

squarely within clearly established law on when such a stay is appropriate.”

After the injunction issued, Sid-Mar’s moved the district court to lift the

injunction in light of their previously filed state court inverse condemnation

proceeding. However, the district court denied that motion in an oral order

without any additional findings of fact or conclusions of law. Sid-Mar’s timely

filed an interlocutory appeal. See 28 U.S.C. § 1292(a)(1).

II.

It is well settled that “if two suits [are] pending, one in a state and the

other in a federal court, [and they] are in rem or quasi in rem, so that the court

or its officer must have possession or control of the property which is the subject

matter of the suits in order to proceed with the cause and to grant the relief

sought, the court first acquiring jurisdiction or assuming control of such property

is entitled to maintain and exercise its jurisdiction to the exclusion of the other.”

Mandeville v. Canterbury, 318 U.S. 47, 48-49 (1943). Accordingly, “an abundance

of federal decisional law, including an impressive array of Supreme Court

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decisions,3 makes it clear that in all cases involving a specific piece of property,

real or personal (including various forms of intangible property), the federal

court’s jurisdiction is qualified by the ancient and oft-repeated rule—often called

the doctrine of prior exclusive jurisdiction—that when a state or federal court of

competent jurisdiction has obtained possession, custody, or control of particular

property, that authority and power over the property may not be disturbed by

any other court.” 13F Charles Alan Wright et al., Federal Practice & Procedure

§ 3631, at 271-72 (3d ed. 2009).

“Although the prior-exclusive-jurisdiction rule is based at least in part on

considerations of judicial comity, it very often is referred to as a jurisdictional

limitation, and has been applied even when the United States is a party.” Id. at

275-77 (emphasis added) (footnotes omitted); see also Penn Gen. Cas. Co., 294

U.S. at 195 (“To avoid unseemly and disastrous conflicts in the administration

of our dual judicial system, see Peck v. Jenness, 48 U.S. (7 How.) 612, 625 (1849);

Taylor v. Carryl, 61 U.S. (20 How.) 583, 595 (1857); Freeman v. Howe, 65 U.S.

3

The Wright and Miller treatise cites the following cases as supporting this proposition:

Mandeville, 318 U.S. 47; Toucey v. N.Y. Life Ins. Co., 314 U.S. 118 (1941); Princess Lida of

Thurn & Taxis v. Thompson, 305 U.S. 456 (1939); Penn Gen. Cas. Co., 294 U.S. 189; Harkin

v. Brundage, 276 U.S. 36, 43 (1928); Lion Bonding & Sur. Co. v. Karatz, 262 U.S. 77, 88-90

(1923); Kline v. Burke Constr. Co., 260 U.S. 226 (1922); Palmer v. Texas, 212 U.S. 118 (1909);

Wabash R.R. Co. v. Adelbert Coll., 208 U.S. 38 (1908); Farmers’ Loan & Trust Co. v. Lake St.

Elevated R.R. Co., 177 U.S. 51 (1900); Moran v. Sturges, 154 U.S. 256 (1894); Byers v.

McAuley, 149 U.S. 608 (1893); Porter v. Sabin, 149 U.S. 473 (1893); Rio Grande Ry. Co. v.

Vinet, 132 U.S. 478 (1889); Borer v. Chapman, 119 U.S. 587, 600 (1887); Heidritter v. Elizabeth

Oil-Cloth Co., 112 U.S. 294 (1884); Krippendorf v. Hyde, 110 U.S. 276 (1884); Ellis v. Davis,

109 U.S. 485 (1883); Yonley v. Lavender, 88 U.S. (21 Wall.) 276 (1874); Buck v. Colbath, 70

U.S. (3 Wall.) 334 (1865); Freeman v. Howe, 65 U.S. (24 How.) 450 (1860); Taylor v. Carryl, 61

U.S. (20 How.) 583 (1857): Orton v. Smith, 59 U.S. (18 How.) 263 (1855); Peale v. Phipps, 55

U.S. (14 How.) 368 (1852); Williams v. Benedict, 49 U.S. (8 How.) 107 (1850); and Peck v.

Jenness, 48 U.S. (7 How.) 612 (1849). 13F Charles Alan Wright et al., Federal Practice &

Procedure § 3631, at 271 n.15 (3d ed. 2009).

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(24 How.) 450, 459 (1860); Buck v. Colbath, 70 U.S. (3 Wall.) 334, 341 (1865);

Farmers’ Loan & Trust Co. v. Lake Street Elevated R.R. Co., 177 U.S. 51, 61

(1900), and to protect the judicial processes of the court first assuming

jurisdiction, Wabash R.R. Co. v. Adelbert Coll., 208 U.S. 38, 54 (1908); Palmer

v. Texas, 212 U.S. 118, 129, 130 (1909), the principle, applicable to both federal

and state courts, is established that the court first assuming jurisdiction over the

property may maintain and exercise that jurisdiction to the exclusion of the

other.”).

The basis of the doctrine in considerations of judicial comity and

federalism was explained by the Supreme Court over one hundred years ago in

Palmer v. Texas, 212 U.S. 118, 125 (1909):

The Federal and state courts exercise jurisdiction within the same

territory, derived from and controlled by separate and distinct

authority, and are therefore required, upon every principle of justice

and propriety, to respect the jurisdiction once acquired over

property by a court of the other sovereignty. If a court of competent

jurisdiction, Federal or state, has taken possession of property, or by

its procedure has obtained jurisdiction over the same, such property

is withdrawn from the jurisdiction of the courts of the other

authority as effectually as if the property had been entirely removed

to the territory of another sovereignty.

“The origin of the rule, however, predates our dual federal-state court

system, and its primary purpose is to protect the jurisdiction of the court that

has acquired control over the property.” 13F Wright et al., supra, at 278-79.

It is settled that where a federal court has first acquired jurisdiction

of the subject-matter of a cause, it may enjoin the parties from

proceeding in a state court of concurrent jurisdiction where the

effect of the action would be to defeat or impair the jurisdiction of

the federal court. Where the action is in rem the effect is to draw to

the federal court the possession or control, actual or potential, of the

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res, and the exercise by the state court of jurisdiction over the same

res necessarily impairs, and may defeat, the jurisdiction of the

federal court already attached. The converse of the rule is equally

true, that where the jurisdiction of the state court has first attached,

the federal court is precluded from exercising its jurisdiction over

the same res to defeat or impair the state court’s jurisdiction.

Kline v. Burke Constr. Co., 260 U.S. 226, 229 (1922).

As a result, the Wright and Miller treatise is able to cite ample authority

demonstrating that the doctrine has been applied equally to suits brought by the

United States and private parties. It highlights that Bank of New York & Trust

Co., 296 U.S. 463, held that “[t]he United States, as a plaintiff, must follow the

general rule that the court first acquiring jurisdiction of a res acquires exclusive

jurisdiction [over] the res.” 13F Wright et al., supra, § 3631, at 277 n.20. In

addition, the treatise cites United States v. One 1985 Cadillac Seville, 866 F.2d

1142 (9th Cir. 1989); United States v. Certified Industries, Inc., 361 F.2d 857 (2d

Cir. 1966); Pridgen v. Andresen, 891 F. Supp. 733 (D. Conn. 1995); and United

States v. Augspurger, 452 F. Supp. 659 (W.D.N.Y. 1978), amended, 477 F. Supp.

94 (W.D.N.Y. 1979), as further support. 13F Wright et al., supra, § 3631, at 277

n.20. Therefore, substantial controlling authority establishes that possibly

always, and certainly in every case except where the United States seeks to

defend its pre-existing property rights, federal courts lack authority to proceed

with in rem proceedings if there is a prior initiated state court in rem proceeding

involving the same subject matter property.

III.

It is undisputed that both this federal condemnation suit and the state

court inverse condemnation action are in rem proceedings. In the absence of

explicit Louisiana case law or commentary to that effect regarding inverse

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condemnation suits, however, I will set forth my reasons for so concluding. After

that, I will discuss further why my colleagues in the majority have fallen into

serious error in failing to adhere to the prior exclusive jurisdiction doctrine in

this case and how this decision stems from their misinterpretation of Leiter

Minerals. I will also demonstrate how their holding creates undesirable

precedent, rests on faulty factual and legal support, and splits us from the

Second Circuit.

A.

Federal and Louisiana courts have expressly recognized that

condemnation suits brought by federal, state and local governments to take

private property for public purposes are in rem proceedings. See United States

v. Carmack, 329 U.S. 230, 235 n.2 (1946) (“The proceeding to condemn the land

being in rem . . . .” (citing United States v. Dunnington, 146 U.S. 338, 352 (1892);

and In re Condemnation Suits by the United States, 234 F. 443, 445 (E.D. Tenn.

1916))); United States v. Petty Motor Co., 327 U.S. 372, 376 (1946)

(“Condemnation proceedings are in rem . . . .” (citing A.W. Duckett & Co. v.

United States, 266 U.S. 149 (1924); and Dunnington, 146 U.S. at 350-54)); A.W.

Duckett & Co., 266 U.S. at 151 (“[I]t seems to us manifest that the United States,

although not taking the fee, proceeded in rem as in eminent domain, and

assumed to itself by paramount authority and power the possession and control

of the piers named, against all the world.”); Eagle Lake Improvement Co. v.

United States, 160 F.2d 182, 184 (5th Cir. 1947) (“A condemnation proceeding is

an action in rem. It is not the taking of rights of designated persons, but the

taking of the property itself.” (citing A.W. Duckett & Co., 266 U.S. at 151)); New

Orleans Redevelopment Auth. v. Lucas, 881 So. 2d 1246, 1255 (La. Ct. App. 4th

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Cir. 2004); State Through Dep’t of Highways v. Boudreaux, 401 So. 2d 428, 430

(La. Ct. App. 1st Cir. 1981) (“An expropriation is in the nature of an in rem

proceeding.” (citing Garber v. Phillips Petroleum Co., 146 So. 2d 518 (La. Ct.

App. 3d Cir. 1963))); Garber, 146 So. 2d at 521 (“A condemnation proceeding is

a proceeding in rem. It is not a taking of rights of persons in the ordinary sense

but an appropriation of the land or property itself. When the property is

conveyed by judgment, all previous existing estates or interests in the land are

extinguished.” (citing A.W. Duckett & Co., 266 U.S. 149; Dunnington, 146 U.S.

338; and United States v. Certain Lands in Borough of Brooklyn, 129 F.2d 577

(2d Cir. 1942))); State Through Dep’t of Highways v. Walker, 129 So. 2d 35, 37

(La. Ct. App. 2d Cir. 1961) (“Condemnation proceedings are in rem . . . .”).

Although I have not found cases explicitly declaring that inverse

condemnation suits are in rem proceedings, I conclude that they should be so

considered because the United States Supreme Court and Louisiana’s highest

court have held that they are substantially equivalent to condemnation actions

and essential to the self-executing constitutional protection of private property

owners from governmental takings without just compensation. “In addition to

. . . three statutory methods, the United States is capable of acquiring privately

owned land summarily, by physically entering into possession and ousting the

owner.” Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 5 (1984) (citing

United States v. Dickinson, 331 U.S. 745, 747-49 (1947)). “In such a case, the

owner has a right to bring an ‘inverse condemnation’ suit to recover the value of

the land on the date of the intrusion by the Government.” Id. (citing United

States v. Dow, 357 U.S. 17, 21-22 (1958)). “Such a suit is ‘inverse’ because it is

brought by the affected owner, not by the condemnor.” Id. at 5 n.6 (citing United

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States v. Clarke, 445 U.S. 253, 257 (1980)). “The owner’s right to bring such a

suit derives from ‘the self-executing character of the constitutional provision

with respect to condemnation.’” Id. (quoting Clarke, 445 U.S. at 257, in turn

quoting 6 P Nichols, Eminent Domain § 25.41 (rev. 3d ed. 1972)). As the

Supreme Court stated in First English Evangelical Lutheran Church of Glendale

v. Los Angeles, “[t]he fact that condemnation proceedings were not instituted and

that the right was asserted in suits by the owners did not change the essential

nature of the claim. The form of the remedy did not qualify the right. It rested

upon the Fifth Amendment. Statutory recognition was not necessary. A promise

to pay was not necessary. Such a promise was implied because of the duty to pay

imposed by the Amendment. The suits were thus founded upon the Constitution

of the United States.” 482 U.S. 304, 315 (1987) (quoting Jacobs v. United States,

290 U.S. 13, 16 (1933)) (internal quotation marks omitted).

Similarly, the Louisiana Supreme Court has held that an “action for

inverse condemnation arises out of the self-executing nature of” the state

constitutional requirement that “the expropriating entity is bound to make

reparations,” and the action requires the state to compensate private landowners

for their property taken or damaged for public purposes even when the state has

not initiated statutorily authorized expropriation proceedings. State Through

Dep’t of Transp. & Dev. v. Chambers Inv. Co., 595 So. 2d 598, 602 (La. 1992); see

also Avenal v. State, 886 So. 2d 1085, 1104 (La. 2004) (“Inverse condemnation

claims derive from the Takings Clauses contained in both the Fifth Amendment

of the U.S. Constitution and Art. I, § 4 of the Louisiana Constitution.”);

Constance v. State Through Dep’t of Transp. & Dev., Office of Highways, 626 So.

2d 1151 (La. 1993); St. Tammany Parish Hosp. Serv. Dist. No. 2 v. Schneider,

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808 So. 2d 576, 582 (La. Ct. App. 1st Cir. 2001) (“[T]he Louisiana Supreme Court

has recognized that the action for ‘inverse condemnation’ arises out of the

self-executing nature of the constitutional command to pay just compensation.”).

Further, the Louisiana Supreme Court held that the “aim of Article I, § 4, of [the

Louisiana] [C]onstitution [of 1974] in requiring that the owner shall be

compensated for property ‘taken or damaged . . . to the full extent of his loss’ . . .

was deliberate, prompted by a belief on the part of the sponsors that inadequate

awards had been provided under the prior law.” Chambers Inv. Co., 595 So. 2d

at 602 (first omission in original) (citing L. Hargrave, The Declaration of Rights

of the Louisiana Constitution of 1974, 35 La. L. Rev. 1, 15 (1974); and citing as

“cf.” State v. Dietrich, 555 So. 2d 1355, 1358-59 (La. 1990); and State Through

Dep’t of Highways v. Constant, 369 So. 2d 699, 702 (La. 1979) as indicating that

“the purpose of the additional language in Article I, § 4 was to compensate an

owner for any loss sustained by reason of the taking, and not merely restricted

as under the former constitution to the market value of the property taken and

to reduction in the market value of the remainder”); see also Avenal, 886 So. 2d

at 1103 n.23 (citing Chambers Inv. Co., 595 So. 2d at 602 for this same

proposition).

For these reasons, I conclude that the inverse condemnation action arising

out of the self-executing nature of the United States and Louisiana Constitutions

affords Sid-Mar’s the same protection to the full extent of their loss as would be

provided them in a statutory condemnation action brought by the state or any

governmental entity in an in rem proceeding. Functionally, an action in rem is

“[a]n action determining the title to property and the rights of the parties not

merely among themselves, but also against all persons at any time claiming an

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interest in that property; a real action.” Black’s Law Dictionary 32 (8th ed.

2004). Sid-Mar’s alleged in their state inverse condemnation suit that they held

a valid title to the 0.166-acre parcel at issue in the instant federal suit (which

was part of the 10.2 acres commandeered by the state) against all persons

claiming an interest in that property when the Governor of Louisiana

commandeered the property by physically taking it and ousting them from

possession and access to the land. Accordingly, I conclude that Sid-Mar’s

commenced a valid inverse condemnation action in rem in the state court prior

to the United States’ filing of the federal condemnation suit against the same

property in rem in the present case. Therefore, the federal courts must respect

the previously filed state court in rem proceedings as establishing that court’s

exclusive jurisdiction to adjudicate the title to the property taken and the

compensation to be paid by the state in connection with the taking.4

Additionally, the Louisiana Governor’s commandeering order reserved to the

owners of the land taken “all such rights and privileges in said land as may be

used without interfering with or abridging the rights hereby acquired.” This

reservation necessarily contemplates that a state court with in rem jurisdiction

and possession and control of the property will determine the nature and the

4

The Louisiana Homeland Security and Emergency Assistance and Disaster Act, La. Rev.

Stat. Ann. § 29:721 et seq., empowers the Governor, subject to any applicable requirements for

compensation, to “commandeer or utilize any private property if he finds it necessary to cope

with a disaster or emergency.” La. Rev. Stat. Ann. § 29:724(D)(4). The Act provides that the

amount of compensation for such a loss “shall be calculated in the same manner as

compensation due for the taking of property pursuant to the condemnation laws of

[Louisiana].” La. Rev. Stat. Ann. § 29:730(G). The Act does not, however, establish or refer to

any particular statutory method or procedure to govern the compensation of persons whose

property is taken or condemned under the Governor’s emergency commandeering power.

Accordingly, Sid-Mar’s inverse condemnation action is an in rem action based on the self-

executing nature of the state and federal constitutions.

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extent, if any, of the landowners’ future right to use the property commandeered

and taken from them.

B.

Contrary to the majority’s and district court’s conclusions, I also conclude

that this case is neither analogous to nor controlled by Leiter Minerals, Inc. v.

United States, 352 U.S. 220 (1957), and therefore the prior exclusive jurisdiction

doctrine applies to and demands dismissal or a stay of this later filed federal in

rem condemnation action in light of the earlier filed state in rem inverse

condemnation action.

In Leiter Minerals, the Supreme Court first decided that the Anti-

Injunction Act, 28 U.S.C. § 2283, does not apply to bar injunctions or stays

sought by the United States because “statutes which in general terms divest pre-

existing rights or privileges will not be applied to the sovereign without express

words to that effect.” 352 U.S. at 224 (quoting United States v. United Mine

Workers of Am., 330 U.S. 258, 272 (1947)) (internal quotation marks omitted).

But the Court then stated that “[t]he question still remains whether the

granting of an injunction was proper under the circumstances of that case.” Id.

at 226. The Supreme Court went on to give qualified approval of the district

court’s injunction of the state court proceedings in Leiter Minerals, id. at 226-28,

but the Court distinguished the situation in Leiter Minerals from the “more

unusual situation where the United States, like any private claimant, made a

claim against funds that it never possessed and that were in the hands of

depositaries appointed by the state court. In [Leiter Minerals], a private party

is seeking by a state proceeding to obtain property currently in the hands of

persons holding under the United States; the United States is seeking to protect

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that possession and quiet title by a federal court proceeding,” id. at 227-28

(emphasis added). Put another way, as the majority recognizes, Leiter Minerals

did not directly analyze the prior exclusive jurisdiction doctrine or its

implications. Majority Op. 7-8. However, it did allude to the doctrine through

distinguishing Bank of New York & Trust Co., which, as discussed supra, applied

the doctrine against a later initiated in rem action brought by the United States.

When its tangential consideration of the doctrine is understood in this manner,

it becomes clear that Leiter Minerals did not fundamentally alter or amend the

prior exclusive jurisdiction doctrine, but rather, at most, recognized a narrow

exception where the sovereign, who is only required to litigate in the courts of

its choosing, was seeking defensively to “protect” and “quiet” title it already

possessed.

An enhanced recounting of Leiter Minerals’ facts and legal analysis, drawn

from the district court’s opinion, helps to contrast its situation from other cases,

such as this one, in which the prior exclusive jurisdiction doctrine applies. “On

December 21, 1938, the United States acquired [by cash sale] from Thomas

Leiter a tract of land comprising more than 8,000 acres” in Louisiana, reserving

“mineral rights in the land to the vendor, with a stipulation that, with certain

exceptions,” the rights “would expire on April 1, 1945.” United States v. Leiter

Minerals, Inc., 127 F. Supp. 439, 440 (E.D. La. 1954). Leiter Minerals, Inc.

claimed “to have succeeded Thomas Leiter in title to the reserved mineral

interest.” Id. On March 1, 1949, the United States executed several mineral

leases to Frank and Allen Lobrano, who conveyed operating rights under the

leases to the California Company, which drilled eighty producing wells on the

property. Id. Subsequently, the United States received royalty therefrom in

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excess of $3.5 million. Id. Thus, any interruption in the operation of the wells

would have caused the United States irreparable damage. Id. Also, “[s]ince the

date of its acquisition, the United States ha[d] . . . maintained and administered

the lands acquired from Thomas Leiter as part of a wild life refuge, thus

retaining physical possession of the surface of the land . . . [and] the mineral

rights by virtue of the mineral operations conducted by its lessees.” Id. Leiter

Minerals filed suit in state court in Louisiana against the California Company

and Allen Lobrano as mineral lessees from the United States and prayed that

Leiter Minerals be recognized as the lawful owner of all mineral rights under the

land acquired by the United States from Thomas Leiter. Id. at 440-41; see also

Leiter Minerals, 352 U.S. at 221 (stating that Leiter Minerals “founded its claim

on Louisiana Act No. 315 of 1940, La. Rev. Stat. § 9:5806 (1950), which, it

alleged, made ‘imprescriptible’ a reservation of mineral rights in a deed of

December 21, 1938, to the United States by its predecessor in title”). The United

States brought suit in the federal district court for the Eastern District of

Louisiana to quiet its title to the mineral rights and for a preliminary injunction

to restrain Leiter Minerals from prosecuting its state court action. Leiter

Minerals, 127 F. Supp. at 441. “It s[ought] equitable relief in the form of an

action to quiet title and to remove clouds on the title of the United States. A

federal court has jurisdiction to grant such relief.” Id. The district court held

that, since the United States was not and could not be made a party to the state

court suit, the title of the United States could be tried only in the federal court

action, and that an injunction against prosecution of the state proceedings

should issue to protect its jurisdiction pending determination of the ownership

of the property. Id. at 443-46. The Court of Appeals affirmed, holding that the

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preliminary injunction was proper because “the district court under the clear

provisions of the statute, 28 U.S.C. § 1345, became vested with exclusive

jurisdiction to determine the title of the United States to the mineral rights

claimed by appellant.” Leiter Minerals, Inc. v. United States, 224 F.2d 381,

383-84 (5th Cir. 1955).

Subject to one modification,5 the Supreme Court affirmed the judgment of

the Court of Appeals upholding the district court’s injunction of the state court

proceedings and allowing the United States’ suit to quiet title to its property to

proceed in the federal district court. The Court based its conclusions on

principles more fully elaborated upon in the district court opinion: The United

States as “sovereign cannot be sued in its own courts, or in any other, without

its consent and permission.” Leiter Minerals, 127 F. Supp. at 442 (quoting Beers

v. Arkansas, 61 U.S. (20 How.) 527, 529 (1857)) (internal quotation marks

omitted). “Officers or agents of the United States may be sued, however, for

possession of property held by them in behalf of the United States.” Id. (citing

Land v. Dollar, 330 U.S. 731 (1947); United States v. Lee, 106 U.S. 196 (1882)).

“Such an action is not one against the United States and, of course, would not

be res judicata as against the United States.” Id. (citing Dollar, 330 U.S. 731;

Lee, 106 U.S. 196). Therefore, “[w]here a suit is brought in a state or federal

court against officers or agents of the United States claiming property held by

those officers for the United States, the United States may bring its own action

in a state or federal court asking the court to adjudicate its claim to title to the

5

To avoid the possibility that the district court would unnecessarily reach and decide a federal

constitutional question, the Supreme Court “modif[ied] the judgment of the Court of Appeals

to permit an interpretation of the state statute to be sought with every expedition in the state

court in conformity with this opinion.” Leiter Minerals, 352 U.S. at 230.

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property involved in the former suit and is entitled to an injunction staying

further proceedings therein.” Id. (emphasis added).6 In other words, “since the

United States cannot be made a defendant to a suit concerning its property, and

no judgment in any suit against an individual who has possession or control of

such property can bind or conclude the government, . . . the government is

always at liberty, notwithstanding any such judgment, to avail itself of all the

remedies which the law allows to every person, natural or artificial, for the

vindication and assertion of its rights,” which, because of sovereign immunity,

must occur in federal court. Id. at 443 (emphasis added) (quoting Lee, 106 U.S.

at 222) (internal quotation marks omitted). Therefore, an injunction was proper

in the circumstances presented in Leiter Minerals because the United States

came into federal court in a defensive position, seeking to protect and quiet title

to an existing property right that was being litigated against its agents in state

court. Id. at 444.

By contrast, the district court continued, an injunction would not have

been proper, were the circumstances present in Leiter Minerals like those at

issue in United States v. Bank of New York & Trust Co., 296 U.S. 463 (1936).

Leiter Minerals, 127 F. Supp. at 444. “In [Bank of New York & Trust Co.] the

Supreme Court held that the federal court did not have exclusive jurisdiction of

6

The court cited the following as support for this proposition: Land v. Dollar, 341 U.S. 737

(1951); Dollar, 330 U.S. 731; Lee, 106 U.S. 196; United States v. Dollar, 196 F.2d 551 (9th Cir.

1952); United States v. Dollar, 193 F.2d 114 (9th Cir. 1952); Dollar v. United States, 190 F.2d

547 (9th Cir. 1951); Brown v. Wright, 137 F.2d 484 (4th Cir. 1943); United States v. McIntosh,

57 F.2d 573 (4th Cir. 1932); United States v. Dollar, 100 F. Supp. 881 (N.D. Cal. 1951); United

States v. Dollar, 97 F. Supp. 50 (N.D. Cal. 1951); United States v. Taylor’s Oak Ridge Corp.,

89 F. Supp. 28 (E.D. Tenn. 1950); United States v. Cain, 72 F. Supp. 897 (W.D. Mich. 1947);

United States v. Babcock, 6 F.2d 160 (D. Ind. 1925); and United States v. Inaba, 291 F. 416

(E.D. Wash. 1923).

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the claim of the United States to certain funds of three Russian insurance

companies dissolved by the Soviet government in 1918, which funds were in the

custody of the state court in New York in connection with proceedings in that

court liquidating the insurance companies. The funds were being held subject to

appropriate orders of the court providing for their distribution to creditors,

policyholders, and other claimants, in accordance with the state insurance laws.

The Soviet government claimed ownership of these funds and assigned its claim

to the United States, which filed suit in 1933, eight years after the state

liquidation proceedings began, in the United States District Court for the

Southern District of New York, and sought to enjoin further proceedings

concerning the funds in the state court. The judgment of the federal district

court, dismissing the complaint and denying a motion for injunction, was

affirmed by the Supreme Court on the ground that the state court had first

assumed jurisdiction and control of the funds, and that such control was

essential to give effect to that court’s jurisdiction to protect the rights of

claimants in the state court proceeding, none of whom was before the federal

court.” Id. at 444-45. Thus, the Leiter Minerals district court emphasized that

were the United States entering federal court offensively, seeking to secure

possession of a property right through an in rem proceeding, and there was a

prior initiated in rem state court proceeding involving the same property, the

prior exclusive jurisdiction doctrine would apply and require the federal court

to stay or dismiss its case in deference to the prior in rem state court action.

Albeit with not as much clarity or detail as the district court, the Supreme

Court affirmed on the same basis: that the circumstances presented in Leiter

Minerals warranting an injunction were narrow: An injunction was only proper

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because the United States had invoked the federal court’s jurisdiction

defensively, being forced to quiet its existing title that had been put at issue in

a state court suit brought against its lessors. The Court explained that the

injunction was proper because “the federal court was the only one that could

finally determine the basic issue in the litigation—whether the title of the

United States to the mineral rights was affected by Louisiana Act No. 315 of

1940. The United States was not a party to the state suit and, under settled

principles, title to land in possession of the United States under a claim of

interest cannot be tried as against the United States by a suit against persons

holding under the authority of the United States.” Leiter Minerals, 352 U.S. at

226 (emphasis added) (citing Lee, 106 U.S. 196).

The Supreme Court also distinguished, rather than overruled, Bank of

New York & Trust Co., 296 U.S. 463, upon which Leiter Minerals continued to

rely, stating: “the Bank of New York case presented the more unusual situation

where the United States, like any private claimant, made a claim against funds

that it never possessed and that were in the hands of depositaries appointed by

the state court. In [Leiter Minerals], a private party is seeking by a state

proceeding to obtain property currently in the hands of persons holding under

the United States; the United States is seeking to protect that possession and

quiet title by a federal court proceeding. Therefore, since the position of the

United States is essentially a defensive one, we think that it should be permitted

to choose the forum in this case . . . .” Leiter Minerals, 352 U.S. at 227-28

(emphasis added). Thus, the Court affirmed the district court’s analysis that

were the United States to have entered federal court offensively, seeking to

secure a right it did not posses through an in rem proceeding, and were there a

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prior initiated in rem state court proceeding involving the same property, the

prior exclusive jurisdiction doctrine would prevent the federal district court from

issuing an injunction against the state court proceedings.7

Lest there be any doubt as to this reading of Leiter Minerals, it has been

supported and adhered to consistently by subsequent Supreme Court and circuit

cases. In Colorado River Water Conservation District v. United States, the Court

reaffirmed the continued validity of the prior exclusive jurisdiction

rule—including when the United States initiates the later federal in rem

action—by explaining, “It has been held, for example, that the court first

assuming jurisdiction over property may exercise that jurisdiction to the

exclusion of other courts.” 424 U.S. 800, 818 (1976) (citing Donovan v. City of

Dallas, 377 U.S. 408, 412 (1964); Princess Lida, 305 U.S. at 466; Bank of N.Y.

& Trust Co., 296 U.S. at 477). The Court continued that “[t]his has been true

even where the Government was a claimant in existing state proceedings and

then sought to invoke district-court jurisdiction.” Id. (citing Bank of N.Y. & Trust

Co., 296 U.S. at 479). The Court acknowledged the Leiter Minerals precedent,

7

Further demonstrating that Leiter Minerals did not meaningfully, if at all, alter or amend

the long-established prior exclusive jurisdiction doctrine, the Leiter Minerals’ district court

explained that it was an open question whether the state suit being enjoined in that case was

in fact an in rem action. It explained that one of the “many and obvious” distinctions between

Leiter Minerals and Bank of New York & Trust Co., is that “[t]here is no case . . . from the

Supreme Court which holds that the mere filing of a suit claiming ownership of property

places that property under the control of the court so that no other court has the right to

adjudicate claims against that property. In fact, the decisions seem to be to the contrary.”

Leiter Minerals, 127 F. Supp. at 446 (citing Markham v. Allen, 326 U.S. 490 (1946);

Mandeville, 318 U.S. 47; Commonwealth Trust Co. v. Bradford, 297 U.S. 613 (1936)). Although

the Supreme Court later acknowledged that “the state litigation has the elements of an action

characterized as quasi in rem,” it declined to call into question the district court’s insinuation

that the prior exclusive jurisdiction doctrine might not be implicated at all because the state

court proceedings were not truly in rem or quasi in rem. Leiter Minerals, 352 U.S. at 228.

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but only through a citation, “but cf.” In this manner, the Court indicated that

Leiter Minerals could be read as a narrow exception to its broad statement that

the prior exclusive jurisdiction doctrine applies “even where the Government

was a claimant.” Nonetheless, the Court’s cursory treatment of the precedent

clearly indicated that it understood Leiter Minerals to provide, at most, an

unremarkable and very narrow exception to the general rules articulated in

Colorado River Water Conservation District.

More recently and directly, the Tenth Circuit in United States v. Buck

described Leiter Minerals as standing solely for the narrow proposition described

above, that a federal court may enjoin a “state court proceeding[] . . . to protect

jurisdiction of [the] federal court in [a] quiet title action brought by [the] United

States.” 281 F.3d 1336, 1344 (10th Cir. 2002).

The situation here, involving Sid-Mar’s prior state court inverse

condemnation in rem action vis-a-vis the subsequently filed United States’

federal court condemnation in rem action, is markedly different from that in

Leiter Minerals. Sid-Mar’s state suit does not challenge the title to land or

minerals held by a lessee who obtained rights in the property from the United

States. The United States’ federal suit is not an action to quiet its pre-existing

title or claim of interest to land or minerals or to remove a cloud on its title

created by Sid-Mar’s. Instead, the United States is seeking to condemn land in

which it previously did not have a title or a claim of interest. In this manner, the

present situation is more similar to the situation in United States v. Bank of New

York & Trust Co., where the United States, like any private claimant, made a

claim against funds that it did not possess or that were not in the hands of

persons holding under the United States’ title. Therefore, assuming arguendo

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that Leiter Minerals intended to speak to and amend the prior exclusive

jurisdiction doctrine, it did not do so in a manner that would keep the doctrine

from applying to the facts of this case; as in Bank of New York & Trust Co., the

rule that the court first assuming jurisdiction over property may maintain and

exercise that jurisdiction to the exclusion of the other applies to the present case.

Accordingly, the state court in Sid-Mar’s inverse condemnation action should be

allowed to maintain its jurisdiction to adjudicate title and compensation with

respect to the 0.166 acres commandeered and taken by the State of Louisiana,

to the exclusion of the federal district court’s jurisdiction to adjudicate the

United States’ condemnation of the same property. Once that state court

litigation is complete, there would be no barrier the United States filing its

condemnation action in federal district court.

C.

The facts and analysis in Leiter Minerals underscored that it created a

narrow exception, if any, to the prior exclusive jurisdiction doctrine: That when

the United States, which is only required to litigate in the courts of its choosing,

is seeking defensively to “protect” and “quiet” title it already possesses, it can

obtain an injunction against a prior initiated state court in rem proceeding

concerning the same property. The majority, however, reads this narrow

exception expansively, as providing federal district courts with the power to

enjoin prior initiated state court in rem suits any time the United States

conceives of a “future interest” it might have in the res. Majority Op. 17.

Momentarily recognizing the unacceptable implications of such a rule, the

majority attempts to characterize the United States’ “future interest” in this case

as concrete: “[I]t is possible the United States has a claim to the land that

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preceded the commencement of the state court lawsuit. . . . [T]he [state]

Executive Order that acted to commandeer the property referred specifically to

the Cooperation Agreement between the United States and the Orleans Levee

District . . . . That Cooperation Agreement . . . indicated the federal government

would later acquire full ownership rights in the property.” Majority Op. 17. Yet

this mischaracterizes the Cooperation Agreements, of which there are actually

three: the original agreement and two supplements. The Cooperation

Agreements between the U.S. Department of the Army and the Orleans Levee

District, among other local entities, do not purport to grant the United States

any interest in the parcel of land that the Governor of Louisiana commandeered

from Sid-Mar’s nor do they obligate the Governor nor the State of Louisiana to

transfer property to the Department. The Agreement merely obligates the

Orleans Levee District, and the other named local entities, to try to acquire

necessary land and right-of-ways, both of which are described by their general

location and not by legal descriptions; and it states that if that strategy fails, the

United States can obtain such an interest “through the exercise of eminent

domain authority” if there existed sufficient appropriations. That is, at the time

the United States signed the Cooperation Agreements, its interest in the

property subject to the Agreements was no more of a legal interest than it might

have in any property in the nation: If the Levee District’s strategy outlined in

the Cooperation Agreements failed, and the United States determined that it

was appropriate and desirable for it to exercise its power of eminent domain, and

funds were available, it intended to do so. Consistent with this, the United

States never alleged nor argued as part of this federal suit that it had an existing

interest in Sid-Mar’s property when Sid-Mar’s state suit was filed. To the

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contrary, in its brief in the district court arguing for a stay, the United States

acknowledged that this case was distinguishable from Leiter Minerals because

it was not filing “a quiet title action in the instant case.” As a result, the

majority’s rule is as broad and unwieldy as it appears. It undermines the

principles of federalism that the prior exclusive jurisdiction doctrine was

designed to protect. Not surprisingly then, the case law that the majority cites

in support of its holding stands for no such principle and, in fact, the majority

splits us from the Second Circuit.

As I described above, the prior exclusive jurisdiction doctrine is designed

to defend and respect our national system of dual sovereignty. “The Federal and

state courts exercise jurisdiction within the same territory, derived from and

controlled by separate and distinct authority, and are therefore required, upon

every principle of justice and propriety, to respect the jurisdiction once acquired

over property by a court of the other sovereignty.” Palmer v. Texas, 212 U.S. 118,

125 (1909). Accordingly, the prior exclusive jurisdiction doctrine was designed

to force courts’ “circumspection in undertaking any action that might result in

the interference with a res in the custody of another court, which thereby might

violate the autonomy of the state and federal judicial systems.” 13F Wright et

al., supra, at 278.

By holding that the prior exclusive jurisdiction doctrine does not apply

whenever the United States has a conceived “future interest” in the res, the

majority provides the federal district courts with largely unfettered discretion

to debase previously filed state court proceedings. According to the majority,

because the United States could exercise its power of eminent domain over

property, that is a sufficient federal interest to empower the district courts

proceeding in rem to reach into the state courts and strip them of their existing

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jurisdiction over property under their control. Although the United States has

no direct interest at stake in the state court suit and it will suffer no impairment

of any pre-existing property right or its right to choose its forum in which to

establish such rights, the majority allows federal courts to stay state court

proceedings and potentially circumvent the state courts in the name of a federal

interest. The majority allows for such an outcome even though these are

precisely the circumstances in which the Supreme Court has stated that our

interests in federalism are at their highest and thus the prior exclusive

jurisdiction doctrine should be fully enforced. See Bank of N.Y. & Trust Co., 296

U.S. at 480-81 (stating that the prior exclusive jurisdiction doctrine prevented

the federal court’s from assuming jurisdiction over the res in a suit brought by

the United States because “[t]here is no merit in the suggestion that the United

States, in presenting its claim in the state proceedings, would be compelled to

take the position of a defendant—being sued without its consent” and “[w]e

cannot see that there would be impairment of any rights the United States may

possess”).

The majority cites Alonzo v. United States, 249 F.2d 189 (10th Cir. 1957),

as supporting its holding that the United States’ “future interest” in the res is

a sufficient basis for a federal court to enjoin a prior initiated state court in rem

proceeding; but that case establishes no such rule. There, the Tenth Circuit held

that because the United States had an existing interest in property subject to a

state court suit, “as clear as it would be if the fee were in the United States,” a

federal district court could enjoin the state proceeding, allowing the United

States to litigate in federal court. Id. at 197. In Alonzo, Lupe, Jim, Joe and

Valentino Alonzo and James Garcia filed suit in a New Mexico court seeking to

eject the Pueblo Indian tribe from “certain lands described in their complaint .

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. . and damages for minerals alleged to have been wrongfully extracted from said

lands.” Id. at 190. The United States then entered federal court “in its own

behalf and in behalf of the Pueblo . . . seeking a judgment quieting the title to

certain of the lands embraced in the state court action and enjoining the

plaintiffs in the state court action from prosecuting such action.” Id. (emphasis

added). The district court issued a preliminary injunction against the state court

plaintiffs preventing them from prosecuting their state court suit and they

appealed.

The Tenth Circuit upheld the injunction, citing Leiter Minerals. Id. at 196-

97. It reviewed the history of the Pueblo’s ownership of the land and their

relationship with the United States and concluded that although the Pueblo had

many traditional aspects of ownership, “[r]estricted Indian land is property in

which the United States has an interest. ‘This national interest is not to be

expressed in terms of property, or to be limited to the assertion of rights incident

to the ownership of a reversion or to the holding of a technical title in trust.’” Id.

at 197 (quoting United States v. Hellard, 322 U.S. 363, 366 (1944), in turn

quoting Heckman v. United States, 224 U.S. 413, 437 (1912)) (internal quotation

marks omitted). Therefore, “the Governmental interest in the instant action is

as great as it would be if the fee to the lands involved were in the United States.

Indeed, since the United States is suing as a guardian of a dependent nation in

discharge of a fiduciary duty, its right and duty to protect the interests of its

wards may be even greater then it would if it were suing in its own behalf with

respect to its own lands.” Id. It was in light of this relationship to and authority

over the land—not, as the majority claims, the United States’ “future interest in

that property,” Majority Op. 17—that the Tenth Circuit concluded, under Leiter

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Minerals, that the United States could seek and obtain an injunction of the state

court suit. Alonzo, 249 F.3d at 197 (citing Leiter Minerals, 352 U.S. 220).

Moreover, the majority’s holding splits us from the Second Circuit. In

United States v. Certified Industries, Inc., 361 F.2d 857 (2d Cir. 1966), the

Second Circuit considered essentially the same question presented by this case:

whether Leiter Minerals amends the prior exclusive jurisdiction doctrine so that

it does not apply to later initiated federal in rem proceedings brought by the

United States. Consistent with my analysis, a unanimous panel of the Second

Circuit held that Leiter Minerals was distinguishable and that the prior

exclusive jurisdiction doctrine continued to apply to federal court actions brought

by the United States except where the United States enters federal court

defensively, seeking to protect and quiet its pre-existing title to property.

In the Second Circuit’s case, Certified Industries, a construction

subcontractor, sued in state court seeking to “foreclose a lien” for funds it was

owed for work it had performed for Meteor, a contractor. Id. at 858-59. The

United States sought to enjoin that state court suit “on the theory that it [was]

entitled to have a trust imposed” on those same funds. Id. at 859. The district

court granted the United States a preliminary injunction, but the Second Circuit

reversed, stating that both the prior initiated state court suit and the federal

suit were in rem. Id. at 859-60. The Second Circuit explained that Leiter

Minerals did “not mean . . . that a stay is automatically granted simply on the

application of the United States.” Id. at 859. As recounted by the Second Circuit,

while the Supreme Court in Leiter Minerals held that the Anti-Injunction Act

did not bar injunctions of state court suits sought by the United States, the

Leiter Minerals Court also “went on to say that it was also necessary to inquire

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‘whether the granting of an injunction was proper in the circumstances of this

case.’” Id. (quoting Leiter Minerals, 352 U.S. at 226). Therefore, the Second

Circuit held, consistent with my analysis and contrary to the conclusion of the

majority, that in light of the prior exclusive jurisdiction doctrine, “[t]he United

States is not entitled to an injunction staying state court proceedings where the

state court is the first court to assume jurisdiction over the subject matter

property of an action in rem or quasi in rem.” Id. at 860 (citing Bank of N.Y. &

Trust Co., 296 U.S. at 447; Penn Gen. Cas. Co., 294 U.S. at 195).

The Second Circuit acknowledged that Leiter Minerals may have carved

out a narrow exception to the prior exclusive jurisdiction doctrine, but, for the

same reasons that I believe that Leiter Minerals is distinguishable from the

instant case, the Second Circuit explained that the exception did not apply to its

case. Id. at 861. The Second Circuit reasoned: “The Supreme Court in [Leiter

Minerals] indicated that where the United States’ position is ‘defensive’ it should

be able to choose its forum ‘even though the state litigation has the elements of

an action characterized as quasi in rem.’” Id. at 861 (quoting Leiter Minerals, 352

U.S. at 228). However, in Certified Industries the United States’ position was not

“defensive” because it was not seeking to protect or retain “funds or title to

property in its possession at the commencement of the state proceeding.” Id.

(emphasis added). Therefore, analogizing the case to Bank of New York & Trust

Co., the Second Circuit concluded that the prior exclusive jurisdiction doctrine

applied to bar the injunction sought by the United States. Id. at 861-62; see also

United States v. Akin, 504 F.2d 115, 122 n.5 (10th Cir. 1974) (stating that the

Supreme Court allowed the injunction in Leiter Minerals because “the United

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States [was] seeking to protect [its] possession and quiet title by a federal court

proceeding” (citing Leiter Minerals, 352 U.S. at 227-28)).

Just last year, the Second Circuit positively cited to Certified Industries’

reading of Leiter Minerals and the prior exclusive jurisdiction doctrine in

Interworks Systems Inc. v. Merchant Financial Corp., 604 F.3d 692, 701 n.7 (2d

Cir. 2010) (indicating that Certified Industries’ analysis of when an “injunction

against state court proceedings could issue” remained good law). This court too

has positively cited Certified Industries for its articulation of the prior exclusive

jurisdiction doctrine. Signal Props., Inc. v. Farha, 482 F.2d 1136, 1137 (5th Cir.

1973) (citing Certified Indus., 361 F.2d 857).

CONCLUSION

Therefore, I conclude that, consistent with the relevant Supreme Court

and circuit authority and the views of the leading commentators, Leiter Minerals

does not exempt in rem actions by the United States from the prior exclusive

jurisdiction doctrine—except possibly where it is defensively seeking to quiet its

pre-existing title to property—and because the United States in this case is

proceeding offensively, not defensively, to acquire title to property for the first

time in this federal action filed after Sid-Mar’s commenced the in rem state court

action involving the same parcel of land, the doctrine requires that the

injunction of Sid-Mar’s state court in rem action issued by the district court be

withdrawn. Accordingly, I would vacate the district court’s injunction and

remand the case to it for dismissal, stay, or other proceedings consistent with

this opinion. For these reasons, I respectfully dissent.

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