Seven Up Pete Ventur v. Schweitzer

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SEVEN UP PETE VENTURE, an 

Arizona general partnership dba

Seven Up Pete Joint Venture;

CANYON RESOURCES CORPORATION, a

Delaware corporation; JEAN MUIR;

IRENE HUNTER, Doctor; DAVID

MUIR; ALICE CANFIELD; TONY

PALAORO; JUNE E. ROTHE-

BARNESON; AMAZON MINING No. 06-35384

COMPANY, a Montana partnership;

PAUL ANTONIOLI; STEPHEN  D.C. No.

CV-00-00013-CCL

ANTONIOLI; JAMES E. HOSKINS,

Plaintiffs-Appellants, OPINION

v.

BRIAN SCHWEITZER, Governor of

the State of Montana; RICHARD

OPPER, Director of the Montana

Department of Environmental

Quality,

Defendants-Appellees.



Appeal from the United States District Court

for the District of Montana

Charles C. Lovell, District Judge, Presiding

Argued and Submitted

November 7, 2007—Seattle, Washington

Filed April 21, 2008

Before: William C. Canby, Jr., Susan P. Graber, and

Ronald M. Gould, Circuit Judges.

4157

4158 SEVEN UP PETE VENTURE v. SCHWEITZER

Opinion by Judge Canby

4160 SEVEN UP PETE VENTURE v. SCHWEITZER

COUNSEL

Sean Connelly, Reilly, Pozner & Connelly, LLP, Denver,

Colorado, for the plaintiffs-appellants.

Anthony Johnstone, Assistant Attorney General, Helena,

Montana, for the defendants-appellees.

OPINION

CANBY, Circuit Judge:

The primary question before us is whether the Eleventh

Amendment precludes federal jurisdiction over an action

seeking compensation under the Fifth and Fourteenth Amend-

ments for a taking of property by a State.

The factual setting of this case is simple enough; the proce-

dural context is more complicated. Seven Up Pete Venture

(“the Venture”) and other plaintiffs acquired leases of Mon-

tana state property for the purpose of mining gold, silver and

other trace minerals.1 Subsequently, voters of Montana

1

Except in the “Factual History” section of this opinion, all references

to “the Venture” include the other plaintiffs as well as Seven Up Pete Ven-

SEVEN UP PETE VENTURE v. SCHWEITZER 4161

enacted Initiative 137 (“I-137”), which banned open-pit min-

ing for gold or silver by the cyanide heap leaching process.

The Venture then brought this reverse condemnation action in

federal district court against the Governor of Montana and the

Director of the Montana Department of Environmental Qual-

ity in their official capacities. The Venture contended that I-

137 effected a regulatory taking of their property, for which

the State of Montana must pay just compensation under the

Fifth and Fourteenth Amendments of the United States Con-

stitution. At the same time, the Venture brought a reverse con-

demnation action in Montana state court. The Venture then

obtained a stay of the federal proceedings pending resolution

of the state claims. After the Montana Supreme Court rejected

the Venture’s claims, the district court dismissed the federal

takings claims under the Eleventh Amendment and, in the

alternative, under the doctrine of issue preclusion. The Ven-

ture now appeals that dismissal.

We join a number of our sister circuits and hold that the

Eleventh Amendment bars a reverse condemnation action

brought in federal court against state officers in their official

capacities. We therefore affirm the district court’s dismissal

of the Venture’s takings claims on that ground without reach-

ing the question of issue preclusion.

BACKGROUND

I. Factual History2

In 1991, the Venture acquired six leaseholds (“the Mineral

Leases”) of state-owned mineral estates in the vicinity of Lin-

ture.

2

Because the Montana Supreme Court recited the facts underlying this

litigation in some detail in a published opinion, we provide only a brief

summary of the events. See Seven Up Pete Venture v. State, 114 P.3d 1009

(Mont. 2005).

4162 SEVEN UP PETE VENTURE v. SCHWEITZER

coln, Montana. The lands encompassed by the Mineral Leases

comprise an area known as the “McDonald Project.” Accord-

ing to feasibility studies, the McDonald Project contains more

than 9 million ounces of gold and 20 million ounces of silver.

Approximately half of these minerals could be recovered

profitably through open-pit extraction combined with cyanide

leaching of the ore. In addition to its interest in the McDonald

Project, the Venture owns surface leases as well as other sur-

face and mineral interests in two other areas also located east

of Lincoln, Montana. These areas are designated as “Keep

Cool Prospect” and “Seven Up Pete Project.” The remaining

plaintiffs own surface or mineral interests in the general vicin-

ity of Lincoln, Montana.

Throughout the mid-1990s, the Venture and the State of

Montana engaged in discussions regarding the environmental

impact and viability of mining in the McDonald Project. Nei-

ther the Venture nor any other plaintiff ever obtained a permit

to begin mining operations, as required by Montana Code

Annotated section 82-4-335(1), and no mining has in fact

taken place to date in the Project.

In November 1998, Montana became the first state to pro-

hibit open-pit mining using cyanide heap leaching. It did so

by passing ballot initiative I-137, which, as codified, pro-

vides:

(1) Open-pit mining for gold or silver using heap

leaching or vat leaching with cyanide ore-processing

reagents is prohibited except as described in subsec-

tion (2).

(2) A mine described in this section operating on

November 3, 1998, may continue operating under its

existing operating permit or any amended permit that

is necessary for the continued operation of the mine.

Mont. Code Ann. § 82-4-390.

SEVEN UP PETE VENTURE v. SCHWEITZER 4163

According to the complaint, there are no gold or silver

recovery processes other than open-pit mining and cyanide

leaching that will allow economically viable production of the

gold and silver in the McDonald Project. In late 1999, the

Montana Department of Environmental Quality informed the

Venture that, in light of the passage of I-137, it had halted its

review of the Venture’s pending application for a mining per-

mit. The Montana Department of Natural Resources and Con-

servation later informed the Venture that the six Mineral

Leases terminated of their own accord due to the Venture’s

failure to “diligently pursue acquisition of a permit under

Montana’s Metal Mine Reclamation Act.” Seven Up Pete

Venture, 114 P.3d at 1015.

II. Procedural History

In April 2000, the Venture filed a complaint in federal

court alleging, among other things, that I-137 worked a taking

of their property without just compensation in violation of the

Fifth and Fourteenth Amendments. On the same day, the Ven-

ture also filed a complaint in state court, which alleged,

among other things, that I-137 effectuated a regulatory taking

of its property rights without just compensation under Mon-

tana law.

In the state complaint, the Venture advised the court that it

“reserve[d] [its] federal claims” for a separate federal action,

but was notifying the state court of its “federal claims so that

Plaintiffs’ state claims may be considered and adjudicated in

light of those claims, and not for determination by [the state]

Court of [its] federal claims.”

The federal district court dismissed the federal Fifth

Amendment claim without prejudice on the ground that the

suit for compensation was not ripe under Williamson County

Regional Planning Commission v. Hamilton Bank of Johnson

City, 473 U.S. 172, 186 (1985), because the Venture had not

finished pursuing the procedures Montana provides for

4164 SEVEN UP PETE VENTURE v. SCHWEITZER

obtaining just compensation. The district court also concluded

that the Venture had preserved its right, pursuant to England

v. Louisiana State Board of Medical Examiners, 375 U.S. 411

(1964), to “return to federal court at the conclusion of the

state court proceedings if it remains necessary to litigate their

reserved federal claims.” Accordingly, the district court dis-

missed the Venture’s taking claims without prejudice and

granted its motion to stay the case pending resolution of the

state court proceedings.

The Montana trial court subsequently granted summary

judgment in favor of the state in the state court proceedings,

and the Montana Supreme Court affirmed. The Montana

Supreme Court held that the Venture was not entitled to just

compensation because “[t]he guarantees of the Fifth and Four-

teenth Amendments apply only when a constitutionally pro-

tected property interest is at stake.” Seven Up Pete Venture,

114 P.3d at 1017 (alterations and internal quotation marks

omitted). The Court reasoned that the Venture’s “ ‘opportu-

nity’ to seek a permit, which required convincing the State

that this cyanide leaching project was appropriate, did not

constitute a property right. The State had wide discretion to

reject the Venture’s permit application, even without the

enactment of I-137.” Id. at 1019.

The United States Supreme Court denied the Venture’s

petition for certiorari to review the state court judgment. The

Venture timely notified the district court and filed a motion to

reopen the case and reinstate the federal takings counts. The

district court reopened the case but dismissed the Venture’s

takings claims with prejudice. It held that the Eleventh

Amendment barred the Venture’s takings claims because they

seek monetary relief against state officials in their official

capacities. In the alternative, the district court held that it was

required to accord issue-preclusive effect to the Montana

Supreme Court’s decision.3 The Venture appeals both grounds

for dismissal.

3

Although the district court had earlier observed that the Venture had

preserved its right under England to return to federal court for adjudica-

SEVEN UP PETE VENTURE v. SCHWEITZER 4165

DISCUSSION

[1] The Eleventh Amendment has been authoritatively con-

strued to deprive federal courts of jurisdiction over suits by

private parties against unconsenting States.4 See Seminole

Tribe v. Florida, 517 U.S. 44, 54 (1996). This jurisdictional

bar remains effective, if a bit less absolute, in cases like this

where state officials, instead of the State itself, are the sub-

jects of suit. Generally speaking, “a suit [brought] against a

state official in his or her official capacity is not a suit against

the official but rather is a suit against the official’s office. As

such, it is no different from a suit against the State itself.” Will

v. Mich. Dep’t. of State Police, 491 U.S. 58, 71 (1989) (cita-

tion omitted). If, however, the plaintiffs seek prospective

injunctive relief against the state official for a violation of fed-

eral law, the Eleventh Amendment does not bar the action. Ex

parte Young, 209 U.S. 123 (1908); Edelman v. Jordan, 415

U.S. 651, 664 (1974).

These general principles guide our analysis of the two

issues that we decide in this case: 1) whether the Takings

Clause occupies a unique place among constitutional protec-

tions in that, by virtue of its built-in remedy of just compensa-

tion, it overrides Eleventh Amendment immunity and 2) if

not, whether the doctrine of Ex parte Young applies to permit

this suit against the state officials. Before turning to the merits

of the first issue, we satisfy ourselves that this court has not

already considered and decided it.

tion of the federal constitutional issues, the court held that the intervening

Supreme Court decision in San Remo Hotel L.P. v. City & County of San

Francisco, 545 U.S. 323, 340-48 (2005), required the district court to give

issue-preclusive effect to the Montana decision.

4

“Immunity under the Eleventh Amendment is a question of law that we

review de novo.” Yakama Indian Nation v. Wash. Dep’t. of Revenue, 176

F.3d 1241, 1245 (9th Cir. 1999).

4166 SEVEN UP PETE VENTURE v. SCHWEITZER

I. Broughton and Stare Decisis

[2] This court upheld the dismissal of a reverse condemna-

tion action on Eleventh Amendment grounds in Broughton

Lumber Co. v. Columbia River Gorge Comm’n, 975 F.2d 616,

620 (9th Cir. 1992). One might well assume that Broughton

thus ends the matter and controls this case, but Broughton was

directed at a different argument. In Broughton, the plaintiff

pursued a reverse condemnation action in federal court alleg-

ing that Washington and Oregon effected an unconstitutional

regulatory taking of its property by failing to issue a land use

permit. Id. at 618. The plaintiff’s argument assumed that the

Eleventh Amendment ordinarily applied in reverse condemna-

tions actions, but asserted that Congress had abrogated the

immunity of Washington and Oregon in the statute approving

the Columbia River Gorge Compact. Id. at 619. The court

found no such abrogation in the statute, and accordingly held

the suit to be barred by the Eleventh Amendment. Id. at 619-

20. The argument presented in today’s case — that the self-

executing nature of the Takings Clause itself defeats Eleventh

Amendment immunity — was neither raised nor discussed.

[3] Because Broughton did not directly address the latter

issue, it does not control our decision. It is true that “where

a panel confronts an issue germane to the eventual resolution

of the case, and resolves it after reasoned consideration in a

published opinion, that ruling becomes the law of the circuit,

regardless of whether doing so is necessary in some strict log-

ical sense.” United States v. Johnson, 256 F.3d 895, 914 (9th

Cir. 2001) (en banc) (per curiam). But Broughton involved no

such reasoned consideration of the issue before us. Reconsid-

eration of an issue may be appropriate “where the later panel

is convinced that the earlier panel did not make a deliberate

decision to adopt the rule of law it announced.” Id. at 915.

That is the situation here: we are convinced that Broughton

made no deliberate decision rejecting the proposition that the

self-executing nature of the Takings Clause overcame Elev-

SEVEN UP PETE VENTURE v. SCHWEITZER 4167

enth Amendment immunity. In deciding that question today,

we are not constrained by Broughton.5

II. Self-Execution and the Eleventh Amendment

A. Self-Execution

[4] The Supreme Court has long recognized that the just

compensation clause of the Fifth Amendment is self-

executing: “ ‘the right to recover just compensation . . . [i]s

guaranteed by the Constitution’ ” and “ ‘[s]tatutory recogni-

tion [i]s not necessary.’ ” First English Evangelical Lutheran

Church v. County of Los Angeles, 482 U.S. 304, 315 (1987)

(emphasis omitted) (quoting Jacobs v. United States, 290 U.S.

13, 16 (1933)). From this fact, the Venture argues that the

constitutional right to compensation overcomes the state’s

Eleventh Amendment immunity. We reject this contention;

we conclude that the constitutionally grounded self-executing

nature of the Takings Clause does not alter the conventional

application of the Eleventh Amendment.

[5] The Supreme Court’s reverse condemnation cases have

not spoken directly to our question. Neither First English, a

suit against a county, nor City of Monterey v. Del Monte

Dunes at Monterey, Ltd., 526 U.S. 687 (1999), a suit against

a municipality, controls the Eleventh Amendment analysis,

for both cases involved state entities not protected by the

Amendment. See, e.g., Lake Country Estates, Inc. v. Tahoe

Regional Planning Agency, 440 U.S. 391, 401 & n.19 (1979)

(“[T]he Court has consistently refused to construe the Amend-

ment to afford protection to political subdivisions such as

counties and municipalities, even though such entities exer-

5

At least two cases decided since Broughton contained dicta suggesting

that it was an open question in this circuit whether reverse condemnation

actions could be brought against an unconsenting State in federal court.

See Spoklie v. Montana, 411 F.3d 1051, 1058 (9th Cir. 2005); Taylor v.

Westly, 402 F.3d 924, 936 (9th Cir. 2005).

4168 SEVEN UP PETE VENTURE v. SCHWEITZER

cise a ‘slice of state power.’ ”).6 In sum, First English

expounds the self-executing character of the Takings Clause

and the resulting obligation by the states to provide a specific

remedy for takings in their own courts, but does not directly

address its interplay with the Eleventh Amendment. See Rich-

ard H. Seamon, The Asymmetry of State Sovereign Immunity,

76 Wash. L. Rev. 1067, 1072-80 (2001). This is the issue to

which we now turn.

B. Eleventh Amendment and Sovereign Immunity

[6] The Supreme Court addressed the interplay of sovereign

immunity and another “self-executing” constitutional provi-

sion in Reich v. Collins, 513 U.S. 106 (1994), a case address-

ing the remedy required under the Due Process Clause for

unconstitutionally levied taxes. The Court concluded that a

state court could not wholly deny a remedy, stating that “ ‘a

denial by a state court of a recovery of taxes exacted in viola-

tion of the laws or Constitution of the United States by com-

pulsion is itself in contravention of the Fourteenth

Amendment,’ the sovereign immunity States traditionally

enjoy in their own courts notwithstanding.” Id. at 109-10

(quoting Carpenter v. Shaw, 280 U.S. 363, 369 (1930)). The

Court also observed parenthetically that, although the State

could not invoke its sovereign immunity to avoid refunding

an unconstitutional tax, the Eleventh Amendment neverthe-

less ordinarily barred such actions from federal court. Id. at

110. If sovereign immunity may not stand in the way of

recovery in state court for unconstitutionally levied taxes

because of the “self-executing” character of the Due Process

6

Unsurprisingly, then, the First English Court did not place any analyti-

cal weight on sovereign immunity, mentioning the term only once and,

even then, only to paraphrase the government’s argument. First English,

482 U.S. at 316 n.9 (“The Solicitor General urges that the prohibitory

nature of the Fifth Amendment, combined with principles of sovereign

immunity, establishes that the Amendment itself is only a limitation on the

power of the Government to act, not a remedial provision.” (citation omit-

ted)).

SEVEN UP PETE VENTURE v. SCHWEITZER 4169

right at stake, it follows that the state courts must also be

available to adjudicate claims brought under the federal Tak-

ings Clause, which is also self-executing. And, as Reich

states, this constitutionally enforced remedy against the States

in state courts can comfortably co-exist with the Eleventh

Amendment immunity of the States from similar actions in

federal court.

[7] It is not surprising, then, that every court of appeals to

have faced this question has expressly or implicitly applied

the Reich rationale and held that the Eleventh Amendment

bars Fifth Amendment reverse condemnation claims brought

in federal district court. See DLX, Inc. v. Kentucky, 381 F.3d

511, 526-28 (6th Cir. 2004) (“[The State] enjoys sovereign

immunity in the federal courts from [a] federal takings claim

. . . .”); John G. & Marie Stella Kenedy Mem’l Found. v.

Mauro, 21 F.3d 667, 674 (5th Cir. 1994) (“[A] Fifth Amend-

ment inverse condemnation claim brought directly against the

State . . . is . . . barred by the Eleventh Amendment.”); Robin-

son v. Ga. Dep’t of Transp., 966 F.2d 637, 640 (11th Cir.

1992) (same); Citadel Corp. v. Puerto Rico Highway Auth.,

695 F.2d 31, 33 n.4 (1st Cir. 1982) (per curiam) (same); Gar-

rett v. Illinois, 612 F.2d 1038, 1040 (7th Cir. 1980) (same).

At least one commentator has agreed. See Richard H. Sea-

mon, supra, at 1080-87.7

There is one additional wrinkle that must be added to the

analysis, however. Five years after its decision in Reich, the

Supreme Court decided Alden v. Maine, 527 U.S. 706 (1999).

Alden held that the immunity of the States from suit without

their consent was a fundamental aspect of sovereignty, which

7

Some earlier articles, written before the Supreme Court’s decision in

Reich, took a different view. See Vicki C. Jackson, The Supreme Court,

the Eleventh Amendment, and State Sovereign Immunity, 98 Yale L.J. 1,

115 n.454 (1988); Jack M. Beermann, Government Official Torts and the

Takings Clause: Federalism and State Sovereign Immunity, 68 B.U. L.

Rev. 277, 338-39 (1988).

4170 SEVEN UP PETE VENTURE v. SCHWEITZER

the States enjoyed before the adoption of the Constitution and

retained thereafter “except as altered by the plan of the [Con-

stitutional] Convention or certain constitutional Amend-

ments.” Id. at 713. Accordingly, Congress lacked the power

under Article I of the Constitution to enact legislation subject-

ing the States to suit in state courts. See id. at 712. The Elev-

enth Amendment was simply a recognition of a two-part

presupposition underlying the Constitution: (1) that each State

is sovereign, and (2) that immunity from suit without the

State’s consent is inherent in sovereignty. Id. at 729.

From this formulation, the Venture draws some interesting

arguments. First, the Venture assumes, justifiably enough,

that there must be some forum in which the self-executing

constitutional guarantee of just compensation for taking of

property may be enforced. Thus, the Takings Clause must be

capable of overcoming State sovereignty. Alden, however,

makes it clear that Eleventh Amendment immunity is not

unique, but is simply one expression of the total sovereign

immunity of the States, applicable equally in federal and state

court. Therefore, the Venture reasons, the self-executing dom-

inance of the Takings Clause over State immunity applies

equally in state and federal court.

We decline to adopt the Venture’s “forum-neutral” concep-

tion of sovereign immunity for several reasons. First, although

the Court in Alden viewed the Eleventh Amendment as a rec-

ognition of, rather than the origin of, sovereign immunity of

the States, it nowhere commanded that the immunity be

treated exactly the same for all purposes in both federal and

state courts. It certainly did not purport to repudiate the com-

mand of the Eleventh Amendment precluding suits by private

parties against unconsenting States in federal court. More-

over, the Court discussed Reich with approval, noting that the

remedy against the State in Reich arose “from the Constitu-

tion itself; Reich does not speak to the power of Congress to

subject States to suits in their own courts.” Alden, 527 U.S.

at 740. Nothing in this passage suggests or requires a change

SEVEN UP PETE VENTURE v. SCHWEITZER 4171

in the regime addressed in Reich: that the State may be sued

in its own courts (but not in federal court) for damages arising

from violation of a self-executing constitutional clause.

[8] We therefore conclude that the Eleventh Amendment

bars reverse condemnation actions brought in federal court

against state officials in their official capacities.8 In reaching

this conclusion, we join the only sister circuit to have

addressed the interplay of the Takings Clause and the Elev-

enth Amendment since Alden. See DLX, Inc., 381 F.3d at 528

(quoting Alden, 527 U.S. at 712).

III. Applicability of Ex parte Young

[9] As its last resort, the Venture contends that the stric-

tures of the Eleventh Amendment may be avoided by viewing

its suit as one seeking injunctive relief against state officers

to force them to adhere to the Constitution, as in Ex Parte

Young. The applicability of the Ex parte Young exception

turns on whether federal takings actions are properly charac-

terized as seeking prospective or retrospective relief. A rem-

edy for past injury, even if it purports to be an injunction

against state officers requiring the future payment of money,

is barred because relief “inevitably come[s] from the general

revenues of the State . . . , and thus . . . resembles far more

closely [a] monetary award against the State itself,” which is

forbidden under the Eleventh Amendment. Edelman, 415 U.S.

at 665. “In determining whether the doctrine of Ex parte

Young avoids an Eleventh Amendment bar to suit, a court

need conduct only a ‘straightforward inquiry into whether the

complaint [1)] alleges an ongoing violation of federal law and

[2)] seeks relief properly characterized as prospective.’ ”

Verizon Md., Inc. v. Pub. Serv. Comm’n, 535 U.S. 635, 645

(2002) (alteration omitted) (quoting Idaho v. Coeur d’Alene

8

The Venture does not contend that the Montana state courts have failed

to provide adequate procedures to adjudicate its just compensation claim.

4172 SEVEN UP PETE VENTURE v. SCHWEITZER

Tribe, 521 U.S. 261, 296 (1997) (O’Connor, J., concurring in

part and concurring in judgment)).

[10] It is impossible to characterize the relief sought by the

Venture as prospective. A reverse condemnation action seeks,

“in a strict sense[,] . . . not just compensation per se but rather

damages for the unconstitutional denial of such compensa-

tion.” Del Monte Dunes, 526 U.S. at 710. From a remedial

perspective, then, “just compensation” is on all fours with tra-

ditional monetary damages, which are the quintessential form

of retrospective relief. Thus, reverse condemnation actions

cannot qualify as claims for prospective relief, and Ex parte

Young consequently does not apply.

CONCLUSION

The Eleventh Amendment bars the Venture’s reverse con-

demnation action brought in federal court against Montana’s

officials in their official capacities. We affirm the district

court’s dismissal of the Venture’s action on this ground and

do not reach the question of issue preclusion.

AFFIRMED.