# Pennzoil Co. v. Texaco Inc. > Supreme Court of the United States · April 6, 1987 · 481 U.S. 1 URL: https://www.frixlaw.com/law-library/cases/9430910 ## Case - **Full name:** Pennzoil Co. v. Texaco Inc. - **Court:** Supreme Court of the United States - **Decided:** April 6, 1987 - **Citations:** 481 U.S. 1; 55 U.S.L.W. 4457; 107 S. Ct. 1519; 95 L. Ed. 2d 1; 1987 U.S. LEXIS 1515 - **Precedential status:** Published - **Opinion:** Concurrence by Stevens - **Judges:** Powell, Rehnquist, White, O'Connor, Scalia, Brennan, Marshall, Blackmun, Stevens - **Cited by:** 1,819 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9430910 ## How later opinions describe it (automated extraction) - explaining the assumption that federal claims 4 Indeed, the Supreme Court has held that “[f]amily relations are a traditional area of state concern.” Moore v. Sims, 442 U.S. 415, 435 (1979). 5 To the contrary, the Minnesota Court of Appeals on numerous occasions has addressed … - holding that while Younger abstention is only justified if the pending state proceeding has the authority to adjudicate a litigant’s federal claims, “when a litigant has not attempted to present his federal claims in related state-court proceedings, a federal court should assu… - holding that “Younger abstention [is applicable] not only when the pending state proceedings are criminal, but also when certain civil proceedings are pending, if the State’s interests in the proceeding are so important that exercise of the federal judicial power would disrega… - finding that lower court should have abstained from deciding the issue before the court; however, in recognizing the propriety of federal abstention, the Court also implicitly recognized that the Rooker-Feldman doctrine did not bar the district court’s federal jurisdiction to … - holding that, so long as challenges to the process by which state judgments are obtained relate to pending state proceedings, “proper respect for the ability of state courts to resolve federal questions presented in state-court litigation mandates that the federal court stay i… ## Opinion text Justice Stevens, with whom Justice Marshall joins, concurring in the judgment. In my opinion Texaco’s claim that the Texas judgment lien and supersedeas bond provisions violate the Fourteenth Amendment is plainly without merit. The injunction against *30 enforcement of those provisions must therefore be dissolved. I rest my analysis on this ground because I cannot agree with the grounds upon which the Court disposes of the case. In my view the District Court and the Court of Appeals were correct to hold that a creditor’s invocation of a State’s post-judgment collection procedures constitutes action “under color of” state law within the meaning of 42 U. S. C. § 1983 , 1 and that there is no basis for abstention in this case. 2 *31 The Court of Appeals upheld the injunction based on its conclusion that Texaco has a substantial chance of success on the merits of its federal constitutional challenge to the Texas postjudgment procedures. The court properly held 3 (and Texaco does not contest this conclusion) that Texaco’s claims arising out of the jury trial itself could not support the injunction, because those claims are appealable only through the Texas courts. See 784 F. 2d 1188, 1143-1145 (CA2 1986). Thus, the injunction must stand or fall on Texaco’s argument that the Federal Constitution requires Texas to grant a stay of the judgment pending appeal without requiring a bond. Pennzoil argues that Texaco’s challenge fails because States are under no constitutional duty to provide for civil appeals. Our precedents do tend to support this proposition. 4 *32 But it is unnecessary to rely on that broad argument in order to reject Texaco’s constitutional attack. Texaco does not claim that the Texas procedures make it impossible for it to take an appeal in this case. The Texas rules do not require a bond or security in order to take an appeal; the rules require a bond or security only in order to obtain a stay of the judgment pending appeal. To be sure, neither of Texaco’s options under the rules is very attractive. On the one hand, if Texaco does not obtain a stay, Pennzoil can immediately begin executing on its judgment, even while Texaco’s appeal is pending. On the other hand, for Texaco to post the security required for a stay would, as the District Court found, seriously impair Texaco’s ability to conduct its normal business operations and could even force the corporation into bankruptcy. 5 Neither of these consequences, however, would necessarily prevent Texaco, or its successor in interest —possibly a bankruptcy trustee — from going forward with the appeal. 6 It is certainly wrong to denigrate the seriousness of these effects. But it is similarly wrong to approach this case as one involving an absolute deprivation of the opportunity to appeal. Thus, the real question is whether Texas is constitutionally required to suspend the execution of money judgments without the posting of a bond or security. The proposition that stays of execution are available as a matter of federal constitutional right was rejected long ago. In Louisville & Nashville R. Co. v. Stewart, 241 U. S. 261 (1916), Justice Holmes *33 explained for a unanimous Court that a State is not bound, by-reason of providing an appellate process, also “to provide for a suspension of the judgment” during the appeal. Id., at 263 . It is clear that the States’ strong concern in protecting appellees’ right to recover on judgments amply justifies the bond or security requirements that are currently so prevalent across the country. 7 Texaco nonetheless argues that once Texas has decided to grant stays of executions to some appellants, it cannot deny stays to others on arbitrary grounds. See Lindsey v. Normet, 405 U. S. 56, 77 (1972) (opportunity for appeal “cannot be granted to some litigants and capriciously or arbitrarily denied to others without violating the Equal Protection Clause”). In this case, Texaco claims that denial of a stay pending a bond or posting of security was arbitrary because (1) it is impossible for it to secure a bond for the amount required by Rule 364 of the Texas Rules of Civil Procedure; (2) posting security under Rule 14c would have a devastating effect on its financial position; and (3) neither a bond nor security is really necessary because Texaco’s vast resources provide ample assurance that Pennzoil will be able to collect its judgment in full after the appellate process has run its course. See Brief for Appellee 11. I agree that it might be wise policy for Texas to grant an exception from the strict application of its rules when an appellant can satisfy these three factors. But the refusal to do so is certainly not arbitrary in the constitutional sense. A provision for such exemptions would require the State to establish rules and to hold individualized hearings whenever relevant allegations are made. Texas surely has a rational *34 basis for adopting a consistent rule refusing to stay the execution of money judgments pending appeal, unless a sufficient bond or security is posted. 8 Admittedly, Texaco makes a sympathetic argument, particularly when it describes the potential adverse impact of this litigation on its employees, its suppliers, and the community at large. But the exceptional magnitude of those consequences is the product of the vast size of Texaco itself— it is described as the fifth largest corporation in the United States — and the immensity of the transaction that gave rise to this unusual litigation. The character of harm that may flow from this litigation is not different from that suffered by other defeated litigants, their families, their employees, and their customers. The price of evenhanded administration of justice is especially high in some cases, but our duty to deal equally with the rich and the poor does not admit of a special exemption for multibillion-dollar corporations or transactions. See Lugar v. Edmondson Oil Co., 457 U. S. 922 (1982), and cases cited at 932-933. In Lugar , the Court explained that “a private party’s joint participation with state officials in the seizure of disputed property is sufficient to characterize that party as a ‘state actor’ for purposes of the Fourteenth Amendment.” Id., at 941 . We reached this conclusion based on the rule that a person “may fairly be said to be a state actor. . . because he is a state official, because he acted together with or has obtained significant aid from state officials, or because his conduct is otherwise chargeable to the State.” Id., at 937 . This reasoning allows no distinction between a litigant’s prejudgment and postjudgment involvement. As the Court of Appeals explained: “The state interests at stake in this proceeding differ in both kind and degree” from the cases in which the Court has held Younger abstention appropriate. 784 F. 2d 1133, 1149 (CA2 1986). As Justice BRENNAN’s analysis points out, ante, at 19-21, the issue whether “proceedings implicate important state interests” is quite distinct from the question whether there is an ongoing proceeding. See Middlesex County Ethics Comm. v. Garden State Bar Assn., 457 U. S. 423, 432 (1982). Although we have often wrestled with deciding whether a particular exercise of state enforcement power implicates an “important state interest,” see Younger v. Harris, 401 U. S. 37 (1971) (criminal statute); Huffman v. Pursue, Ltd., 420 U. S. 592 (1975) (obscenity regulation); Juidice v. Vail, 430 U. S. 327 (1977) (contempt proceedings); Trainor v. Hernandez, 431 U. S. 434 (1977) (welfare fraud action); Moore v. Sims, 442 U. S. 415 (1979) (child abuse regulation); Middlesex County Ethics Comm., supra, (bar disciplinary proceedings); Ohio Civil Rights Comm. v. Dayton Christian Schools, Inc., 477 U. S. 619 (1986) (antidiscrimination laws), we have invariably required that the State have a substantive interest in the ongoing proceeding, an interest that goes beyond its interest as adjudicator of wholly private disputes. By abandoning this critical limitation, the Court cuts the Younger doctrine adrift from its original doctrinal moorings which dealt with the States’ interest in enforcing their criminal laws, and the federal courts’ longstanding reluctance to interfere with such proceedings. See Huffman, supra, at 604 . For the reasons stated by Justice BRENNAN, ante, at 21, and Justice Scalia, ante, at 18, I do not believe that the doctrine described in District of Columbia Court of Appeals v. Feldman, 460 U. S. 462 (1983), and Rooker v. Fidelity Trust Co., 263 U. S. 413 (1923), bars the federal courts from considering Texaco’s claims. See generally Feldman, supra, at 490 (Stevens, J., dissenting). In Marine Cooks and Stewards v. Arnold, 348 U. S. 37, 42-43 (1954), the Court stated: “Here the petitioner has had its day in court. The dismissal has cut off only a statutory right of review after a full trial by judge and jury. “While a statutory review is important and must be exercised without discrimination, such a review is not a requirement of due process. District of Columbia v. Clawans, 300 U. S. 617, 627 ; Ohio v. Akron Park District, 281 U. S. 74, 80 ; Reetz v. Michigan, 188 U. S. 505, 508 ; McKane v. Durston, 153 U. S. 684, 687-688 .” Similarly, the Court has explained: “An appeal from a judgment of conviction is not a matter of absolute right, independently of constitutional or statutory provisions allowing such appeal. A review by an appellate court of the final judgment in a criminal case, however grave the offense of which the accused is convicted, was not at common law and is not now a necessary element of due process of law. It is wholly within the discretion of the State to allow or not to allow such a review. A citation of authorities upon the point is unnecessary.” McKane v. Durston, 153 U. S. 684, 687 (1894). See also Ortwein v. Schwab, 410 U. S. 656, 660 (1973) (per curiam). The Court of Appeals stated that Texaco has “a liquidation value of $22 billion and a net worth of about $23 billion.” 784 F. 2d, at 1152; see also id., at 1155; Brief for Appellee 6. As the Court points out, the judgment against Texaco, including prejudgment interest, totaled approximately $11 billion. Ante, at 4. Of course, if Texaco were forced to file for bankruptcy under Chapter 11, the claims of judgment creditors would be automatically stayed. See 11 U. S. C. § 362 . If Texaco were then to prevail on its appeal from the Texas judgment, the bankruptcy court could dismiss the reorganization proceeding. 11 U. S. C. § 1112 . See R. Lynn, Appellate Litigation 385 (1985) (collecting provisions on requirements to obtain stay of execution pending appeal). A judgment creditor’s interest in the judgment can be adversely affected during the appelate process in a variety of ways. Por example, the debtor may purposely dissipate its assets, or subsequent secured creditors may attach the debtor’s property. “In the area of economics and social welfare, a State does not violate the Equal Protection Clause merely because the classifications made by its laws are imperfect. If the classification has some ‘reasonable basis’ it does not offend the Constitution simply because the classification ‘is not made with mathematical nicety or because in practice it results in some inequality.’ Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 78 [(1911)].” Dandridge v. Williams, 397 U. S. 471, 485 (1970). Cf. Johnson v. Louisiana, 406 U. S. 356, 364 (1972) (State acted rationally in attempting to “ ‘facilitate, expedite, and reduce expense in the administration of criminal justice’ ” (citation omitted)). --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9430910. Public record. Not legal advice.