Petition — Citadel Corp. v. Puerto Rico Highway Authority

82-1785

MAY ® is

IN THE SUPREME COURT OF THE UNITED STATES Te Oe }

OCTOBER TERM, 1982

No.

CITADEL CORP., PETITIONER

PUERTO RICO HIGHWAY AUTHORITY

AND PUERTO RICO LAND AUTHORITY

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FIRST CIRCUIT

Robert H. Rout

Attorney for Petitioner

Lakeville, CT 06039

203-435-9897

QUESTION PRESENTED

Whether petitioner's damage action

under the Civil Rights Act of 1871,

42 USC Section i983, and the Fifth and

Fourteenth Amendments against a state-

created public corporation for an uncon-

stitutional regulatory "taking" of its

land is cognizable in a federal court.

TABLE OF CONTENTS

Opinion below

Jurisdiction

Constitutional and statutory

provisions involved

Statement

Reasons for granting the petition

Conclusion

Appendix A

Appendix B

TABLE OF AUTHORITIES

Cases:

Barbian v. Panagis, 694 F2d 476

Burrows v. City of Keene, 432 A2d

Lo

County of Kauai v. Pacific Stan-

Gara Lire Ins., 653 P.2 166

Devines v. Maier, 665 F2d 138

Fountain v. Metro Atlanta Rapid

Transit Authority, 678 Fea 1038

Hernandez v. City of Lafayette,

643 F2d 1188

Hodel v. Virginia Surface Min. &

Recl. Assn., 452 U.S. 264

In Re Air Crash in Bali, Indonesia

On April 22, 1974, 6646 Fad 1301

Pamel Corp. v. Puerto Rico Highway

Authority, 621 Fad 33

Parratt v. Tavior, 451 U.S. 527

San Diego Gas & Electric Co. v.

City of San Diego, 450 U.S. 621

Shamrock Development Co. v. City of

Concord, 656 Féd 13890

Page

Constitution and statutes:

United States Constitution:

Fifth Amendment

Fourteenth Amendment

Civil Rights Act of 1971,

42 USC i863

Page

-le

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1982

No.

CITADEL CORP., PETITIONER

v.

PUERTO RICO HIGHWAY AUTHORITY

AND PUERTO RICO LAND AUTHORITY

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FIRST CIRCUIT

A writ of certiorari is respectfully

sought to review the judgment of the United

States Court of Appeals for the First Cir-

cuit in this case.

THE OPINION BELOW

The opinion of the court of appeals

(App. A, infra, la - 13a) is reported at

695 F2a 31.

JURISDICTION

The judgment of the court of appeals

(App. A, infra, la - 13a) was entered on

a

December 22, 1982. A petition for rehear-

ing was denied on February 2, 1983 (App.

B, infra, 13a). The jurisdiction of this

court is invoked under 28 USC 1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED

1. The Fifth Amendment to the Con-

stitution of the United States states in

relevant part: "No person shall...be

deprived of life, liberty, or property,

without due process of law; nor shall

private property be taken for public use,

without just compensation."

2. The Fourteenth Amendment to the

Constitution of the United States states

an relevant part: “No State shall...

deprive any person of life, liberty, or

property, without due process of law;"

3. Section 1 of the Civil Rights

Act of 1871, 42 USC Section 1983, states

the following:

= Fu

"Every person who, under color of

any statute, ordinance, regula-

tion, custom, or usage, of any

State or Territory, subjects, or

causes to be subjected, any citi-

zen of the United States or other

person within the jurisdiction

thereof to the deprivation of any

rights, privileges, or immunities

secured by the Constitution and

laws, shall be liable to the par-

ty injured in an action at law,

suit in equity, or other proper

proceeding for redress."

STATEMENT OF THE CASE

This is an action brought in the

United States District Court for the Dis-

trict of Puerto Rico by petitioner, the

owner of 15 acres of unimproved land

located in San Juan, Puerto Rico, pursuant

to Section 1 of the Civil Rights Act of

1871, 42 USC Section 1983 (herein called

the "Act") and the Fifth and Fourteenth

Amendments to the Constitution of the

United States.

Petitioner claims that defendants un-

der color of state law, custom and usage

-4-

kept petitioner's land frozen for 17 years

in order to reserve it for acquisition for

the constructian of a highway interchange

in violation of the Act and petitioner's

Constitutional rights, thereby entitling

petitioner to monetary damages.

The district court granted defendants'

motion to dismiss on the grounds of colla-

teral estoppel from which order petitioner

appealed to the court of appeals. On De-

cember 22, 1982, the court of appeals held

that collateral estoppel did not bar

petitioner's action in the district court

but affirmed the dismissal on the grounds

that petitioner's claim for damages stem-

ming from an unconstitutional regulatory

"taking" of its land is not cognizable in

a federal court and that petitioner's

remedy is limited to enjoining defendants’

unconstitutional conduct. The court of

appeals denied petitioner's petition for

rehearing on February 2, 1983.

vin

REASONS FOR GRANTING THE PETITION

A. THE DECISION BELOW CONFLICTS WITH

DECISIONS OF OTHER FEDERAL COURTS OF APPEAL

AND STATE COURTS OF LAST RESORT AND WHAT

APPEARS TO BE THE NOT CLEARLY SETTLED POSI-

TION OF THIS COURT ON THE SAME MATTER.

This case presents the important Con-::

Stitutional and federal law question of

whether a landowner is entitled to damages

in a federal court for an unconstitutional

regulatory "taking" by a state-created

public corporation.

The decision by the court of appeals

below erroneously limited the liability

of state-created public corporations under

the Act and the Fifth and Fourteenth

Amendments to enjoining the unconstitution-

al land use regulation and held that damage

actions do not lie in the federal courts

for an unconstitutional regulatory "taking."

/App. A, infra, 5a - 13a7, If the court of

<6-

appeals is correct, petitioner will be

deprived of any remedy for the 17 year

period during which defendants kept peti-

tioner's property frozen.

The dissenting and concurring opin-

ions of this Court in San Diego Gas &

Beectxvic Co. VW. City of San Diego,. 450 U.S.

621 (1981) (herein called "San Diego Gas"),

which appear to reflect the view of the

majority of this Court, conflict with the

court of appeals below.

The ruling below by the court of

appeals is based upon its own decision in

Pamel Corp. v. Puerto Rico Highway Author-

ZBuvVes G41 Fad 33 (let Cir. 1980) and, in

addition to conflicting with what appears

to be the position of this Court in San

Diego Gas, as aforesaid, also conflicts with

decisions (1) of this Court citing San Diego

Gas (Hodel v. Virginia Surface Min. & Recl.

Assn., 452 U.S. 264, 305-306 (1981) and

earrace V. Tevyior, 451 U.S. 527, 553 n.1@) :

ety He

(2) four other courts of appeals (Barbian

V. Faeneagis, S634 FP2c 476, 482 n.5 (7th Cir.

1982), Hernandez v. City of Lafayette,

643 F2d Lise, 1200 (Sth Cir. 1981), cert.

den. 102 S.Ct. 1251, Shamrock Development

Co. Ws. City of Comcora, 656 F2d 1380, 1384

(9th Cir. 1981), Fountain v. Metro Atlanta

Rapid Transit Authority, 678 F2d 1038,

4043 (L1Ith Cir. 1982), In Re Air Crash in

Bali, Indonesia on April 22, 1974, 684 F2d

4201, i3ii n.7 (8th Cir. 1982), Devines v.

meter, 665 Fea L356, 143 (7th Cir. 1961):

and (3) two state courts of last resort

(County of Kauai v. Pacific Standard Life

2n8., G92 F.2 766, 779 n.20, Hawaii, 1962,

and Burrows v. City of Keene, 432 A2d 15,

20, N.H. 1981, all of which appear to

Support the rule that a damage action by

a landowner arising out of an unconstitu-

tional regulatory "taking" of land is a

cognizable claim in a federal court under

a is

the Act and the Fifth and Fourteenth

Amendments.

The error made by the court of appeals

in construing the position of this Court,

as aforesaid, is compounded by its express

disagreement with this Court on an impor-

tant legal issue which leads to the precise

issue in this case; namely, the unwilling-

ness of the court of appeals to character-

ize an unconstitutional land use regula-

tion as a "taking" (App. A, infra 9a, note

4) as this Court does in San Diego Gas at

628, note 8; and id. at 651-653 (Brennan,

J., dissenting).

Thus, in summary, the conclusion of

the court of appeals that a state-created

public corporation cannot be sued in a

federal court for damages because of an

unconstitutional regulatory "taking" is

inconsistent with the apparent position of

this Court, the federal courts of appeal

ee

for the fifth, seventh, ninth and eleventh

circuits, and the courts of last resort of

the States of Hawaii and New Hampshire.

B. THE ISSUE PRESENTED IS OF GREAT

PUBLIC IMPORTANCE AND SHOULD BE SETTLED

BY THIS COURT.

The growing conflict between the

rights of private landowners and the con-

trol of the environment through land use

regulation makes the unsettled issue at

bar one of great public importance.

Whether a federal court may provide

a monetary remedy to a landowner in the

case of an unconstitutional "taking" by

regulation or whether it must limit its

remedy to injunctive relief has been de-

cided, as aforesaid, by other federal

courts of appeal and state courts of last

resort in conflict with the court of

appeals below, but this important question

of constitutional and federal law, although

-10-

left "barely open" by this Court (Shamrock

Development Co. v. City of Concord, supra

page 7, at 1384 and San Diego Gas), has

not been but should be settled by this

Court.

CONCLUSION

The petition for a writ of certiorari

should be granted.

Lakeville, Connecticut, April 29, 1983.

Robert H. Rout

Attorney for Petitioner

Lakeville, CT 06039

203-435-9897

APPENDIX A

THE DECISION BELOW

UNITED STATES COURT OF APPEALS FOR

tue FIRSS CIRCUIT

No. 82-1395

CITADEL CORPORATION,

Plaintiff, Appellant

v.

PUERTO RICO HIGHWAY AUTHORITY, ET AL.,

Defendants, Appellees

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

/Hon. Carmen Consuelo Cerezo,

U. &S. District Judge/

Before

Coffin, Chief Judge

Timbers, Senior Circuit Judge *

and Bownes, Circuit Judge.

* Of the Second Circuit, by designation.

la

Robert H. Rout, for appellant,

Marta Quinones de Torres, Assis-~

tant Solicitor General, with whom Miguel

Pagan, Acting Solicitor General, and

Americo Serra, Assistant Solicitor General,

Department of Justice, were on brief, for

appellee.

December 22, 1982

Per Curiam. iIn a prior action, the

District Court for the District of Puerto

Rico enjoined various officials of the

Commonwealth of Puerto Rico from depriv-

ing appellant Citadel Corporation of its

property in contravention of the Fifth

Amendment (Citadel I). The court in that

case, however, denied appellant's claim

for damages. In this second action,

appellant seeks monetary relief for injur-

ies arising out of the same events, but in

this action relief is sought from govern-

mental entities not joined as defendants

in the first action. The district court

dismissed the instant action on the ground

2a

of collateral estoppel, holding that the

issues in Citadel I and Citadel II were

1

‘identical.

We agree that the instant action

should be dismissed, but on the ground of

failure to state a claim cognizable ina

federal court, rather than on the ground

of collateral estoppel.

ie

COLLATERAL ESTOPPEL CLAIM

The district court in the instant

case held that Citadel I laid appellant's

claims to rest. Appellant had based its

first action directly on the Taking Clause

of the Fifth Amendment, incorporated in

the Fourteenth Amendment, as well as on

2 U.S.C. Section 1983 (1976). That

action sought damages and an injunction

enjoining the allegedly unconstitutional

l. Citadel Corp. v. Puerto Rico Highway

Authority (Citadel Ii), No. 19-733

(U.P .m. Marcn 23, 13962).

3a

"freeze" On 1tsS property. Governmental

agencies had planned to build a highway in

the vicinity of appellant's property. In

the mid 1960's these agencies proscribed

further development on property situated

in the path of the proposed highway. Some

ten years later, however, plans had not

been finalized nor had money been allotted

for the construction. The district court

in the first action held a full bench

trial on appellant's claims. The court de-

cided in favor of appellant on all but the

claim for damages. Neither side appealed

from the final judgment, although appellant's

motion before trial to join additional de-

fendants in the instant action, had been

denied on the ground that it was not time-

Age

2. The motion to join additional defen-

dants was filed more than two years after

plaintiff commenced the action. Citadel

Corp. v. Rafael Hernandez Colon (Citadel

2) NO. 76-1155 (0.P.R. Jan. 3, 1979)

(order denying motion to add defendants).

‘a :

Appellant commenced this second ac-

tion against the Commonwealth of Puerto

Rico, the Puerto Rico Highway Authority,

and the Puerto Rico Land Authority while

the first action was pending. * Appellant

makes no claim that it did not receive a

fair opportunity to litigate its case

fuily in Citadei i. The district court

held that Citadel I precluded appellant

from relitigating the same issue in Cita-

del II. See Parklane Hosiery Co. v. Shore,

439 U.S. 322, 331-33 (19739). Although

factual issues may have been identical,

defendants’ different identities in the

two actions make reliance on collateral es-

toppel inappropriate.

While the traditional mutuality re-

3. Appellant filed the second complaint

commencing the instant action on March

19, 1979, apparently not including the

individual defendants it had attempted to

join in Citadel I.

5a

quirement for issue preclusion has been

relaxed, see, ©-JG-s Blonder-Tongue Labor-

atories, Inc. V- University of Illinois

Foundation, 402 U.S. 313, 332-37 (1971),

affirmative use of collateral estoppel by

a nonparty still must be premised on the

identity of issues in the two actions.

See generally Restatement (Second) of

Judgments Section 68 (Tent. Draft No. 4,

1977). Appellees have not demonstrated

that the issue of defendants' liability

in Citadel II is the same as that am Cita

del I. The district court in the first

action may have declined to award damages

against the defendant public officials

for any number of reasons that would not

immunize the governmental entities in the

second action. The district court's

failure in Citadel I to specify its

grounds for denying damages makes this

likely. The issue of the governmental

6a.

entities! liability for alleged unconsti-

tutional action not having been litigated,

collateral estoppel does not bar appel-

lant's second action. The critical ques-

tion therefore is whether appellant has

asserted a cognizable theory that would

render the governmental entities liable

for damages. We turn now to a considera-

tion of this question.

LZ

ABSENCE OF A CLAIM COGNIZABLE

IN A FEDERAL COURT

We held in Pamel Corp. v. Puerto Rico

Highway Authority, 621 F.2d 33 (lst Cir.

1980), that damage actions against govern-

mental entities stemming from land use

policies were not cognizable in a federal

court. Plaintiff in Pamel, like appellant

in the instant case, sought damages equiv-

alent to the value of property allegedly

"taken" as a result of the restrictive zon-

ing policies of the Puerto Rico Highway

Authority. Id. at 34. We characterized

7a

Plaintiff's claim in Pamel as an inverse

condemnation action, i.e., an action seek-

ing fair compensation for the government's

alleged unconstitutional extinguishment of

plaintiff's Property rights. While recog-

nizing that "/ r 7 egulation of property

use may be so oppressive or arbitrary that

it crosses the wavering line separating

a valid exercise of the police power from

an exercise of the eminent domain power,"

id. at 35, we determined that the proper

remedy in such a case was not the awarding

of the value of the diminished property

right. There are strong policy arguments

against any court requiring the state to

Purchase the Property over which it has

imposed excessive regulation. See Note,

Inverse Condemnation: Its Availability

in Challenging the Validity of a Zoning

Ordinance, 26 Stan. L. Rev. 1439, 1452

(1974). Those arguments are even stronger

when the court is a federal one. As we

a

Stated in Pamel:

"{-£_/ ederal enforcement of the in-

verse condemnation remedy would be a

Singularly inappropriate intrusion

into the states' traditional domains

of property law and land use policy.

The federal constitutional right can

be secured to the individual without

forcing the state to purchase his

property. Voiding the offending re-

Striction will make the owner whole.

Moreover, once the constitutional

line has been drawn, the state or lo-

cal authority administering the com-

plex structure of land use controls

Should be free to decide whether the

expected benefits from the restriction

are worth the cost of the required com-

pensation."

621 F.2d at 36 (citations omitted) .4

4. Since our decision in Pamel, the Su-

preme Court has decided San Diego Gas

& Electric Co. v. City of San Diego,

S50 U.S. G21 (2981). Te appears

that at least eight of the Justices

may disagree—-with our unwillingness

to characterize oppressive regulation

as a taking, see 450 U.S. at 628 n.8;

id. at 651-53 (Brennan, J., dissent-

ing), but only four would find that

Such a taking requires compensation,

see id. at 653-58 (Brennan, J., dis-

senting). It may be that Justice

Rehnquist's concurrence should be

taken as a fifth vote in favor of

compensation, see id. at 633-34

(Rehnquist, J., concurring), but de-

riving enough direction from his

9a

Appellant invites us to limit Pamel

to situations in which plaintiffs chal-

lenge an invalid zoning restriction.

We decline the invitation. Under appel-

lant's theory, Pamel would be inapplicable

to the case at hand in which appellant

alleges an unconstitutional deprivation

due to wrongful conduct by governmental

Ootficiais. The distinction is not per-

SuaSive. Whether the conduct is negli-

brief comment in support of "much of

what is said" by Justice Brennan to

abandon our position that the consti-

tution does not require compensation

in this case seems to be carrying ju-

dicial tea leaf reading to an uncalled-

for extreme. In any event, none of

the Justices addressed the issue of

federal court ordered compensation,

Since the lower court in San Diego Gas

was a state court. Even if the con-

sitution is read to require compensa-

tion in an inverse condemnation case,

the Eleventh Amendment should prevent

a federal court from awarding it. See

Quern v. Jordan, 440 U.S. 332 (1979);

Edelman v. Jordan, 415 U.S. 651 (1974);

Knight v. State of New York, 443 F.2d

415 (2d Cir. 1971); Beck v. State of

California, 479 F. Supp 392 (C.D. Cal.

1979); Nasralah v. Barcelo, 465 F.

Supp 1273 (0.8.8. 1979) .

10a

gent or not, the gravamen of the inverse

condemnation claim remains the unconstitu-

tional deprivation of property. Resort can

still be made to a tort action in the state

courts. The governmental freeze on appel-

lant's property is sufficiently similar to

the restrictive zoning in Pamel to bring

this case within our holding in Pamel.

Both cases involve allegations that state

governmental agencies unconstitutionally

deprived plaintiffs of property through

land use controls. > Federal courts may

5. Arguably, Pamel might be distinguished

on the ground that there the cause of

action was based on 42 U.S.C. Section

1983, while the instant case also is

based directly on a violation of the

Fourteenth Amendment. We find such

distinction not dispositive. The same

concerns which impel the result in the

Section 1983 context likewise should

govern in a "Bivens" action. Cf.

Monell v. New York City Dept. of Social

Services, 436 U.S. 658, 712-13 (1978)

(Powell, J., concurring) (liability of

municipality should be the same whether

predicated on Section 1983 claim or

implied from the Fourteenth Amendment).

lla

enjoin such unconstitutional conduct on

the part of states in an inverse condemna-

tion proceeding, but they may not award

damages. The Commonwealth of Puerto

Rico's unconstitutional "freeze" on appel-

lant's property therefore does not subject

the governmental entities to an action for

damages in a federal court.

We affirm the judgment of the district

court dismissing the instant action, but

we do so on the grounds stated in this

Opinion.

Affirmed.

l2a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

NO. 82-1395

CITADEL CORPORATION,

Plaintiff, Appellant

V.

PUERTO RICO HIGHWAY AUTHORITY, ET AL.,

Defendants, Appellees

Before

COFFIN, Chief Judge,

TIMBERS, *Senior Circuit Judge,

and BOWNES, Circuit Judge

ORDER OF COURT

Entered: February 2, 1983

It is ordered that the petition for re-

hearing filed on January 20, 1983 be, and

the same hereby is, denied.

By the Court:

/s/ Dana H. Gallup

Clerk.

* Of the Second Circuit, sitting by desig-

nation.

l3a