# Amicus Curiae Brief — Ariyoshi v. Robinson > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0260%3A08 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1985 - **Citation:** 474 U.S. 1018 ## Text ie # \ No. 85-406 MAY 28 1966 caveman see. In the Supreme Court of the Ynitet States — OCTOBER TERM, 1985 GEORGE A. ARIYOSHI, GOVERNOR OF HAWAII, ET AL., PETITIONERS v. SELWYN A. ROBINSON, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES AS AMICUS CURIAE CHARLES FRIED - Solicitor General F. HENRY HABICHT II Assistant Attorney General LAWRENCE G. WALLACE Deputy Solicitor General EDWIN S. KNEEDLER Assistant to the Solicitor General |. PETER R. STEENLAND, JR. ANNE S. ALMY Attorneys Department of Justice Washington, D.C. 20580 (202) 633-2217 QUESTIONS PRESENTED 1. Whether a 1973 decision of the Supreme Court of Hawaii constituted final governmental action that could be a “taking” of respondents’ rights to waters of a river in that State, notwithstanding a subsequent decision of the Supreme Court of Hawaii that contemplates further proceedings in state court on matters pertaining to re- spondents’ right to divert water from the river. 2. Whether the rejection by the Supreme Court of Hawaii of respondents’ petitions for rehearing, which contended that that court’s 1973 decision resulted in a taking of respondents’ property without just compensa- tion or due process, constituted a final determination of the federal claims that cannot be reviewed in these sepa- rate proceedings in federal court. 3. Whether the Hawaii Supreme Court’s rejection of, or failure to address, respondents’ taking claim at the time of the consideration of their rehearing petitions de- prived them of due process of law, on the ground that respondents were not afforded un adequate opportunity to be heard on the taking question. (I) TABLE OF CONTENTS Page ELITES OA ITC TL SER RI WEE Re 1 Nt NR ein ORR SRP PR ose Ba He. 9 Ea sre MORE Le RS TRO LE TED ETERS 20 TABLE OF AUTHORITIES Cases: Aginse V. Tiburon, 447 U.S. 266 ....................-..-......-- 10, 16 Andrus V. Allard, 444 U.S. 511 ..................................... 18 Arizona V. California, 460 U.S. 605 -.....000202222e. ee. 16 Bellotti V. Baird, 428 U.S. 182 ......................ccc.ccccsceeees 13 Carter v. Territory, 24 Hawaii 47 ...........................--- 3 Connolly v. Pension Benefit Guaranty Corp., No. IE III, | UE cece cee peeeesinccosetecueeie 10 Cox Broadcasting Corp. v. Cohn, 420 U.S. 469........ 16 Danforth v. United States, 308 U.S. 271 ................... 16 Demorest v. City Bank Co., 321 U.S. 36.................... 13 District of Columbia Court of Appeals v. Feldman, ee TES GE en SOE, PON Oe 19 Gibson V. Berryhill, 411 U.S. 564 .................2.2...0.2. 11 Glover v. Fong, 42 Hawaii 560................0002002222.---..- 15 Harrison y¥. NAACP, 360 U.S. 167 ................------0---0- 13 Hawaii Housing Authority v. Midkiff, 467 U.S. (SSA ae a SE BI PSI EN 11 Hodel v. Virginia Surface Mining & Reclamation i MI a I cecicecic ds a ccehecinind nents adetans 10 Hughes v. Oklahoma, 441 U.S. 322 000.0000... 17 Hughes v. Washington, 389 U.S. 290 ......................--- 13 Kaiser Aetna Vv. United States, 444 U.S. 164 _........... 2,18 Kirky Forest Industries, Inc. v. United States, 467 eG Ca ITI EEN atx cE Cee ee eee 7 UR OE en 16 Marrese Vv. American Academy of Orthopaedic Sur- geons, No. 83-1452 (Mar. 4, 1985) _....................... 19 McBryde Sugar. Co. v. Robinson, 54 Hawaii 174, 504 P.2d 1380. appeal dismissed and certs. de- me QR RB Pe. eee enone 1 Middlesex Ethics Committee v. Garden State Bar cE Sol ae REP ERROR cian re ree 11 IV Cases—Continued : Page Bicnmaen 0. Titel, BG EE, BEG cassis cssesciesecnecsecscesesceee 12 Nevada v. United States, 463 U.S. 110 -.........---.-.. 14 Parsons Steel, Inc. v. First Alabama Bank, No. 84- Be Ss Sa: MII eicccctewtiavce cick cacascantinciicedeneersionect 19 Penn Central Transp. Co. v. New York City, 438 EG” SER apc ee cand eee RR TREY Red TO 10-11, 14, 18 PruneYard Shopping Center v. Robins, 447 U.S. , SRA AaB Recs NR SR EN RIN SOT Dee ERE oC 12 Rooker v. Fidelity Trust Co., 263 U.S. 413 -............. 11, 19 Sporhase v. Nebraska ex rel. Douglas, 458 U.S. Ba cocpetuain eee el ose eo 17 Territory V. Gay, 31 Hawaii 376, aff’d, 52 F.2d 356, ee ey Ce 3 Toomer V. Witsell, 334 U.S. 385 .....................----eeeee0 17 United States v. Riverside Bayview Homes, Jnc., Ne 66-701 (Oe. 6 tee) oe 14, 17 Williamson County Regional Planning Comm’n V. Hamilton Bank, No. 84-4 (June 28, 1985) ........ 2, 10, 11, 12, 14, 16, 18, 19, 20 Constitution and statutes: U.S. Const. : Amend. V (Just Compensation Clause) .......... 6,14 Amend. XIV (Due Process Clause) .................. 6 OO ie I sacccassctacinctscesesiessantanenaceebeptaciei sokitasnanimaiicintantets 19, 20 Ms cicaccheks Goa pateiicteniessrcalse taht tet cetacalite eed. 19 Hawaii Rev. Stat. §§ 234-30 to 234-36 (1955)........ 11 Iu the Supreme Court of the United States OCTOBER TERM, 1985 No. 85-406 GEORGE A. ARIYOSHI, GOVERNOR OF HAWAII, ET AL., PETITIONERS Vv. SELWYN A. ROBINSON, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES AS AMICUS CURIAE This brief is submitted in response to the Court’s in- vitation to the Solicitor General to express the views of the United States. STATEMENT This case involves the definition of rights to the use of the waters of the Hanapepe River on the Island of Kauai in Hawaii. The court of appeals held that the decision of the Supreme Court of Hawaii in McBryde Sugar Co. v. Robinson, 54 Hawaii 174, 504 P.2d 1380 (1973), ap- peal dismissed and certs. denied, 417 U.S. 962 and 1976 (1974), deprived respondents of “vested” water rights established by prior law and thereby resulted in an un- constitutional taking of respondents’ property without the payment of just compensation. In our view, how- ever, the subsequent decision by the Supreme Court of Hawaii on questions certified to it by the court below (Pet. App. 14a-55a) makes clear that the decision in McBryde was not a final determination of respondents’ (1) 2 rights that can give rise to a ripe taking claim under Williamson County Regional Planning Comm’n v. Ham- ilton Bank, No. 84-4 (June 28, 1985). 1. The watershed of the Hanapepe River is about 15 miles long and from two to five miles wide. The north- erly portion of the watershed reaches up toward Mount Waialeale, where the annua! rainfall of 400 to 500 inches is among the heaviest in the world. The lower portion, by contrast, receives relatively little rainfall. About half- way down the watershed, the Koula and Manuahi streams join to form the Hanapepe River. The volume of water in the watershed generally ranges between 32 and 145 million gallons per day (gpd). Pet. App. 200a, 202a, 216a. In the Great Maheie or division of Hawaiian lands in the mid-Nineteenth Century (see Kaiser Aetna v. United States, 444 U.S. 164, 166-167 (1979)), the Ahupuaa of Hanapepe,' roughly equivalent to the watershed of the Hanapepe River and its tributaries, was designated as crown land (Pet. App. 200a). The portion of the water- shed above the confluence of the Manuahi and Koula is comprised of lesser divisions of land, known as the ilis kupono of Manuahi and Koula, which are now owned by respondents Robinson, et al. Respondent McBryde Sugar Co. owns land in the Ahupuaa of Hanapepe below the confluence of the Manuahi and Koula (id. at 201a, 207a). The Robinsons, McBryde and the other respondents (known as the small owners), as well as the State, are successors in interest to the owners of ancient taro plots in the watershed that were cultivated at the time of the Great Mahele (id. at 224a). 2. Beginning in 1891, Gay and Robinson (G&R) built a dam and a system of ditches to deliver water from the Koula stream to lands outside the Hanapepe Valley in the Makaweli watershed (Pet. App. 203a-208a). In the late 1920’s, a dispute arose between the Territory of Hawaii and G&R concerning the latter’s diversions. The Terri- 1 An ahupuaa is the largest division of land under the ancient Hawaii system. See Kaiser Aetna, 444 U.S. at 167. 3 tory, as the owner of the Ahupuaa of Hanapepe, claimed that it was the owner of all or part of the surplus waters of the stream, and it sought an injunction barring G&R from diverting water in derogation of that right. The parties stipulated to the existence of “normal daily sur- plus of waters” in the Hanapepe. Territory v. Gay, 31 Hawaii 376, 377, 381 (1930), aff’d, 52 F.2d 356 (9th Cir.), cert. denied, 284 U.S. 677 (1931). The Supreme Court of the Territory dismissed the crritory’s bill in equity, holding thet G&R, as owner of the ili kupono of Koula, was the owner of the “normal” surplus waters (those not needed to satisfy other rights) arising on that land. 31 Hawaii at 388. The Chief Judge would have gone further and included “storm and freshet”’ surplus water under this rule, overruling the holding in Carter v. Territory, 24 Hawaii 47 (1917), that “storm and freshet” surplus water is to be appor- tioned according to the doctrine of riparian rights. 31 Hawaii at 403. A dissenting justice was of the view that both “normal” and “storm and freshet” surplus water should be governed by the doctrine of riparian rights urder the rationale of the Carter decision. 31 Hawaii at 408-417. The Court of Appeals for the Ninth Circuit declined to disturb the judgment of the Supreme Court of the Territory on these questions of local prop- erty law (52 F.2d 356 (1931)), and this Court denied certiorari (284 U.S. 677 (1931) ). . 3. a. In the period from 1945 to 1949, G&R and its lessee, respondent Olokele Sugar Co., Ltd., constructed new delivery works that increased the amount of water G&R was able to divert from the Hanapepe watershed (Pet. App. 209a). This diminished the amount of water available to McBryde. Accordingly, in 1959, McBryde commenced an action against G&R in state court, seeking an adjudication that it had appurtenant, prescriptive or riparian rights to 11 million gpd from the Hanapepe and an injunction barring G&R from diverting water in a manner that interfered with McBryde’s rights (Pet. App. 316a-317a). The State and the small owners also ap- peared as defendants (id. at 197a-198a). 4 The trial court quantified the appurtenant water rights of each of the parties for ancient taro lands.’ It further held that G&R was the owner of all of the surplus water flowing in the Koula and Manuahi streams. The court recognized that the Supreme Court of the Territory had held in Carter v. Territory that “storm and freshet” surplus water was to be apportioned according to the doctrine of riparian rights (Pet. App. 250a) and that the subsequent decision in Territory v. Gay held only that the “normal” surplus water belonged to the owner of the land on which the water arose (Pet. App. 250a-251a). However, the court questioned whether Carter was “still the law of Hawaii” and believed that Gay “‘invite[d] reconsideration of the [Carter] rule’ (Pet. App. 251la- 252a) .® b. On January 10, 1973, the Supreme Court of Hawaii affirmed the award of appurtenant rights for ancient taro lands (Pet. App. 175a-178a), although it held that those rights apply only to the land to which they are appurtenant and do not extend to the transportation of water to another watershed (id. at 178a). The Supreme Court reversed the judgment of the trial court in all other respects. It first rejected the trial court’s holding that G&R, as owner of the ilis of Koula and Manuahi, owned all of the surplus water that arose on that land (Pet. App. 167a-174a). Quoting the prin- ciples adopted by the Land Commission and approved by the legislature in 1846, the Supreme Court held that at 2 The court found the following acres of ancient taro lands and corresponding water rights: McBryde (98.21 acres; 4,915,400 gpd) ; the State (83.27 acres; 4,167,650 gpd); the small owners (29.11 acres; 1,456,950 gpd); G&R, for lands below Koula and Manuahi (30.68 acres; 1,533,050 gpd). Pet. App. 218-233a, 246a-250a, 259a-260a. 3 The only exception to the trial court’s award of all surplus water to G&R was for 2,084,600 gpd that the court concluded McBryde had acquired as against G&R by way of prescription (Pet. App. 214a- 215a, 246a, 253a-257a). The Hawaii Supreme Court reversed that award (id. at 186a-187a), and it is not directly at issue here (see id. at 108a-109a, 266a-267a). 5 the time of the Great Mahele, the King did not convey any of his sovereign rights, including the right “ ‘to en- force the usufruct of lands for the common good’” (id. at 172a, 173a). Because the right to water is one of the most important usufructs, the right to water was reserved “for the people of Hawaii for their common good in all of the land grants” (ibid. (footnote omitted) ). Accordingly, the Supreme Court declared that the State is the owner of the water in the Koula and Manuahi streams and Hanapepe River (id. at 174a). The Su- preme Court recognized that this conclusion was incon- sistent with Territory v. Gay, at least as regards “nor- mal” surplus water (Pet. App. 167a). But it concluded that the relevant statements in two of the early decisions upon which the Territorial Supreme Court had relied in Gay were dicta and that Carter v. Territory, although applying riparian principles only to “storm and freshet” surplus water, was broader in its reasoning (Pet. App. 168a-169a). The court also overruled Carter v. Terri- tory. holding that “storm and freshet” surplus water likewise was reserved to the State (Pet. App. 187a). The Supreme Court further held that McBryde, the State, G&R, and other owners of land in the Hanapepe Valley have riparian water rights under an 1850 Act of the Hawaiian legislature, which provides that “[t]he people shall also have a right to drinking water, and running water, and the ‘right of way” (Pet. App. 179a- 180a & n.17). Id. at 178a-185a. The court explained that these owners are permitted to use the water flowing in the river without prejudicing the rights of others, al- though this right appertains only to land adjoining the water course (id. at 185a). Finally, the Supreme Court concluded that the judg- ment in Territory v. Gay was res judicata as between the State and G&R, the only parties to that case (Pet. App. 164a-166a). However, the Court observed that the holding in Territory v. Gay was based only on an assump- tion, not a finding, that there actually would be “normal” surplus waters, because there had been no determination of the superior rights of others in the Hanapepe Valley. 6 In view of its recognition in McBryde of riparian rights to the flow of water without substantial diminution, the court found that there is no “normal” surplus to which G&R would be entitled under Territory v. Gay (Pet. App. 186a-187a). ce. McBryde, G&R, and the small owners petitioned for rehearing, challenging the Supreme Court’s state-law rulings and contending that the decision violated their rights under the Just Compensation and Due Process Clauses. See, e.g., Pet. App. 353a-38la. After supple- mental briefing on two state-law issues and oral argu- ment, the Supreme Court, with two dissents (id. at 113a- 162a), reaffirmed its original judgment (id. at i12a- 113a). This Court denied review. 417 U.S. 962 and 976 (1974). 4.a. While respondents’ appeal and certiorari petitions were pending in this Court, the Robinson respondents commenced the present action in the United States Dis- trict Court for the District of Hawaii (Pet. App. 271a- 276a). McBryde, the small owners, and others inter- vened as plaintiffs. The complaint alleged that the deci- sion in McBryde was “directly contrary” to the settled law of Hawaii and violated the Due Process and Just Compensation Clauses of the Fifth and Fourteenth Amendments. The district court rendered a decision in favor of respondents on October 26, 1977 (Pet. Apv. 56a- 110a), concluding after an extensive analysis of the Hawaii Supreme Court precedents (id. at 64a-75a) that the McBryde decision constituted an abrupt change in the law (Pet. App. 107a). The court held that respondents’ ownership of surplus waters and their right to transport water out of the watershed under pre-McBryde law were “vested” property rights and that enforcement of the decision in McBryde would result in an unconstitutional taking of those rights. The court accordingly enjoined petitioners from enforcing the judgment in McBryde (Pet. App. 266a-267a). b. On petitioners’ appeal, the court of appeals certified six questions to the Supreme Court of Hawaii concern- ing “the proper interpretation” of the McBryde decision 7 (Pet. App. 414a-415a). After briefing and oral argu- ment, the Supreme Court issued an opinion explaining that the McBryde holding that the State owns the sur- plus water in the Hanapepe River did not refer to “ownership in the corporeal sense where the State may do with the property as it pleases” (Pet. App. 5la). Instead, it contemplated only the State’s “retention of * * * authority to assure the continued existence and beneticial application of the resource for the common good” (ibid. (footnote omitted) )—i.e., a public trust as reflected in the 1850 State statute declaring the rights of the people to “running water” (id. at 52a-54a). The Supreme Court also stressed that by recognizing riparian rights and limiting water rights generally to the land to which they are appurtenant, MyBryde “did not actually enjoin or explicitly prohibit the diversion of water from the watershed” (Pet. App. 19a). Instead, McBryde merely stated that the “private usufructory interests” in water were “not so broad as to include any inherent enforceable right to transmit water” beyond the appurtenant lands (Pet. App. 19a). Accordingly, Mc- Bryde was not “conclusive of the circumstances” in which a transfer might be enjoined, especially since such an action would be subject to the equitable doctrines of estoppel, laches, and public use (Pet. App. 19a-20a). The court made clear in this regard that “diversions will be restrained only after a careful assessment of the interests and circumstances involved indicates a need for restraint” (id. at 20a-21a). With respect to the res judicata consequences of Mc- Bryde in any such action to enjoin diversions by respond- ents, the Supreme Court first held that “McBryde in its current posture has no bar and merger effect,” because no final judgment: has yet been entered in that case (Pet. App. 23a). Similarly, the court held that “issue preclu- sion would be confined to the quantification of appurte- nant water rights [for ancient taro lands],” because only that portion of the state trial court’s judgment was af- firmed in McBryde (Pet. App. 23a-24a). The court ac- knowledged that McBryde also had confirmed the exist- 8 ence of riparian rights, delineated limitations on the transportation of water, and declared the State to be the owner of surplus water (Pet. App 23a). But these rul- ings, the court explained, would only be the “law of the case” in the “continuation of the case at the trial level” (id. at 24a). Moreover, the court stated that it would be necessary, “prior to any final judgment respecting the distribution of the waters of the Hanapepe,” to resolve certain “factual and legal issues,” including, “most sig- nificantly[,! the nature and scope of any remedies to be afforded the parties” (id. at 24a-25a). The Supreme Court likewise held that McBryde would not preclude an independent action by respondents in state court with respect to issues left unresolved by the McBryde opinion, including the application of the principles of McBryde to “existing diversions” (Pet. App. 42a). The court stressed that McBryde did not determine whether the cessation of any given diversion would constitute a “‘tak- ing” (Pet. App. 42a). Finally, the Supreme Court advised the court of ap- peals that state law prior to McBryde was unsettled and confusing (Pet. App. 42a-50a). In its view, only tliree cases addressed “surplus” waters in the 125 years between the Great Mahele and McBryde; in each, surplus water was treated differently, and “in none of them did the court even attempt to clearly define or quantify the nature of this right” (Pet. App. 47a-48a). The court also explained that these prior cases recognized that “surplus” water was a residual category, to which the undefined interests of other users were superior (id. at 49a). In sum, the Supreme Court interpreted its McBryde decision as a reassertion of the sovereign authority to “enforce the usufructs of the land for the common good’ ” (Pet. App. 54a) and a rejection of respondents’ assertion of “absolute and exclusive” control over the use of waters in the watershed (id. at 55a). The McBryde opinion, however, was only the beginning of “a necessary defini- tion of the parameters of the State’s authority,” which would proceed on a case-by-case basis (Pet. App. 55a). ce. After the Supreme Court of Hawaii answered the certified questions, the court. of appeals nevertheless held —- = 9 that the decision in McBryde resulted in an unconstitu- tional taking of respondents’ property (Pet. App. la-13a). The court of appeals found that respondents had “vested”’ property rights to divert water because they had relied on the decree in Territory v. Gay and constructed diver- sion works (Pet. App. lla, 12a), and it held that Mc- Bryde could not “divest rights that were vested before the court announced the new law” (Pet. App. 12a). Al- though the court of appeals referred to the answers to the certified questions (id. at 5a), it did not address the substance of those answers, including the availability of means by which respondents could contest any attempt by the State to halt diversions. However, because petitioners had taken no steps to interfere with respondents’ diver- sions, the court of appeals vacated the injunction that barred petitioners from seeking to enforce the decision in McBryde and affirmed only the district court’s declara- tory judgment (Pet. App. 13a). ARGUMENT There are lurking in this case a number of difficult and potentially important questions concerning (i) the respec- tive roles of the state and federal courts in the ascertain- ment and enforcement of property rights created by state law, and (ii) the authority of a federal district court to entertain a suit raising issues of federal law that are intertwined with questions that previously were dis- posed of by the highest court of the State. The super- imposition of these procedural questions on evolving and novel principles of Hawaiian water law makes this case one of extraordinary complexity. But as we see it, there is no occasion for the Court to explore those issues here. In its current posture, this case raises one legal issue that overshadows all else.and suggests a simple and straight- forward disposition. The opinion of the Supreme Court of Hawaii in re- sponse to the questions certified to it by the court of ap- peals makes clear that the McBryde decision did not finally determine respondents’ entitlement under state law to divert water from the Hanapepe River and its 10 tributaries. The decision in McBryde therefore was not the sort of “final” action by the State that could give rise to a ripe taking claim under this Court’s decision in Williamson County Regional Planning Comm’n v. Hamil- ton Bank, No. 84-4 (June 28, 1985). Because the judg- ment of the court of appeals constitutes a substantial in- trusion into the state court proceedings in McBryde and may inhibit the development of state water law more generally, we suggest that the Court should grant the petition for a writ of certiorari, vacate the judgment, and remand the case to the court of appeals for further con- sideration in light of Williamson County. 1. In Williamson County, the Court held that a claim that a taking of property has been effected by zoning reg- ulations is not ripe until the responsible administrative agency “has arrived at a final, definitive position regard- ing how it will apply the regulations at issue to the particular land in question.” Slip op. 17. The Court found this finality requirement to be “compelled by the very nature of the inquiry required by the Just Compen- sation Clause” (ibid.), under which the Court has en- gaged in “ad hoe, factual inquiries into the circumstances of each particular case.” Connolly v. Pension Benefit Guaranty Corp., No. 84-1555 (Feb. 26, 1986), slip op. 13. To assist in this assessment, the Court typically considers, inter alia, the “economic impact of the challenged action” and “the extent to which it interferes with reasonable investment-backed expectations.” Williamson County, slip op. 17; Connolly, slip op. 13-15. “Those factors simply cannot be evaluated” until the administrative agency “has arrived at a definitive position on the issue that inflicts an actual, concrete injury” (slip op. 17, 19). The Court further held in Williamson County that in order for the finality requirement to be satisfied, the landowner must invoke available procedures for obtaining a vari- ance, which might enable him to develop his property to the extent necessary to obviate any “taking” claim. Slip op. 14-17. Accord, Hodel v. Virginia Surface Mining & Reclamation Ass’n, 452 U.S. 264, 297 (1981); Agins v. Tiburon, 447 U.S. 255, 260 (1980); Penn Central 11 Transportation Co. v. New York City, 438 U.S. 104, 136-137 (1978). This case involves an alleged taking not as a result of the acticn of a state administrative agency, as in Wil- liamson County, but as the result of a decision rendered by a state court that assertedly worked a radical change in state property law and upset settled expectations. But this distinction does not undermine the applicability of the finality requirement of Williamson County and re- lated cases. For where the State has assigned to its courts the responsibility for defining and regulating prop- erty rights,‘ it is only after the courts have taken defini- tive action with respect to particular rights that the economic impact of the judicially fashioned rules and the extent of their interference with reasonable investment- backed expectations could be considered by this Court on direct view or by a federal district court considering a taking claim in a separate suit (if the latter would not be barred by the doctrine of Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), discussed at note 7, infra). Application of the finality rule in this case also fur- thers the principles of comity that underlie the require- ment that federal courts abstain from adjudicating fed- eral questions that arise out of and could be presented in ongoing proceedings in state court. See, e.g., Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 237-239 (1984) ; Middlesex Ethics Committee v. Garden State Bar Ass’n, 457 U.S. 423, 4382-437 (1982) ; Gibson v. Berryhill, 411 U.S. 564, 577 (1973). The interest in comity is at its zenith where, as here, the premise of the taking claim is that a state court’s interpretation or application of judicially fashioned principles of state law affecting prop- erty interests was allegedly erroneous and a sharp de- parture from prior law. In such a case, the state courts should have every opportunity, before rendering a final judgment, to correct or explain their rulings on questions 4 The state trial judge in McBryde exercised authority vested in him as commissioner of private ways and water rights under Hawaii Rev. Stat. §§ 234-30 to 234-36 (1955). See Pet. App. 197a. 12 of state law, to consider any claim that those state-law rulings would give rise to a taking of property in certain circumstances (see Pet. App. 42a), and otherwise to ac- commodate competing interests. Premature intervention into this process by the federal courts on a taking theory could have the untoward effect of freezing the evolution of state law. Cf. PruneYard Shopping Center v. Robins, 447 U.S. 74, 82-85 (1980); id. at 92-93 (Marshall, J., concurring) ; Munn Vv. Illinois, 94 U.S. 113 (1877). 2. When the irstant suit was commenced in federal district court in 1974, it might have appeared that the finality requirement of Williamson County was satisfied. The decision of the Supreme Court of Hawaii in Mc- Bryde had declared the State to be the owner of all surplus water in the Hanapepe watershed and seemed to bar the holders of appurtenant or riparian water rights from using water on other lands. Moreover, although G&R had been held in Territory v. Gay to be the owner of all “normal” surplus water, the recognition of riparian rights in McBryde apparently left no water in that residual category. Nor could prescriptive rights be rec- ognized for the benefit of respondent McBryde because prescription does not run against the State. See pages 4-6, supra. Standing alone, these rulings might have been understood to be a conclusive determination under state law of the nature and extent of respondents’ rights to divert water from the Hanapepe and its tributaries for use both within and without the watershed. In that event, the finality requirement of Williamson County and related cases would have been satisfied. 3.a. The answers to the certified questions rendered by the Hawaii Supreme Court in 1982, however, dispelled whatever air of finality had surrounded the decision in McBryde. Those answers, in the form of a _ published opinion rendered after briefing and oral argument by the parties, must be regarded as the dispositive exposition of the meaning and consequences of the McBryde deci- sion as a matter of state law. Indeed, the court of ap- peals’ express purpose in making the certification was to obtain an authoritative construction of the McBryde opin- 13 ion (see Pet. App. 414a), “ ‘which might avoid in whole or in part the necessity for federal- constitutional ad- judication, or at least materially change the nature of the problem.’” Bellotti v. Baird, 428 U.S. 182, 147 (1976) (quoting Harrison v. NAACP, 360 U.S. 167, 177 (1959)). Yet when it received the answers to the questions, the court of appeals failed to appreciate their significance to the “taking” inquiry, and instead essen- tially ignored them. For example, the court of appeals failed even to mention, much less rebut, the Hawaii Supreme Court’s explanation, given in direct response - to one of the court of appeals’ questions, that the law of Hawaii with regard to the ownership of surplus water was unclear prior to McBryde (Pet. App. 44a-5la).® But the court of appeals nevertheless held that respond- ents had “vested” rights based on state law prior to McBryde (Pet. App. 10a-12a).° 5 The courts below appear to have applied an essentially de novo standard of review to the state court’s determination of the content of state property law (see Pet. App. 98a-103a). We believe that approach fails to accord sufficient deference to the state court. The court of appeals relied on the concurring opinion of Justice Stewart in Hughes v. Washington, 389 U.S. 290, 296-297 (1967), which steted that “[w]hether [a state court] decision * * * worked an unpredictable change in state law * * * inevitably presents a federal question for the determination of this Court.” But that statement did not mean that federal courts may freely impose their own views on the content of state property law. Indeed, Justice Stewart would have restricted the scope of the federal court’s inquiry to whether the state court’s pronouncements were “reasonable.” Jd. at 296. The inquiry has been described in a related context as whether the state decision has “fair support” or a “fair and suhstantial basis.” Demorest v. City Bank Co., 321 U.S. 36, 42-48 (1944). If so, the federal court will not “substitute its own view of what should be deemed the better rule, for that of the state court” (id. at 42 (foot- note omitted) ). 6 The court of appeals identified the actions that rendered the water rights ‘‘vested” as the decree in Territory v. Gay (Pet. App. 12a) and the construction of diversion works and past use of waier (id. at 1la). The court apparently believed that any disturbance of those “vested” rights would of necessity effect an unconstitutional taking. In our view, this formulation of the circumstances in which a taking of respondents’ asserted rights in water would occur is too 14 b. For present purposes, however, the importance of the Hawaii Supreme Court’s answers to the certified questions is in their description of the issues of state law affecting respondents’ rights that remain to be resolved after the Supreme Court’s decision in McBryde—and simplistic, at least without a much firmer foundation in the law of Hawaii than is exhibited by the court’s opinion. Cf. Williamson County, slip op. 18-19 n.12. We do not dispute that the judgment of a court may vest a prop- erty right under governing law—as, for example, in the general adjudications that are conducted in many western States to settle all of the rights to the use of the waters of a particular stream. See Nevada v. United States, 463 U.S. 110, 130-134, 138-141 (1983). However, Territory v. Gay was not a general adjudication of all rights to the waters of the Hanapepe River, and it did not even quantify the respective rights of the Territory and G&R, the only parties to the case. Although the judgment in Territory v. Gay nevertheless has a certain res judicata effect as between those parties (see Pet. App. 28a-31la), it is not clear, as a matter of state law, that the judgment actually “vested” any property rights in G&R, much less in the other respondents in this case. Similarly, although the building of diversion works and the beneficial applica- tion of water may be important events in the “vesting” of water rights in those States that recognize the doctrine of prior appropri- ation (see Nevada v. United States, 463 U.S. at 123-126), those events are not necessarily determinative of the particular water rights claimed in this case, which are based in large measure on the mere ownership of certain land (ancient taro lands and ilis kupono). We agree that, in the absence of a noxious use or similar adverse impact on others, past and présent uses of property ordinarily must be respected if the implementation of a new regulatory program is to avoid giving rise to a taking of property within the meaning of the Just Compensation Clause. See Penn Central, 438 U.S. at 136; id. at 144-145 (Rehnquist, J., dissenting). Nevertheless, the Court has held that, in certain circumstances, even an existing use may be proscribed without effecting a taking. See id. at 125-126. At the same time, a prohibition against the future exercise of a previously uninvoked incident of ownership may, in the proper case, effect a taking. See United States v. Riverside Bayview Homes, Inc., No. 84-761 (Dec. 4, 1985), slip op. 4. Thus, to the extent the decision of the court of appeals is based on concepts of “vesting” that are not rooted in state law, it results in a declaration regarding the circum- stances in which a taking will be found that is potentially both under- and over-inclusive. 15 that apparently remain open in further proceedings in McBryde itself. First, contrary to what appears to have been the parties’ prior understanding (see, e.g., Pet. App. 39a n.22), the answers to the certified questions now make clear that the decision in McBryde did not con- stitute the final disposition of that case (Pet. App. 23a- 24a). The only determination with res judicata effect was the quantification of the appurtenant water rights for ancient taro lands, which was affirmed in McBryde and is not at issue here. The Supreme Court’s reversal of the remainder of the trial court’s judgment simply rendered that remainder void, thereby permitting a “con- tinuation of the case at the trial level’ with regard to all aspects of the case except the quantification of ap- purtenant water rights for ancient taro lands (Pet. App. 24a). The Supreme Court recognized that it also had ad- dressed other issues in its opinion in McBryde: it “con- firmed the existence of riparian rights, delineated limita- tions on the right to transport appurtenant and riparian waters, and found that the State was the owner of sur- plus waters” (Pet. App. 23a). But because it did not give instructions to the trial court on these questions or exercise its own authority to render a final judgment, the court’s rulings on these questions have only the status of the “‘law of the case’” in the further proceedings that must take place in the trial court before a final judgment is entered (id. at 24a). The Supreme Court explained that those rulings would “serve as a founda- tion” for such further proceedings but “would not neces- sarily be completely dispositive’ of them, because the doctrine of the law of the case is “ ‘not subject to the inflexibility of res judicata’” (id. at 24a & n.9, quoting Glover Vv. Fong, 42 Hawaii 560, 578 (1958)). Thus, al- though the Supreme Court has expressed its opinion at an interlocutory stage of the proceedings on questions of law that might eventually affect respondents’ property rights, it has not incorporated those rulings into a final judgment that has a binding effect on respondents. And 16 until it does so, the Supreme Court presumably retains the authority to alter its rulings. Compare Arizona V. California, 460 U.S. 605, 618-619 (1983). This case therefore is in the same posture in which the administrative proceedings in Williamson County would have been if the Planning Commission had expressed its opinion on certain legal issues but had not yet denied the developer’s subdivision application. In that event, the developer clearly would not have obtained the requisite “final decision” regarding if and how it would be per- mitted to develop the land, and it therefore would not have a ripe taking claim. Williamson County, slip op. 17. So here, until judicial proceedings are “complete” (id. at 22), the responsible state entity has not rendered its “final decision” that binds respondents and has concrete legal consequences for them. At least until that time, respondents may continue to divert water. In short, the mere rendering of a legal opinion at an interlocutory stage of proceedings in state court concerning respond- ents’ rights does not constitute a “taking” of their prop- erty. Kirby Forest Industries, Inc. v. United States, 467 U.S. 1, 15 (1984); Agins, 447 U.S. at 263 n.9; Danforth v. United States, 308 U.S. 271, 285 (1939). Nor is this an instance in which further proceedings in state court would have no effect on respondents’ taking claim. Cf. Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 477-487 (1975). To the contrary, the Hawaii Supreme Court’s answers to the certified questions establish that the decision in McBryde did not eradicate all bases for protection of respondents’ diversions and that a number of issues bearing on that protection remain to be decided in state court. For example, although the McBryde decision declares the State to be the owner of all surplus water in the Hanapepe watershed (Pet. App. 162a-174a), the answers to the certified questions make clear that McBryde did not have reference to ownership in the corporeal sense, under which the State could dispose of the water entirely as it pleases, but rather contemplated the retention by 17 the State of authority “to assure the continued existence and beneficial application of the resource for the common good” (Pet. App. 5la (footnote omitted)). As this Court has recognized, the public ownership theory is “but a fiction expressive in legal shorthand of the im- portance to its people that a State have power to pre- serve and regulate the exploitation of an important re- source.’” Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941, 951 (1982) (quoting Hughes v. Oklahoma, 441 U.S. 322, 334 (1979), and Toomer v. Witsell, 334 U.S. 385, 402 (1948)). See also Sporhase, 458 U.S. at 951-954. But this Court has “made it quite clear that the mere assertion of regulatory jurisdiction by a govern- mental body does not constitute a regulatory taking.” United States v. Riverside Bayview Homes, Inc., No. 84-701 (Dec. 4, 1985), slip op. 4-5. Beyond this, McBryde and the answers to the certified questions establish only that the Robinson respondents do not own the surplus water in the sense of having the unfettered right to use it in any manner they choose, and that none of the respondents has “absolute and ex- clusive” interests in the water, including an “inherent enforceable right’ to transmit water beyond the land to which their usufructory interests appertain (Pet. App. 19a, 55a). But the Supreme Court of Hawaii authori- tatively held in the answers to the certified questions that the application of the general principles in the McBryde opinion to any particular diversions and the circumstances under which any existing diversions may continue were not addressed or decided in McBryde, even as the law of the case. Pet. App. 19a-2la, 23a-25a, 42a. The Supreme Court made clear, in fact, that diversions would be barred “only after a careful assessment of the interests * * * involved indicates a need for restraint” (id. at 2la) and that any action to restrain diversions would require con- sideration of the equitable doctrines of laches, estoppel, and public use (id. at 19a-20a). These questions appar- ently remain open in further proceedings in McBryde itself, since the answers to the certified questions state that among the “unresolved factual and legal issues” in 18 that case are “the nature and scope of any remedies to be afforded the parties” (Pet. App. 25a). They also may be addressed in an independent action brought in state court by either petitioner or respondent (id. at 19a-21la, 42a). These procedures in state court by which respondents may be permitted to divert water afford the possibility for the very protection that the court of appeals held to be constitutionally compelled for what it termed respond- ents’ “vested rights’ (Pet. App. 10a-12a). Resort to state judicial procedures, either in McBryde itself or in an independent acticn, therefore is directly analogous to the application for a variance or similar administrative relief that this Court held in Williamson County (slip op. 12-18) and Virginia Surface Mining (452 U.S. at 297) might serve to permit uses of property to the extent nec- essary to obviate any taking problem. Thus, until the state courts have “arrived at a final, definitive position” (Williamson County, slip op. 17) regarding existing di- versions, it cannot be determined whether respondent’s interests will be so substantially impaived by an actual prohibition as to preclude “economically viable uses” of their alleged rights under pre-McBryde law (Riverside Bayview Homes, slip op. 5) or to undermine substan- tially their “investment backed expectations’ (Kaiser . Aetna, 444 U.S. at 175). See also Penn Central, 438 U.S. at 130-131; Andrus v. Allard, 444 U.S. 51, 66 (1979). 4. In sum, we believe it is quite clear on the basis of the answers to the certified questions that no final action that could amount to a “taking” of respondents’ property has yet occurred in the McBryde case. Accordingly, this federal suit should be dismissed, so that any necessary state court proceedings may run their course and thereby perhaps obviate any taking claim, or at least sharpen the inquiry into the various factors that are relevant to such a claim. We recognize, however, that the decision of the court of appeals in this case was rendered before Wil- liamson County, which greatly clarified the role of final- ity as a prerequisite to a taking claim. The Court there- fore might wish to vacate the judgment below and 19 remand the case to the court of appeals for further con- sideration in light of Williamson County. in any event, the Court should grant the petition in order to eliminate the substantial intrusion by the courts below into the liti- gation in state court with regard to water rights in the Hanapepe watershed and, more generally, into the case- by-case development of state water law by the Supreme Court of Hawaii.’ 7If, as we submit, the appropriate disposition is for this case to be dismissed for lack of final action by the State that could give rise to a taking claim, the other issues presented by petitioners are of no moment here. Petitioners contend (Pet. 20-22; Pet. Reply Br. 6-8) that the Hawaii Supreme Court’s decision in McBryde precludes respondents from bringing their taking claim in federal district court, because “‘a United States District Court has no authority to review final judgments of a state court in judicial proceedings. Review of such judgments may be had only in this Court’” (Pet. 20, quoting District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983)). See Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923). However, it now is clear in light of the answers to the certified questions that the decision in McBryde was not a “final judgment or decree” of the Supreme Court of Hawaii chat was subject to review by this Court under 28 U.S.C. 1257, because important questions remained to be decided in that case that would have a direct bearing on respondents’ taking claim. The defect in the judgment below therefore is that it intrudes into non-final state court proceedings—a subject addressed not by Feid- man and Rooker, but by the abstention doctrine as a general matter (see Pet. Reply Br. 9-10) and by the finality requirement of Wiiliam- son County in the particular context of a taking claim. Petitioners’ related contention (Pet. 24-26) that the full faith and credit statute, 28 U.S.C. 1738, bars relitigation of respondents’ tahing claim in this case is misplaced for similar reasons. As peti- tioners acknewledge, that statute “ ‘requires a federal court to look first to state preclusion law in determining the preclusive effects of a state court judgment’” (Pet. 24 (quoting Marrese v. American Academy of Orthopaedic Surgeons, No. 83-1452 (Mar. 4, 1985), slip op. 7)). See also Parsons Steel, Inc. v. First Alabama Bank, No. 84- 1616 (Jan. 27, 1986). In this case, the Hawaii Supreme Court held in its answers to the certified questions that because no final judg- ment has been entered in McBryde on any issue other than the quantification of appurtenant water rights (which is not at issue here), the decision in McBryde has no bar-andc-merger or issue- preclusion effect that is relevant to this case. At present, the 20 CONCLUSION The petition for a writ of certiorari should be granted, the judgment of the court of appeals vacated, and the case remanded to the court of appeals for further consid- eration in light of Williamson County Regional Planning Commission Vv. Hamilton Bank, No. 84-4 (June 28, 1985). Respectfully submitted. CHARLES FRIED Solicitor General F. HENRY HABICHT II Assistant Attorney General LAWRENCE G. WALLACE Deputy Solicitor General EDWIN S. KNEEDLER Assistant to the Solicitor General PETER R. STEENLAND, JR. ANNE §S. ALMY Attorneys MAY 1986 McBryde rulings regarding riparian rights, the transportability of water, and State ownership of surplus water, are merely the law of the case (Pet. App. 23a-24a). Thus, until a final judgment is entered in McBryde on other issues that relate directly to respond- ents’ taking claim, neither the doctrine of res judicata nor the full faith and credit statute is the source of the bar to litigation in federal court. By the same token, when a final judgment is entered in McBryde, respondents will be free to present to this Court on direct review under 28 U.S.C. 1257 any constitutional objections to the effect that the actions of the state courts might have on their property rights—including their claim that the decision in McBryde, either on its face or as applied in future proceedings, results in an unconstitutional taking of their property without just compensation (see Pet. App. 42a). * U. S. GOVERNMENT PRINTING OFFICE; 1986 421507 20231 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0260%3A08. Public record. Not legal advice.