# Reply Brief — Harding v. Ward > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386005_1719%3A4 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief - **Published:** January 1, 1994 - **Citation:** 510 U.S. 1177 ## Text No. 93-1049 IN THE Supreme Court of the United States OCTOBER TERM, 1993 WILLIAM HARDING, et ai., Petitioners, V. GARNETT WARD AND THE COMMONWEALTH OF KENTUCKY. Respondents. On Petition for a Writ of Certiorari to the Supreme Court of Kentucky REPLY BRIEF OF PETITIONERS KEVIN M. MCGUIRE REX E. LEE * JOHN S. PALMORE CARTER G. PHILLIPS JACKSON & KELLY TAMARA L. PREISS 175 E. Main Street SIDLEY & AUSTIN Suite 500 1722 Eye Street, N.W. Lexington, Kentucky 40507 Washington, D.C. 20006 (606) 255-9500 (202) 736-8000 Counsel for Petitioners February 22, 1994 * Counsel of Record WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 TABLE OF AUTHORITIES CASES Page Akers Vv. Baldwin, 736 S.W.2d 294 (Ky. 1987) ....4, 5, 6,7 Buchanan v. Watson, 290 S.W.2d 40 (Ky. 1956)... 3,5 Commerce Union Bank v. Kinkade, 540 S.W.2d 861 (Ky. 1976), cert. denied, 430 U.S. 915 SE ae EE Ce 5 tection Vv. No. 8 Ltd., 528 S.W.2d 684 (Ky. a, RN RP TERS S Ble Ee” doled 6 First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987)... 8 Hughes v. Washington, 389 U.S. 290 (1967) 1 Keystone Bituminous Coal Ass’n V. DeBenedictis, 480 U.S. 470 (1987) 5 Lucas Vv. South Carolina Coastal Council, 112 S. Ct. RI i a 2,8 Martin v. Kentucky Oak Mining Co., 429 S.W.2d 395 (Ky. 1968) sadiaceteabapeoencbieaetepinbiahiisadtcemcuaie 5 McIntire v. Marian Coal Co., 227 S.W. 298 (Ky. I eccseutindicae ise Aeebidiiaeneaidemdeieetiaas ee, 4 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 UE Mitaranicesirenientontst ecient 4 Rudd v. Hayden, 97 S.W.2d 35 (Ky. 1936) 4 IN THE Suprene Court of the United States OCTOBER TERM, 1993 No. 93-1049 WILLIAM HARDING, et al., 7 Petitioners, GARNETT WARD AND THE COMMONWEALTH OF KENTUCKY. Respondents. On Petition for a Writ of Certiorari to the Supreme Court of Kentucky REPLY BRIEF OF PETITIONERS Respondents’ numerous assertions do not detract from petitioners’ central argument, viz., review by this Court is warranted to prevent the evisceration of the Takings and Due Process Clauses of the United States Constitu- tion effected by the Kentucky Supreme Court’s decision to eliminate, by judicial fiat, petitioners’ established prop- erty rights. 1. In an attempt to downplay the importance of this case, respondents observe that, since Justice Stewart's concurring opinion in Hughes v. Washington, 389 US. 290, 294-98 (1967), revived the notion of “judicial tak- ings,” only two federal courts of appeals have concluded that a court’s actions may effect a taking. Respondents’ argument misses the point; it is because of the judicial takings doctrine that very few state courts have retro- actively eliminated established property rights. Petition- 2 ers cited numerous cases in which both state and federal courts recognized that judicial decisions which work major changes in property law may indeed constitute “takings.” See Petition for a Writ of Certiorari (“Pet.”) 14-15. Most of these courts declined to disturb existing precedent solely out of respect for property rights and a desire to conform to constitutional imperatives. See, e.g., State v. Corvallis Sand & Gravel Co., 582 P.2d 1352. 1363 (Ore. 1978) (given state of precedents, adoption of a contrary rule “would raise serious questions about the taking of private property for public use without compensation”). Moreover, this Court’s recent decision in Lucas vy. South Carolina Coastal Council, 112 S. Ct. 2886 (1992), emphasized the extent to which takings analysis depends upon the nature of the common law of nuisance and property. It would be curious indeed if a property owner’s reasonable expectations about the uses to which he can put his property hinge upon the state’s common law, which, in turn, is subject arbitrarily to revocation at any time by state courts. But that is pre- cisely the result urged by respondents. See Pet. 16 n.20. 2. Respondents next argue that, regardless of the validity of “judicial takings,” no taking occurred in this case because petitioners had no “reasonable, investment- backed expectations” in any right to engage in surface mining. Leaving aside for the moment whether this states the appropriate legal standard (see infra pp. 4-5), peti- tioners’ “reasonable . . . expectations” could not be plainer. The deed under which they own and lease the mineral rights at issue in this case conveyed the right to use the surface of the land “in any and every manner” that the grantee “deemed necessary or convenient in the free exercise and enjoyment of said property, rights and privileges hereby granted or conveyed.” Pet. App. 45a (emphasis added). If “necessary or convenient for the exercise and enjoyment of the said property rights,” the grant is broad enough to include, for example, “the right to build, erect, alter and repair, maintain and operate 3 upon said land . . . any and all such buildings, structures, appliances, machinery and equipment,” thus permitting the mineral owner to occupy the entire surface of the land. Id. at 46a. Given the breadth of the rights conveyed, it comes as no surprise that the actual language of the deed appears nowhere in respondents’ brief. Their assertion that the holding below “simply restored the parties to their rights pre-Buchanan” because the deed conveyed only the right to mine by deep mining methods conveniently ignores the unequivocal language of the instrument itself, which formed the basis of 50 years of judicial construction. See Opp. 20-21. Not only is there no ambiguity to warrant a judicial inquiry into the “intent of the parties,” it is difficult to imagine a more clearly expressed intent to convey the right to use the surface in any way incident to the mining of coal.’ ' Respondents also contend that the Hardings could not have formed any “reasonable, investment-backed expectations” about the right to surface mine because they acquired their mineral interests prior to Buchanan v. Watson, 290 S.W.2d 40 (Ky. 1956), which clearly established the right of owners of mineral rights under broad form deeds to engage in surface mining. Regardless of when they first obtained these rights, however, the Hardings retained the mineral rights in the years since Buchanan with the ex pecta- tion of using them when they saw fit, and with no expectation whatsoever that these rights would be nullified by subsequent judi- cial action. In fact, the mineral rights were leased to the petitioner Lash Coal Co. in 1982, long after Buchanan. Pet. App. 49a. It is no accident that a coal company, which quite obviously leased the rights with a “reasonable, investment-backed expectation” that it could mine the coal, is a petitioner in this case. Respondents assert that Lash’s claim is moot, based solely on their reading, in isolation, of a single provision of the lease. This issue has never been litigated in any court, and, in any event, Lash remains a party to this case by virtue of its interest in the contract. Under these circumstances, respondents’ mootness claim is nothing more than a bald effort to avoid review. Moreover, review of cases decided prior to Buchanan reveals that Buchanan represented the culmination of, rather than a de- parture from, case law regarding the relative rights of surface 4 Respondents also contend that the action of the court below does not constitute a taking because the court’s decision destroyed just one “strand” in petitioners’ “bundle of property rights.” Opp. 21-24. Respondents’ analysis is ill-conceived, both factually and legally. First, it is flatly wrong to call the contention that the coal can be removed only by surface or strip mining an “unsup- ported allegation.” See id. at 21. The affidavit of Wil- liam Harding established that it is economically infeasible to mine the Hardings’ coal by any method other than surface mining.” Pet. 17-19. The facts of Harding’s affi- davit were accepted as true by the Kentucky Supreme Court for the purposes of its decision in this case and are not subject to challenge here. /d. at 6. Second, as a matter of law, and despite respondents’ arguments to the contrary, there is no question that this case fits squarely within this Court’s takings jurispru- dence. In Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 414 (1922), the Court held that the right to coal carries with it the right to mine it, and thus “[t]o make it commercially impracticable to mine certain coal has very nearly the same effect for constitutional purposes as appropriating or destroying it.” Respondents do not, and cannot, distinguish this case from Pennsylvania Coal, be- and mineral owners. See, e.g., McIntire v. Marian Coal Co., 227 S.W. 298 (Ky. 1921) (mineral grantee may use as much of the surface as is necessary or convenient to the mining business, in- cluding use and occupancy of the entire surface) ; Rudd v. Hayden, 97 S.W.2d 35 (Ky. 1936) (rights of mineral owner to use the surface may include surface mining); Treadway v. Wilson, 192 S.W.2d 949 (Ky. 1946) (dominance of mineral estate permits mineral owners to engage in surface mining); see generally Akers V. Baldwin, 736 S.W.2d 294, 298-300 (Ky. 1987) (discussing pre- Buchanan cases). * Somewhat disingenuously, respondents speculate at one point that new mining methods developed in the future might allow petitioners to remove their coal without disturbing the surface, then, in the next breath, respondents reiterate that petitioners have no rights to engage in any mining method not in existence at the time of the original conveyance. Opp. 24. 5 cause the unrebutted facts confirm that it is commercially impracticable for the Hardings to mine their coal by methods other than surface mining and the only purpose of the state’s law is to shift a property right held by one private person to another. For this reason, the holding of Pennsylvania Coal requires reversal of the decision below.* See Pet. 17-19. 3. Respondents also contend that, regardless of the significance of the right to surface mine relative to peti- tioners’ “bundle” of property rights, the decision of the Kentucky Supreme Court to overrule Buchanan v. Wat- son, 290 S.W.2d 40 (Ky. 1956), does not represent the type of abrupt and unpredictable change in state law that might effect a “taking,” because Buchanan had been under attack for almost 40 years. This argument simply mischaracterizes precedent by relying solely on dissenting opinions in Akers v. Baldwin, 736 S.W.2d 294 (Ky. 1987), and Martin v. Kentucky Oak Mining Co., 429 S.W.2d 395 (Ky. 1968), a concurring opinion in Com- merce Union Bank v. Kinkade, 540 S.W.2d 861 (Ky. 1976), cert. denied, 430 U.S. 915 (1977), and the opin- ion below. Opp. 24-31. The logical fallacy inherent in citing the opinion below for the proposition that the opinion below works no sea change in the law requires no comment. The truth re- mains that the continuing validity of Buchanan has been affirmed in a long line of cases, including those cited by respondents. See, e.g., Kinkade, 540 S.W.2d at 864 (broad form deeds grant “such overwhelming mining rights that the mineral owner in fact has the right to use the surface of the land, part or all of it, in recovering the coal acquired by the deeds”); Martin, 429 S.W.2d at 399 (refusing to reconsider Buchanan; landowners’ * To the extent that this Court’s decision in Keystone Bituminous Coal Ass’n V. DeBenedictis, 480 U.S. 470 (1987), restricts the sweep of Pennsylvania Coal, this case provides the Court with the opportunity to clarify the relationship between the two cases. See Pet. 18-19. 6 arguments cannot prevail against “the long entrenched rule of our previous cases in reliance upon which prop- erty rights have vested”) (emphasis added); Pet. 4 n.3. Moreover, the Kentucky Supreme Court has twice re- jected on constitutional grounds legislative efforts to over- rule Buchanan. See Akers v. Baldwin, 736 S.W.2d 294 (Ky. 1987); Department for Natural Resources & Envil. Protection v. No. 8 Ltd., 528 S.W.2d 684 (Ky. 1975); Pet. 6-8.* Most surprising, perhaps, is respondents’ reliance on Akers, decided while this case was pending in the lower Kentucky courts. Respondents make much of the Akers court’s decision to modify that part of Buchanan that denied damages to surface owners for destruction of the land as a result of surface mining, but they seem obliv- ious to the fact that Akers expressly left intact the right of mineral owners under broad form deeds to engage in surface mining.” 736 S.W.2d at 304-05. The court ex- plicitly rejected the surface owners’ argument that the deeds did not convey this right because surface mining was not contemplated at the time the deed was executed: 4 Respondents incorrectly state that Akers was decided solely on separation of powers grounds. Opp. 27 n.6. Following the separa- tion of powers discussion, the court held that “[a] statute that functions retroactively to determine the meaning of a preexisting deed or lease is constitutionally impermissible because this impairs the obligation of a contract,” and therefore “declare{d| that part of the legislation unconstitutional.” Akers, 736 S.W.2d at 310 (emphasis added). The court found it unnecessary to reach the other grounds of alleged unconstitutionality, i.e., that the statute deprived mineral owners of their property without due process of law and that it effected a taking without just compensation. /d.; see also Pet. 7-8 & n.9. 5 It is the right to mine in the first place, not liability for dam- ages, that is at issue here, but it is worth noting that the Akers court excluded from its ruling on damages all conveyances by broad form deed, and leases and mining efforts under broad form deed, made between the date of the Buchanan decision and the date of the Akers decision. Akers, 736 S.W.2d at 307. This exemp- tion applies to the Hardings, who leased their mineral rights in 1982. See Pet. App. 49a. 7 The provisions in typical broad form deeds are, be- yond cavil, clear and unambiguous. They are, in fact, overwhelming in their language to demonstrate an intent to convey away the rights to the minerals described. The right to the minerals carries with it the right to mine them. That a certain method of mining was known at the time the document was executed 1s simply not relevant. Id. In this case, the Kentucky Supreme Court avoided the clear mandates of its earlier decisions only by a judi- cial sleight of hand—it mooted the constitutional ques- tions presented by first eliminating the property rights at issue, thereby creating the new constitutional question presented in the petition. See Pet. 8-9.° 4. Having exhausted their arguments that no taking has occurred, respondents turn to the question of relief, contending that the Hardings have sought the wrong remedy and that the proper course is to file an inverse condemnation suit in Kentucky state court. The irony in counselling petitioners that they must seek “just com- pensation” for their lost property rights from the same courts which effected that taking is apparent. But the law does not compel such a futile undertaking. In Williamson County Regional Planning Commission Vv. Hamilton Bank, 473 U.S. 172 (1985), upon which ® Respondents’ mischaracterizations extend to their description of the proceedings below: their contention that the continuing validity of Buehanan was an issue before the Kentucky Supreme Court is flatly wrong. In his brief to the supreme court, the Attorney General expressly stated that he was intervening for “the limited purpose of addressing the validity under the United States Constitution of subsection 2 of the Kentucky Constitution, Section 19 [the broad form deed amendment].” See Brief of Attorney General, at (i). Buchanan and Akers were not at issue because the parties naturally assumed that the amendment itself overturned the holdings in those cases. See also Pet. App. 23a (dissenting opinion of Justice Leibson notes that “the parties have not raised the issue and presented compelling reasons to believe [the court’s] previous decisions erred”). 8 respondents rely, this Court held that “if a State provides an adequate procedure for seeking just compensation, the property Owner cannot claim a violation of the Just Com- pensation Clause until it has used the procedure and been denied just compensation.” Jd. at 195 (emphasis added). No Kentucky state court proceeding will be “adequate” to provide just compensation to petitioners because the state’s highest court has just held that peti- tioners have no property to “take.” Lucas v. South Caro- lina Coastal Council, 112 S. Ct. 2886 (1992), makes clear, moreover, that review of a takings claim is not con- ditioned upon exhaustion of meaningless state court rem- edies. In that case, the Court found that. “given the breadth of the South Carolina Supreme Court's holding and judgment, [the property owner] would plainly be unable . . . to obtain further state-court adjudication,” without this Court’s intervention, and held that the takings claim was ripe for review. Id. at 2891-92. Here, as in Lucas, the breadth of the decision of the state supreme court regarding the property rights at issue renders fur- ther resort to state courts pointless. Moreover, petitioners are seeking not compensation, but a declaration that their contract rights are in fact property rights. /f this Court were to grant review, and if the Hardings were to prevail on the merits. then the case would return to the Kentucky Supreme Court, which would then determine the constitutionality of the broad form deed amendment in a manner consistent with the property rights established by this Court’s decision. if the Kentucky Supreme Court declared the amendment unconstitutional (a result mandated by that court's pre- vious decisions in No. 8 Ltd. and Akers), then the Com- monwealth of Kentucky may elect to rescind the amend- ment, thus avoiding the need to compensate mineral own- ers such as the Hardings for the permanent deprivation of their property. See First English Evangelical Lutheran Church v. County of Los Angeles, 482 US. 304, 321 (1987). Only if the Commonwealth chooses continued ee 9 enforcement of the amendment does the exercise of emi- nent domain take place, triggering the just compensation requirement. Respondents’ argument, therefore, has put the cart several steps before the horse in a disingenuous effort to avoid review of the breathtaking ruling of the Kentucky Supreme Court in this case. 5. Finally, respondents assert that petitioners are seek- ing an advisory opinion because the petition did not seek this Court’s review of the broad deed amendment. This formulation begs the question at issue here—this Court cannot review, because the Kentucky Supreme Court never decided, whether the broad form deed amendment effects an unconstitutional taking of petitioners’ property. The Kentucky court neatly avoided this issue arbitrarily by redefining away the property rights at issue; therefore, the only remedy available to petitioners is a decision by this Court that the state court’s action was itself unconstitu- tional. Only by resolving the issue presented can this Court force the Kentucky Supreme Court to resolve the constitutional challenge to the broad form deed amend- ment. As indicated above, under the settled rulings in Kentucky the outcome of that challenge is readily pre- dictable, which is why the court below eviscerated peti- tioners’ property interests to avoid having to decide the constitutional issue that was before the court. * * * * At the end of the day, respondents cannot dispute that the existence and substance of the “judicial takings” doc- trine is a matter of recurring importance, both in prac- tice and in legal theory, which this Court has not ad- dressed. Nor can respondents dispute that the judicial action here poses the question of the validity of that doc- trine as starkly as any state court decision could. Fifty years of unbending judicial opinion creating vested rights on which property owners have relied in commercial trans- actions affecting hundreds of miilions of dollars were swept away by a single pronouncement from four state 10 Supreme court justices. Respondents seek to distract the Court from the issue squarely presented by that holding by positing mootness and ripeness concerns that simply have nothing to do with the proper disposition of this case. Because respondents have done nothing to under- mine the compelling reasons offered by petitioners for review of the decision below, the petition should be granted. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted, KEVIN M. MCGUIRE REX E. LEE * JOHN S. PALMORE CARTER G. PHILLIPS JACKSON & KELLY TAMARA L. PREISS 175 E. Main Street SIDLEY & AUSTIN Suite 500 1722 Eye Street, N.W. Lexington, Kentucky 40507 Washington, D.C. 20006 (606) 255-9500 (202) 736-8000 Counsel for Petitioners February 22, 1994 * Counsel of Record --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386005_1719%3A4. Public record. Not legal advice.