Opposition Brief — DLX, Inc. v. Kentucky

No. 04-1018 SOEIRE OF THE CLERK |

In the

Supreme Court of the United States

DLX, Inc.,

Petitioner,

V.

COMMONWEALTH OF KENTUCKY, KENTUCKY ENVIRONMENTAL

AND PUBLIC PROTECTION CABINET, AND THE SECRETARY,

KENTUCKY ENVIRONMENTAL AND PUBLIC PROTECTION

CABINET, IN HER OrriciAL Capacity,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Sixth Circuit

BRIEF IN OPPOSITION FOR RESPONDENT

COMMONWEALTH OF KENTUCKY

S. BRADFORD SMOCK Topp E. LEATHERMAN

Counsel of Record ELIZABETH UNGAR NATTER

RANDALL G. McDowELL KENTUCKY OFFICE OF THE

ENVIRONMENTAL AND PUBLIC ATTORNEY GENERAL

PROTECTION CABINET 1024 CapirAL CENTER DRIVE

OFFICE OF LEGAL Services Suite 200

#2 Hupson HoLLow FRANKFORT, KY 40601-8204

FRANKFORT, KY 40601 (502) 696-5389

(502) 564-2356

Becker Gallagher Legal Publishing, Inc. 800.890.5001

COUNTERSTATEMENT OF

QUESTION PRESENTED

This case more particularly involves DLX’s attempt to

recover money damages, under the Fifth and Fourteenth

Amendments, against a state defendant in federal court after

DLX’s aborted efforts to obtain a coal mine permit

amendment which might have been issued. The question

presented is as follows:

Did the Sixth Circuit err when it determined that the

Commonwealth of Kentucky was immune from suit in

federal court for money damages on account of an

alleged regulatory “taking” of coal?

SUPREME COURT RULES 29.6

AND 14.1(b) STATEMENT

The actual Respondent is the Commonwealth of Kentucky.

The named Respondent, Environmental and Public Protection

Cabinet, is an executive agency of the Commonwealth of

Kentucky, formerly known as the Kentucky Natural

Resources and Environmental Protection Cabinet. The named

Respondent, Secretary of the Environmental and Public

Protection Cabinet (LaJuana Wilcher being substituted for

~ James E. Bickford) is an executive agency head sued in her

official capacity. There is no _ dispute that each

Respondent— Kentucky, the Cabinet and the Secretary sued in

her official capacity—is “the State” for purposes of this

action. (R.8, DLX Response to Motion to Dismiss, J.A., p.

299, footnote 1.) All nominal Respondents are represented

herein by all counsel appearing on the cover of this Brief in

Opposition.

TABLE OF CONTENTS

COUNTERSTATEMENT OF QUESTION

en aie ter ager tbe

SUPREME COURT RULES 29.6 AND

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ee Oe APR MEND 5 05s 66. Ub wena e's obs eo lil

COUNTERSTATEMENT OF BASIS FOR

NS aa. -d on ok 4 4 08 4 Mae Roe

EI rs ee ee

REASONS FOR DENYING THE PETITION .......

I. There Is No Split or Conflict of

Authority Among Circuits on the

Question of the Applicability of

Eleventh Amendment Immunity to

I c--s 6 g's whch a wa ae 68

iV

Il. The Sixth Circuit’s Opinion Regarding

Eleventh Amendment Immunity Does

Not Conflict With Supreme Court

Precedent, and Thus the Question

Presented Is Not of Such Importance

As to Warrant This Court’s Attention ..... 10

Ill. There are Several Other Issues

Necessitating this Court’s Affirmance

on the Record, or Affirmance By a

Lower Court in the Event of Remand. ..... 16

GR Awe esa ented oe eee 568 21

Vv

TABLE OF AUTHORITIES

Cases 5

ee

Alden v. Maine, 527 U.S. 706 (1999) ......... 11, 14

Anderson v. Charter Township of Ypsilanti,

266 F.3d 487 (6th Cir. 2001) ............... 20

Arnett v. Myers, 281 F.3d 552 (6th Cir. 2002)... 8,9, 10

Atascadero State Hospital v. Scanlon,

473 U.S. 234 (1985), reh. denied, 473 U.S.926 ... 15

Boise Cascade Corporation v. State of Oregon,

991 P.2d 563 (Or. 1999), review denied,

18 P.3d 1099 (2000), cert. denied,

We UD, SER CED inks ha owe eee 14

Broughton Lumber Company v. Columbia River

Gorge Commission, 975 F.2d 616 (9th Cir. 1992),

cert. denied, 510 U.S. 813 (1993) ............ 7

Citadei Corp. v. Puerto Rico Highway Authority,

695 F.2d 31 (Ist Cir. 1982), cert. denied,

404 US. S13 (99835) 2 ok 8c ee cc 7

Commonwealth of Kentucky v. DLX, Inc..,

42 S.W.3d 624 (Ky. 2001) .-............... 5

Commonwealth of Kentucky, Natural Resources and

Environmental Protection Cabinet v. Stearns Coal

& Lumber Company, 678 S.W.2d 378 (Ky. 1984),

appeal dismissed at 473 U.S. 921 (1985),

reh. denied, 473 U.S.926 ................. 15

vi

Davis v. United States, 417 U.S. 333 (1974)... 2... . 10

Pistrict of Columbia Court of Appeals v. Feldman,

G60 UB. GEE Ce 0 i cp cee ues 145060455005 6

Ex parte Young, 209 U.S. 123 (1908) ............ 9 7

First English Evangelical Lutheran Church v.

Los Angeles, 482 U.S. 304 (1987) ......... 13, 14

Garrett v. Illinois, 612 F.2d 1038 (7th Cir. 1980),

cert. denied, 449 U.S. 821 (1980) ............ 7

Hans v. Louisiana, 134 U.S. 1 (1890)... 2.2.2.2... 10

John G. and Marie Stella Kenedy Memorial Foundation

v. Mauro, 21 F.3d 667 (Sth Cir. 1994),

cert. denied, 513 U.S. 1016 (1994) ........... 7

Kovacevich v. Kent State University, 224 F.3d 806

ts Cle. FORD 0 0 0 Ske wine Chaswoeseeeee 14

Lake Country Estates, Inc. v. Tahoe Regional

Planning Agency, 440 U.S. 39141979) ...... 11, 16

Larson v. Domestic & Foreign Commerce Corp.,

337 U.S. 682 (1949), reh. denied, 338 U.S. 840... 12

ee ee

Lynch v. United States, 292 U.S. 571 (1934)... . 2... 12

MacDonald, Sommer & Frates v. County of Yolo, et al.,

477 U.S. 340 (1986), reh. denied, 478 U.S. 1035 . . 17

McKesson Corp. v. Div. of Alcoholic Beverages

~ and Tobacco, 496 U.S. 18 (1990) ........ Pre r

i ol

vu

Migra v. Warren City School District Board of

Education, 465 U.S. 75 (1984) ........000.... 19

Nevada Dept. of Human Resources v. Hibbs,

a es ee 13

Northwest Airlines, Inc. v. County of Kent, Michigan,

Pee Dae SOD ok 6 4 0 60 0 0:6 800064468 17

Palazzolo v. Rhode Island, 533 U.S. 606 (2001) ..... 14

Pascoag Reservoir & Dam, LLC v. Rhode Island,

337 F.3d 87 (1st Cir. 2003), cert. denied,

oo. Se. ee eee 18

Reich v. Collins, 513 U.S. 106 (1994) .. 22.0000... 13

Robinson v. Georgia Department of Transportation,

966 F.2d 637 (11th Cir. 1992), cert. denied,

PO es DUMB CRUE vc cack vcadesececewcs 8

Rooker v. Fidelity Trust Company, 263 U.S. 413 (1923) 6

San Remo Hotel, L.P. v. City & County of

San Francisco, et al., 364 F.3d 1088

(9th Cir. 2004), cert. granted,

125 S.Ct. 685 (U.S. Dec. 10, 2004)

Ge b <a ok a ee ok a oe 19

Schillinger v. United States, 155 U.S. 163 (1894) .... 12

Seminole Tribe of Florida v. Florida,

tg 8 PEPE TT EP Te TE Teer rT Te 1]

Tennessee v. Lane, 541 U.S. 509 (2004) .......... 11

vill

Webster v. Doe, 486 U.S. 592 (1988) ............ 12

Will v. Michigan Dept. of Police, 491 U.S. 58 (1989) . . 13

Williamson County Regional Planning

Commission v. Hamilton Bank of Johnson City,

Ck ye fs | Pe 4,5, 17, 18, 20

Wisconsin Department of Corrections v. Schacht,

ED 6 oo tks oc clea we aes s 14

Constitutional and Statutory Provisions

a sono ooh e Ha aes whe Sen 6 8 Do 20

a MEME fh Wb os dSa.6 on wn ee eae 06s kaw 19

EY or oc bux GG 8 wie a as da eae aa 13

LSS pea accta wkid 46 6k ee ae ae ae ek 6

RA eee ee ET Tee eee eee Cre 4

OG NE TED BBLS ne cc ccs cmctsnenees 3

Other

Michael Berger, Brief of Amicus Curiae

Franklin P. Kottschade, San Remo Hotel L. P.

v. City and County of San Francisco, et al.,

ON eer ee ee ee 13

R. Stern & E. Gressman, Supreme Court Practice,

cS ee ee ere 10

Wright, Miller & Cooper, Federal Practice &

Procedure: Jurisdiction 2d § 4004.4 ............. 17

l

CITATION OF OPINIONS AND ORDERS

’

The Respondent agrees with Petitioner’s description of

decisions below, except to note two additional points: (1) the

Kentucky Supreme Court upheld the dismissal of DLX’s state

takings claim on ripeness and exhaustion principles (Petition

Appendix D, pp. 58a-64a); and (2) DLX’s challenge to the

agency's permit denial was the subject of an administrative

Hearing Officer’s Report and Cabinet Secretary’s Order,

which DLX chose not to appeal, choosing rather to file its

regulatory takings claim in state court. The administrative

findings are therefore conclusive, binding and beyond

collateral attack. The administrative Hearing Officer’s Report

and Secretary’s Order are found in the record of this Case, at

R.5, Joint Appendix (hereinafter “J.A.,”) pp. 70-101.

COUNTERSTATEMENT OF BASIS

FOR JURISDICTION

The Respondent agrees with Petitioner’s Statement of

Jurisdiction, subject only to the issues evident from the record

of this case relating to Eleventh Amendment immunity and

ripeness, which are both jurisdictional in nature.

INTRODUCTION

DLX alleges that the Commonwealth of Kentucky is liable

in monetary damages for the alleged taking of coal by virtue

of the Commonwealth’s denial of an amendment to a permit

under which DLX had already mined thousands of acres of

coal. In a published Opinion, the Sixth Circuit held that the

Eleventh Amendment prevents DLX from bringing a claim in

federal district court for money damages against a state, even

for an alleged “taking” brought pursuant to the Fifth and

Fourteenth Amendments. (Pet. App. B, pp. 29a-33a.) No

2

Judge on the Sixth Circuit requested a vote on DLX’s Petition

for Rehearing en banc. (Pet. App. A, pp. la-2a.) This case

was previously the subject of a reported opinion of the

Kentucky Supreme Court which dismissed DLX’s state

takings claim based on ripeness and exhaustion principles.

(Pet. App. D, pp. 58a-64a.)

This Court should not accept certiorari in this case

because: (1) there is no split or conflict of authority among

circuits on the question of the applicability of Eleventh

Amendment immunity to takings cases, (2) the Sixth Circuit’s

Opinion regarding Eleventh Amendment immunity is correct

and does not conflict with Supreme Court precedent and (3)

there are several other issues necessitating this Court’s

affirmance on the record, or affirmance by a lower court in

the event of remand.

COUNTERSTATEMENT OF THE CASE

Relevant Facts

This case involves DLX’s application to amend an existing

permit to mine coal under which DLX and its predecessor in

interest had already been authorized to mine thousands of

acres. The amendment application sought permission to mine

130 acres underneath the Lilley Cornett Woods in Letcher

County, Kentucky. (Pet. App. D, p. 59a; R.5, Hearing

Officer’s Report, J.A., p. 72.) The Lilley Cornett Woods

~ (hereinafter “Woods”) is an old growth forest, biological

research facility, wildlife refuge and designated National

Natural Landmark. (R.5, Hearing Officer’s Report, J.A., pp.

72 and 81-4.) Given the nature of this surface resource, the

agency’s review of the amendment application became

concerned with the extent to which mining could be allowed

3

without interrupting the hydrologic balance in the Woods.

(R.5, Hearing Officer’s Report, J.A., pp. 76-81.)

The agency ultimately denied the amendment application

because DLX withdrew its only viable hydrologic protection

plan (which had proposed maintaining a vertical depth of

cover, between mining and the Woods, of 250 feet) and

substituted its previous submittal (proposing only 110 feet of

vertical cover) without exploring any extent of mining

between those depths of cover which might afford protection.

(R.5, Hearing Officer’s Report, J.A., pp. 73, 77-80 and 89.)

The scientific inquiry concerned what extent of mining

could be allowed in the area of the Woods without causing

mine-induced fracturing to connect with the naturally

occurring stress relief fracture system—the primary source of

groundwater movement in eastern Kentucky—and thus de-

water the Woods. (R.5, Hearing Officer’s Report, J.A:,

pp.76-81.) In regard to this inquiry, and consistent with

Supreme Court Rule 15.2, the Respondent points out an

egregious misstatement of fact at page 3 of the Petition, where

Petitioner states that “DLX submitted a number of permit

applications with greater and greater proposed vertical cover

for its mining,” and that the agency “insisted” on 250 feet of

vertical cover. In fact, DLX filed a single application resulting

in technical review and resubmittals concerning, among other

things, hydrologic protection. In its second-to-last submittal

on the hydrologic protection question, DLX proposed 250 feet

of vertical cover, and the agency was at that point poised to

issue the permit amendment. However, before the agency

could issue the amendment, DLX withdrew the 250 foot

submittal and substituted a 110 foot vertical cover which it

had already been told was unsatisfactory, and requested the

agency to issue or deny the application “as is.” (R.5, Hearing

Officer’s Report, J.A., pp. 73, 89 and 102-3.) Therefore,

4

DLX did not file “a number of applications with greater and

greater vertical cover,” and the agency did not “insist” on a

depth of cover of 250 feet. This misstatement of fact is

relevant to the ripeness defect in this case, discussed infra.

The agency fact-finder found that the agency was willing

to consider alternate proposals or additional scientific studies

demonstrating that mining would not cause irreparable harm

to the Woods (which might have allowed additional mining,

or which might at least enable a takings jury to place a value

on any alleged taking), but that DLX did not further engage

the discussion. (R.5, Hearing Officer’s Report, J.A., pp. 73

and 89.) Rather than seeking either approval of a revised plan,

or judicial review of the agency’s denial of the amendment

application (which by statute it had the right to do, KRS

350.0305), DLX filed a takings action in state court alleging,

Sate inter alia, that the agency’s findings were not supported by

substantial evidence, that the agency misapplied its own

regulations, and that the agency was arbitrary and capricious.

(Compare DLX’s state and federal complaints, R.1,J.A., pp.

5-9 and R. 5, J.A., pp. 59-69.)

The state court takings litigation concluded with a

published opinion of the Kentucky Supreme Court which

upheld the dismissal of DLX’s state complaint on subject

matter jurisdiction grounds. (Pet. App. D, pp. 58a-64a.)

Although the Kentucky Supreme Court intertwined the issues

of ripeness and exhaustion, it expressly relied on this Court’s

holding in Williamson County Regional Planning Commission

v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985) to

conclude its legal analysis as follows:

Our reluctance to examine taking claims until such a

final decision has been made is compelled by the very

nature of the inquiry required by the Just

ee

5

Compensation Clause. Although “the question of

what constitutes a ‘taking’ for purposes of the Fifth

Amendment has proved to be a problem of

considerable difficulty,” . . . the Court consistently

has indicated that among the factors of particular

significance in the inquiry are the economic impact of

the challenged action and the extent to which it

interferes with reasonable investment-backed

expectations. . . Those factors simply cannot be

evaluated until the administrative agency has arrived

at a final, definitive position regarding how it will

apply the regulations at issue to the particular land in

question.

Commonwealth of Kentucky v. DLX, Inc., 42 S.W.3d 624,

626-7 (Ky. 2001), quoting Williamson County, at 473 U.S.

190-1 (internal citations omitted), Pet. App. D, pp. 62a-63a.

While clearly based on ripeness principles, the Kentucky

Supreme Court went on to hold that because DLX waived its

statutory right of appeal from the Secretary’s Order it could

not proceed on its state constitutional takings claim.

Proceedings Below

DLX’s federal complaint is nearly identical to the

complaint which it filed in state court. (R.1, J.A., pp. 5-9;

R.5, J.A., pp. 59-69.) It sought compensation against the

Commonwealth of Kentucky for the same alleged taking, upon

the same allegations that the agency findings were not

supported by substantial evidence and were arbitrary and

capricious, and even contained the same erroneous claims for

“consequential damages” which DLX has since admitted have

no basis in condemnation jurisprudence. (R.8, DLX Response

to Motion to Dismiss, J.A., p. 299, footnote 2.) The

Commonwealth moved to dismiss the complaint in the District

6

Court, pursuant to FRCP 12(b)(1), upon grounds of Eleventh

Amendment immunity, Williamson County ripeness Prong I

(failure to seek a final, definitive position on how the agency

would apply the applicable regulations to its property),

Williamson County ripeness Prong II (failure to meaningfully

utilize its state court condemnation remedy), res judicata, the

Rooker-Feldman doctrine' and exhaustion. The District Court

agreed that it lacked subject matter jurisdiction on the basis of

ripeness (using Prong II of Williamson County) and Rooker-

Feldman. It did not rule upon any other basis for relief in the

Motion to Dismiss. (Pet. App. C.)

On appeal to the Sixth Circuit, the Commonwealth

preserved all of its defenses raised in the Motion to Dismiss.

The Sixth Circuit held that the Eleventh Amendment operated

to prevent DLX from bringing its claim for monetary damages

against the Commonwealth of Kentucky in federal district

court and rejected the Commonwealth’s arguments based on

Williamson County Prong II ripeness, Rooker-Feldman, res

judicata and exhaustion. It declined to rule on Williamson

County Prong I ripeness finding that, in the absence of fact-

finding by the District Court, that inquiry was too fact-

intensive. (Pet. App. B.)

In the concurring opinion, Judge Baldock, sitting by

designation from the Tenth Circuit, agreed that the Sixth

Circuit’s Eleventh Amendment analysis was sound, but would

have first disposed of the case jurisdictionally under the

Rooker-Feldman doctrine and Williamson County ripeness

Prong I, or as being barred by res judicata. (Pet. App. B, pp.

35a-37a and 39a-41a.) Nota single Judge on the Sixth Circuit

' Rooker v. Fidelity Trust Company, 263 U.S. 413 (1923); District

of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983).

ee

7

requested a vote on DLX’s Petition for Rehearing en banc,

and said petition was denied on October 28, 2004. (Pet. App.

A.)

REASONS FOR DENYING THE WRIT

I. There Is No Split or Conflict of Authority

Among Circuits on the Question of the

Applicability of Eleventh Amendment

Immunity to “Takings” Cases.

DLX’s insistence that the Sixth Circuit’s ruling is

inconsistent with the “dominant thrust” (Petition, p. 7) of

Fifth Amendment, Eleventh Amendment and Fourteenth

Amendment jurisprudence is belied by the decisions of every

federal Circuit Court of Appeals that has considered the issue.

There is no split or conflict of authority among Circuits on the

question of the Eleventh Amendment’s applicability to Fifth

Amendment takings cases. In fact, all five federal Courts of

Appeal which have previously addressed this issue have

reached the identical conclusion: Citadel Corp. v. Puerto Rico

Highway Authority, 695 F.2d 31, 33 (1st Cir. 1982), cert.

denied, 464 U.S. 815 (1983) (“even if the Constitution is read

to require-compensation in an inverse condemnation case, the

Eleventh Amendment should prevent a federal court from

awarding it”); John G. and Marie Stella Kenedy Memorial

Foundation v. Mauro, 21 F.3d 667 (Sth Cir. 1994), cert.

denied, 513 U.S. 1016 (1994) (affirming the district court’s

dismissal of the plaintiff's Fifth Amendment claim on

Eleventh Amendment grounds); Garrett v. Illinois, 612 F.2d

1038 (7th Cir. 1980) cert. denied, 449 U.S. 821 (1980)

(holding Fifth Amendment claim barred by Eleventh

Amendment despite assertion of self-executing nature of Fifth

Amendment); Broughton Lumber Company v. Columbia River

Gorge Commission, 975 F.2d 616 (9th Cir. 1992), cert.

st

8

denied, 510 U.S. 813 (1993) (holding that because state’s

immunity had not been abrogated or waived, damages claim

brought pursuant to Fifth Amendment is barred by the

Eleventh Amendment); and Robinson v. Georgia Department

of Transportation, 966 F.2d 637 (11th Cir. 1992), cert.

denied, 506 U.S. 1022 (1992) (affirming dismissal of Fifth

Amendment takings suit on Eleventh Amendment grounds).

The Circuits are uniform in their application of Eleventh

Amendment immunity to Takings Clause damage suits

brought against states in federal court. The Circuit Courts’

consistent application of the constitutional precedents of this

Court reveals the strained nature of DLX’s-attempt to invent

a conflict between this Court’s previous decisions and the

Sixth Circuit’s decision. Since there is no confusion or split of

authority among the Circuits, and the Sixth Circuit could find

no contrary authority for applying immunity to such suits,

there is no reason for this Court to grant certiorari-in this

mm —

The only conflict alleged in the Petition is with another

Sixth Circuit decision. However, DLX is wrong when it

suggests that the Sixth Circuit’s opinion is “squarely in

conflict” with Arnett v. Myers, 281 F.3d 552 (6th Cir. 2002).

(Petition, p. 9.) The Sixth Circuit’s decision in Arnett in no

way stands for the proposition that takings claims seeking

compensation are not barred by the Eleventh Amendment.

Despite DLX’s gross misreading of Arnett, it is clear that the

plaintiffs there did not assert a claim for money damages. In

fact, the Sixth Circuit itself characterized DLX’s argument on

this point as “lack[ing] merit.” (Pet. App. B, pp. 20a-31a,

footnote 14.)

The plaintiffs in Arnett—owners of fishing rights and

duck blinds on Reelfoot Lake—sued Tennessee officials for

9

declaratory and injunctive relief, not for damages, after the

officials physically removed their duck blinds from the lake.

Id. at 558-9. Unlike the present case, Arnett was not a takings

case filed for damages, but applied the Ex parte Young, 209

U.S. 123 (1908), exception for a takings claim seeking

equitable relief. DLX’s truncated quotes of the Court’s

opinion, at pages 9-10 of the Petition, donot convey the true

analysis of the holding, which is evident in the Sixth Circuit’s

succeeding discussion: :

Eleventh Amendment sovereign immunity does not bar

the Arnetts’ claims in this case. The Arnetts seek

prospective equitable relief to enjoin Tennessee

_ Officials from committing continuing violations of

federal law, namely violation of their rights under the

Fifth and Fourteenth Amendments. The Ex parte

Young exception applies in this case, and Couer d’

Alene does not dictate a contrary result.

Arnett, 281 F.3d at 568 (emphasis added). Arnett, a decision

on a claim for declaratory and prospective injunctive relief, is

entirely consistent with the principle that the Eleventh

Amendment bars original actions for money damages against

a state in federal district court. See Ex parte Young, supra.

Therefore, it should be clear that the Sixth Circuit did not

depart from its own precedent in this case. Since the Sixth

Circuit in the present case followed both its own established

precedent and that of a unanimous set of Circuits, DLX has

not presented a substantial question worthy of certiorari.’

* Even if the Sixth Circuit’s decision in DLX were in conflict with

the decision of another panel of that Court in Arnett, which it is not,

such a conflict could be resolved through an en banc review within

that Circuit. Such intra-circuit conflicts are ordinarily resolved in

10

II. The Sixth Circuit’s Opinion Regarding

Eleventh Amendment Immunity Does Not

Conflict With Supreme Court Precedent and

Thus the Question Presented Is Not of Such

Importance As to-Warrant This Court’s

Attention.

This Court has not heretofore recognized an exception to

Eleventh Amendment jurisprudence for Fifth Amendment

takings claims, and there is no need to do so now, especially

upon the facts presented in this case. Since at least 1890, with

the decision in Hans v. Louisiana, 134 U.S. 1 (1890), the

susceptibility of states to suit in federal court for monetary

damages has been well settled. Likewise, the limited

exceptions to Eleventh Amendment immunity are also well

settled and include only those instances where the state waives

its immunity and consents to suit in federal court, where

Congress clearly abrogates immunity pursuant to Section 5 of

the Fourteenth Amendment, or where the plaintiff sues a state

official for prospective injunctive relief to end a continuing

violation of federal law or a constitutional deprivation. See

Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996),

Alden v. Maine, 527 U.S. 706 (1999) and Tennessee v. Lane,

541 U.S. 509 (2004). As noted in Section I, supra, all of the

Circuits which have addressed this issue in the context of Fifth

Amendment damage suits against States are consistent with

this Court’s decisions.

the circuit affected, rather than by this Court upon a petition for

writ of certiorari. See Davis v. United States, 417 U.S. 333, 340

(1974) and R. Stern & E. Gressman, Supreme Court Practice, 235-

6 (8th Ed. 2002). However, as pointed out in this Brief in

Opposition, the decision in DLX is not even remotely in conflict

with Arnett.

11

Moreover, in Lake Country Estates, Inc. v. Tahoe

Regional Planning Agency, 440 U.S. 391 (1979), this court

implicitly concluded that Eleventh Amendment immunity bars

federal court takings claims seeking damages against States.

At issue in Lake Country Estates was a takings claim for

damages against a bi-state agency created by a congressionally

approved interstate compact between California and Nevada.

This court rejected the agency’s assertion of Eleventh

Amendment immunity as being:

. . . an expansive reading of the Eleventh Amendment.

By its terms, the protection afforded by that

Amendment is only available to ‘one of the United

States.’ It is true, of course, that some agencies

exercising state power have been permitted to invoke

the Amendment in order to protect the state treasury

from liability that would have had essentially the same

practical consequences as a judgment against the State

itself.

Id. at 400-1. By necessary implication, the Eleventh

Amendment would have protected the planning agency’s

parent states from liability on Lake Country Estates’ claims,

had they been parties to the suit. This court went on to note

that “[b]ecause of our disposition of this question, we need

not address petitioner’s argument that, even assuming TRPA

might be entitled to Eleventh Amendment immunity, such

protection was affirmatively waived by the compacting

States.” (Citation omitted.) /d. at 402, footnote 23. Implicit

in this discussion is the Court’s assumption that the Eleventh

Amendment applies to takings claims.

The Sixth Circuit’s decision below is also consistent with

this Court’s long-standing recognition of the parallel immunity

of the federal government (absent a waiver) from takings

12

claims. See Schillinger v. United States, 155 U.S. 163, 166-9

(1894) (applying immunity to a claim for the alleged improper

use or taking of a patent); Lynch v. United States, 292 U.S.

571 (1934) (where, in dicta, after the Court recognized that

“the Fifth Amendment commands that property be not taken

without making just compensation,” /d. at 579, the Court

stated that “[t}he rule that the United States may not be sued

without its consent is all-embracing,” /d. at 581); Larson v.

Domestic & Foreign Commerce Corp., 337 U.S. 682, 697,

footnote 17 (1949), reh. denied, 338 U.S. 840 (an injunctive

action to compel the delivery of surplus coal under a contract

with the War Assets Administration, where the Court stated

that at the time of one of its previous decisions in 1882

“[t}]here clearly was no remedy available by which [a

landowner] could have obtained compensation [from the

federal government] for the taking of his land”); and Webster

v. Doe, 486 U.S. 592, 613 (1988) (Scalia dissenting) (“[njo

one would suggest that, if Congress had not passed the Tucker

Act, 28 U.S.C. §1491(a)(1), the courts would be able to order

disbursements from the Treasury to pay for property taken

under lawful authority (and subsequently destroyed) without

just compensation,” citing Schillinger, supra).

DLX does not cite any decision which conflicts with any

of the cases cited above. It does cite a number of cases, at

pages 11-14 of the Petition, which it uses to argue the “self-

executing” nature of the Takings Clause. However, it

concludes that discussion by explaining that “[t}he analysis of

whether the clause is or is not self-executing is not dependent

on or even necessarily related to an analysis of the reach of

the Eleventh Amendment.” (Petition, p. 14.) Therefore, DLX

concedes that the arguably self-executing nature of the Fifth

Amendment is not germane to the reach of the Eleventh

Amendment. DLX cannot cite any decision which recognizes

a Takings Clause exception to a State’s sovereign immunity

13

under the Eleventh Amendment, and there is no pressing need

to find one now.’

DLX’s continued reliance on dicta from this Court’s

plurality opinion in First English Evangelical Lutheran

Church v. Los Angeles, 482 U.S. 304 (1987) to argue that the

Fifth Amendment’s “self-executing character” elevates it

above the other Amendments (most notably, the Eleventh), is

misplaced. Even if DLX is correct that the Fifth Amendment

is self-executing, the Court should not grant the Petition. The

Sixth Circuit’s holding that takings damages are not

recoverable against a state in federal court is simply not

inconsistent with such an analysis. Compare Reich v. Collins,

513 U.S. 106 (1994) (due process clause required state to

* That the Sixth Circuit’s decision below does not warrant further

review by this Court seems to find support in an amicus brief

recently filed by one of the nation’s leading property rights

advocates. Michael Berger, in his Brief of Amicus Curiae Franklin

P. Kottschade, San Remo Hotel L.P. v. City and County of San

Francisco, et al., No. 04-340 (2005), at 5, states that: “But the

State is not involved in 42 U.S.C. $1983 cases like this one. States

and their officials cannot be sued under Section 1983 (Will v.

Michigan Dept. of Police, 491 U.S. 58 [1989]), nor (with very

narrow exceptions [Nevada Dept. of Human Resources v. Hibbs,

538 U.S. 721 (2003)]) can they be brought into federal court at all

against their will (U.S. Const., 11th Amendment). The real issue

in cases like this is whether the local entity—like the City and

County of San Francisco at bench—is alleged to have taken private

property for public use and failed to pay for it. If so, the question

whether the city can be compelled to pay lies at the heart of

litigation in either state or federal court.” (Italics in original.) It

would seem, therefore, that not only is this Court’s Eleventh

Amendment jurisprudence well settled, but so too are the

expectations of the property rights bar.

14

provide state court remedy for deprivation of taxes in

violation of federal law).

Also, while First English held that the Fifth Amendment

does provide a remedy for a taking, the Eleventh Amendment

was not even an issue in the case. This is because the

defendant there was a municipality, rather than a state. The

Eleventh Amendment has no applicability to damage suits

brought in federal court against municipalities. Alden, at 527

U.S. 756. Similarly, DLX’s citation to Palazzolo v. Rhode

Island, 533 U.S. 606 (2001), is inapposite. There is no

indication that the Eleventh Amendment was raised as a

defense in Palazzolo. The Eleventh Amendment is an

affirmative defense and is not necessarily jurisdictional.

Therefore, a court can raise it or it can ignore it if it is

waived. See Wisconsin Department of Corrections v. Schacht,

524 U.S. 381 (1998), and Kovacevich v. Kent State

University, 224 F.3d 806 (6th Cir. 2000). Contrary to DLX’s

assertion at page 14 of the Petition, a court’s review of a Fifth

Amendment takings case without discussing the Eleventh

Amendment (as this Court did in Palazzolo) does not equate

to a holding that Fifth Amendment claims override Eleventh

Amendment immunity. See McKesson Corp. v. Div. of

Alcoholic Beverages and Tobacco, 496 U.S. 18, 27-31 (1990)

(Eleventh Amendment does not preclude the Supreme Court’s

exercise of appellate jurisdiction over the decisions of a state’s

highest court.)

As is the case for any takings plaintiff who has an

adequate state court condemnation remedy, DLX cannot truly

claim constitutional harm. This is because DLX was not

deprived of a remedy, and this is arguably all that the Fifth

Amendment guarantees. See Boise Cascade Corporation v.

State of Oregon, 991 P.2d 563, 567 (Or. 1999), review

denied, 18 P.3d 1099 (2000), cert. denied, 532 U.S. 923

a a

15

(2001). Because the Kentucky courts have, since at least 1984

with the decision of Commonwealth of Kentucky, Natural

Resources and Environmental Protection Cabinet v. Stearns

Coal & Lumber Company, 678 S.W.2d 378 (Ky. 1984),

appeal dismissed at 473 U.S. 921 (1985), reh. denied, 473

U.S. 926, expressly recognized a remedy in inverse

condemnation, this is not a case where a takings plaintiff is

without a reasonable and adequate state condemnation

remedy. This Court has stated: “ ‘the issue [in applying the

Eleventh Amendment] is not the general immunity of the

States from private suit . . . but merely the susceptibility of

the States to suit before federal tribunals.’ ” Atascadero State

Hospital v. Scanlon, 473 U.S. 234, 240, footnote 2, internal

citation omitted (1985), reh. denied, 473 U.S. 926.

Therefore, DLX has not presented a question of sufficient

importance to require the granting of certiorari.

While DLX promises in its argument heading an

“important question” among its reasons for granting certiorari

(Petition, page 7), the text of the Petition fails to state one. All

this case is about is whether the Eleventh Amendment bars a

remedy in federal court against a non-consenting state for

retroactive money damages. Upon this question, this Court’s

jurisprudence is clear and well settled. The Petition presents

no constitutional crisis, particularly because what is submitted

for this Court’s review is a fact-bound case characterized by

procedural waivers, of DLX’s own making, giving rise to

other jurisdictional and preclusive defects. (See Argument III,

infra.) Indeed, the substantive portions of DLX’s federal

complaint (R.1, J.A., pp. 5-9) read like a collateral attack of

the unappealed agency findings. This Court need not accept

an invitation to create a new exception to Eleventh

Amendment immunity upon a case such as this one.

16

Finally, this Court has observed that land use regulation

is something which is traditionally handled at the local

government level. Lake Country Estates, supra, 402 (1979).

Given that this particular case is factually and procedurally

flawed, and that most land use disputes arise against local

government entities, the impact of the Sixth Circuit’s decision

below (consistent with decisions of the First, Fifth, Seventh,

Ninth and Eleventh Circuits, and with no Circuit to the

contrary) to apply the Eleventh Amendment to a federal action

against a State for takings damages, is not of sufficient scope

to warrant certiorari.

Ill. There are Several Other Issues Necessitating |

this Court’s Affirmance on the Record, or

Affirmance By a Lower Court in the Event

of Remand. |

Another reason why this Court should deny certiorari is

that there are several other jurisdictional or procedural issues

on which the Commonwealth of Kentucky will prevail.

Therefore, even if the Eleventh Amendment is found not to

bar this action, this Court’s review is not likely to affect the

ultimate outcome of this case.‘

* The Respondent hereby gives notice in its Brief in Opposition that

it will rely upon all issues supported by the record in defending the

result below, should this Court grant certiorari. These alternative

grounds include Williamson County ripeness Prongs I and II, res

judicata and application of the Rooker-Feldman doctrine. While

this brief is not the appropriate place to extensively argue

alternative grounds for affirmance on the merits, the Respondent

intends to preserve all issues supported by the record for

consideration in its brief on the merits, should this Court grant

certiorari. None of the alternative grounds for relief would request

this Court to expand in any way the scope of the judgment already

lV

1. Ripeness Prong I—Under this analysis, this Court has

required that for a takings claim to be ripe for purposes of a

federal court’s Article III jurisdiction, an applicant for a

benefit or privilege before an administrative agency must first

have allowed the agency to arrive at a “final, definitive

position regarding how it will apply the regulations at issue to

the particular land in question.” Williamson County, at 473

U.S. 190-1. A takings claim is not ripe where the agency has

left open the possibility that some development will be

permitted, because “rejection of exceedingly grandiose

development plans does not logically imply that less ambitious

plans_ will receive similarly unfavorable reviews.”

MacDonald, Sommer & Frates v. County of Yolo, et al. , 477

U.S. 340, 353, footnote 9 (1986), reh. denied, 478 U.S.

1035.

The Commonwealth’s argument on this question is based

on DLX’s withdrawal of its only viable hydrologic protection

plan, replacing it with a plan that it had already been told was

unsatisfactory, and demanding issuance or denial of the

application “as is.” (R.5, Hearing Officer’s Report, J.A., pp.

73, 77-80, 89 and 102-3.) The Sixth Circuit chose not to

resolve this issue as being too fact-dependent, but discussed

it as follows:

It seems at first blush that Kentucky has the better of

this argument—DLX’s futility argument is based on a

mischaracterization of Peterson’s testimony, and

obtained in the Commonwealth’s favor. See Northwest Airlines,

Inc. v. County of Kent, Michigan, 510 U.S. 355 (1994) and Wright,

Miller & Cooper, Federal Practice & Procedure: Jurisdiction 2d

§4004.4. .

18

examining that testimony reveals that he would have

_ been receptive to a permit application stipulating less

vertical cover accompanied by additional data. . . .

(Pet. App. B, pp. 27a-28a.) The concurring opinion would

have dismissed DLX’s claim on ripeness grounds, using res

judicata and the Rooker-Feldman doctrine. (Pet. App. B, pp.

35a-37a and 39a-41la.) The Commonwealth will maintain that

the Sixth Circuit avoided a threshold jurisdictional issue

despite an ample record, and without recognizing the

preclusive effect of binding, unappealed agency findings

establishing the lack of a final agency action under Williamson

County Prong I. (R.5, Hearing Officer’s Report, J.A., pp.73,

77-80, 89 and 102-3.)

2. Ripeness Prong II—Under this analysis, this Court has

required that for a federal takings claim to be ripe the

claimant must first have used the state court condemnation

remedy (if there is one) and been denied compensation.

Williamson County, at 473 U.S. 194-5. In the present case,

the Kentucky Supreme Court has already held that DLX could

not invoke the state condemnation court’s subject matter

jurisdiction due to its prior procedural waivers, and thus left

itself in the position of being unable to show that it had in fact

been denied just compensation. Therefore, as a matter of state

law, DLX forfeited its claim. See also Pascoag Reservoir &

Dam, LLC v. Rhode Island, 337 F.3d 87 (1st Cir. 2003), cert.

denied, 540 U.S. 1090 (2003). This was, in relevant part, the

holding of the federal District Court. (Pet. App. C, p. 56a.)

The Sixth Circuit rejected this holding upon its erroneous

assumption that the Commonwealth of Kentucky was equating

the ripeness Prong II requirement with state exhaustion

principles. (Pet. App. B, p. 14a.) Thus, if the Eleventh

Amendment did not bar DLX’s suit in federal district court,

Williamson County ripeness would. The Commonwealth will

i

19

maintain that the federal courts lack subject matter jurisdiction

due to DLX’s ripeness defects.

3. Res judicata—DLX’s federal complaint is nearly

identical to the one it filed in state court. (R.1, J.A., pp. 5-9:

R. 5, J.A., pp. 59-69.) It arises out of the same permit denial

which was the subject of the state takings action. The state’s

highest court held that it was barred by state and federal law

from deciding DLX’s takings claims on subject matter

jurisdiction grounds. (Pet. App. D.) Despite DLX’s attempt

to reserve its federal claim, federal authority holds that

Kentucky’s state court adjudication of DLX’s claim is entitled

to full faith and credit, and is also entitled to preclusive effect

under state and federal law. See 28 U.S.C. §1738 and Migra

v. Warren City School District Board of Education, 465 U.S.

75 (1984). The concurring opinion below would have

dismissed DLX’s takings claim upon the view that the

England-reservation doctrine is applicable only to reserve

federal questions in state court after federal court abstention.

(Pet. App. B, p. 40a.) The Commonwealth will maintain that

DLX’s federal claim is precluded by virtue of the state court

adjudication of the same allegations.°

> The Respondent is aware that the issue of the preclusive effect of

a state court takings adjudication, in the face of an attempted

reservation of the federal claim, is currently pending this Court’s

review in San Remo Hotel, L.P. v. City & County of San Francisco,

et al., 364 F.3d 1088 (9th Cir. 2004), cert. granted, 125 S.Ct. 685

(U.S. Dec. 10, 2004) (No. 04-340). Even if the Court is tentatively

inclined to grant certiorari in the present case on the Eleventh

Amendment issue, the Respondent respectfully requests that it hold

this case until its resolution in San Remo, and then deny certiorari

in the present case if the decision in San Remo supports the

Commonwealth’s argument herein.

20

4. Rooker-Feldman—The District Court also held that it

lacked jurisdiction under the Rooker-Feldman doctrine,

concluding that “the federal claims asserted by DLX are

identical to the claims adjudicated in state court,” and

recognizing that to assert its jurisdiction over the federal

claims would put it in the position of reviewing the state court

decision in violation of 28 U.S.C. §1257(a). (Pet. App. C,

pp. 55a-56a.) See also Anderson v. Charter Township of

Ypsilanti, 266 F.3d 487 (6th Cir. 2001). While the Sixth

Circuit declined to so hold because of its assumption that the

state court adjudication was limited to the state doctrine of

exhaustion of administrative remedies, the concurring opinion

concluded, and the Commonwealth will maintain, that the

state court decision was firmly founded upon the ripeness

principles laid out in Williamson County, and that the federal

District Court did not have jurisdiction over DLX’s federal

claims.

21

CONCLUSION

For the foregoing reasons, the Petition for Writ of

Certiorari should be denied.

Respectfully submitted,

S. BRADFORD SMOCK :

Counsel of Record 4

RANDALL G. McDOWELL

Environmental and Public

Protection Cabinet

Office of Legal Services

gi #2 Hudson Hollow

Frankfort, Kentucky 40601

(502) 564-2356

TODD E. LEATHERMAN

is ELIZABETH UNGAR NATTER :

Kentucky Office of the ;

Attorney General :

1024 Capital Center Drive, Suite 200

Frankfort, Kentucky 40601-8204

(502) 696-5389

Counsel for Respondents

Dated February 25, 2005