Appendix — Ozga Enterprises, Inc. v. Wisconsin Department of Natural Resources

Supreme Court brief1996

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SUPREME COURT OF To ORES Be et hel

October Term

OZGA ENTERPRISES, INC.,

Petitioner,

Vv.

WISCONSIN DEPARTMENT OF

NATURAL RESOURCES,

WISCONSIN DEPARTMENT OF

INDUSTRY, LABOR AND

HUMAN RELATIONS,

SAM ROCKWEILER,

SUSAN JOSHEFFS,

JAMES QUINLAN and

MARQUETTE COUNTY,

Respondents.

SEPARATE APPENDIX TO PETITION FOR A

WRIT OF CERTIORARI TO THE WISCONSIN COURT

OF APPEALS, DISTRICT IV

Robert A. Pasch, Esq.

Counsel of Record

Murphy & Desmond, S.C.

2 E. Mifflin St., #800

P.O. Box 2038

Madison, WI 53701-2038

(608) 257-7181

Of Counsel:

Alan E. Korpady, Esq.

Murphy & Desmond, S.C.

P.O. Box 2038

Madison, WI 53701-2038

January 12, 1996

No.

~ IN THE

SUPREME COURT OF THE UNITED STATES

October Term 1995

OZGA ENTERPRISES, INC.,

Petitioner,

WISCONSIN DEPARTMENT OF

NATURAL RESOURCES,

WISCONSIN DEPARTMENT OF

INDUSTRY, LABOR AND

HUMAN RELATIONS,

SAM ROCKWEILER,

SUSAN JOSHEFFS,

JAMES QUINLAN and

MARQUETTE COUNTY,

Respondents.

SEPARATE APPENDIX TO PETITION FOR A

WRIT OF CERTIORARI TO THE WISCONSIN COURT

OF APPEALS, DISTRICT IV

Robert A. Pasch, Esq.

Counsel of Record

Murphy & Desmond, S.C.

2 E. Mifflin St., #800

P.O. Box 2038

Madison, WI 53701-2038

(608) 257-7181

Of Counsel:

Alan E. Korpady, Esq.

Murphy & Desmond, S.C.

P.O. Box 2038

Madison, WI 53701-2038

January 12, 1996

Office of the Clerk

SUPREME COURT

231 E. STATE CAPITOL

P.O. BOX 1688

MADISON, WISCONSIN 53701-1688

TELEPHONE 608-266-1889

To: October 17, 1995

Hon. Richard Rehm James C. McKay, Jr.

Columbia County Asst. Attorney

Circuit Court General

400 DeWitt Street P.O. Box 7857

Portage, WI 53901- Madison, WI 53707-

0587 7857

Michael S. Anderson Alan E. Korpady

Bradley D . Edward S. Marion

Armstrong Murphy & Desmond,

Axley Brynelson S.C.

P.O. Box: 1767 P.O. Box 2038

Madison, WI 53701- Madison, WI 53701-

1767 2038

You are hereby notified that the Court has

entered the following order:

Nos. 94-0660 Ozga Enterprises, Inc. v. DNR

L.C. #92CV26 and 94-0735

A petition for review pursuant to sec.

808.10, Stats., having been filed on behalf

of plaintiff-respondent-cross appellant-

petitioner, Ozga Enterprises, Inc., and

considered by the court,

IT IS ORDERED that the petition for

review is denied, without costs.

Marilyn L. Graves

Clerk of Supreme Court

COURT OF APPEALS

DECISION

DATE AND RELEASED

August 3, 1995

A party may file

with the Supreme

Court a petition

to review an

adverse decision

by the Court of

Appeals. See

§ 808.10 and RULE

809.62, STATS.

NOTICE

This opinion is

subject to further

editing. If

published, the

official version

will appear in the

bound volume of

the Official

Reports.

Nos. 94-0660

94-0735

IN COURT OF APPEALS

DISTRICT VI

STATE OF WISCONSIN

No. 94-0660

OZGA ENTERPRISES, INC.,

Plaintiff-Respondent-CrossAppellant,

WISCONSIN DEPARTMENT OF NATURAL RESOURCES

AND WISCONSIN DEPARTMENT OF INDUSTRY, LABOR

AND HUMAN RELATIONS,

Defendants-Appellants-Cross

Respondents,

GEORGE MEYER,

SAM ROCKWEILER,

SUSAN G. JOSHEFF

AND JAMES B. QUINLAN,

Defendants.

No. 94-0735

OZGA ENTERPRISES, INC.,

Plaintiff-Appellant,

WISCONSIN DEPARTMENT OF NATURAL RESOURCES,

WISCONSIN DEPARTMENT OF INDUSTRY, LABOR AND

HUMAN RELATIONS,

GEORGE MEYER,

SAM ROCKWEILER,

SUSAN G. JOSHEFF,

JAMES QUINLAN,

MARQUETTE COUNTY,

Defendants-Respondents.

APPEAL and CROSS-APPEAL from orders of

the circuit court for Marquette County:

RICHARD REHM, Judge. Affirmed in part and

reversed in part.

Before Gartzke, P.J., Sundby and

Vergeront, JJ.

VERGERONT, J. This case arises out of

the efforts of Ozga Enterprises, Inc.

(Ozga) tc develop its property in Marquette

County. Ozga appeals from an order

dismissing all but one of its claims

against the Wisconsin Department of Natural

Resources (DNR), two DNR employees, the

Wisconsin Department of Industry, Labor and

Human Relations (DILHR), and two DILHR

employees. Ozga also appeals from an order

granting summary judgment to Marquette

County on all of its claims against

Marquette County. We granted leave to the

two state agencies to appeal from a non-

final order denying their motion to dismiss

Ozga’s procedural due process claim against

them.’

We conclude that Ozga’s amended

complaint does not state a claim against

the state agencies or the state employees

for a taking of property without just

compensation. Ozga’s claims for money

damages for violations of substantive and

‘ Ozga filed a cross-appeal in the

State agencies’ appeal. Because of our

disposition of the issues on appeal, we

need not address Ozga’s cross-appeal.

procedural due process against the state

agencies are barred by the doctrine of

sovereign immunity. Ozga’s amended

complaint does not state a claim against

the state employees for either a

substantive or procedural due process

violation, or under 42 U.S.C. § 1983.

Finally, the initial complaint was properly

dismissed against Marquette County because

that complaint failed to state any claim

against Marquette County.

BACKGROUND

Ozga’s first complaint named Marquette

County and the two state agencies as

defendants. The factual allegations were

as follows.

Ozga’s property is adjacent to a dam

that created Mason Lake in Marquette

County. Ozga obtained authority from DNR

pursuant to § 31.12, STATS.,’ to build a

penstock and powerhouse on its property.

Ozga then received a variance from the

County’s shoreland zoning ordinance to

allow construction of a house and

condominium with a reduced setback. Ozga

began construction of the condominium on

September 1, 1986, and the County ordered

Ozga to cease construction the next day.

Ozga then filed applications with

DILHR for the issuance of a private sewage

System permit and to develop in a

floodplain. DNR refused to sign the

application to develop in a floodplain

because it disagreed with Ozga on the

Original flood elevation and flood zone

designation. DNR informed Ozga of this on

* Chapter 31, STATS., gives the DNR the

authority to regulate dams and bridges.

Section 31.05, STATS., requires permits

from the DNR for the construction of dams.

Section 31.07, STATS., requires permits

from the DNR for the operation and

maintenance of existing dams.

November 13, 1986. In December 1986, the

County refused Ozga’s application for a

zoning permit, stating that the entire

property was in a floodplain. Also in

December 1986, DNR filed a suit against

Ozga alleging a violation of § 31.12,

STATS., with respect to the construction of

the penstock and powerhouse. That suit

resulted in a stipulation to an injunction

prohibiting further construction, but

permitting Ozga to provide for security and

maintenance of existing improvements.

The complaint also alleged that DNR

filed a second lawsuit against Ozga on

March 11, 1988, for a violation of WIS.

ADM. CODE ch. NR 116 for building within a

floodplain.’ On January 31, 1991, this

* WIS. ADM. CODE ch. NR 116 deals with

Wisconsin’s floodplain management program

and requires municipalities to adopt,

administer and enforce floodplain zoning

ordinances that meet certain criteria. If

a county fails to adopt aé floodplain

ordinance, DNR must adopt one for the

court reversed the trial court order in

this second enforcement action and

reinstated the jury verdict. The jury had

found that DNR’s determination of a flood

elevation was not reasonable.‘

The complaint alleged that in 1989,

before the trial, Ozga filed additional

applications with DILHR for permission to

develop in a floodplain and for a private

sewage system. These were denied or

refused further processing. Because of

DILHR’s denials, the County refused to

issue a sanitary permit or a building

permit, preventing completion of the

county. Section 87.30(1), STATS. WIS.

ADM. CODE § NR 116.22(4)(b) and (c)

requires DNR to aid municipalities in

floodplain enforcement, specifically

permitting it to seek an injunction to stop

construction in a floodplain until an

adequate floodplain ordinance is adopted

and approved and to stop construction where

it violates an approved ordinance or the

provisions of WIS. ADM. CODE ch. NR 116.

* By stipulation of the parties, only

the floodplain elevation issue was tried.

reenter

project and depriving Ozga of all economic

use of its property and causing other

damages. The County adopted a floodplain

ordinance on September 11, 1991, which

renders Ozga’s property practically and

substantially useless for all reasonable

purposes and precludes all development of

the property.

Ozga asserted claims against all

defendants for inverse condemnation,

conspiracy and unconstitutional taking,

conspiracy and deprivation of property

without due _ process, conspiracy and

violation of 42 U.S.C. °§ 1983, -and a

violation of § 134.01, STATS. The

complaint requested monetary damages.

All defendants moved for summary

judgment. On January 19, 1993, the trial

court orally granted the County’s motion

entirely.* It also granted the state

agencies’ motion on all claims but the

procedural due process claim.

Ozga amended its complaint on November

i2, 1993. It added four individual

defendants: George Meyer, the

administrator of DNR’s Division of

Enforcement and alleged to be involved in

the decision to bring enforcement actions

against Ozga; Sam Rockweiler, the

Supervisor of DILHR’s plan review unit and

the person who denied Ozga’s April 13, 1989

application for a private sewer system

permit on the ground the construction was

in a floodway; Susan Josheff, an

environmental engineer employed by DNR who

determined that the construction was in a

floodway and who refused to Sign the

* The trial court’s written order

granting the County’s motion for summary

judgment is, for some reason, dated

January 1, 1993. The order was not entered

until January 10, 1994. '

September 11, 1986 and April 17, 1989

applications for permission to build in a

floodway; and James B. Quinlan, a DILHR

plumbing inspector and plan reviewer.

The amended complaint contained

substantially the same factual allegations

as the initial complaint. New factual

allegations of significance will be

discussed below. The amended complaint

requested monetary damages and asserted

claims for deprivation of property without

due process, taking of property without

just compensation and without due process

in violation of the state and federal

constitutions, and a violation of 42 U.S.C.

§ 1983.

All of the state defendants moved for

dismissal of the amended complaint on the

grounds of sovereign immunity and that the

amended complaint failed to state a claim

upon which relief can be granted. The

court granted the motion on all claims

against the state agencies, except for the

claim regarding procedural due process. As

to those claims against the state agencies

other than the procedural due process

Claim, the court decided that the claims

were in reality claims against the state

and were barred by the doctrine of

sovereign immunity and because the state

cannot be sued under 42 U.S.C. § 1983. The

court concluded that the claims against

Meyer were against him in his official

Capacity and dismissed the claims against

him. The other individuals had qualified

immunity, the court held, and were also

dismissed.

STATE AGENCIES

Whether a complaint states a claim is

a question of law that we determine without

deference to the trial court’s decision.

See Williams v. Security Sav. & Loan Ass‘n,

120 Wis.2d 480, 482, 355 N.W.2d 370, 372

(Ct. App. 1984).°

We first consider the state agencies’

argument that sovereign immunity entitles

them to a dismissal of all claims.’ The

* Ozga apparently believes that we are

to review the grant of summary judgment in

favor of the state defendants. This is

incorrect. Ozga did not appeal from the

order granting summary judgment in favor of

the state agencies on all claims in the

initial complaint but the procedural due

process claim. Rather, Ozga appealed from

the order granting the motion of the state

agencies and state employees to dismiss the

amended complaint on all but the procedural

due process claim. In deciding that

motion, the trial court did not consider

materials outside the pleadings.

Therefore, as to the state defendants, we

consider only the allegations of the

amended complaint and not the materials

submitted in connection with the state

agencies’ motion for summary judgment on

the initial complaint.

’ In its reply brief, Ozga argues that

the state agencies waived their right to

raise sovereign immunity as a defense

because sovereign immunity goes to personal

jurisdiction and the state agencies did not

cite § 802.06(2)(a)3, STATS., in their

motion to dismiss. There is no merit to

this contention. The motion stated that

the amended complaint should be dismissed

because it wasS barred by sovereign

0 Ee

State of Wisconsin has sovereign immunity

and may not be sued for monetary relief

without its consent. Lister v. Board of

Regents, 72 Wis.2d 282, 291, 240 N.wW.2d

610, 617 (1976). This immunity from suit

extends to the agencies of the state. Id.

DNR and DILHR are therefore immune from

Suit unless the state has consented to suit

against them on the claims alleged in the

amended complaint. The prohibition in the

Wisconsin Constitution against taking

property for a public purpose without just

compensation® is a waiver of sovereign

immunity, and both parties argued this

issue before the trial court.

* WIS. CONST., art. I, § 13, provides:

The property of no person

Shall be taken for public use

without just compensation

therefor.

The Fourteenth Amendment to the United

States Constitution also entitles a

property owner to just compensation if the

State or one of its Subdivisions takes the

owner’s land for a public purpose without

immunity for claims alleging a violation of

that constitutional provision and seeking

just compensation. Zinn v. State, 112

Wis.2d 417, 436, 334 N.W.2d 67, 76 (1983).

Ozga cites no authority for a waiver of

sovereign immunity on its other claims

against the stage agencies except the

dissent in Grall v. Bugher, 181 Wis.2d 163,

511 N.W.2d 336 (Ct. App. 1993), rev’d on

other grounds, __ Wis.2d ___, 532 N.W.2d

122 (1995). However, the majority in Grall

clearly affirmed the principle of sovereign

immunity and the requirement that there be

an express waiver, even if the claims

allege state and federal constitutional

violations and seek relief under 42 U.S.C.

§ 1983.

We conclude there is no express waiver

of sovereign immunity for any claim

just compensation. Gamble v. Eau Claire

County, 5 F.3d 285, 286 (7th Cir. 1993),

cert denied, 114 S. Ct. 1096 (1994).

asserted in the amended complaint except

the claim of a taking without just

compensation. The trial court therefore

properly dismissed the substantive due

process claim. It should have dismissed

the procedural due process claim against

the state agencies for the same reason.’

The trial court should not have dismissed

the claim of an unconstitutional taking

against the state agencies on the ground of

sovereign immunity. However, we conclude

that claim was properly dismissed because

the amended complaint does not state a

Claim for a taking without just

compensation.

The amended complaint alleges that

Ozga was denied permits necessary to

* As Ozga concedes, DNR and DILHR are

not “persons” amenable to suit under 42

U.S.C. § 1983. See will v. Michigan Dep’‘t

of State Police, 491 U.S. 598, 70 (1989)

(state agencies are not “persons” within

the meaning of 42 U.S.C. § 1983).

construct a condominium on its property and

that the basis for the denials was a

determination by DNR of the flood elevation

that had no reasonable basis.” The

amended complaint does not state the

‘outcome of the second DNR enforcement

action against Ozga after the determination

** Specifically, Ozga alleges in the

amended complaint that its September 11,

1986 application for permission to develop

in a floodplain identified the regional

flood elevation as 796.0 feet above mean

sea level; that at the time DNR and Josheff

refused to sign it, the only available

information was that the regional flood

elevation immediately downstream from the

property was 796.0 feet above mean sea

level; that Josheff and DNR did not

complete their calculations of the regional

flood elevation at Ozga’s property until

sometime in October 1987, and did so

without a public hearing; that the average

lake level in Mason Lake since 1965 has

been set at 798.4 feet above mean sea

level; that the Park Service Commission and

later the DNR have maintained the level of

Lake Mason approximately one foot higher

than the minimum level in order to avoid

irritating riparian owners of property on

Mason Lake, thereby raising the regional

flood elevation.

of the flood elevation." Liberally

construing the amended complaint in Ozga’s

favor, we read it to allege that DNR’s

denial of Ozga’s request to build in a

floodplain was determined to be in error,

as was the denial of the other applications

insofar as they were based On DNR’‘s

erroneous determination of the flood

elevation. Ozga argues that DNR’s and

DILHR’s denials of its applications on an

erroneous basis constitute an

unconstitutional taking because they

deprived it of all economically viable use

of its property.

In the absence of physical occupancy

Or possession, private property can be

‘ The amended complaint does allege

that on February 4, 1992, DILHR returned

Ozga’s application and 1989 request to

build in a floodplain, indicating that any

renewed submittal would be treated as a new

application. But, although the amended

complaint was filed on November a4, 1993,

it does not allege what happened to Ozga’‘s

applications after February 4, 1992.

taken for public use only by state, county

or municipal action that imposes a legally

enforceable restriction on the use of the

property. Reel Enters. v. City of La

Crosse, 146 Wis.2d 662, 674, 431 N.W.2d

743, 749 (Ct. App. 1988). A Legally

imposed restriction that the adopting

agency later repeals, rescinds or amends

may be a compensable temporary taking. Id.

at 677, 431 N.W.2d at 749. See also Zinn,

112 Wis.2d at 429, 334 N.W.2d at 73. But

if a court reverses the agency’s action

that created the restriction, a legally

imposed restriction does not exist and no

taking has occurred. Reel Enters., 146

Wis.2d at 676-77, 431 N.W.2d at 749-50.

There is no allegation in_ the

complaint that DNR or DILHR repealed,

rescinded or amended its denials of Ozga’s

applications. The only reasonable

inference we can draw from the allegations

concerning the second enforcement action is

that DNR’s and DILHR’s actions in denying

Ozga’s applications were invalid because

they were based on an erroneous

determination of flood elevation as found

by the jury in that action. Those actions,

therefore, were not legally imposed

restrictions and the amended complaint does

not state a claim for an unconstitutional

taking.”

* Ozga also argues in its brief that

inverse condemnation has occurred. The

initial complaint did assert a Claim for

inverse condemnation under § 32.10, STATS.,

as well as a claim for an unconstitutional

taking. However, the amended complaint

makes no reference to either § 32.10 or to

inverse condemnation. Section 32.10

permits the owner of land that has been

occupied by a person possessing the power

of condemnation to institute condemnation

proceedings by presenting a verified

petition in circuit court asking that

condemnation proceedings be commenced.

Even if we were to read the amended

complaint as attempting to assert a claim

under § 32.10 for inverse condemnation, the

amended complaint would not state a claim

under § 32.10 for the same reason it does

not state a claim for an unconstitutional

taking. The requirement of a legally

STATE EMPLOYEES

The amended complaint does not state

a claim for an unconstitutional taking

against the state employees. It is the

state (or county or municipality) and its

agencies that take property for public

purposes, not the employees of the

agencies. Moreover, since the amended

complaint does not state a claim for an

unconstitutional taking against the state

agencies, it follows that the amended

complaint does not state a claim against

the employees who acted for those agencies.

We now consider Ozga’s argument that

the individual state employees deprived it

of property without procedural due

process.” We continue to limit our

enforceable restriction applies to both

claims. Reel Enters., 146 Wis.2d at 674-

75, 431 N.W.2d at 749.

* We read the amended complaint to

raise due process claims under both the

state and federal constitutions. The state

analysis to the allegations in the amended

complaint. In addition to the allegations

concerning the denials and refusals to

approve Ozga’s applications, the amended

complaint alleges that no defendant

provided Ozga with written notice of

disapproval of its applications as required

by WIS. ADM. CODE § ILHR 83.06(4),** and

that Ozga exhausted all administrative

constitution’s guarantee of due process is

the functional equivalent of the federal

constitutional guarantee. State v.

McManus, 152 Wis.2d 113, 130, 447 N.W.2d

654, 660 (1989).

‘‘ WIS. ADM. CODE § ILHR 83.06(4)(c)

provides:

Written notice The county

Shall issue written notice to

each applicant whose Sanitary

permit application is

disapproved. Each notice shall

State the specific reasons for

disapproval and amendments to

the application, if any, which

render the application

approvable. Each notice shall

also give notice of the

applicant’s right to appeal and

the prccedures for conducting an

appeal under ch. 68, Stats.

remedies of which it had notice. The

amended complaint also alleges’ that

defendants failed to respond to Ozga’s

notices of claim, which it filed on June

29, 1989 and August 31, 1989. We conclude

the amended complaint fails to state a

claim against the state employees for a

violation of Ozga’s right to procedural due

process.

The fundamental requirement of

procedural due process is the opportunity

to be heard at a meaningful time and in a

meaningful manner. In re Christopher D.,

191 Wis.2d 681, 702, 530 N.W.2d 34, 42 (Ct.

App. 1995). Section 227.42(1)(a), STATS.,

provides that any person filing a written

request with an agency for a hearing has

the right to a hearing if a “substantial

interest of the person is injured in fact

or threatened with injury by agency action

or inaction.” The plain language of this

provision indicates that Ozga could have

requested a hearing on the denials or

refusals of its applications by the state

agencies. To the extent Ozga is

complaining of delay, it could have

requested a hearing based on agency

inaction.

The amended complaint does not allege

that Ozga requested a hearing before either

DILHR or DNR and was not given a hearing.

It does not allege that the procedures for

a hearing under ch. 227, STATS., were

either unavailable to it or inadequate.

The allegation that Ozga was not advised of

its right to a hearing as required by WIS.

ADM. CODE § ILHR 83.06(4) is not relevant

to a procedural due process claim against

the state employees because that provision

applies, by its terms, to counties. The

allegation that Ozga exhausted all

administrative remedies of which it had

notice is not a sufficient factual

allegation to state a claim for a violation

of procedural due process against the state

employees in view of the availability of

oh. 227. Ozga has not alleged in the

amended complaint, or pointed out in its

brief, any requirement that the individual

state employees inform it of its right to

request a hearing or of the availability of

ch. 227. Finally, the allegation that the

state employees failed to respond to the

notices of claim Ozga filed does not state

a claim against them. Section 893.82,

STATS., does not require any~ state

employee, much less the four state

employees named as defendants in this

action, to respond to a notice of claim.

Turning to the claim of substantive

due process, we conclude the amended

complaint fails to state such a claim

against the state employees. Considering

iia

only the factual allegations and not the

legal conclusions, the essence of the

pertinent allegations is that the state

employees did not have a reasonable basis

for the calculation of the flood elevation

on which they based the denials of Ozga’s

applications.

The cases Ozga cites do not Support

its argument that these allegations are

sufficient to state a claim for a violation

of substantive due process. These

allegations do not, even liberally

construed, constitute the type of

government action where power is used for

purposes of oppression, where there is an

abuse of power that shocks the conscience

Or where government action is not

sufficiently keyed to a legitimate state

interest. See Polenz v. Parrott, 883 F.2d

951, 558 (7th Cir. 1989). Nor do they show

that the state employees acted without

authority under state law, which the court

in Brady v. Town of Colchester, 863 F.2d

205, 215 (2nd Cir. 1988), suggested could

constitute a violation of substantive due

process in a zoning context.” Ozga had a

procedural vehicle for challenging the

inaction or erroneous action of the state

employees involved in denying its

applications but, based on the allegations

in the amended complaint, Ozga did not use

those procedures. The disputed issue was

resolved favorably to Ozga in the second

DNR enforcement action. We conclude the

amended complaint does not state a claim

for a violation of substantive due process.

** We note that the United States Court

of Appeals for the Seventh Circuit in New

Burnham Prairie Homes, Inc. v.-Village of

Burnham, 910 F.2d 1474, 1481 (7th Cir.

1990), disagreed with Brady v. Town of

Colchester, 863 F.2d 205, 215 (2nd Cir.

1988), and held that, in addition to

alleging that the decision was arbitrary

and capricious, the plaintiff must show

either a separate constitutional violation

or the inadequacy of state law remedies.

Because the amended complaint does not

state a claim against the state employees

for any federal constitutional violation,

it does not state a claim against them for

a violation of 42 U.S.c. § 1983. See Riedy

v. Sperry, 83 Wis.2d 158, 163, 265 N.W.2d

475, 478 (1978) (a cognizable claim under

42 U.S.C. § 1983 requires a showing that

the plaintiff has been deprived of a right

secured by the federal constitution by a

person acting under color of state law).

We therefore do not reach the issue of

whether the state employees had qualified

immunity under § 1983, the issue which the

trial court found dispositive.

MARQUETTE COUNTY

Our review of a grant of summary

judgment is de novo and we apply the same

Standard as the trial court. Brownelli v.

McCaughtry, 182 Wis.2d 367, 372, 514 N.W.2d

48, 49 (Ct. App. 1994). We first examine

the complaint to determine whether it

states a claim. Id. If it does not, the

defendant is entitled to a dismissal of the

action and we need not examine the answer

or any materials beyond the complaint.

The factual allegations of the initial

complaint’ with respect to the County are

that because DILHR denied Ozga’s

application based on DNR‘S~ erroneous

determination of flood elevation, the

County refused to issue a sanitary permit

or building permit and did so without

notifying Ozga of its right to a hearing

under WIS. ADM. CODE § ILHR 83.06(4). The

County is also alleged to have adopted a

floodplain ordinance that will prevent

development of Ozga’s property.

‘** We examine only the _ initial

complaint because Ozga appeals from the

trial court’s order entered January 10,

1994, granting summary judgment to

Marquette County on all of Ozga’s claims in

its first complaint against Marquette

County.

We conclude the complaint does not

state a claim against the County for an

unconstitutional taking. The County may

not issue a building permit unless the

property owner has a Sanitary permit.

Section 66.036(1), STATS. A county may not

issue a sanitary permit for a holding tank

without the approval of DILHR. WIS. ADM.

CODE § ILHR 83.08(1)(b). We have already

held that the actions of the State agencies

alleged in the complaint did not constitute

an unconstitutional taking. It follows

that no taking claim is stated against the

County for failing to issue permits that it

was prohibited from issuing based on the

State agencies’ actions.

The allegations concerning the

floodplain zoning ordinance adopted by the

County is not sufficient to state a claim

for an unconstitutional taking. According

to the initial complaint, the County had

not yet adopted an ordinance at the time

the County refused to issue the permits.

If there is other action or inaction of the

County pursuant to the ordinance it adopted

on September 11, 1991, that constitutes an

unconstitutional taking, the initial

complaint does not say what that is.

Because the County, in view of the

state agencies’ actions, did not have

authority to issue the permits, the

County’s failure to do so does not state a

claim for a denial of substantive due

process by the County. Nor does the

County’s failure to give written notice of

disapproval of Ozga’s application for a

sanitary permit constitute a denial of

procedural due process.- The action or

inaction that Ozga is contesting is the

refusal of the state agencies to approve

its applications because of the dispute

over the flood elevation. The County

cannot grant the sanitary permit without

the state agencies’ approval. An appeal

under ch. 68, STATS., the Municipal

Administrative Procedure Act, of the

County’s failure to issue the permit does

not provide a meaningful Opportunity for

Ozga to contest the action that is

allegedly depriving it of the use of its

property--the refusal of the state agencies

to approve Ozga’‘s applications. The

failure of the County to give Ozga notice

of that procedure is therefore not a

violation of its right to procedural due

process.

AS we explained, in the absence of any

viable claims against the County for a

violation of federal constitutional rights,

the initial complaint does not state a

claim against the County under 42 U.S.C. §

1983.

By the Court.--Orders affirmed in part

and reversed in part.

Not recommended for publication in the

official reports.

Nos. 94-0660(D)

94-0735(D)

SUNDBY, J. (dissenting). Ozga

presents seven issues. I limit my dissent

solely to the following issue:

In an action which involves

a taking of private property for

public use without just

compensation, are the state

agencies protected under the

doctrine of sovereign immunity

when the state impliedly

consents to suit under the terms

of the state constitution?

The just compensation Clause, article

I, § 13 of the Wisconsin Constitution, is

a partial surrender of the State’s

sovereign immunity. Nonetheless, the state

argues that even if the amended complaint

contains the essential elements of a claim

for inverse condemnation, "“[w]je_ state

unequivocally that the trial court’s order

dismissing all state defendants because

they are immune from this suit is correct

and must be affirmed.” Zinn v. State, 112

Wis.2d 417, 334 N.W.2d 67 (1983), is

perhaps the most cited decision

interpreting the just compensation clause.

In that case, the court said that:

Art. I, sec. 13 of the Wisconsin

Constitution is self-executing

and needs no express statutory

provision for its enforcement.

This is because just

compensation following a taking

"is a constitutional necessity

rather than a legislative dole."

The “waiver” to the doctrine of

sovereign immunity is found in

the constitution itself and thus

no legislative direction

pursuant to Art. IV, sec. 27 is

necessary.

Id. at 436, 334 N.W.2d at 76 (citation

omitted).

The majority recognizes that the state

and its agencies may not erect the defense

of sovereign immunity to avoid liability

for a taking. However, the majority

concludes that Ozga’s “taking” claim was

properly dismissed because "the amended

complaint makes no reference to either §

32.10 or to inverse condemnation." Maj.

Op. at 12 n.12.

As in Zinn, this review comes before

this court on a motion to dismiss.

Thus the sole issue before

the court is whether the

plaintiff's complaint states a

claim upon which relief can be

granted. In determining whether

the complaint was properly

dismissed by the court of

appeals, "we apply the familiar

test that the pleadings are to

be liberally construed to do

Substantial justice between the

parties, and the complaint

should be dismissed as legally

insufficient only if it appears

to a certainty that no relief

can be granted under any set of

facts that the plaintiff can

prove in support of her

allegations."

Zinn, 112 Wis.2d at 423, 334 N.W.2d at 70

(quoting Strid v. Converse, 111 Wis.2d 418,

422, 331 N.W.2d 350, 353 (1983)).

Ozga’s complaint details the denials

of permits by defendants which it claims

have deprived it of the Opportunity to

develop its property. Ozga alleges that:

ieee iil

58. Defendants’ actions

have deprived [Ozga] Enterprises

of all economically viable use

of the property.

59. Defendants’ actions

have prevented Enterprises from

realizing its investment

expectation with respect to the

{[p]roperty.

60. Enterprises has not

been compensated for the loss of

viable economic use of the

property nor for the diminution

in valve.

Clearly, the complaint states a claim

for the taking of its property without just

compensation.

For these reasons, I respectfully

dissent.

STATE OF WISCONSIN MARQUETTE COUNTY

CIRCUIT COURT

OZGA ENTERPRISES, INC.,

a foreign corporation ORAL DECISION

Plaintiff,

Vs Case No. 92CV26

WISCONSIN DEPARTMENT OF

NATURAL RESOURCES,

WISCONSIN DEPARTMENT OF INDUSTRY,

LABOR AND HUMAN RELATIONS,

and MARQUETTE COUNTY,

Defendants.

The following telephonic proceedings were

had upon the hearing of the above-entitled

matter held at the Courthouse in the City

of Portage, Columbia County, Wisconsin, ;

before

HONORABLE RICHARD L. REHM,

Acting Circuit Judge of Marquette County,

Wisconsin, on the 19th day of January,

1993, commencing at about 2:32 in the

afternoon.

APPEARANCES:

ALAN KORPADY, Attorney at Law,

Madison, Wisconsin, representing the

Plaintiff.

GORDON BALDWIN, Attorney at Law,

Madison, Wisconsin, representing the

Plaintiff.

JOANNE KLOPPENBURG, Assistant Attorney

General, representing the State of

Wisconsin DNR and DILHR.

MARK HAZELBAKER, Attorney at Law,

Madison, Wisconsin, representing

Marquette County.

Ke&k kkk Kk

(Whereupon the following telephonic

proceedings were duly had: )

THE COURT: This was set as a status

conference. As you know, I have been

working on the decision with respect to the

motions for summary judgment. I have

reached a decision on all of the five

claims and what I am going to do is I’m

going to advise you of the decision,

dispositionally, and not go into the basis

of those decisions by telephone. I will

consider that the decision is not rendered

until such time as the written decision is

issued, which should be quite soon. But

the reason I’m doing this is I want to move

the matter forward so that we can work

toward resolution. Is that satisfactory to

you, Mr. Korpady?

MR. KORPADY: Yes, your Honor. Thank

you.

THE COURT: Mr. Hazelbaker:

MR. HAZELBAKER: Yes, it is, your

Honor.

MS. KLOPPENBURG: Yes, your Honor.

THE COURT: All right. With respect

to Claim 1, which is the inverse

condemnation claim as to Marquette County,

the Court is granting the summary judgment.

I also -- I have to apologize. We have

some background noise associated with

construction that is being done at the

courthouse. If any of you in the course of

the conversation have difficulty hearing,

please advise me promptly and we'll see if

we can adjust that.

MR. KORPADY: Your Honor, this is Al

Korpady. I thought that was Mr. Hazelbaker

celebrating.

MR. HAZELBAKER: Yeah.

THE COURT: All right. As to Claim 1

and DNR and the Department of Industry,

Labor and Human Relations, the Court is

going to grant summary judgment on that

portion.

Claim 2 is the unconstitutional taking

cause as to Marquette County. The Court is

going to grant the summary judgment motion.

As to DNR and Department of Industry, Labor

and Human Relations, I will also grant that

motion.

Oa . Ciein.. 3, the -- what =I’‘ll

conceptualize as the procedural due process

cause, the Court is going to grant the

summary judgment motion as to Marquette

County. As to the Department of Natural

Resources and the Department of Industry,

Labor and Human Relations, the summary

judgment will be denied.

As to the fourth claim, which is the

1983 action, the Court will grant summary

judgment as it relates to DNR and the

Department of Industry, Labor and Human

Relations. And the Court is also going to

grant summary judgment to Marquette County.

On Claim 5, which is the statutory

cause, the Court is going to grant summary

judgment to all defendants.

Now, with re -- that basically will

take Marquette County out of the action

entirely, with the exception of the

remaining issue of actual costs for which

they have moved. The Court has not made a

determination as to exactly how I’m going

to handle that. If we get to the issue of

~~ I mean, if I determine that I’m going to

award costs, Mr. Hazelbaker --

MR. HAZELBAKER: Your Honor --

THE COURT: Yes? Sorry. I have this

noise in the background.

MR. HAZELBAKER: I understand, your

Honor. I used to work in a courthouse and

I’ve been through remodeling.

THE COURT: Yes. Obviously we have a

question of -- of the costs and expenses

that might be involved here. Do you wish

to defer submitting information in that

regard or scheduling a hearing in that

regard until I’ve actually made a decision

and determination of -- of whether or not

they’re going to be awarded?

MR. HAZELBAKER: I would prefer to do

all -- to handle all of it at once since I

suspect much of the evidence will be the

same, or at least some of it will. I’d

rather do it that way than do it piecemeal.

THE COURT: All right.

MR. HAZELBAKER: In other words, what

I’m saying is I wouldn’t envision

Submitting a bill of costs for the

Statutory items of cost under Chapter 814

in general until such time as we know what

the Court’s ruling will be on -- the ruling

will be on the merits of our other motion.

THE COURT: Then we’ll defer that, and

the same will apply with respect to the

Department of Industry, Labor and Human

Relations and DNR because even though a

claim survives here, there may be some

question on some of the other causes of

action.

MR. HAZELBAKER: Understandably.

THE COURT: Now, I’d like to proceed

to scheduling here, if that’s satisfactory

to Mr. Korpady and Ms. Kloppenburg.

MS. KLOPPENBURG: Yes, your Honor. It

would be helpful to receive the decision

first, I think.

MR. KORPADY: I have to concur, your

Honor. We have to know, before we can

schedule, whether we’re going to pursue an

appeal at this point.

THE COURT: All right. So you -- you

would prefer to do that rather than doing

anything scheduling-wise on the due process

claim?

MS. KLOPPENBURG: Yes, our Honor. I

would like to see the decision first before

determining what should be done next.

THE COURT: All right. Well, I’m more

concerned about Mr. Korpady’s position in

that regard, and what is your position?

MR. KORPADY: Your Honor, I have to

agree. I’‘d prefer to see the decision

before we decide where we’re going and when

we’re going to get there.

THE COURT: All right. Then we’ll

continue to defer scheduling.

MR. KORPADY: Your Honor, do I

understand that you’re continuing your

protective order as to the one issue left?

THE COURT: Well, I want to give some

thought to that. Now, assuming that we’re

proceeding only on the procedural due

process claim, what discovery near term

here do you anticipate, Mr. Korpady, if we

were to proceed?

MR. KORPADY: Your Honor, I think

we’re going to have to see what the

(PORTIONS OMITTED)

STATE OF WISCONSIN MARQUETTE COUNTY

CIRCUIT COURT

OZGA ENTERPRISES, INC.,

a foreign corporation TELEPHONIC

HEARING-COURT’S

Plaintiff, ORAL DECISION

AND MOTIONS

Vv.

Case No. 92CV26

WISCONSIN DEPARTMENT OF

NATURAL RESOURCES,

WISCONSIN DEPARTMENT OF INDUSTRY,

LABOR AND HUMAN RELATIONS,

and MARQUETTE COUNTY,

Defendants.

The following proceedings were had

upon the hearing of the above-entitled

matter held at the Courthouse in the City

of Portage, Columbia County, Wisconsin,

before the

HONORABLE RICHARD L. REHM,

Circuit Judge of Columbia County,

Wisconsin, on the 7th day of January, 1994,

commencing about 2:57 in the afternoon.

APPEARANCES:

ALAN E. KORPADY and EDWARD Ss. MARION,

Attorneys at Law, Madison, Wisconsin,

representing the Plaintiff.

JAMES C. MCKAY, Assistant Attorney General,

Madison, Wisconsin, representing the

Defendant State Agencies.

(Whereupon the following telephonic

proceedings were duly had: )

THE COURT: We are appearing in Ozga

Enterprises, Inc. vs. Wisconsin Department

of Natural Resources, Marquette County Case

Number 92CV26. There are several matters

to attend to here today and I’m going to

give some decisions first and then we’ll

address remaining issues.

First of all, there remains a -- the

motions of the state agencies dated

February 24, 1993 which were subsequently

briefed and require decision. To some

extent, the motions are affected by the

amendment of the pleadings. It’s also

noted that some of the arguments on this or

these motions relate to arguments on the

motions to dismiss the amended complaint.

Therefore, I first want to address these

remaining motions.

The only cause of action which

remained in the original complaint was the

cause against the state agencies relative

to procedural due process, and the state

argued for dismissal of that remaining

cause of action on a couple of bases. One,

they argued that the Court lacks subject

matter jurisdiction on the plaintiff’s

federal due. process claims based upon the

eleventh amendment to the U.S.

Constitution, allegedly barring suits

against the state unless’ statutorily

authorized and pursuant to the decision in

Will vs. Michigan Department of State

Police at 491 U.S. 58 that the ethtede not

a “person,” in quotes, within the meaning

of 42 U.S. Code Section 1983. In other

words, a 1983 action against the state is

not possible because it is not a person.

With respect to this latter principle, the

Court agrees and it was on that basis that

the Court originally dismissed the

plaintiff’s 1983 cause of action against

the state agencies.

AS argued by the plaintiff, the

State’s immunity from suit under the

eleventh amendment to the U.S. Constitution

is not applicable in this case. The

eleventh amendment prohibition against

Suits against the state is inapplicable in

state courts. The state agencies argue

that the only remedy available to the

defendant are state law remedies under

Chapter 227 of the Wisconsin Statutes or

under inverse condemnation. However, the,

in quotes, "self-executive," end quotes,

nature of the constitutional rights -- of

certain constitutional rights has. been

aaa ace aaa

acknowledged in cases such as Zinn v.

State, 112 Wis. 2d 417, cited by the

plaintiff. And under that reasoning or the

reasoning of that case, constitutional

claims are not automatically barred by

sovereign immunity if state law claims are

inadequate.

Plaintiff’s remaining cause of action

is based upon the state agencies’ alleged

deprivation of his property based upon

decisions not having a reasonable factual

basis. The focus of the plaintiff's

argument is upon the procedures followed by

the agencies because of the particular

manner in which the plaintiff’s

applications were processed and_ the

consequences of agency actions or inaction.

It appears that the plaintiff has no

adequate remedy at law short of suit based

upon the constitutional due process issue.

Therefore, consistent with the ruling in

_™ ee

Zinn, direct suit against the state appears

appropriate here under the very unusual

circumstances of this case.

The state agencies also have argued

that the Court lacks subject matter

jurisdiction with respect to the

plaintiff’s state law procedural due

process claim because the exclusive method

for judicial review of state agency

decisions is under Chapter 227 and strict

compliance with the procedures of that

chapter are required. In particular, it is

argued that the plaintiff did not properly

file a petition for review. Many of the

allegations of the plaintiff relate to the

-- to failure of the state agencies to act

upon its applications. Because this -- of

this inaction, there is not, at least with

respect to portions of the plaintiff's

claim, a, in quotes, "decision," end

quotes, of the agencies to review.

The Court is not focusing upon the

time limits for filing requests for review

under Chapter 227, but the existence of

events which would normally result in

triggering a request for review under that

chapter. In the absence of that event and

in light of the plaintiff’s allegations

respecting procedural due process, I find

that the plaintiff is not foreclosed from

Suit against the state without following

the procedure outlined in Chapter 227

respecting judicial review. Therefore,

based upon the foregoing, the Court at this

time is denying the motions to dismiss made

by- the defendants.

Now, I want to move then to the

current motions to dismiss filed on behalf

of the defendants dated December 3rd, 1993.

Here, the defendants have made several

motions to dismiss which have been briefed

and which the Court has reviewed at length.

I’ll first address the arguments respecting

the issues of the bar of the state -- the

statute of limitations.

The defendants have argued that

Section 1983 causes of action are governed

by a three-year statute of limitations and

there appears to be no dispute in that

regard. Here the original complaint was

filed February 13, 1992. The amended

complaint which added four individual

defendants was filed November 2nd, 1993.

Defendants argue that plaintiff’s cause of

action arose as a result of denials of

permit applications in April and May of

1989. The plaintiff has argued that there

has been a continuing violation of the

constitutional rights of the plaintiff

and/or that the statute did not -- the

Statute of limitations did not begin

running until February 4, i992 when the

plaintiff’s last application was returned

without action on behalf of the state

agencies.

Because of the nature of plaintiff's

allegations regarding procedural

irregularities and procedural unfairness

which relate to matters which go beyond the

denial of the applications, the Court finds

that it is not appropriate to fix the terms

from which the statute of limitations would

run based upon the dates of the denial of

the applications in April and May of 1989.

The allegations are of a continuing

violation of procedural due process which

extend to February 4, 1992, and therefore

the statute of limitations has not run.

The plaintiff has also made _ the

argument that the bar of the statute of

limitations can be avoided by the, in

quotes, “relation back," end quotes,

provisions of Section 802.09(3) of the

Wisconsin Statutes. And under that

provision, the -- a party may be added if,

to paraphrase the basic provisions, one,

the claim arises out of transactions or

occurrences set forth in the original

complaint; two, that some event or

transaction occurred within the period

provided by law for commencing the action;

three, the added party has received notice

of the commencement of the action so as not

to be prejudiced; and four, the party knew

Or should have known that, but for a

mistake in identity, the action would have

been brought against them.

The Court acknowledges here that there

was really no mistake as to identification

of the proper parties, as argued by the

state agencies. However, there is the

intent of the provisions of Section

809.02(3) to deal with what appear to be

the -- to avoid prejudice to the parties

that are joined at -- beyond the statute of

limitations period, and as we discussed in

Korkow vs. General Casualty Company of

Wisconsin, 117 Wis. 2d 187 as cited by the

plaintiff.

Here the transactions alleged in the

amended complaint are nearly identical to

those allegations and causes raised in the

original complaint. The added parties were

aware of the litigation. That is

particularly true with respect to

Defendants Josheffs, Quinlan, and

Rockweiler. Their actions are the alleged

underlying basis for plaintiff's cause of

action and they actively participated in

the litigation and preparation of defenses

to this action.

The added parties are represented by

the office of the attorney general, which

of course if intimately familiar with the

case as a result of their representation of

the two defendant state agencies. Under

these circumstances, it appears that there

is no significant prejudice to the added

parties to permit the computation of time

with respect to the statute of limitations

to relate back to the date of the

commencement of the original action, which

would have been within the time required to

commence the action if one concedes that

the denial of the applications in 1989

triggered the running of the statute. Such

a result does not violate general

principles underlying the statutes of

limitations under the particular

circumstances of this case. Therefore, the

motions to dismiss based upon the bar of

the statute of limitations is denied.

The next issues deal with questions of

sovereign immunity in several forms.

First, the state agencies or the defendants

have argued that it and its agencies are

immune to actions under Section 1983

because they are not persons, as previously

noted. And as previously noted, the

leading case in that regard is Will vs.

Michigan Department of State Police, a U.S.

Supreme Court case. That principle, as

noted, is the basis for the previously

dismissed 1983 action against the state,

and likewise, any such claim in the amended

complaint against the state or its agencies

directly is -- is dismissed.

Next, the defendants also argue that

sovereign immunity extends to the

individual defendants. This position is

based upon an argument that a suit for

nonprospective relief only against a state

official and in the state official’s

official capacity is no different than a

Suit against the state itself. With

respect to this argument, the Court

considers that defendant Secretary Meyer is

in a somewhat different category and

eee

position than the other named individual

defendants. As to defendant Secretary

Meyer, it appears, based on the allegations

in the complaint, that he is being sued in

his official capacity. And unlike the

other named individual defendants, the

amended complaint does not contain

allegations regarding specific actions of

the secretary which would constitute

violations of procedural due process in the

application for permit -- permits made by

the plaintiff. Therefore, the Court will

grant the state’s motion to dismiss the

amended complaint as it relates to

Secretary Meyer.

The amended complaint does allege that

the other individual defendants are being

sued as individuals for specific actions

take by them in connection with the permit

application process. Therefore, they are

not being sued in their, in quotes,

“official capacity,” end quotes, and the

state’s motion or the defendants’s motions

to dismiss on that basis with respect to

the other three individual defendants is

denied.

The next issue related to sovereign

immunity is that of qualified immunity.

And the Court has paid particularly close

attention to the standards respecting this

argument as set forth in the following

cases cited by the parties: Baxter vs. DNR

at 165 Wis. 2d 298, Barnhill vs. Board of

Regents at 166 Wis. 2d 395, and Polenz vs.

Parrott at 883 F.2d 551. I will not review

at.length the basic bases for qualified

immunity but will note the following

elements necessary for evaluating the

defendant’s arguments that the individual

defendants have qualified immunity.

One is the issue of whether or not the

acts of the individuals were discretionary,

and two, whether their conduct violated a

clearly established statutory or

constitutional right. The primary focus of

the arguments have been whether the

contours of the rights involved are

sufficiently clear that a _reasonabie

official would unde stand that what was

done violated the right. The defendants

argue that merely raising due process in a

general manner is not adequate, and

further, the defendants have noted based on

the Barnhill case that the burden is upon

the plaintiff to establish the, in quotes,

“clearly established,” end quotes,

constitutional rights involved.

The defendants frame their arguments

in terms of the constitutional right to --

to the issuance of a sewer permit.

However, the rights involved are framed in

a broader fashion by the plaintiff. In

fact, the constitutional rights relate to

the issuance of permits affecting the use

of the plaintiff’s property and alleged

procedural irregularities regarding the

same. Although the plaintiff’s allegation

is general with respect to procedural due

process, it is specific with respect to the

alleged defects in that process. The

alleged procedural defects are set forth in

the amended complaint. Furthermore, these

are rights which had _ been clearly

established at the time of plaintiff’s

applications or the processing of the

applications, being substantially rights of

procedural fairness.

However, the defendants go beyond the

issue of whether or not the constitutional

right is clearly established. And based

upon the Polenz decision, the state, the

defendants, have argued that there is

another prong of the test to determine

whether or not qualified immunity is

applicable. And that argument arises from

the following quotation at page 559 of the

Polenz decision, and I’m quoting from that

case

“For purposes of qualified immunity,

it is not enough to assert that a broad or

abstract right, such as the right to due

process or the right to exclusive use and

enjoyment of one’s land, is_ clearly

established. Rather, the Court must frame

the right in the context of the particular

action. Here, we believe the inquiry

consists of two parts. The first question

is whether it was clearly established in

1984 that under the due process claims

property owners have a right to be free

from arbitrary and irrational decisions of

local zoning or land use officials on

applications for permits relating to land

use. The second question is whether in

light of pre-existing law a reasonable

official should have known that the

available state law remedies were

inadequate."

And it is this second element

identified in Polenz that the defendants

have raised and argued effectively. And I

find that a reasonable official would not

have known that the state law remedies were

inadequate to address the plaintiff's

procedural due process concerns. And as

noted by the state, there are specific

procedures set forth within Chapter 227 of

the Wisconsin Statutes which are most

commonly used for the purpose of

challenging actions of the state agencies

in their administrative functions. A

reasonable official under the conditions

alleged in the amended complaint would not

know Of any reason why such procedural

protections under existing state law would

not be appropriately used by the plaintiff.

von }

Therefore, on this basis, the Court will

grant the motion on behalf of the

individual defendants to dismiss the -- the

amended complaint as to them. Anc based

upon these foregoing rulings, it is not

necessary to address further the issues

raised -- the other issues raised in the

argument, in particular, exhaustion of

remedies in this context, nor the issue of

notice of claim requirements.

Therefore, we stand now with the two

state agencies as the remaining parties to

the lawsuit. I’m going to direct that Mr.

McKay draft the orders resulting from these

decisions. Is that satisfactory to you,

Mr. McKay?

MR. MCKAY: Yes, Sir.

THE COURT: All right. You’1ll submit

those to the Court with five days’ notice

to counsel for the plaintiff, and without

objection, the Court will sign them. Now,

we remain with pending motions regarding

the jury view and the motion with respect -

- the motion in limine, both motions having

been made by the plaintiff.

MR. MCKAY: Your Honor?

THE COURT: Yes.

MR. MCKAY: Jim McKay. May I ask a

clarification question?

THE COURT: Yes.

MR. MCKAY: I understood the Court to

Say in addressing our new motions, if you

will, the December motions to dismiss --

THE COURT: Yes. ~

MR. MCKAY: -- that the Court granted

the motions of the state agencies under the

sovereign immunity argument. And so as I

would understand that, or at least my

question is that then dismisses the entire

Suit with your ruling on the individual

defendants.

iad Reatiee <n

THE COURT: No, it does not. It -- it

-- it only relates to the 1983 action.

MR. MCKAY: My understanding,

according to the transcripts in here, was

that that was all that was left.

THE COURT: No, that’s not -- that’s

not correct.

MR. MCKAY: What is -- what is left

then?

THE COURT: The procedural due process

challenge to the actions of the agencies.

I assume that is your understanding, Mr.

Korpady.

MR. KORPADY: Yes, your Honor.

MR. MCKAY: Isn’t that a 1983 action?

THE COURT: No, it is not. That is

the distinction that the Court was making

with respect to Zinn. Is that understood?

MR. MCKAY: Well, I’m not sure I

understand it. My understanding of the

transcript, which of course I was not at

the January ‘93 status conference, was, as

Mr. -- or the plaintiff indicated in its

brief, that the Court indicated you’d

reached a decision on all the claims and

were going to dismiss them all.

THE COURT: Oh, no, that’s not

correct. There remained the procedural due

process issue and that was the reason on

the motions made by Ms. Kloppenburg

following those initial decisions --

Actually, she first raised it in connection

with a request for a protective order and

then later raised it as a separate motion

or separate set of motions to dismiss the -

- event the procedural due _ process

remaining cause of action. Is that

consistent, Mr. Korpady, with your

recollection?

MR. KORPADY: Yes, your Honor.

THE COURT: So I’‘1l1 now proceed to the

-- these additional motions that relate

directly to the trial of the proceedings.

First, with respect to the plaintiff’s

coaneut for the -- for the jury view, the

Court believes that a view of the physical

features of the premises involved here will

be beneficial to the jury and is necessary

to promote an understanding of the issues

involved. I recognize and clearly

recognize the main -- remaining issues are

ones of procedural due process only.

However, the physical features of the

property are an integral part of the facts

associated with the procedural issues.

I also recognize, based upon the

representations made by Mr. McKay

(PORTIONS OMITTED)

MR. MCKAY: No. I’m afraid I’m it.

THE COURT: All right. What is the

status of Ms. Kloppenburg?

MR. MCKAY: Well, she’s right now on

maternity leave Or -- (inadequate

telephonic transmission)

THE COURT: Has she delivered or --

MR. MCKAY: Yes. They had a baby

girl.

THE COURT: Well, great, great. All

right, then I will look forward to

receiving materials from you on Tuesday and

then seeing you on Wednesday morning bright

and early.

MR. MCKAY: Judge?

THE COURT: Yes.

MR. MCKAY: Jim McKay. I need to make

a request on the record.

THE COURT: Yes.

MR. MCKAY: A couple of things, and I

will go ahead and ask it even though it’s

repetitive, and then I have a request to

make of the Court. While you were talking

about the motion in limine, I dug out the

i ee i

—- ———_—-

Original complaint. The only procedural

due process claims that I see in there, and

obviously the Court and Mr. Marion and Mr.

Korpady are more familiar with this than I

am, are procedural due process under the

constitution. And so I remain, I will

confess, unclear as to what the remaining

due process issue is that is going to be

tried, because all I see -- the only

allegations I see are under the

constitution, which will then give rise to

my next request, but I’m hoping that

perhaps the parties or the Court would be

so kind as to answer that for me. I don’t

see a theory other than under’ the

constitution, which then, as I say, gives

rise to another request.

THE COURT: Okay. That’s -- that’s --

you’re correct that it’s that -- I believe

it was the third cause of action; is that

correct, Mr. Korpady?

MR. KORPADY: I don’t have that, your

Honor. I can take a second and get it if

it would help.

THE COURT: I believe it was the third

cause of action in the original complaint.

MR. MCKAY: That’s the one I’m looking

at.

THE COURT: Um-hum.

MR. MCKAY: That’s what gave rise to

my previous confusion, Judge, when there

was indications in the plaintiff’s brief

with the quote from the original transcript

of your conference in January of ‘93 that

all five, and there are only five alleged

in. the complaint, were going to be

dismissed against the state agencies.

THE COURT: No.

MR. MCKAY: And that was my

understanding when I asked it the first

time, what was left to be tried based on

rT a

that transcript and the Court’s ruling

today.

THE COURT: All right. Well, I don’t

know where you derived that perspective.

MR. MCKAY: From the plaintiff’s

brief.

THE COURT: Oh, well, then it -- It’s

in the plaintiff’s brief. It was --

MR. MCKAY: It’s a quote from the

transcript of the January ‘93 hearing.

THE COURT: All right. Well, that --

that’s -- that was an incorrect statement

if -- I’m not sure where that arises. But

Mr. Korpady, that would have been

incorrect; isn’t that right?

MR. KORPADY: I’m not sure I followed

Mr. McKay’s line. I don’t know quite what

he’s getting at, your Honor.

MR. MCKAY: I’m sorry. It indicated

to me that the original five claims against

the two original state agency defendants

were in the process of being dismissed.

But with these dismissals, including

sovereign immunity as against the

individuals, it appeared to me that the

entire action was dismissed.

MR. KORPADY: That’s certainly not

what we intended to convey, your Honor, and

I don’t know that that’s the purport of the

language.

THE COURT: I don’t know, but I’ve

Clarified that that isn’t the case, Mr.

McKay.

MR. MCKAY: So --

THE COURT: That gives rise to what

request you’re going to make now?

MR. MCKAY: All right. If I

understand the Court, it is the third cause

of action which is being tried.

THE COURT: Well, it relates to the --

the allegations that were originally made

in the third cause of action of the

original complaint. Let me just -- If you

can hold on just a second here.

Yes, I’m correct. It was this third

cause of action. The second cause of

action was the substantive due process

argument.

MR. MCKAY: So what is set to go to

trial are the allegations in the third

cause of action only against the two state

agencies.

THE COURT: That’s correct. Now, what

is your -- what is your request?

MR. MCKAY: All right. What I need to

ask -- excuse me -- I would formally ask

the Court, because we believe that -- The

sovereign immunity, the absolute immunity

issue, is one that obviously the Court has

ruled against us on. We believe that that

is also subject to an immediate appeal,

because the cases that talk about qualified

immunity indicate that sovereign: immunity

issues are immediately appealable for the

same reasons, that it is an immunity from

suit. And if we are prohibited from

appealing that immediately, then the

efficacy of that immunity remedy is

absolutely gone if we have to go through

trial. So I ask the Court to stay the

trial to allow us to take that appeal on

the sovereign immunity issue in regards to

—

the two stat agency defendants.

Now, Mr. Marion and I had a

conversation yesterday -- I don’t know if

we got this specific -- where he indicated

the plaintiff would not oppose our request

for a stay although they would fight the

grounds of the appeal.

THE COURT: Mr. Marion?

MR. MARION: Well, your Honor, I have

to say, I don’t think Mr. McKay anticipated

the -- the specificity of your Honor’s

rulings. I know I didn’t. And I’m -- and

I’m -- the conversation that Jim and I had,

I think, to be quite candid, was around

this qualified immunity business. And I

told Jim that if indeed the law was that an

order requiring the individual defendants

to go to trial, even though they claimed

they had qualified immunity, was

immediately appealable, I wouldn’t oppose

his request for a stay because that’s just

inviting the Court of Appeals to stay it.

And I wouldn’t look very good if I forced

them to do that if there was an automatic

right of appeal.

I have to say, and I hope Jim doesn’t

think this is unfair, I don’t understand

why the state would have an automatic

appeal given the Court’s rulings today with

respect to what is left. The qualified

immunity defense has been acknowledged by

the Court and the motion to dismiss those

defendants was granted.

THE COURT: I think Mr. McKay is

saying that he believes that the issue

still goes to sovereign immunity, the

decision of the Court, but as it relates

now to the state agencies. Is that

correct, Mr. McKay?

MR. MCKAY: That’s correct, your

Honor. And the same cases that talk about

immediate appealability because it’s an

immunity from suit regarding the qualified

immunity question, they predicate using the

same reasons for immediate appealability of

qualified immunity rulings as are used in

the immediate appealability of absolute or

sovereign immunity rulings, because it’s

the same animal, if you will. Both of

those are immunity from suit, not from

liability or damages, which can be appealed

after a trial. If we cannot appeal the

question or denial -- the denial of our

motion for dismissal of the state based on

sovereign immunity, the usefulness of that

remedy is gone if we’re forced to trial.

So it’s the same reasoning for immediate

appealability of both qualified immunity

and absolute or sovereign immunity.

THE COURT: Yes. Mr. Marion.

MR. MARION: I would -- With respect

to Mr. McKay, I don’t see it that way.

There’s absolute immunity under 1983, the

absolute immunity of individual persons to

not have to stand trial, or there’s

absolute immunity for judges on judicial

decisions and prosecutors for prosecutorial

decisions. The individuals are out of this

case completely. With respect to sovereign

immunity, frankly, I fail to see a credible

appeal on the claim that the eleventh

amendment would bar this lawsuit, and I

don’t know how else sovereign immunity is

implicated. The state can’t foreclose

access to its own courts for vindication of

federal constitutional rights.

MR. MCKAY: I understand Mr. Marion

disagrees with what might happen on the

appeal and with our argument, and I

appreciate that. But my point is that I

believe we have a right to try and

immediately appeal this for the same

ipeanisan

reasons, that if our claim of sovereign

immunity is denied, which the Court has

done, and we are forced to go to trial and

then later appeal it, that remedy then or

theory or doctrine of sovereign immunity

has -- has no efficacy whatsoever because

it them becomes nugatory because we’re

forced to defend ourselves through trials

which ultimately may be reversed because of

sovereign immunity or those doctrines to

avoid those trials and the later reversal.

And I think we have a very equitable

argument under -- not only under terms of

;

equity, but an argument that we ought to be

able to appeal this immediately rather than

be forced to trial, and should we get an

adverse verdict, or regardless of which way

the verdict comes down, have to fight an

appeal later and perhaps come out with --

with a result favoring the immunity

question.

THE COURT: Well --

MR. KORPADY: This is Al Korpady.

THE COURT: Yes.

MR. KORPADY: If I may, first, I’m not

Sure I agree. My reading of the cases on

qualified immunity lead me to at least two

observations. One is I’m not sure I agree

it’s an immunity from suit as opposed to

immunity from damages. Especially the

state law cases seem to talk more in terms

of the immunity from liability for damages

than they do from liability -- or suit.

And second, I believe if you look at th:

qualified immunity cases, they deal with

the qualified immunity of individuals and

are predicated on basically the recognition

that if state officials had to go to court

every time they did something that somebody

didn’t like, government would grind to a

screeching halt. I -- I suggest, your

Honor, that the same reasoning is not

applicable to state agencies, which are

more than adequately prepared to go to

court and to still do the ordinary business

of the state, plus they do it all the time.

THE COURT: All right, but Mr.

Korpady, what is being argued here is not -

- I understand the analogy you’re drawing

Or comparison you’re drawing. It’s not on

the qualified immunity question. Mr. McKay

is taking the position that the state

agencies are immune. They can’t be sued

under 1983, nor can they be sued in the

fashion that they’re being sued here; isn’t

that correct, Mr. McKay?

MR. MCKAY: Yes, Sir.

THE COURT: Well, and -- and I -- I

Suppose that is an issue that he has a

right to pursue. I am not enthusiastic

about staying the proceeding. I’ve done --

I had hoped that we would proceed to trial.

I -~ I believe, however, that if there is

some recognizable basis upon which to claim

immunity here, to go to trial would not be

appropriate. Therefore, I -- I am inclined

to grant the stay and permit the appeal.

MR. MCKAY: All right, your Honor.

Want a separate order on that then, too?

THE COURT: Absolutely.

MR. MCKAY: All right.

THE COURT: Which effectively takes us

off calendar.

MR. MCKAY: Five day -- Sorry. Didn’t

mean to interrupt you.

THE COURT: I’m sorry. Yes, you can

do it on the same basis.

MR. MCKAY: All right.

MR. MARION: Your Honor, if I may, I’d

like -- I‘d like Mr. McKay to -- to commit

that he’s going to actually file this

appeal and that he’1ll do that within the

ten days of -- of this order so that we’re

not held in -- in limbo.

MR. MCKAY: Well, I -- I -= I can

assure you that I will. And I know Edward

doesn’t mean it this way, but I don’t do

these things lightly either. And I

certainly don’t represent to court and

counsel that I’m going to ask for a stay to

appeal and then just sit there.

MR. MARION: I certainly didn’t mean

to suggest that.

MR. MCKAY: I know he isn’t suggesting

that, but you can rest assured.

MR. MARION: As to the timing, just so

it’s done quickly so that we can keep

moving ahead. That’s all.

MR. MCKAY: Sure.

THE COURT: And I think it’s not

inappropriate that there be some time frame

here. And I don’t want to be -- make it

difficult for anyone, but Mr. McKay, what

do you believe a reasonable time for this

appeal to be made would be for you? Is ten

days, twenty days? What -- what would y

desire?

MR. MCKAY: I suspect I’m going t

have to ask the Court of Appeals, even

though our theory is that this isn’t right,

but the state cases indicate that these are

the type that are granted. So from the --

we have ten days from the date you sign the

order in order to file that petition. And

it will be filed as soon as possible afte:

that.

THE COURT: All right. That would

seem satisfactory and you can provide that

in the order. |

MR. MCKAY: Okay.

THE COURT: Well, I will advise the

clerk of court of Marquette County that

they will call off their jury. And I will

look forward to receiving your documents,

gentlemen.

MR. MCKAY: All right.

THE COURT: Thank you very much.

MR. MARION: Perhaps it’s unnecessary

to say, but we won’t have to file the jury

instructions and the like.

THE COURT: Absolutely unnecessary to

say, Mr. Marion. Those -- those

requirements with respect to the documents

and preparation for trial are no longer

necessary and it isn’t even necessary of

course to enter the order in that regard.

hicnieneieiiiiaaaiaisiiiieeiiaal

MR. MARION: Your Honor, I’d like to

thank you very much for the obvious care

and attention you’ve given on these issues,

and you’ve dealt with this with great

specificity and subtlety. I appreciate it.

THE COURT: Well, counsel, you all

know that the issues in this case are very

deem and very complicated. And I -- and I

am conscientious about trying to -- to

respond to the arguments and not Simply

doing something off the cuff, and I

appreciate your appreciation of that. I’m

going to disconnect at this time.

MR. KORPADY: Thank you, your Honor.

MR. MARION: Thank you.

MR. MCKAY: Thank you, Judge.

(Proceedings concluded at 3:55 p.m. )

*** 82% 88

STATE OF WISCONSIN )

COUNTY OF COLUMBIA )

I, CHRISTINE M. CHAMPEAU, Official

Court Reporter of Branch III of the

Columbia County Circuit Court, State of

Wisconsin, do hereby certify that the

foregoing is, to the best of my ability

under the telephonic reporting conditions

then present, a full, complete and correct

transcript of the proceedings had on the

hearing in the above-entitled matter as the

same are contained in my stenographic notes

taken on said proceedings.

Dated this 19th day of January, 1994.

Court Reporter, RPR-CM

STATE OF WISCONSIN

COURT OF APPEALS

DISTRICT IV

Appeal Nos. 94-0660 and 94-0735

OZGA ENTERPRISES, INC.,

Plaintiff-Respondent-Appellant-

Cross Appellant,

Marquette County

Vv. Case No. 92-CV-26

WISCONSIN DEPARTMENT OF NATURAL

RESOURCES, WISCONSIN

DEPARTMENT OF INDUSTRY, LABOR

AND HUMAN RELATIONS,

MARQUETTE COUNTY,

SUSAN JOSHEFFS,

SAM ROCKWEILER,

GEORGE MEYER, and

JAMES QUINLAN,

Defendants-Appel lants-Respondents-

Cross Respondents.

BRIEF OF OZGA ENTERPRISES, INC. AS

PLAINTIFF-APPELLANT IN APPEAL NO. 94-0735

APPEAL FROM A JUDGMENT OF THE CIRCUIT

COURT FOR MARQUETTE COUNTY, THE HONORABLE

RICHARD L. REHM, JUDGE

MURPHY & DESMOND, S.C.

Attorneys for Plaintiff-

Appellant

Alan E. Korpady

State Bar #1001782

2 E. Mifflin St., Suite 800

P.O. Box 2038

Madison, WI 53701-2038

(608) 257-7181

(PORTIONS OMITTED)

1. Ozga’s Amended Complaint

States A Prima Facie Cause

Of Action Under The Takings

Clauses In Both Federal And

State Constitutions.

There is there is no set formula for

determining when government action effects

a taking. Penn Central Transportation

Company v. New York City, 438 U.S. 104, 124

(1978). The U.S. Supreme Court, however,

made clear that regulation effects a taking

if it eitiier: (1) fails to substantially

advance a legitimate state interest; or (2)

denies an owner all economically viable use

of his. or her land. See Nollan vy.

California Coastal Commission, 483 U.S.

825, 834 (1987); Agins v. City of Tiburon,

447 U.S. 255, 260 (1980). Even though a

property owner is not deprived of all

economically valuable use of land,

regulation may still constitute a taking

depending on (1) the character of the

government action, (2) the economic impact

on the property, and (3) the impact on the

owner’s investment-backed expectations.

Penn Central, 438 U.S. at 124.

Government action will constitute a

taking if (1) it imposes a legally

enforceable restriction; and (2) facts

indicate deprivation of all, or practically

all, use of the property. Busse v. Dane

County Regional Planning Commission, 181

Wis. 2d 527, 541, 511 N.W.2d 356 (Ct. App.

1993).

There is no suggestion in this case

that either the floodplain regulations in

Chapter NR 116, Wis. Adm. Code, or the

County’s floodplain ordinance fail to

substantially advance a legitimate state

interest. Ozga recognizes that Chapter 31,

Stats., and the County’s zoning ordinances

are legally enforceable restrictions. That

is, of course, precisely the point of

Ozga’s takings claims; not to mention half

its prima facie case.

Ozga must also show that either (1)

the government’s action denied to it all,

or substantially eli, economically

beneficial or productive use of the

landowner’s property or (2) that the

character and economic impact of the

government’s action, taken together with

the effect on the property oowner’s

investment-backed expectations , constitute

a taking of a portion of the owner’s

property. See, Lucas _v. South Carolina

Coastal Council, 505 U.S. , 120 L.Ed.2d

798 (1992); Penn Central, 438 U.S. at 124.

Ozga unquestionably alleged all of the

essential elements of both a federal and

State takings claim:

(1) Ozga is the owner of the

Property. R.51:49.

(2) On September Zs 1986, the

County’s zoning administrator,

Mr. Stapleton, ordered Ozga to

(3)

(4)

(5)

(6)

(7)

cease construction on the

property because Ozga had not

obtained a building permit.

R.51:416.

Since at least on or about

November 11, 1986, DNR and Ms.

Josheffs have refused to

“verify” the RFE and Flood Zone

designations in Ozga‘s

applications to DILHR

purportedly because the Property

is in the floodway of Mason

Lake. R.51:4925 and 26.

DNR has maintained the level of

Mason Lake at one foot higher

than minimum levels, to avoid

irritating riparian property

owners on Mason _ Lake, with

effect of raising the RFE at the

property. R.51:4953.

Because DNR and Josheffs refuse

to sign Ozga’s PLB 89 Form,

DILHR refused to approve Ozga’s

application for a private sewage

system permit. R.51:431.

Because DILHR refused to approve

Ozga’s application, the County

has refused to issue either a

sanitary permit or a building

permit. R.51:442.

The effect of the Defendants’

actions has been to prevent any

further development of the

Property, impose substantial

economic losses on Ozga and

frustrate Ozga’s legitimate,

investment-backed expectations.

R.51:9937, 54, and 57 to 59.

(8) Defendants’ actions have forced

Ozga to leave the Property

economically idle for the last 8

years and have deprived Ozga of

all or substantially all viable

economic use of the Property.

R.51:960.

This record entitles Ozga to trial.

2. The Amended Complaint

Contains All The Essential

Elements Of A Claim Under

The Due Process Clause In

Both Federal And State

Constitutions.

Due process is implicated when a state

action deprives a citizen of a protected

property interest. Estate of Wolff v.

Westown Town Board, 156 Wis. 2d 588, 596,

457 N.W.2d 510 (1990).

The Amended Complaint contains

allegations reaching all the essential

elements of a due process claim:

(1) Ozga is the owner of the

Property. R.51:998 and 9.

(2)

(3)

(4)

(5)

(6)

(7)

(8)

In connection with its

application for a building

permit, Ozga was required to

apply for a sanitary permit and

a permit to develop in a

floodplain. R.51:94417 and 18.

DNR and Josheffs disagreed with

the RFE and the flood zone

designation stated in Ozga’s PLB

89. R.51:9925 and 26.

DNR and Josheffs refused to sign

Ozga’s PLB 89 on the grounds

that the RFE and flood zone

designation stated in Ozga’s PLB

89 were incorrect. R.51:9925

and 26.

At the time DNR and Josheffs

Originally refused to- sign

Ozga’s PLB 89, and until at.

least as late as December of

1987, no Defendant had

calculated the RFE at the site.

R.51:427.

No determination has ever been

made of the horizontal

boundaries of the floodway at

the site. R.51:427.

Under the circumstances,

Josheffs’ refusal to sign Ozga’s

PLB 89 was arbitrary and

Capricious. R.51:49964 and 67.

Defendant Marquette County

denied Ozga’s applications

without giving Ozga notice of

its right to a hearing.

R.51:4965.

(9) The effect of Defendants’

actions has been to deprive Ozga

of all economically viable use

of the property and to prevent

Ozga from realizing its

investment-backed expectations

at the Property. R.51:4957 to

60.

x The Amended Complaint

Contains The Essential

Elements Of A Claim For

Inverse Condemnation.

To be entitled to maintain an inverse

condemnation suit, Ozga must demonstrate

that it has been deprived of all, or

particularly all, of the beneficial use of

its property or any part thereof.

Hillcrest Golf v. Altoona, 135 Wis. 2d 431,

435, 400 N.W.2d 493 (1986). See also,

First English Evangelical Lutheran Church

of Glendale View, Los Angeles County, 482

U.S. 304, 315 (1987). As demonstrated

above, Ozga stated that claim.

100

4. The Amended Complaint

Contains The Essential

Elements Of A Claim Under

Title 42 U.S.C. §1983.

The Amended Complaint also contains

all the essential elements of a cl#im under

Title 42: U.S.C. -@i9eee The essential

elements of a §1983 claim are:

l. Persons;

y Acting under the color of state

law;

Le Deprived the Plaintiff;

4. Of a right secured by the

Federal Constitution;

Paul v. Davis, 424 U.S. 693, 696-97 (1976).

See also, Riedy v. Sperry, 83 Wis. 2d 158,

163, 265 N.W.2d 475 (1978).

The Amended Complaint contains the

essential elements of a § 1983 claim:

(1) Defendants Quinlan, Josheffs,

Rockweiler and the County

constitute persons under §1983.

R.51:994-8.

(2) All of whom were acting under

the color of state law in

reviewing and acting upon Ozga’s

permit applications. R.51:469.

(3) The actions of Quinlan,

Josheffs, Rockweiler and the

101

County deprived Ozga of its

right to build on the property

without just compensation and

without due process. R.51:49967

and 68.

Ozga will concede that, after Will v.

Michigan Department of State Police, 491

U.S. 58 (1989), DNR and DILHR do not

constitute “persons” amenable to suit under

§1983. There is no reason to question

whether the Amended Complaint states a

Claim under §1983 against the other

Defendants.

~ Summary Judgment Is

Inappropriate Because Neither

The State Nor The County Stated

A Defense To The Claims Alleged

In The Amended Complaint.

Because the Amended Complaint states

a prima facie cause of action, the Court

next looks to the Defendant’s motion papers

to see if they have presented a defense

that defeats the Plaintiff’s claim.

Johnson, 151 Wis. 2d at 745.

102

Defendants presented essentially two

defenses to Ozga’s' claims. First,

Defendants argued that their actions (or

inaction) do not constitute a taking and

did not deprive Ozga of property without

due process. Second, Defendants argue that

there are jurisdictional protections

available to them, such as sovereign or

qualified immunity, or doctrines of

judicial economy, such as the exhaustion of

administrative remedies doctrine, that

protect them from liability regardless of

whether or not the action constitutes a

taking.

6. None Of The Defendants Stated A

Defense To Ozga’s Takings

Claims.

a. Categorical Takings.

Under both the Federal and Wisconsin

Constitutions, private property cannot be

taken for public use without payment of

103

just compensation. U.S. Constitution

Amendments V and XIV. Wisconsin

Constitution, Article aa M2 While

regulatory takings jurisprudence is at

times muddled, the basic premise ‘of the law

is firmly established:

When a property owner has been

called upon to sacrifice all

economically beneficial uses in

the name of the common good,

that is, to leave his property

economically idle, he has

suffered a taking.

Lucas, 120 L.Ed.2d at 815. See also Zinn

v. State, 112 Wis. 2d 417, 424, 334 N.W.2d

67 (1983).

A private cause of action for damages

may be brought directly under the takings

clauses in both the state and federal

constitutions. First English Evangelical

Lutheran Church v. Los Angeles, 482 U.S.

304 (1987). Zinn, 112 Wis. 2d at 424.

Where regulation deprives the owner of

all economically beneficial use of the

104

property, it constitutes a “categorical”

taking and requires compensation without

regard to the purpose of the regulation or

the circumstances of its enforcement.

Lucas, 505 U.S. at 820 to 8621. The

government may avoid paying compensation

for such “categorical” takings only if the

proscribed use interests were not part of

the owner’s title to begin with. In

particular, the government must:

prove that its law or decree

{does} no more than duplicate

the result that could have been

achieved in the courts--by

adjacent landowners (or other

uniquely affected persons) under

the State’s law of private

nuisance or by the State under

its complementary power to abate

nuisances that affect the public

generally or otherwise.

Lucas, 505 U.S. at 821.

After Lucas, the only defense to

Ozga’s takings claim is for the Defendants

to show either that there is no taking or

that they would have been entitled to

105

impose the same conditions or obtain the

same result at common law. In mecting its

burden, the government can not rely on the

gratuitous, self-serving distinction

between “harm-preventing" and “benefit-

conferring” regulations. See Lucas at

(818). Instead, as Defendants would be

required to do if they sought to restrain

Ozga in a common-law action for public

nuisance, they:

must identify background

principles of nuisance and

property law that prohibit the

uses [the landowner] now intends

in the circumstances in which

the property is presently found.

Only on this showing can [the

government] fairly claim that in

proscribing all such beneficial

uses, [the government] is taking

nothing.

Lucas, 120 L.Ed 2d at 822-823.

The government must demonstrate a

"nexus" between any permit condition it

would impose and the end advanced as

justification for the condition. Nollan,

106

483 U.S. at 837; Dolan v. City of Tigurd,

512 U.S. __, 129 L.Ed.2d 317 (1994). If

such a nexus exists, the government must

also show that it made an individualized

factual determination that the required

condition was related both in nature and

extent to the impact of the proposed

development. Dolan, 129 L.Ed.2d at 320.

As their defense, the Defendants

relied substantially on what they

characterize as_~ the “public trust"

doctrine. Citing Just v. Marinette County,

56 Wis. 2d 7, 201 N.W.2d 761 (1972), the

Defendants suggest that, in Wisconsin, when

the government acts to prevent public harm,

even though the enactment deprives an owner

of a substantial portion of the potential

value of property, it does not give rise to

an obligation to compensate. See, R.26: p.

14-15.

107

The United States Supreme Court, in

Lucas, unequivocally rejected that

approach. Professor Joseph L. Sax, writing

on the impact of the Lucas case, recognized

as much:

Lucas may thus be viewed as the

[U.S. Supreme] Court’s long-

delayed answer to the decision

by the Wisconsin Supreme Court

in Just v. Marinette County

- «+ « « [T]he Court repudiates

the conclusion of Just, and

instead effectively reverses the

Wisconsin court’s conclusion

that ‘it is not an unreasonable

exercise of [police] power to

prevent harm to public rights by

limiting the use of private

property to its natural uses.

Sax, Property Rights and the Economy of

Nature: Understanding Lucas _v. South

Carolina Coastal Council, 45 Stanford Law

Review 1433, 1439-40 (1993) (emphasis

added).

The Court in Lucas recognized that,

especially in the case of regulation of

land:

108

+ -« Ses QOCLOR -. os 4 - Shad

title is somehow held subject to

the “implied limitation" that

the State may subsequently

eliminate all economically

valuable use is inconsistent

with the historical compact

recorded in the Takings Clause

that has become part of our

constitutional culture.

Lucas, 505 U.S. , 120 L.Ed.2d at Id.

After Lucas, the government can avoid

compensating Ozga only if the condominium,

at common law, constituted a nuisance.

They can not defend by relying on self-

serving characterizations of the regulation

as preventing public harm. Rather, after

Dolan, the Defendants must demonstrate a

nexus between the conditions imposed on

Ozga’s permit applications and document

individualized factual findings that the

conditions are “roughly proportionate" in

both nature and extent to the impact of the

proposed development. There is nothing in

this record sufficient to establish a

“nuisance defense" to Ozga’s takings claims

109

and nothing evidencing any "individualized"

factual consideration of Ozga’s permit

applications.

The government’s defense must _ be

comprised of something more than the fact

that Ozga intends to build on its property.

It is axiomatic that ". . . development of

a residential lot does not constitute a

nuisance." Bowles v. United States, 31

Fed. Cl. 37 (1994).

In the Trial Court, the government

Suggested that the Briggsville Dame was

“unsafe” and was, therefore, a nuisance.

There is no such evidence in this record.

Moreover, the safety, vel non, of the dam

was never given as a reason for denying

Ozga’s permit. The Briggsville dam is the

dam owner’s responsibility, not Ozga’s.

Its safety, or lack of it, is no basis for

denying Ozga’‘s permit applications and is

no defense to Ozga’s takings claims.

110

DNR and DILHR also refer to numerous

statutes that characterize construction in

a floodplain or floodway as a nuisance.

This, of course, assumes a fact not in

evidence in this record; namely that the

property is in a floodway. More to the

point, however, DNR and DILHR rely on "the

legislature’s declaration the uses [0Ozga]

desires are inconsistent with the public

interest"; an approach clearly rejected by

the Lucas Court. See, Lucas, 120 L.Ed.2d

at 822-823.

The County’s reliance in the Trial

Court on two cases to argue that Ozga’s

proposed construction constituted a

nuisance and could have been prevented at

common law is, at best, misplaced. The

first case, State v. Douglass, 4 Wis. 403

(1854), concerns maintenance of a dam

rather than construction of a building.

Again, the Briggsville dam is not, or at

111

least should not be, at issue in this

case. The County’s suggestion that

Douglass applies because “[tjhe structure

built by Plaintiff is just as capable of

displacing water outside of its natural

course" is not only facially absurd, but

clearly goes beyond this record. R.30:p.

16. There is nothing in this record

establishing that the Property is in the

floodway and nothing suggesting the

building would be in jeopardy or pose any

danger whatsoever during a flood.

The second case is State v. Trudeau,

139 Wis. 2d 91, 408 N.W.2d 337 (1987),

recons. den. 145 Wis. 2d 894, 434 N.W.2d

786; cert. den’d, 108 S. Ct. 701, 484 U.S.

1007, 48 L.Ed.2d 652. The County’s

reliance on that case is misplaced. The

Court merely held that §87.30(2), Stats.,

is an alternative statutory means of

112

enforcing local floodplain zoning

ordinances.

(PORTIONS OMITTED)

7. Defendants’ Jurisdictional

And Judicial Administration

Defenses Are Insufficient

To Support Summary

Judgment.

The appellants all claim immunity from

suit. DNR and DILHR suggest they have

sovereign and qualified immunity from all

claims. Meyer claimed sovereign immunity

from all claims because he was allegedly

sued in his official capacity. Messrs.

Quinlan, Rockweiler, and Ms. Josheffs

claimed qualified immunity from all claims

because the constitutional rights here

involved were not sufficiently clear at the

time of the action for a reasonable state

employee to have known the = action

constituted a constitutional violation.

The County claimed no _ qualified or

sovereign immunity.

113

a. Ozga’s State And

Federal Law Claims Are

Not Barred By

Sovereign Immunity.

The State suggests that all Ozga’s

state law claims except inverse

condemnation are barred by _ sovereign

immunity. State’s Brief at Page 23. The

doctrine of sovereign immunity has only

limited application to actions against the

State which allege a constitutional taking

of private property without just

compensation. Zinn, 112 Wis. at 435.

Sovereign immunity cannot bar actions for

just compensation. Id. Article 1, Section

13 of the Wisconsin Constitution is self-

executing and needs no express statutory

provision for its enforcement. Id. Ozga’s

claims under the federal Constitution and

42 U.S.C. §1983, therefore, are not subject

to Wisconsin’s sovereign immunity.

With respect to Ozga’s due process

claims, it is clear that a complaint

114

against state employees in their individual

capacities is not barred by state sovereign

immunity. See Lister v. Board of Regents,

72 Wis. 2d 282, 299, 240 N.W.2d 610 (1976).

These Individual Defendants were not sued

in their official capacities. Ozga can

concede that Defendant Meyer, based on

subsequent discovery, may not be properly

subject to this action. The other three

Individual Defendants, Ms. Josheffs, and

Messrs. Quinlan and Rockweiler, are,

however, appropriately parties to this

action. Each was sued not because he or

she holds a particular position but because

their acts taken together and under color

of state law deprived Ozga of its property

without just compensation and without due

process of law.

115

b. The Defendants Are Not

Entitled To Qualified

Immunity.

The issue of qualified immunity is a

question of law to be decided by the Court.

Barnhill v. Board of Regents, 166 Wis. 2d;

395, 406, 479 N.W.2d 917 (1992). Factual

disputes relative to the immunity claim,

however, preclude summary judgment. Archer

v. Sanchez, 933 F.2d 1526, 1531 (10th Cir.

1991).

Qualified immunity for discretionary

acts does not apply to agencies but merely

immunizes acts of individual public

officials for discretionary acts taken in

their official capacity. C.L. v. Olson,

143 Wis. 2d 701, 708-715, 422 N.W.2d 614

(1988). Consequently, neither DNR, DILHR

nor the County can claim qualified immunity

from suit.

The defense of qualified immunity must

be denied where Plaintiff demonstrates, at

116

the time of violation, that the right was

clearly established such that a reasonable

official would understand that what he or

she is doing violates that right. Baxter

v. DNR, 165 Wis. 2d 298, 307, 477 N.W.2d

648 (Ct. App. 1991).

Ozga had ae clearly established

constitutional right to build on its own

property subject only to legitimate

permitting requirements. Nollan, 483 U.S.

at 853, fn.2. Ozga also had a right to be

advised of the reasons its applications

were being denied, or even when they were

"“non-approved." Ozga had a right to a

decision on its permit applications based

not on hearsay, conjecture or guesswork but

on reasonable investigation into the facts.

Ozga had a right to rely on the judgment of

this and lower courts with respect to the

RFE at his property and to insist that the

government recognize that judgment in

REO SMR HIT

117

connection with its permit applications.

See, Nollan at 687.

Those rights were clear at the time

Ozga first applied for a building permit

and throughout the course of this ordeal.

The decisions establishing those rights

predate Ozga’s original application. The

government is charged with conforming its

behavior to the law. Moreover, this appeal

does not raise questions regarding

subtleties or nuances of Defendants’

behavior. The abuses visited on Ozga are

gross violations of its constitutional

rights.

The question then devolves to whether

it was reasonable for the Defendants to act

as they did in the face of those clearly

established rights without knowing that

they violated the law. Manifestly it was

not.

118

c. Plaintiff Did Not Fail

To Exhaust Its

Administrative

Remedies.

The Defendants argue that the Amended

Complaint fails to state a claim under 42

U.S.C. §1983 because Ozga allegedly failed

to file an adequate notice of claim. The

notice of claim requirement, however,

applies to neither federal constitutional

actions nor to actions under 42 U.S.C.

§1983. Defendants have cited Kramer v.

Horton, 128 Wis. 2d 404, 383, N.W.2d 54

cert. denied, 476 U.S. 918 (1986), for the

proposition that a §1983 plaintiff must

exhaust state administrative remedies

before going to court. Kramer, however,

was reversed on precisely that issue in

Casteel v. Vaade, 167 Wis. 2d 1, 17, 481

N.W.2d 477 (1992).

Moreover, the U.S. Supreme Court has

made it absolutely clear that neither the

notice of claim statute nor a common law

119

exhaustion requirement will bar an action

under §1983. - Ca , 139 Wis. 2d

614, 408 N.W.2d 19 (1987) reversed at 487

U.S. 131, 147 (1988). While §893.82(2)(m),

Stats., requires strict compliance with the

requirements of the statute, this provision

was not added to the law until the 1991-92

biannual state budget, therefore, it does

not apply to notices of claim filed by the

Plaintiff. 1991 Wisconsin Act 39, Section

3582.

Finally, if there was any

administrative or judicial remedy available

to the Plaintiff for Defendants’ actions,

no notice of it was given to the Plaintiff.

While this may be understandable under the

Circumstances, it is clear failure to

afford Ozga the process to which it was

constitutionally due.

The Kramer case relied on _ by

Defendants is still a good law on at least

120

one issue. The case does stand for the

proposition that, if a state administrative

body “either cannot or will not afford [a

person] adequate relief ...", exhaustion

is not required prior to bringing a §1983

action. Where there is evidence that the

agency is biased or unwilling to hear the

claim or is "delaying review

unnecessarily,” exhaustion is not required

either. Kramer, 128 Wis. 2d at 420.

It flies in the face of common sense

and fairness to suggest that, after nearly

six years of pursuing permit applications,

defending lawsuits, and dealing with state

agencies and their employees, Plaintiff has

somehow failed to exhaust its

administrative remedies. More likely the

gravamen of Defendants’ concern here is

that they failed to exhaust Ozga.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.