# Reply Brief — South Dakota v. SDDS, Inc.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_0789%3A4

## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2001
- **Citation:** 532 U.S. 1007

## Text

‘4 >upreme Coert, US,
J riLletpD

No. 00-1273 APR}; 200:

Jn the Supreme Court of the Gnited States

STATE OF SOUTH DAKOTA,
Petitioner,
v.
SDDS, INc.,
Respondent.

On Petition for a Writ of Certiorari to the
United States Court of Appeals for the Eighth Circuit

PETITIONER’S REPLY BRIEF
MICHAEL J. SCHAFFER CHARLES A. ROTHFELD
SANDRA K. HOGLUND Counsel of Record
Davenport, Evans, Hurwitz DAVID GOSSETT
& Smith, LLP Mayer, Brown & Platt
513 South Main Avenue 1909 K Street, NW
Sioux Falls, SD 5710] Washington, DC 20006
(605) 336-2880 (202) 263-3000

WILLIAM P. FULLER
Woods, Fuller, Shultz &
Smith, P.C.
300 S. Philips Ave., Ste. 300
P.O. Box 5027
Sioux Falls, SD 57101
(605) 336-3890

Counsel for Petitioner

TABLE OF CONTENTS

py Rha ig ee ere rrr ee ii

A. SDDS’s Account Of The Proceedings Below Should
Not Obscure The Eighth Circuit’s Holding That A State
Waives Its Eleventh Amendment Immunity By
NE Th RIE ows 8 doch 0 cee ndcvuks beans ]

B. The Eighth Circuit’s Erroneous Interpretation of Rule
60(b)(4) Is Inconsistent With Decisions Of Other
Courts Of Appeals And Warrants Review ........... 3

C. This Court Should Review The Eighth Circuit’s
Holding That A State Waives Eleventh Amendment
Immunity By Participating In Litigation ............ 7

li

TABLE OF AUTHORITIES
Page(s)
Ackerman v. United States, 340 U.S. 193 (1950) ........ 5
Clark v. Barnard, 108 U.S. 436 (1883) ............... 8
Durfee v. Data, 7S UB. WOR GI ca ccnnveccvvccess 5
Federated Dept. Stores, Inc. v. Moitie,

452 US. FOR CURRED ok sh oe ee ee vanes 5
Florida Dep't of State v. Treasure Salvors, inc.,

438 U.S. GTO CHORD) buhivie si Cl este ees 8
Gunter v. Atlantic Coast Line R.R., 200 U.S. 273 (1906) . 8
Howlett v. Rose, 496 U.S. 356 (1990) ................ 9
Jordan v. Gilligan, 500 F.2d 701 (6th Cir. 1974) ........ 6
Kovacevich v. Kent State University, 224 F.3d 806

(60a Cm. PODS nc icc eae 6
Mathias v. WorldCom Technologies, Inc.,

Mo. GETS 0. .05:80unneee eee ees 9,10
Pennhurst State School & Hosp. v. Halderman,

465 U.S. BD CURBS). 5 xk ue eee a eke 9
Petty v. Tennessee-Missouri Bridge Comm'n,

399 US. 279 RS i eke ee ss 8
Port Authority Trans-Hudson Corp. v. Feeney,

GIS US. BFP 6 kad an eek eee eek aes 9
Saahir v. Estelle, 47 F.3d 758 (Sth Cir. 1995) .......... 8
United States v. United States Fidelity & Guar. Co.,

SOP US. SOR CIOS 5 bes ke xs cee eens esses 4,5
Watts v. Pinckney, 752 F.2d 406 (9th Cir. 1985) ........ 5

Wisconsin Dept. of Corrections v. Schacht,
SAUD. Bee COMO: 8 ok bea ko kk oe Keds ]

iil

TABLE OF AUTHORITIES — Continued

Page(s)

STATUTES ND RULES
MOR inc. sccccesceaccsecnsesoesssess 9
I oneness cacseceranne: 5
Fed. R. Civ. P. 60(b)(4) ....---- eee eee ee eres passim
Bed BR Civ. P. GOUDNG) ......- 0-2 e cece cee ceecees: 5
S._D. CopIFIED LAWS § 1-11-1(2) (Michie 2000) ......--. 9
S._D. CopIFIED LAWS § 3-21-10 (Michie 2000) .......-- 9
MISCELLANEOUS
MoorE’S FEDERAL PRACTICE

(Matthew Bender ed. 2000) ....--..-------+++-- 4,5

RESTATEMENT (SECOND) OF CONFLICT OF LAWS (1971) ..4

Respondent SDDS’s brief in opposition confirms that the
decision below departs from fundamental principles of state
sovereignty. SDDS’s basic argument against review is its
assertion that States may be deemed to waive Eleventh
Amendment immunity by participating in litigation, and that,
in any event, federal-court judgments overriding that immunity
should not be treated as void. As we explained in the petition,
however, these arguments are inconsistent with decisions both
of this Court and of other courts of appeals. Because the Eighth
Circuit’s holding creates considerable confusion in areas of
great practical importance, further review is essential.

A. SDDS’s Account Of The Proceedings Below Should
Not Obscure The Eighth Circuit’s Holding That A
State Waives Its Eleventh Amendment Immunity By
Engaging In Litigation

SDDS’s account of the procedural background of this case
attempts to create the impression that the State was inexcusably
manipulative or dilatory in raising its Eleventh Amendment
arguments. Although these contentions have no direct bearing
on the legal issues presented here, it is worth noting that they
are misleading in several significant respects.

First, SDDS is wrong in contending that the State, in a
calculated attempt to “ma[k]Je free use of the federal courts
whenever doing so suits its purposes” (Br. in Opp. 5), expressly
consented to (or acquiesced in) the exercise of federal
jurisdiction over the claims at issue here. See Br. In Opp. 3-7.
The State and its officers did not voluntarily invoke federal
jurisdiction; they simply responded to the Commerce Clause
claims advanced against them in SDDS VI. See Pet. 3:
compare, é.g., Wisconsin Dept. of Corrections v. Schacht, 524
U.S. 381, 395 (1998) (Kennedy, J., concurring). To be sure, in
doing so the State’s attorneys failed expressly to contest the
assertion of federal jurisdiction over the State itself. But that
oversight is, perhaps, understandable: because the federal court
unquestionably had Ex Parte Young jurisdiction to resolve
claims that the 1991 ballot referendum was unconstitutional —
claims that were advanced against South Dakota officers sued

2

in their official capacities — the fact that the complaint also
named the State was of limited practical importance.

In contrast, the State and its officials have vigorously
contested the exercise of federal jurisdiction over claims that
could effectively require South Dakota to pay money damages
— that is, the claims that were advanced in SDDS VIII and that
are principally at issue in this petition. As SDDS itself
acknowledges (at Br. in Opp. 3), the State’s answer to the
complaint expressly invoked the Eleventh Amendment “to the
extent that [the complaint] can be construed to involve a claim
for monetary relief.” See Pet. 7 n.3. The State went on to
argue this point at length to the Eighth Circuit in SDDS VIII.
In re SDDS, Inc., No. 96-2705 (CA8), Resp. Br. 12-13. As a
consequence, SDDS plainly is wrong in suggesting that this is
a case in which the State tried to “manipulate federal courts and
litigants by, first, consenting to suit, then litigating to achieve
a desired result, and finally, after the litigation is done and the
judgments are final, withdrawing its consent.” Br. in Opp. 14.

Second, SDDS also is incorrect in arguing that this Court’s
denial of the State’s petition for certiorari in South Dakota v.
SDDS, Inc., No. 97-1378, has any bearing on the current
petition. The questions presented in No. 97-1378, which sought
review of a decision of the South Dakota Supreme Court,
concerned the substantive scope of the Eleventh Amendment
and the res judicata effect of certain federal judgments on
subsequent state-court proceedings; this case, in contrast,
presents entirely different questions concerning waiver of
Eleventh Amendment immunity and the scope of Rule 60(b)(4).
In addition, SDDS’s central grounds for opposing certiorari in
No. 97-1378 were the arguments that the state-court decision
was not yet final and that the federal questions in the case had
not been addressed. No. 97-1378, Br. in Opp. 9-14. Neither of
those arguments has any application here.

Third, SDDS misstates the basis of the Eleventh
Amendment holding below. The Eighth Circuit did not, as

Di aaeereeeeeeaisiiesiiaiilibiiiaiiiai

3

SDDS asserts, premise its decision on a finding of “an express
waiver [that] was followed by acquiescence in three adverse
final judgments.” Br. in Opp. 11. Instead, the court of appeals
declared that it was the State’s “conduct” of litigation on the
merits that effected the waiver of immunity. Pet. App. 4a-Sa.
Nor was it crucial to the court’s finding of waiver in this latest
proceeding that the Eighth Circuit’s prior assertions of
jurisdiction had become final; indeed, as we note in the petition
(at 13 n.7), the authority cited by the Eighth Circuit as support
for its waiver theory was a decision in which the State had
asserted immunity during the course of the initial district court
proceedings. The questions presented in the petition therefore
come to this Court in stark terms: whether a State waives
immunity by litigating the merits of the claim against it in
federal court, and whether a party is barred from seeking
review of a void judgment under Rule 60(b)(4) whenever the
party did not first challenge that judgment by petitioning this
Court for a writ of certiorari.

B. The Eighth Circuit’s Erroneous Interpretation of
Rule 60(b)(4) Is Inconsistent With Decisions Of
Other Courts Of Appeals And Warrants Review

1. In defending the Eighth Circuit’s construction cf Rule
60(b)(4), SDDS argues principally that a judgment issued in
violation of the Eleventh Amendment cannot be “void” within
the meaning of the Rule because Eleventh Amendment
immunity is waivable. Br. in Opp. 15-16. That reasoning, we
note, was not the basis for the holding below, which turned on
the Eighth Circuit’s conclusion that Rule 60(b)(4) is
inapplicable whenever the party seeking 60(b)(4) relief
declined to first petition this Court for certiorari to overturn the
challenged judgment. SDDS’s new argument is, in any event,
plainly inconsistent with this Court’s precedents. As we noted
in the petition (at 24), the Court settled long ago that,
notwithstanding a sovereign’s ability to waive its immunity, a
judgment against the sovereign is void unless the sovereign
actually has waived its immunity: “Consent alone gives

4

jurisdiction to adjudge against a sovereign. Absent that
consent, the attempted exercise of judicial power is void.”
United States v. United States Fidelity & Guar. Co., 309 U.S.
506, 514 (1940) (emphasis added). As we also noted, the Court
went on to hold in United States Fidelity & Guaranty that a
sovereign may not be bound by such a void judgment. See id.
at 514-515. SDDS makes no response to this point.

Indeed, even where collateral attacks on judgments are
involved (and as we explain below, the attack on the judgment
in this case is direct rather than collateral), the judgment is
“void if it * * * was issued in-contravention of a * * * sovereign
immunity. * * * [Such judgments] remain subject to collateral
attack if recognition or enforcement is sought either in the
jurisdiction where reached or in another jurisdiction.” 18
Moore’S FEDERAL PRACTICE § 130.04[3], at 130-15, 130-16
(Matthew Bender ed. 2000). For this reason, the usual res
judicata and collateral estoppel rule — which bars collateral
attack on a court’s determination of its own jurisdiction — “is
not applicable in actions against a sovereign where the officials
who represent the sovereign in the action are not empowered to
waive the immunity of the sovereign or to bind the sovereign by
litigating the question of its immunity.” RESTATEMENT
(SECOND) OF CONFLICT OF LAWS § 96, cmt. a (1971) (emphasis
added) (citing United States Fidelity & Guaranty). As a
consequence, so long as the State did not waive its Eleventh
Amendment immunity here, the challenged judgments are void
within the meaning of Rule 60(b)(4).

2. The other arguments that SDDS asserts against review
of the court of appeals’ Rule 60(b)(4) holding are insubstantial.
First, SDDS argues, as the Eighth Circuit held, that recourse to
Rule 60(b)(4) is foreclosed by the State’s failure to petition this
Court for certiorari to review the challenged judgments. Br. in
Opp. 16-17. As we explain in the petition (at 22-25), however,
nothing in Rule 60(b)(4) makes pursuit even of a direct appeal
from the void judgment — let alone the filing of a petition for
certiorari in this Court — a prerequisite for relief under the

5

Rule. Indeed, imposition of such a requirement would run
directly contrary to the rationale for the Rule, which is that a
void judgment is a “nullity”; for this reason, although motions
for relief from judgment brought pursuant to other sections of
Rule 60(b) must be filed within a “reasonable” time, “[a]
motion under Rule 60(b)(4) challenging a judgment as void is
subject neither to the ‘reasonable’ time requirement * * * [nor]
to the equitable doctrine of laches, but rather may be made at
any time.” 12 MOORE’S FEDERAL PRACTICE, § 60.44[5][a], at
60-150, 60-151. Again, SDDS makes no response to this point.’

Second, SDDS argues that the State was obligated to seek
certiorari directly from the Eighth Circuit’s decision in SDDS
VIII — presumably, in SDDS’s view, in lieu of ever seeking
relief under Rule 60(b)(4) — because the court of appeals held
in SDDS VIII that it had jurisdiction to decide the claim against
South Dakota, and a court’s express determination of its
jurisdiction ordinarily is not subject to collateral attack. Br. in
Opp. 17-18. But this argument is wrong on two scores. To
begin with, as we explained in the petition (at 23-24), a
challenge under Rule 60(b)(4) is “direct, not collateral,” Watts
v. Pinckney, 752 F.2d 406 (9th Cir. 1985), and the rule of
jurisdictional finality invoked by SDDS simply has no
application to direct attacks on judgments. SDDS makes no
attempt to deal with this point. In addition, as we note above,
United States Fidelity & Guaranty holds that an erroneous
determination of jurisdiction may not bind a sovereign, even in
proceedings that really are collateral. See also Durfee v. Duke,
375 U.S. 106, 114 (1963). There accordingly is nothing in the

' The authorities cited by SDDS at Br. in Opp. 17 offer it no support.
Ackerman v. United States, 340 U.S. 193 (1950), involved a request
for relief from judgment pursuant to Rule 60(b)(6), not Rule 60(b)(4).
The judgment in Ackerman thus was not void, making the decision
irrelevant here. Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394
(1981), concerned rules of res judicata, rather than those governing
direct attacks on judgments pursuant to Rule 60(b)(4), and also did
not concern a judgment that was void.

Hilly

6

Eighth Circuit’s jurisdictional holding that bars recourse to
Rule 60(b)(4).

Third, SDDS is wrong in contending that there is no
conflict in the circuits on the proper construction of Rule
60(b)(4). In the petition (at 21-23), we cited decisions of the
Fifth, Sixth, and Ninth Circuits holding that Rule 60(b)(4) relief
is available even when the movant failed to first appeal the
challenged judgment. Those courts expressly rejected the
approach taken by the Eighth Circuit here. SDDS’s only
attempt to distinguish those decisions is its observation that two
of them did not involve the Eleventh Amendment, and that the
Eleventh Amendment analysis used by the third has been
undermined by more recent doctrine. This argument, however,
entirely misses the crucial point. For present purposes, the
relevant holdings of the Fifth, Sixth, and Ninth Circuits are that
parties may invoke Rule 60(b)(4) even when they did not
appeal the challenged judgment; the relevant holding of the
Eighth Circuit is that parties may not invoke Rule 60(b)(4) in
such circumstances. None of these courts regarded the reason
that the challenged judgment was void as having any bearing on
the Rule 60(b)(4) analysis.? Review to resolve this conflict
therefore is necessary.

2

SDDS is wrong in suggesting that the Sixth Circuit’s decision in
Kovacevich v. Kent State University, 224 F.3d 806 (6 Cir. 2000),
somehow impliedly overrules the aspect of Jordan v. Gilligan, 500
F.2d 701 (6" Cir. 1974), that conflicts with the decision below. See
Br. in Opp. 18. Kovacevich recognized that Eleventh Amendment
immunity is waivable, but it went on to reaffirm that the immunity
may be raised at any point in the proceedings — and it dismissed on
immunity grounds a claim that had been raised for the first time on
appeal. Other claims were allowed to proceed only because they
were brought pursuant to a federal statute, enacted to enforce the
Fourteenth Amendment, that abrogated Eleventh Amendment
immunity. 224 F.3d at 816. Nothing in this holding retreats from
Jordan’s conclusion an appeal is not a prerequisite to invocation of
Rule 60(b)(4).

7

Fourth, SDDS also is wrong in contending that review is
unwarranted because Rule 60(b)(4) relief is appropriate only
when there has been “‘a plain usurpation of [judicial] power’”
and that, because “the Eleventh Amendment does not
automatically deprive the federal courts of original jurisdiction
over a State,” the Eighth Circuit’s decision “was not [an]
egregious usurpation of power.” Br. in Opp. 19 (citation
omitted). This reasoning, again, was not the basis for the
decision below. And the argument is wrong on its own terms.
The fact that Eleventh Amendment immunity may be waived
surely does not mean that a judgment is insulated from attack
when a court commits plain error by exercising jurisdiction
over a State that has not waived its immunity. That, of course,
is precisely what happened here.

C. This Court Should Review The Eighth Circuit’s
Holding That A State Waives Eleventh Amendment
Immunity By Participating In Litigation

SDDS’s arguments against review of the Eighth Circuit’s
Eleventh Amendment holding are insubstantial. SDDS does
not deny that, to the extent that its claims are attempting to
obtain monetary relief from the State, the “waiver” of immunity
found by the Eighth Circuit is one that is implied from the
State’s conduct of litigation. And SDDS makes no attempt to
explain away the disagreement in the courts of appeals about
the rules governing implied waivers of Eleventh Amendment
immunity. Against this background, SDDS offers no reason for
the Court to deny certiorari.

1. SDDS’s principal argument against review is the
assertion that the State did waive its immunity. But this
contention assumes its conclusion. Like the Eighth Circuit,
SDDS premises its argument on the proposition that a State
surrenders its immunity when its attorneys “voluntarily
appear[] and participate[] on the merits of a case in federal
court.” Br. in Opp. 20. As we explained in the petition,
however, this Court consistently has rejected this argument,

8

holding that “[t]he fact that the State appeared and offered
defenses on the merits does not foreclose consideration of the
Eleventh Amendment issue.” Florida Dep’t of State v.
Treasure Salvors, Inc., 458 U.S. 670, 683 n.18 (1982) (plurality
opinion).°

To escape this precedent, SDDS contends that, although
Eleventh Amendment immunity may be raised at any time prior
to final judgment, South Dakota may not now claim immunity
in this case because the State failed to invoke the Eleventh
Amendment until after “the conclusion of the proceedings in
question.” Br. in Opp. 21. Once again, as we explain above (at
3) and also noted in the petition (at 13 n.7), that was not the
basis for the Eighth Circuit’s holding; the court of appeals
believed that waiver could be found simply because ““the State
has made a general appearance in federal court and defended a
lawsuit on the merits.”” Pet. App. 4a (citation omitted).
Indeed, the asserted “finality” of SDDS VIII could not have
been crucial to the holding below because South Dakota did
assert its immunity prior to judgment, both in its answer to
SDDS’s complaint and in its argument to the Eighth Circuit in
SDDS VIII. It may be added, however, that South Dakota
would be entitled to assert its immunity now even had it failed
to do so prior to issuance of the Eighth Circuit’s mandate in
SDDS VIII, courts of appeals routinely have held that States
may invoke the Eleventh Amendment to challenge the
enforcement of unappealed judgments that had long since
become final. See, e.g., Saahir v. Estelle, 47 F.3d 758, 762 (5"
Cir. 1995).

> Not surprisingly, the authorities cited by SDDS at Br. in Opp. 20
are inapposite. In Clark v. Barnard, 108 U.S. 436, 447-448 (1883),
and Gunter v. Atlantic Coast Line R.R.,200 U.S. 273, 292 (1906), the
State itself voluntarily invoked the jurisdiction of the federal court.
And Petty v. Tennessee-Missouri Bridge Comm'n, 359 U.S. 275,
278-282 (1959), involved an interstate compact, entered into by the
State, that this Court construed to waive immunity. There is nothing
remotely similar in this case.

9

2. SDDS’s argument that the Court should disregard the
South Dakota statute that prohibits state officials from waiving
Eleventh Amendment immunity has no merit at all. SDDS’s
contention that the statute is ambiguous (see Br. in Opp. 21) is
patently wrong; the provision provides, without exception, that
“{njo waiver of state immunity by statute or, where permitted,
by any officer or agent of the state may constitute or be
interpreted as a waiver of the state’s immunity from lawsuits in
federal court.” S.D. CODIFIED Laws § 3-21-10 (Michie 2000)
(emphasis added). As we noted in the petition (at 11-12), this
statute, with its express disapproval of attempted waivers by
state officers, has greater clarity than the provision at issue in
Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 103
n.12 (1984) — which the Court read to declare “an express
preservation of [the State’s] immunity from suit in federal
court.” SDDS also is incorrect in arguing that § 3-21-10 is
inconsistent with a South Dakota law that permits the State’s
attorney general to defend the State “in any court.” Br. in Opp.
21 (citing S.D. CopIFIED LAws § 1-11-1(2)). In fact, as this
Court has long held, such a general statutory reference to
“courts” may not be interpreted tc waive a State’s immunity
against suit in federal court. See, e.g, Port Authority Trans-
Hudson Corp. v. Feeney, 495 U.S. 299, 3060).

SDDS’s remaining argument — that § 3-21-10 is preempted
by 42 U.S.C. § 1983 (see Br. in Opp. 22-24) — is frivolous. It
doubtless is true that States may not, by statute, immunize state
officials against liability under § 1983, and the various decisions
cited by SDDS stand for that proposition. See, e.g., Howlett v.
Rose, 496 U.S. 356, 376-377 (1990). That hardly means,
however, that federal law preempts state statutes that decline to
waive a State’s constitutional immunity. If that were the case,
Eleventh Amendment immunity would be rendered nugatory.

3. Finally, we note that the recent grant of certiorari in
Mathias v. WorldCom Technologies, Inc., No. 00-878, confirms
that review in this case likewise is warranted. Mathias presents
the question whether a state regulatory commission’s

10

“acceptance of Congress’ invitation to participate in
implementing a federal regulatory scheme that provides that
state commission determinations are reviewable in federal court
constitutes a waiver of Eleventh Amendment immunity”; the
grant of certiorari suggests recognition of confusion in the courts
of appeals about the scope of the Amendment. At the same
time, it bears emphasis that it would not be appropriate for the
Court to hold this case pending disposition of No. 00-878. The
outcome in Mathias, which concerns the scope of congressional
authority and the significance of state participation in a field that
is regulated by Congress, will not control disposition of the
Eleventh Amendment issue in this case — and will have no
bearing at all on the Rule 60(b)(4) question. Holding the
petition therefore would not obviate the need for ultimate review
by this Court and would only delay final disposition of the case.

For the foregoing reasons and those stated in the petition, the
petition for a writ of certiorari should be granted.

Respectfully submitted.
MICHAEL J. SCHAFFER CHARLES A. ROTHFELD
SANDRA K. HOGLUND Counsel of Record
Davenport, Evans, Hurwitz DAVID GOSSETT
& Smith, LLP Mayer, Brown & Platt
513 South Main Avenue 1909 K Street, NW
Sioux Falls, SD 57101 Washington, DC 20006
(605) 336-2880 (202) 263-3000

WILLIAM P. FULLER
Woods, Fuller, Shultz &
Smith, P.C.
300 S. Philips Ave., Ste. 300
P.O. Box 5027
Sioux Falls, SD 57101
(605) 336-3890

APRIL 2001

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_0789%3A4. Public record. Not legal advice.