Opposition Brief — Guetersloh v. Texas

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94-393) ("Tir

NOV 29 1994

NO.

RARARAAARARARARARRARARRRRARAERARRRARRRRRR *MF FICE OF THE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1994

M.F. GUETERSLOH, JR.,

Petitioner

THE STATE OF TEXAS, et al.,

Respondents

RESPONDENTS’ BRIEF IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

DAN MORALES

Attorney General of Texas

JORGE VEGA

First Assistant Attorney General

TONI HUNTER

Chief, General Litigation Division

Assisting on the Brief: JAMES C. TODD

DAVID S. MORALES Assistant Attorney General

General Litigation Division

P.O. Box 12548, Capitol Station

Austin, Texas 78711-2548

(512) 463-2120

Counsel for Respondents

QUESTION PRESENTED FOR REVIEW

Is the Eleventh Amendment a procedural bar to a takings

claim under the Fifth and Fourteenth Amendment to the U.S.

Constitution, in an inverse condemnation suit against a State and

its officials?

TABLE OF CONTENTS

QUESTION PRESENTED FOR

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CONSTITUTIONAL PROVISIONS

I. THIS COURT SHOULD DENY

CERTIORARI BECAUSE NO

LEGITIMATE CONFLICT

EXISTS AS TO WHETHER

THE ELEVENTH

AMENDMENT ACTS AS A

JURISDICTIONAL BAR TO A

SUIT FOR DAMAGES

AGAINST A STATE IN

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II. THIS COURT SHOULD DENY

CERTIORARI BECAUSE

PETITIONER’S FIFTH

AMENDMENT JUST

COMPENSATION CLAIM IS

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III. THIS COURT SHOULD DENY

CERTIORARI BECAUSE

PETITIONER HAS AN

ALTERNATIVE FORUM FOR

ADJUDICATING HIS FIFTH

AMENDMENT JUST

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TABLE OF AUTHORITIES

CASES

City of Austin v. Teague, 570 S.W.2d 389

ee aa cpactsicanessoveaneceoenonscorcesesene 9

Estate of Scott v. Victoria County, 778 S.W.2d 585

(Tex.App. -- Corpus Christi 1989, n.w.h.) ..00.000.0000cc. 10

First English Evangelical Lutheran Church v.

County of Los Angeles, 482 U.S. 304,

EE 8, 10

Ford Motor Co. v. Department of Treasury,

pe | | 5

Grand Prarie v. Sisters of Holy Family, 868 S.W.2d 835

(Tex.App. -- Dallas 1993, n.w.h.)....0...0.ccccecceceeeeeeeeeees 10

Harrison v. Hickel, 6 F.3d 1347 (9th Cir. 1993) ..0..00....000000000. 5

John G. and Stella Marie Kenedy Mem. Foundation

v. Mauro, 21 F.3d 667 (Sth Cir. 1994) ooo. 5

Lucas v. South Carolina Coastal Council,

ee 8

Monell v. Department of Social Services,

436 U.S. 658, 98 S.Ct. 2018 (1978) ooo. ee, 10

Mt. Healthy Board of Education v. Doyle,

429 U.S. 274, 97 §.Ct, S68 (1977) ooo cceeeeeeeeee. 10

Pennhurst State School & Hosp. v. Halderman,

465 U.S. 89, 104 S.Ct. 900 (1984)

People of the Territory of Guam v. Yang,

Se ee Biase ieinstcis censssenareviccinedscdocncdeasovs 6

Quern v. Jordan, 440 U.S. 332, 99 S.Ct 1139 (1979)... 0000000... 5

Samaad v. City of Dallas, 940 F.2d 925

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State v. Biggar, 873 S.W.2d 11 (Tex.1994)..........ccceeeeeee 10

Steele v. City of Houston, 603 S.W.2d 786 (Tex. 1980) ........... o)

Williamson County Regional Planning v. Hamilton Bank,

STS UD. UFZ, FD SAA SO CON in cesevcssecnccesecévscscenses 6,9

NO.

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-IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1994

M.F. GUETERSLOH, JR.,

Petitioner

THE STATE OF TEXAS, et al.,

Respondents

RESPONDENTS’ BRIEF IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

CONSTITUTIONAL

PROVISIONS INVOLVED

The following constitutional provisions are at issue: U.S.

Const. Amend. V, XI, and XIV.

STATEMENT OF THE CASE

In 1982, Petitioner owned a lienholder’s interest in a small,

privately owned water system in the rural Carlisle community

near Lubbock, Texas, having sold the system to an individual

named Ray Nichols. Petitioner retained a vendor’s lien and deed

of trust as security. The system was in a dilapidated condition at

the time of the sale to Nichols.

Nichols managed the utility in violation of state statutory

standards and after reviewing complaints from customers, the

Public Utility Commission (PUC)' investigated, held hearings,

and on October 22, 1982, ordered Nichols to remedy a number

of serious technical and managerial deficiencies.

When the violations continued, PUC filed suit in state district

court in Travis County to declare statutory receivership*. In

July, 1983, a Travis County court named James Miller receiver

and directed him to take possession of and operate the utility to

prevent interruption of service and to maintain compliance with

the Health Department and PUC standards.

In late 1985, Petitioner privately foreclosed his lien, claimed

legal title to the system and attempted to re-enter and take

possession of the utility. Unable to oust the receiver, he

physically removed one of the pumps and shut down the water

supply. When that tactic didn’t succeed, he attempted to evict

the receiver by filing a forcible entry and detainer action in JP

court, but the receiver sought and received an order from the

district court in Austin enjoining further interference with his

management.

' In 1985, authority to regulate water and sewer systems was transferred

from the PUC to the Texas Water Commission under the Texas Water

Code. See historical note Tex. Water Code Ann. § 13.001 et seq. (Vernon

1988) at 271.

2 The Public Utilities Regulatory Act, Tex.Rev. Civ.Stat.Ann., art. 1446c

(Vernon 1980), as originally enacted in 1975, contained no provision for

receivership; that was added as Art. 1446C §§ 71A and 71B, effective April

7, 1981 (Vernon Supp. 1993, at 109). On receivership practice generally

see Tex.R.Civ.P. 695, Tex. Civ.Prac.Rem. Code §64.001 ef seg. Dorsaneo,

Texas Litigation Guide, Chapter 43 (Matthew Bender, 1992).

From time to time during the pendancy of the receivership,

attorneys representing the state notified Petitioner of

developments in the proceedings and suggested that he intervene

as he had a right to do under the applicable statutes,’ but he

failed to do so. Instead, Petitioner filed an inverse condemnation

lawsuit in a district court in Lubbock County, naming as

defendants the receiver, James Miller, and the City of Lubbock.

In that action Petitioner originally alleged that the

receivership constituted a “taking, damaging, or destroying ...

for, or application to, public use without adequate

compensation” in violation of the Texas Constitution and the

Fifth and Fourteenth Amendments to the United States

Constitution. Subsequently, Petitioner abandoned his federal

constitutional takings claims, and elected to proceed solely on

the basis of his state constitutional claims.

The Public Utilities Commission intervened in the inverse

condemnation action and took over the defense. In March,

1986, PUC lawyers caused the receivership case to be

transferred from Travis County to Lubbock. At this point, both

cases were in Lubbock County, but in different district courts.

The receiver continued to manage the utility until April,

1988, on which date administration was terminated and the

receiver’s final accounting approved without objection.

Petitioner still had not intervened.

By the time of the termination of the receivership, the City of

Lubbock had completed extension of its lines into the Carlisle

community, and all of the former customers of Petitioner’s

private utility were hooked up to the municipal water system.

Next, the PUC and City of Lubbock filed motions for summary

judgment in the inverse condemnation suit. Petitioner offered no

proof in the summary judgment proceeding, not even evidence

of his legal title, and the district court granted summary

> See footnote 2.

judgment to all movants except the PUC. The Lubbock court

transferred the case back to Travis County, and the district court

there granted summary judgment to the PUC.

Petitioner appealed to the Austin Court of Appeals, and it

affirmed. The Texas Supreme Court denied writ of error.

On June 10, 1992, Petitioner filed his First Original

Complaint in the United States District Court for the Western

District of Texas, Austin Division. Petitioner brought an action

for inverse condemnation alleging that Respondents, the State of

Texas, the Public Utilities Commission (PUC), the Texas Water

Commission, Attorney General Dan Morales, the directors and

employees of these agencies in their individual and official

capacities and James Miller, had taken Petitioner’s property in

violation of the Fifth and Fourteenth Amendments to the U.S.

Constitution, and of 42 U.S.C. § 1983. Petitioner sought

compensatory and punitive damages, pre- and post-judgment

interest and attorney’s fees.

On September 15, 1993, the parties appeared before United

States Magistrate Alan Albright for a non-jury trial on the

merits. Petitioner asserted two claims in the trial court: the first

an action against the State of Texas‘ for “just compensation” for

the taking of property and, the second, a 42 U.S.C. § 1983 civil

rights claim against the individual estates of several officials,

lawyers, and the receiver, James Miller.

The trial court entered a final order on September 17, 1992

denying relief on all claims. Petitioner seeks writ concerning

only his takings claims against the state, and has abandoned the

civil rights claims against all of the individuals. The only issue

raised by this petition for writ relates to the claim for just

compensation against the State of Texas.

on,

The incarnations in which the state is sued are as Public Utilities

Commission, Texas Water Commission, Attorney General Dan Morales,

and the directors and employees of these agencies in their official capacities.

ar)

The trial court held that the claim was barred by the Eleventh

Amendment, the statute of limitations, and res judicata. The

trial court also held that there was no compensable taking and

that Petitioner had failed to prove any monetary loss as a result

of the claimed taking. On June 3, 1994, the Fifth Circuit

modified and affirmed the trial court judgment, holding that the

dismissal of Petitioner’s claims was proper for want of

jurisdiction under the Eleventh Amendment.

REASONS FOR DENYING THE WRIT

ARGUMENT

I. THIS COURT SHOULD DENY CERTIORARI

BECAUSE NO LEGITIMATE CONFLICT EXISTS

AS TO WHETHER THE ELEVENTH

AMENDMENT ACTS AS A JURISDICTIONAL BAR

TO A SUIT FOR DAMAGES AGAINST A STATE IN

FEDERAL COURT.

The Fifth Circuit properly concluded that the Eleventh

Amendment is a jurisdictional bar to a suit for damages in federal

court against a state, any state agency, or state officer in his

official capacity, and that any abrogation or waiver of such a bar

must be express and unequivocal. The Circuit’s decision was

based upon well-established Eleventh Amendment principles

embraced and adopted by this Court. Quern v. Jordan, 440

U.S. 332, 343, 99 S.Ct. 1139, 1146 (1979); Pennhurst State

School & Hosp. v. Halderman, 465 U.S. 89, 98-100, 104 S.Ct.

900, 907-8 (1984); Ford Motor Co. v. Department of Treasury,

323 U.S. 459, 462, 65 S.Ct. 347, 350 (1945).

Petitioner’s Fifth Amendment just compensation action in

federal court against the State of Texas is, consequently, barred

for lack of jurisdiction. John G. and Stella Marie Kenedy Mem.

Foundation v. Mauro, 21 F.3d 667, 674 (Sth Cir. 1994);

Harrison v. Hickel, 6 F.3d 1347, 1352 (9th Cir. 1993).

Petitioner’s assertion that the circuits are in conflict is

misplaced. Petitioner’s sole reliance on an unpublished Sixth

Circuit opinion does not present before this Court a legitimate

conflict of binding circuit law. Unpublished opinions are not

written to pronounce the law of the jurisdiction. They are

written merely to inform the parties of the reasons for the

court’s decision, not to serve as guidance for future judicial

decisionmaking. They do not contain extensive and elaborate

reasoning or narrowly tailored holdings, and precise language is

notably absent from them. People of the Territory of Guam v.

Yang, 800 F.2d 945, 949 (9th Cir. 1986). They have, by

definition, no controlling precedential authority, and cannot

serve as the sole basis for a challenge of binding circuit law. See

e.g. FED. R. APP. P. 47; STH CIR. R. 47.5.1, 47.5.3.

Consequently, federal jurisprudence would be better served

by letting this issue percolate further in the circuits.

II. THIS COURT SHOULD DENY CERTIORARI

BECAUSE PETITIONER’S FIFTH AMENDMENT

JUST COMPENSATION CLAIM IS NOT RIPE.

Petitioner’s Fifth Amendment Just Compensation claim is

not properly before this Court. Petitioner has failed to exhaust

the available and adequate state remedies afforded to him by the

State of Texas. This Court has determined that this failure to

exhaust state remedies is an unwaiyable prerequisite to a Fifth

Amendment suit.

If a State provides an adequate

procedure for seeking just compensation,

the property owner cannot claim a

violation of the Just Compensation Clause

until it has used the procedure and been

denied just compensation. Williamson

County Regional Planning v. Hamilton

Bank, 473 U.S. 172, 195, 105 S.Ct.

3108, 3121 (1985).

A property owner, as a matter of law, cannot suffer a

violation of the Just Compensation Clause until the owner has

been denied just compensation through the procedures provided

by the state for obtaining such compensation. Jd. The Fifth

Amendment does not proscribe the taking of property; it only

proscribes taking without just compensation. Jd. at 194, 105

S.Ct. at 3120.

Petitioner’s claim does not present to this Court an

opportunity to decide whether a property owner, having

exhausted all state remedies and been denied just compensation,

can bring a Fifth Amendment cause of action against a state in

federal court. This case contains complicated facts that render a

writ improper at this time. Petitioner has not used the

procedures the State of Texas has implemented to remedy

government takings without just compensation. Petitioner failed

to intervene in the receivership proceeding, stating that in his

subjective belief he would not be successful. This remedy,

which Petitioner has made no attempt to characterize as

inadequate to protect his federal constitutional rights, is only one

example of Petitioner’s lack of diligence in seeking relief under

state remedial procedures.

Petitioner subsequently filed suit in state court, first

asserting, but later abandoning, his Fifth Amendment Just

Compensation action. Petitioner ultimately proceeded solely

under the Texas Constitution’s takings clause. Petitioner,

having elected not to argue his Fifth Amendment claim in state

court, and having lost his takings case under the Texas

Constitution, now asserts that the state remedy is inadequate in

actual practice to provide him with just compensation under the

Fifth Amendment.

Petitioner seems to equate success of his claim in the state

courts with an adequate and available state remedy. If this were

the case, every plaintiff who was dissatisfied with the results of

his state takings lawsuit could demand relief from the federal

courts. Neither lack of success in a state court, nor a claimed

inadequacy of an award rise to the level of a constitutional

question.

The test for an available and adequate state procedure for

seeking just compensation begins with the presumption that the

state procedure implemented is fair. A plaintiff then carries the

burden of establishing that the state law unquestionably would

afford him no remedy. See Samaad v. City of Dallas, 940 F.2d

925, 935 (Sth Cir. 1991). Petitioner’s assertion that Texas law

affords him no remedy, based solely on the Texas courts’

findings that he was entitled to no compensation, is incorrect.

Comparison of state and federal law reveals that Texas law is as

liberal, if not more so, as federal law in compensating property

owners subjected to regulatory takings under the police power.

Id. at 936.

Under federal law, regulatory takings that involve physical

invasion of property entitle the owner to compensation even if

the taking is only partial or temporary. Lucas v. South Carolina

Coastal Council, _ US. _, 112 S.Ct. 2886, 2892 (1992);

First English Evangelical Lutheran Church v. County of Los

Angeles, 482 U.S. 304, 318, 107 S.Ct. 2378, 2388 (1987). On

the other hand, where the government does not physically

occupy the property but only restricts its use -- for example, by

zoning ordinance -- federal law requires compensation only if the

effect is a total denial of all economically beneficial uses of the

property. Lucas, 112 S.Ct at 2895; First English, 482 U.S. at

320, 107 S.Ct at 2388. Land use regulations which merely

diminish the value are not takings under federal law and are not

required to be compensated. Federal law does nor require

compensation for mere damage to property as does Texas law.

Id.

An analysis of Texas eminent domain law begins with Article

I, Section 17 of the Texas Constitution.

“No person’s property shall be taken,

damaged, or destroyed for or applied to

public use without adequate

compensation.”

The Texas Supreme Court has interpreted this language to

create a cause of action under state law for the recovery of the

economic value of property resulting from valid scenic zoning

regulations enacted under the police power, whether the losses

are permanent or temporary. City of Austin v. Teague, 570

S.W.2d 389, 394 (Tex. 1978). The Texas Constitution,

therefore, compensates for regulatory takings at least as liberally

as does the federal. In addition, state law apparently goes

further than federal law and provides a remedy for mere damage

to property resulting from lawful exercise of police power

whether or not it amounts to a taking. Steele v. City of Houston,

603 S.W.2d 786, 789 (Tex. 1980).

It is clear that since Texas has fashioned remedies that meet

or surpass federal standards’, these remedies are far from being

“unavailable” or “inadequate.” Petitioner’s assertion that the

decision of the Texas state courts granting summary judgment

against him in his state takings action, constitutes evidence of an

inadequate and unavailable remedy, is erroneous and presents no

substantive question for this Court’s determination.

lil. THIS COURT SHOULD DENY CERTIORARI

BECAUSE PETITIONER HAS AN ALTERNATIVE

FORUM FOR ADJUDICATING HIS FIFTH

AMENDMENT JUST COMPENSATION CLAIM.

The Fifth Circuit correctly concluded that Petitioner is not

without recourse as to his Fifth Amendment Just Compensation

claim. The Texas courts are open to Fifth Amendment inverse

condemnation suits for damages against the state This

* See Williamson County, 473 US. at 196, 105 S.Ct. at 3122; Samaad, 940

F.2d at 934-35.

availability is not disputed by Petitioner, and is further evidenced

by his filing such an action in state court. Petitioner,

nonetheless, claims that he should have the additional right to a

trial in federal court, and argues that applying the Eleventh

Amendment to bar Fifth Amendment Takings claims against a

state in federal court will have “the effect of rendering the

takings clause of the Fifth Amendment meaningless as applied to

the states.” This statement is inaccurate. A property owner

who has suffered a taking by a state has a forum available in

which he may have his Fifth Amendment rights adjudicated.

Plaintiff asserts that this remedy is inadequate given his

unsuccessful state court suit in which the appellate court ruled

that compensation was not required for the loss Petitioner

sustained. The question of whether compensation is required is

a question of fact that, in this case, has been decided under the

Texas Constitution. This determination was also available to

Petitioner under the U.S. Constitution had he chosen to litigate

that issue. Petitioner’s assertion concerning the adequacy of the

state remedy at this time, however, is inappropriate.

Petitioner refers at length to First English, to support his

contention that he has a right to a federal cause of action for his

Fifth Amendment takings claim. This is not the case. In First

English, the Plaintiff brought its Fifth Amendment claim in state

court against a defendant that was not a state. It is not disputed

that a property owner can maintain this type of suit against a

municipality or county. See Mt. Healthy Board of Education v.

Doyle, 429 U.S. 274, 280-81, 97 S.Ct. 568, 572-73 (1977);

Monell v. Department of Social Services, 436 U.S. 658, 690, 98

S.Ct. 2018, 2035 (1978). This rule of law, however, does not

support Petitioner’s contention that such a suit can be

maintained in federal court against a state.

Further, First English actually supports the principle that the

litigation of Fifth Amendment claims in state court is sufficient

to afford a person his rights under the Fifth Amendment.

Petitioner could have brought his Fifth Amendment claim in

State court just as the plaintiffs in First English did, but elected

not to. Texas courts have been, and continue to be, open to

inverse condemnation damage claims on the basis of the Fifth

Amendment. State v. Biggar, 873 S.W.2d 11, 13 (Tex.1994);

Estate of Scott v. Victoria County, 778 S.W.2d 585, 589-91

(Tex.App. -- Corpus Christi 1989, n.w.h.); Grand Prarie v.

Sisters of Holy Family, 868 S.W. 2d 835, 844 (Tex.App. --

Dallas 1993, n.w.h.). Thus the Fifth Circuit’s holding, contrary

to Petitioner’s assertion, has not rendered the Fifth Amendment

meaningless. Petitioner’s writ should, therefore, be denied.

CONCLUSION

Respondents respectfully request that this Court deny

Petitioner’s Writ of Certiorari to the United States Supreme

Court.

Respectfully submitted,