DLX Inc v. Comwlth KY ( 2004 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 DLX, Inc. v. Commonwealth No. 03-5528
ELECTRONIC CITATION: 2004 FED App. 0280P (6th Cir.) of Kentucky, et al.
File Name: 04a0280p.06
_________________
UNITED STATES COURT OF APPEALS COUNSEL
FOR THE SIXTH CIRCUIT ARGUED: D. Duane Cook, Stamping Ground, Kentucky,
_________________ for Appellant. S. Bradford Smock, OFFICE OF LEGAL
SERVICES, Frankfort, Kentucky, for Appellees.
DLX, INC., X ON BRIEF: D. Duane Cook, Stamping Ground, Kentucky,
Plaintiff-Appellant, - for Appellant. S. Bradford Smock, Mark A. Posnansky,
- OFFICE OF LEGAL SERVICES, Frankfort, Kentucky, for
- No. 03-5528 Appellees.
v. -
> MOORE, J., delivered the opinion of the court, in which
,
COMMONWEALTH OF SILER, J., joined. BALDOCK, J. (pp. 29-39), delivered a
-
KENTUCKY , et al., separate opinion concurring in the judgment of dismissal
-
Defendants-Appellees. - only.
- _________________
N
Appeal from the United States District Court OPINION
for the Eastern District of Kentucky at Pikeville. _________________
No. 02-00164—David L. Bunning, District Judge.
KAREN NELSON MOORE, Circuit Judge. Plaintiff-
Argued: June 11, 2004 Appellant DLX, Inc. (“DLX”) appeals from the dismissal of
its § 1983 action against Defendants-Appellees the
Decided and Filed: August 26, 2004 Commonwealth of Kentucky, the Kentucky Natural
Resources and Environmental Protection Cabinet (“Cabinet”),
Before: SILER, MOORE, and BALDOCK, Circuit and James E. Bickford, Secretary of the Cabinet, in his
Judges.* official capacity (collectively, “Kentucky”), alleging a taking
of its property without just compensation in violation of the
Fifth Amendment. The district court dismissed the complaint
on Kentucky’s Federal Rule of Civil Procedure 12(b)(1)
motion, for lack of subject matter jurisdiction, on the basis of
ripeness and the Rooker-Feldman doctrine. Although both of
these grounds were inapposite, we sustain this dismissal on
different reasoning, because the Eleventh Amendment bars
*
DLX’s claims against Kentucky in federal court. The district
The Ho norable B obb y R. B aldock, Circuit Judge of the United States court’s dismissal is therefore AFFIRMED.
Court of Appeals for the Tenth Circuit, sitting by designation.
1
No. 03-5528 DLX, Inc. v. Commonwealth 3 4 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
I. BACKGROUND the surface was proposed in a third submittal; further
deficiency letters resulted in a fourth submittal which left a
The Lilley Cornett Woods (“Woods”), in Letcher County, 250-foot vertical cover, and proposed a fifty-percent recovery,
Kentucky, is a tract of land owned by the state and maintained that is, that half the coal in the area was extractable under the
by Eastern Kentucky University as a wildlife refuge and plan. No deficiency letter was issued by the Cabinet, but
research facility. The Woods are designated a National DLX in reassessing its fourth submittal decided that the
Natural Landmark as “[p]robably the only surviving virgin proposal was unfeasible, and that a 250-foot cover would
tract of any size in the Cumberland Mountains section of the result in only twenty-five-percent recovery. DLX therefore
mixed mesophytic forest, which is characterized by a withdrew its fourth proposal, submitting a fifth proposal
great variety of tree species.” National Park Service, instead which provided for fifty-percent recovery, but only a
National Registry of Natural Landmarks, 110-foot vertical cover. This proposal was submitted with a
http://www.nature.nps.gov/nnl/Registry/USA_Map/States/ letter requesting that the permit be issued or denied “as is.”
Kentucky/nnl/lcw/index.htm. The surface rights to the J.A. at 73 (Report). On April 25, 1994, the application was
Woods were originally purchased by Kentucky from the denied, for six reasons: the potential danger to the old-growth
Kentucky River Coal Company, which retained the mining forest portion of the Woods; a failure to demonstrate that the
rights; a portion of the property was also purchased from the mining operation could be feasibly accomplished under 405
Cornett heirs. In 1975, the South-East Coal Company KAR 8:010 § 14(2); that the application did not contain
obtained a lease from the Kentucky River Coal Company to sufficient geological and hydrologic information to
mine coal, including coal under the Woods, pursuant to which demonstrate the hydrologic consequences of the project on
South-East acquired a permit from the state to mine 3,000 the Woods; that it did not present information detailing the
acres. Immediately before filing the amendment to South- care the applicant would take to minimize hydrologic
East’s then-existing permit that is at issue in this case, South- consequences; that there was inadequate information
East filed for bankruptcy. DLX purchased all of South-East’s regarding the surrounding nature habitats; and there was no
assets, including the leases with Kentucky River and the state information on the minimization of the impact of mining on
permit. At that point, DLX had a lease and permit allowing those habitats. DLX petitioned for review, and at the hearing,
it to mine approximately 3,000 acres, which did not include the reasons for denial of the application were distilled to one:
any mining under the Woods. All the coal remaining in the “The application for the Permit (Amendment No. 3) was
lease is either under the Woods or can only be accessed by acceptable to the Cabinet except for the failure of the
DLX through the land under the Woods. Petitioner to agree to a minimum cover (i.e., distance from
mining to the surface) of greater than 110 feet.” J.A. at 75
DLX applied for Amendment No. 3 to the existing permit, (Report).
which proposed an additional 130 acres to be added to the
3,000-acre permit area. DLX submitted an initial plan to the The Hearing Officer of the Cabinet affirmed the decision of
Cabinet, which responded with a “deficiency letter.” DLX the Cabinet to deny the permit, finding both that the Cabinet
resubmitted, adding “a pillar design for subsidence control.” could provide extra protection for the old-growth portion of
Joint Appendix (“J.A.”) at 73 (Hearing Officer’s Report and the Woods that is not required for second-growth forests and
Recommendation). After additional deficiency letters, a that the Cabinet had a sufficient basis for determining that the
seventy-five-foot vertical cover between mine operations and 110-foot vertical cover proposed by petitioner was inadequate
No. 03-5528 DLX, Inc. v. Commonwealth 5 6 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
to minimize the impact to the hydrologic balance of the appeal from the decision of the Cabinet. Id. at 627
Woods. Noting that the petitioner bore the burdens of (Wintersheimer, J., dissenting). As the decision was one of
production and persuasion, the officer concluded that DLX state law only, a writ of certiorari from the United States
failed to carry its burden of showing “that a 110-foot vertical Supreme Court was not sought.
cover would minimize disturbances to the hydrologic balance
within the old-growth portion of the Lilley Cornett Woods.” One year after the Kentucky Supreme Court dismissed
J.A. at 93 (Report). This report was adopted by then- DLX’s state constitutional claim, DLX filed in federal district
Secretary Phillip J. Shepherd without comment. court, alleging a violation of the Fifth Amendment actionable
under 42 U.S.C. § 1983. Kentucky immediately moved for
Although Kentucky law allows a permit applicant to seek dismissal under Federal Rule of Civil Procedure 12(b)(1),
judicial review of a Secretary’s final Order under KRS arguing that the court lacked subject matter jurisdiction under
§ 350.0305, DLX immediately filed a state-court takings the doctrine of sovereign immunity of the Eleventh
claim, asserting that the denial of a permit to mine under the Amendment, the doctrine of ripeness, the doctrine of
Woods constituted a regulatory taking of its property in exhaustion, the Rooker-Feldman doctrine, and res judicata.
violation of the Kentucky constitution. DLX expressly The district court granted the motion on March 24, 2003, on
reserved its federal claims, noting, the basis of ripeness and the Rooker-Feldman doctrine.
RESERVATION OF FEDERAL CLAIMS II. ANALYSIS
DLX hereby reserves its Federal claims. DLX will A. Standard of Review
pursue in Federal court any remedies it may have under
the United States Constitution or under United States A Rule 12(b)(1) motion can either attack the claim of
statutes or regulations. jurisdiction on its face, in which case all allegations of the
plaintiff must be considered as true, or it can attack the factual
J.A. at 67 (State Ct. 1st Am. Compl.). After the state trial basis for jurisdiction, in which case the trial court must weigh
court dismissed the case for lack of ripeness, an intermediate the evidence and the plaintiff bears the burden of proving that
court reversed, and the Supreme Court of Kentucky granted jurisdiction exists. See RMI Titanium Co. v. Westinghouse
the Cabinet’s petition for review. See Commonwealth v. Elec. Corp., 78 F.3d 1125, 1133-35 (6th Cir. 1996); United
DLX, Inc., 42 S.W.3d 624, 625 (Ky. 2001). That court States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994); Ohio Nat’l
decided the case on the basis of exhaustion of administrative Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir.
remedies, rather than ripeness. See id. (“We conclude that 1990). As the district court made essentially no factual
DLX failed to exhaust its administrative remedies.”). findings in deciding it that lacked jurisdiction, we will treat
Because DLX had not appealed the Secretary’s final order this as a “facial” 12(b)(1) motion. We review a motion to
before filing a takings claim, it could not proceed on the state dismiss under Rule 12(b)(1) de novo where it requires no
constitutional takings claim. Id. at 626-27. Two justices (of fact-finding. See COB Clearinghouse Corp. v. Aetna United
seven) dissented, noting that DLX was prevented from raising States Healthcare, Inc., 362 F.3d 877, 880 (6th Cir. 2004);
its constitutional claims in the administrative proceedings, RMI, 78 F.3d at 1135 (in factual attack, district court’s factual
and that it would have been prevented from doing so in its findings are reviewed for clear error).
No. 03-5528 DLX, Inc. v. Commonwealth 7 8 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
B. Rooker-Feldman with the claim asserted in the prior state court proceeding.
Adopting Justice Marshall’s phrasing in Pennzoil Co. v.
The Rooker-Feldman doctrine, named for Rooker v. Texaco Inc., 481 U.S. 1, 25 (1987) (Marshall, J., concurring),
Fidelity Trust Co., 263 U.S. 413 (1923), and District of this circuit has held,
Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983),
stands for the proposition that a party aggrieved by a state- The federal claim is inextricably intertwined with the
court decision cannot appeal that decision to a district court, state-court judgment if the federal claim succeeds only to
but must instead petition for a writ of certiorari from the the extent that the state court wrongly decided the issues
United States Supreme Court. This circuit has devised a before it. Where federal relief can only be predicated
number of formulae for determining when a district court upon a conviction that the state court was wrong, it is
lacks jurisdiction under the Rooker-Feldman doctrine; broken difficult to conceive the federal proceeding as, in
down to essentials, there are two categories of cases barred by substance, anything other than a prohibited appeal of the
the doctrine. First, when the federal courts are asked to state-court judgment.
“engage in appellate review of state court proceedings,” the
doctrine necessarily applies. Peterson Novelties, Inc. v. City Peterson Novelties, 305 F.3d at 391. See, e.g., Anderson v.
of Berkley, 305 F.3d 386, 390 (6th Cir. 2002). In determining Charter Township of Ypsilanti, 266 F.3d 487, 492-94 (6th
when a plaintiff asks for appellate review, we have in the past Cir. 2001) (applying “inextricably intertwined” test to hold
looked to the relief sought, see Dubuc v. Mich. Bd. of Law Rooker-Feldman abstention appropriate).1
Exam’rs, 342 F.3d 610, 618-19 (6th Cir. 2003), or asked the
question whether the plaintiff alleges “that the state court’s
judgment actively caused him injury [rather than] that the
judgment merely failed to redress a preexisting injury,” 1
W e note that two recent cases of this court have attempted to adopt
Pieper v. Am. Arbitration Ass’n, Inc., 336 F.3d 458, 461 n.1 the Seventh Circuit’s division between Rooker-Feldman abstention and
(6th Cir. 2003). See also Hutcherson v. Lauderdale County, preclusion law, casting aside the Pen nzoil inextricably-intertwined
326 F.3d 747, 755 (6th Cir. 2003) (“‘[T]he fundamental and formulation to the extent that it op erates to forbid subsequent litigation of
issues already decided by a state court where the injury alleged in federal
appropriate question to ask is whether the injury alleged by court predates the state proceeding. See Stemler v. Florence, 350 F.3d
the federal plaintiff resulted from the state court judgment 578, 588-89 (6th Cir. 2003) (“As [plaintiff] is not directly challenging the
itself or is distinct from that judgment.’” (quoting Garry v. state court’s judgments in federal court, the doctrines of claim and issue
Geils, 82 F.3d 1362, 1365 (7th Cir. 1996)); Tropf v. Fid. Nat’l preclusion are more p roperly applied to this case.”); Hood v. Keller, 341
Title Ins. Co., 289 F.3d 929, 937 (6th Cir. 2002) (The doctrine F.3d 593, 597-599 (6th Cir. 2003) (reversing district court’s application
“precludes federal court jurisdiction where the claim is a of the Rooker-Feldman doctrine where plaintiff had raised facial and as-
applied constitutional challenges in prior state-court criminal proceeding
specific grievance that the law was invalidly — even without applying Pen nzoil formulation). W hatever the advisability of
unconstitutionally — applied in the plaintiff’s particular such a move, it is clearly foreclosed by prior cases of this court requiring
case.” (internal quotation marks and citations omitted)). the dismissal of claims that involve an injury predating the state-court
proceedings on the exclusive grounds that the issues that the federal court
The second category of cases barred by Rooker-Feldman is would have to decide are inextricably intertwined with the state-court
decision, in that to allow relief would require the conclusion that the state
those which allege an injury that predates a state-court court had wrongly decided the issues before it. See P eterson N ovelties,
determination, but present issues inextricably intertwined Inc. v. City of Berkley, 305 F.3d 38 6, 390-93 (6th Cir. 2002).
No. 03-5528 DLX, Inc. v. Commonwealth 9 10 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
DLX’s claim is of the second type: the injury alleged is the district court could have concluded that DLX had established
permit denial that predates the state-court proceedings, not the a regulatory taking of its property under the Fifth Amendment
state-court decision itself, and the relief that DLX requests is and was entitled to relief without undermining any of the state
monetary. Therefore, the doctrine bars jurisdiction only to the court’s conclusions. Indeed, as discussed below, the Supreme
extent that the district court must determine that the state Court in Williamson County Regional Planning Commission
court decided an issue wrongly in order for DLX’s claim to v. Hamilton Bank, 473 U.S. 172, 195-97 (1985), clearly
succeed. Here, the state court decided that administrative contemplates that after a state just-compensation proceeding,
exhaustion was a necessary component of a state a federal-court action will be filed.3 Rooker-Feldman is
constitutional takings claim; that although certain exceptions inapplicable here.
applied to that requirement, DLX met none of them; and that
DLX had failed to exhaust administratively its claims. See
DLX, 42 S.W.3d at 624-26. As administrative exhaustion is
explicitly not a component of a federal takings claim,2 the
Id. at 627. B ecause ad ministrative exhaustion is explicitly not a
compo nent of a federal takings claim under Williamson County, 473 U.S.
2 at 194 n.13 (“Exhaustion of review procedures is not required.”), the
The concurrence reads the Kentucky Supreme Court’s opinion as
applying Williamson Coun ty prong-one ripene ss; we respectfully disagree district court could have concluded that DLX had mad e out a regulatory
with this interpretation of the state court’s opinion. Although “prong- taking of its property under the Fifth Amendment and was entitled to
one” ripeness under William son County Regional Planning Commission relief without undermining any of the state court’s conclusions. D LX ’s
v. Hamilton Bank, 473 U.S. 172 , 186 -91 (1 985 ), is a requirement under federal takings claim and its state takings claim are not
Kentucky law, the Kentucky Supreme Court did not rest its decision on “indistingu ishable,” as the concurrence asserts, for this reason: the federal
that ground. W hile the K entuck y trial court “granted the Ca binet’s claim does not require administrative exhaustion, where the state claim
motion for judgment on the pleadings on grounds that the case was not doe s. Rooker-Feldman is thus inapplicable in this case.
ripe for judicial determination and that DLX failed to exhaust its 3
administrative remedies,” the Kentuck y Supreme Court con clude d only If DLX had in fact been allowed in the state cou rts to reach the
“that DLX failed to exhaust its administrative remedies.” Comm onw ealth merits of its takings claim and then lost, it is likely that the formula
v. DLX, Inc., 42 S.W .3d 624, 625 (Ky. 2001). Although the Kentucky adopted by this circuit as applied in our p ast cases would require Roo ker-
Supreme Court in DLX cited to William son County’s language regarding Feldman abstention, in evident tension with Williamson County Regional
“prong-one” ripeness, it clearly did so to bolster its exhaustion decision, Planning Commission v. Hamilton Bank, 473 U.S. 172 , 195-97 (198 5),
noting that the William son County Court “explained the exhaustion of which clearly contemplates that a takings plaintiff who loses he r claim in
administrative remedies requirement in taking cases thusly” in introducing state court will have a day in fed eral co urt. Th e catch-22 of the
the quotation. Id. at 626. Finally, in summing up its holding, the “Williamson trap” discussed below with respect to res judicata is also
Kentucky S upreme C ourt m ade clear the grounds for its decisio n: evident with respect to the Rooker-Feldman doctrine. We do not need to
confront these tensions in this case, however, and express no opinion as
The Court of Appeals erred in holding that making an to the reso lution of this conflict. To the extent that recent cases of this
unco nstitutional-as-app lied challenge in an administrative court indicate a recognition that the “inextricably intertwined” prong of
proceeding creates an exemption to the exhaustion-of-remedies Rooker-Feldman may be doing the work that res judicata law should do,
requirement. Therefore, we reverse the Court of Appeals and an England reservation may be sufficient to defeat a Rooker-Feldman
hold that DLX 's failure to exhaust its administrative remedies by argument where the England reservation would defeat claim preclusion.
failing to appeal the Secretary's order, deprived the Franklin See Ivy Club v. Edwards, 943 F.2d 27 0, 284 (3d C ir. 1991) (England
Circuit Court of subject-matter jurisdiction to hear DLX 's reservation sufficient to d efeat Rooker-Feldman as well as res judicata
takings claim. after Pullman abstention).
No. 03-5528 DLX, Inc. v. Commonwealth 11 12 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
C. Williamson County Prong-Two Ripeness and is no exception for takings claims. Williamson County, 473
Administrative Exhaustion U.S. at 193, 194 n.13.
Williamson County, 473 U.S. at 186-91, 194-96, sets out The district court apparently held that because the state-
two requirements for a federal regulatory-takings claim to be court action was dismissed on the basis of a lack of
ripe. First, a plaintiff must demonstrate that the jurisdiction, “DLX has not yet been denied just
decisionmaking body has come to a “final” decision, allowing compensation.” J.A. at 407 (D. Ct. Op. at 10). But DLX has
the federal courts to assess how much use of the property is been denied just compensation in a state suit; it sought
allowed and therefore whether the regulatory decision compensation and none was awarded. That the decision was
amounts to a taking. Id. at 186-91. This has become known not “on the merits” in the strictest sense does not mitigate
as “prong-one ripeness,” and will be discussed in more detail DLX’s injury; its property has allegedly been taken through
below, as an issue of fact remains as to whether DLX satisfies the denial of its permit application, and an attempt to remedy
prong-one ripeness. The district court, however, apparently that injury in the state court has been defeated by a rule of
relied on prong-two ripeness, which requires that a plaintiff state law. DLX has no more remedy to seek in state court; the
“seek compensation through the procedures the State has time for application for review of the Cabinet’s decision is
provided for doing so.” Id. at 194. This refers only to an long past, and any state-court action it files will be dismissed
action for just compensation or inverse or reverse for want of exhaustion. DLX has been denied a federal right
condemnation, but not to review procedures. “Exhaustion of through the operation of a state procedural rule without
review procedures is not required.” Id. at 194 n.13. That analogue in federal law, and its complaint is ripe.
administrative exhaustion is not required is part of the general
rule that exhaustion is never required in § 1983 suits. See In its brief, Kentucky attempts to defend this aspect of the
Patsy v. Fla. Bd. of Regents, 457 U.S. 496 (1982). Finality, district court’s holding by arguing that DLX is precluded
however, is required, so that the federal court can assess the from arguing “that it has pursued its state condemnation
scope of the taking; an inverse-condemnation action is remedy or that the state condemnation remedy was
required, because no violation of the Fifth Amendment inadequate, because it did not invoke it correctly.” Appellees’
attaches until a plaintiff “has used the procedure and been Br. at 24. But Williamson County is clearly concerned with
denied just compensation,” Williamson County, 473 U.S. at ripeness, not with giving state decisionmakers adequate
195; but administrative exhaustion is not required. opportunity to right a wrong. This is demonstrated by the
Williamson County Court’s staunch refusal to require
Kentucky argues on appeal that despite this clear language administrative exhaustion. “Remedial procedures” are not
from Williamson County, an exhaustion requirement still required by Williamson County, because the value isn’t
applies. Kentucky cites to a number of Kentucky state cases, allowing state decisionmakers to arrive at a decision, but
two district court cases, and a Federal Circuit case in which instead is ensuring that an injury has actually occurred. DLX
the plaintiff apparently never satisfied Williamson County has not received just compensation in a state action for the
prong-one ripeness, in never having pursued a permit. This same; its federal claim is ripe under Williamson County prong
sparse precedent is unavailing in the face of clear Supreme two. See Front Royal & Warren County Indus. Park Corp. v.
Court precedent that exhaustion is never required in a § 1983 Town of Front Royal, 135 F.3d 275, 283 (4th Cir. 1998) (even
case (except pursuant to Congressional reform) and that there where plaintiff made bad-faith effort in state court, “no clear
No. 03-5528 DLX, Inc. v. Commonwealth 13 14 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
basis under Williamson County to determine that [the] takings 1970). Therefore, because DLX could have brought its
claim is other than finally ripe for adjudication in a federal federal constitutional claim in state court, argues Kentucky,
forum.”). that claim is now barred by the operation of claim
preclusion.6 See Migra v. Warren City Sch. Dist. Bd. of
D. Res Judicata and England Reservation4
The availability of federal courts to hear federal 6
Although Newman v. Newman, 451 S.W .2d 417, 419 (Ky. 1970),
constitutional takings claims has often seemed illusory, has been the law in Kentucky since its issuance and continues to be cited
because under Williamson County takings plaintiffs must first by Kentuck y state courts for the prop osition that claim s which should
file in state court, as DLX did, before filing a federal claim, have been brought in the first proceeding are subject to claim preclusion,
and because in deciding that federal claim, preclusive effect see, e.g., Whittake r v. Cecil, 69 S.W.3d 69, 72 (Ky. 2002), this court has
not consistently hewn to that p rinciple. Compa re Stemler v. Florence,
must be given to that prior state-court action under 28 U.S.C. 350 F.3d 578, 588 (6th Cir. 2003) (relying on Yeoman v. Kentucky, 983
§ 1738 according to the res judicata5 law of the state, S.W . 2d 459, 464-65 (Ky. 1998), and Barnes v. McDo well, 848 F.2d 725,
including the doctrines of merger and bar whereby all claims 730-31 (6th Cir. 1988), in allowing federal constitutional substantive due
which could have been brought in an earlier cause of action process claim to go forward desp ite previous state-court wrongful-dea th
are precluded. See Michael M. Berger, Supreme Bait & action arising from same set of facts) with Donovan v. Thames, 105 F.3d
291, 295 (6th C ir. 199 7) (“U nder Kentucky law, res judicata, or c laim
Switch: The Ripeness Ruse in Regulatory Takings, 3 WASH . preclusion, ‘may be used to preclude entire claims that were brought or
U. J. L. & POL’Y 99 (2000). Kentucky state law applies res should have been bro ught in a prior action. . . ” (quoting City of
judicata to bar not just asserted claims, but all claims which Covington v. Bd. of Trs. of the Policemen’s and Firefighters’ Ret. Fund,
should have been raised in prior litigation. “[I]t has long been 903 S.W.2d 517, 521 (Ky. 1995)) and Consol. Television C able Serv., Inc.
recognized that a party may not split its cause of action, v. City of Frankfort, 857 F.2d 354, 357 (6th Cir. 1988) (rejecting claims
that “could have been raised in the prior litigation” under the authority of
therefore, if a cause of action should have been presented and Newman and Vinson v. Campbell County Fiscal Ct., 820 F.2d 194, 197
the party failed to do so and the matter should again arise in (6th Cir. 1987)). Yeoman, 983 S.W.2d at 465 , cited by Stemler, requires
another action, it will be held that the first action was res that for “claim preclusion to apply, the subject matter of the subsequent
adjudicata as to all causes that should have properly been suit must be identical,” and cites to Newman for the proposition that
presented.” Newman v. Newman, 451 S.W.2d 417, 419 (Ky. “there must be identity of the causes of ac tion” for claim preclusion to
apply. The key paragraph in Newman reads as follows:
The general rule for determining the question o f res adjudicata
as between parties in actions emb races severa l cond itions. First,
4 there m ust be id entity of parties. Se cond, there must be identity
Although res judicata is not jurisdictional but an affirmative defense, of the two causes of action. Third, the action must be decided
it would form an indepe ndent basis for disposing of the case were it held upon its merits. In short, the rule of res adjudicata does not act
to apply, and both parties have extensively briefed the issue. as a bar if there are different issues or the questions of law
5
presented are different. Likewise, it has long been recognized
Most of the decisions use the terms “issue preclusion” and “claim that a party may not split his cause of action, therefore, if a cause
preclusion” rather than “co llateral esto ppe l” and “res judicata,” to avoid of action should have b een p resented and the party failed to do
con fusion of the use of “res judicata” to mean the entire body of so and the matter should again arise in another action, it will be
preclusion law with its narrow use as a synonym for “claim preclusion.” held that the first action was res adjudicata as to all causes that
In this opinion, we will use “res jud icata” to refer to b oth the doctrines of should have properly been presented. We stated the rule in Hays
claim preclusion and issue preclusion, and we will use those latter terms v. Sturgill, 193 S .W.2d 64 8, as follows:
whenever possible. “The rule that issues which have been once litigated
No. 03-5528 DLX, Inc. v. Commonwealth 15 16 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
Educ., 465 U.S. 75, 85 (1984) (state-court judgments have is held to be operative against plaintiffs who ripen under
claim-preclusive effects in § 1983 actions, barring Williamson County, most plaintiffs could still be barred from
constitutional claims not brought in prior state-court contract the federal courthouse, as the state constitutional takings
action). Of course, given Williamson County’s ripeness claim will often overlap substantially with the federal claim.
requirements, DLX could not have chosen to file a federal- As DLX was in fact prevented from litigating all the issues in
court action first encompassing both its state and federal its state takings claim which would have affected its federal
claims; therefore, the interaction of Williamson County’s takings claim, it only needs to overcome claim preclusion to
ripeness requirements and the doctrine of claim preclusion litigate its federal claim, but this is unusual in these cases.
could possibly operate to keep every regulatory-takings The barring of the federal courthouse door to takings litigants
claimant out of federal court.7 Even if only issue preclusion seems an unanticipated effect of Williamson County, and one
which is unique to the takings context, as other § 1983
plaintiffs do not have the requirement of filing prior state-
court actions; reading Williamson County, the expectation is
cannot be the subject matter of later action is not on ly
salutary but necessary in the administration of justice. that an unsuccessful state plaintiff will then return to federal
The subsid iary rule that one may no t split up his cause court.
of action and have it tried piecemeal rests upon the
same found ation. T o permit it would not be just to the A number of circuits have addressed this problem in a
adverse party or fair to the co urts. So, as said in Combs number of different contexts. Some plaintiffs have in fact
v. Prestonsburg Water Co., 84 S.W .2d 15, 18: ‘The
rule is elementary that, when a matter is in litigation,
litigated their federal claims in state court, and wish to avoid
parties are required to bring forward their whole case; issue preclusion that they feel is unfair. Others chose not to
and “the plea of res judicata applies not only to the litigate their federal claims in state court, and some in doing
points upon which the court was required by the parties so made an explicit reservation of their federal claims to
to form an opinion and prono unce judgment, but to federal court, as DLX did. The courts of appeals have
every point which properly belonged to the subject of responded in various ways, but no court has held that where
litigation, and which the parties, exercising reasonab le
diligence, might have brought forward at the time.”’” a plaintiff reserves its federal claims in an England
451 S.W.2d at 419 (first emphasis added). The error in Stemler thus reservation, named for England v. Louisiana State Board of
seems to be in following Newman’s formulation of the general rule of res Medical Examiners, 375 U.S. 411 (1964), and does not
judicata without noting the additional rule against claim-splitting. litigate them in the state courts, that claim preclusion will
However this tangle of case law is to be resolved, it seems likely that even operate to bar a federal-court action. England concerned an
under Stemler’s erroneous reading of Kentucky’s re s judicata rules, a state
takings claim and a federal takings claim wo uld be identical in bo th action originally filed in the federal district court, which had
“subject matter” and “cause of action” for the purpose of claim-preclusion
law.
7
Although this would not ap ply where a plaintiff could demo nstrate U.S. 304, 315-16 & n.9 (1987), so the “inadequate” remedy might be
that the procedures offered by the state are clearly inadequate, the either the refusal of the state court to reco gnize that remedy, wh ich would
distinction between a state cause of action and a cause of action in the likely be redressable in the first instance through a petition for a writ of
state courts is troubleso me. T he Suprem e Co urt has held that the Fifth certiorari in the United States Supreme Court, or instead the more narrow
Amendm ent Takings C lause is a se lf-executing remedy in state courts, see inadequacy of having no promulgated state law providing a remedy. See
First English E van gelica l Lutheran Church v. County of Los Angeles, 482 Kruse v. Village of Chagrin Falls, 74 F.3d 694 , 698-700 (6th Cir. 1996).
No. 03-5528 DLX, Inc. v. Commonwealth 17 18 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
invoked Pullman abstention in refusing to hear the claim. The court then refused to decide “whether it is possible to
After the state courts rendered a decision adverse to the reserve a federal claim, or, if so, what must be done to reserve
plaintiffs, which resolved both the state-law issues that the such a claim, because at no time did plaintiffs attempt to do
district court’s abstention was directed towards and the so.” Id. at 1324-25. In Palomar v. Mobilehome Park Ass’n
federal claims that had been submitted unreservedly by the v. City of San Marcos, 989 F.2d 362, 363 (9th Cir. 1993),
plaintiffs to the state courts, the plaintiffs returned to federal again, the plaintiff had asserted its federal claims in state
court to attempt to resuscitate their federal action. 375 U.S. court, and no attempt at reservation was made. Finally, in
at 414. The district court granted defendants’ motion to Peduto v. City of North Wildwood, 878 F.2d 725 (3d Cir.
dismiss on the basis of res judicata. The Supreme Court 1989), the plaintiffs asserted their federal claims in state
reversed, noting, “There are fundamental objections to any court, and again made no attempt to reserve their claims. Id.
conclusion that a litigant who has properly invoked the at 726-27, 729 n.5. See also Rainey Bros. Constr. Co. v.
jurisdiction of a Federal District Court to consider federal Memphis & Shelby County Bd. of Adjustment, 967 F.Supp.
constitutional claims can be compelled, without his consent 998, 1004 n.5 (W.D. Tenn. 1997) (res judicata applies where
and through no fault of his own, to accept instead a state plaintiff brought federal claims in state court; because
court’s determination of those claims.” Id. at 415. “[A] party plaintiff made no reservation, court “expressly declines
may readily forestall any conclusion that he has elected not to whether such a reservation would be effective.”), aff’d, 1999
return to the District Court . . . by making on the state record WL 220128 (6th Cir. Apr. 5, 1999).
the ‘reservation to the disposition of the entire case by the
state courts’ . . . . When the reservation has been made, . . . his Indeed, the Ninth Circuit in cases since Palomar has
right to return will in all events be preserved.” Id. at 421-22 indicated that the reach of that case may be confined to issue
(citations omitted). Some courts have held that a plaintiff in preclusion, rather than claim preclusion, where a reservation
state court for the sole purpose of ripening his claims under has been made. See San Remo Hotel v. San Francisco, 364
Williamson County’s second prong is in state court F.3d 1088, 1094 (9th Cir. 2004) (“The City does not dispute
involuntarily, and therefore can make an “England that the plaintiffs’ England reservation was sufficient to avoid
reservation” of his federal takings claims for federal the doctrine of claim preclusion” but issue preclusion still
disposition. applies); Macri v. King County, 126 F.3d 1125, 1130 (9th Cir.
1997) (reservation is possible, preventing operation of res
While Kentucky cites three cases for the proposition that judicata);8 Dodd v. Hood River County [Dodd I], 59 F.3d 852,
res judicata applies regardless of the need to ripen under 862 (9th Cir. 1995) (implicit consent by defendants to claim-
Williamson County, closer examination of these cases reveals splitting and reservation by state courts sufficient to reserve
that none requires that claim preclusion apply where, as here, the claim for federal determination; issue preclusion still
plaintiffs have made an England reservation of their federal
claims. In Wilkinson v. Pitkin County Board of County
Commissioners, 142 F.3d 1319 (10th Cir. 1998), the court 8
noted first that the “plaintiffs asserted federal claims in the Ma cri seems possibly to misread earlier Ninth Circuit prece dent in
state court proceedings, which were fully adjudicated.” Id. at holding that neither issue nor claim preclusion applies, in direct conflict
with Dodd I and Dodd II, Dodd v. Hood R iver Coun ty, 136 F.3d 1219,
1324. Therefore, both issue preclusion and claim preclusion 122 2 (9th Cir. 19 98). The more rece nt San Remo case seems to indicate
would have operated to bar the plaintiff’s claim in Wilkinson. that the issue /claim p reclusio n split will be the law in the Ninth Circuit.
No. 03-5528 DLX, Inc. v. Commonwealth 19 20 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
applies). Other circuits have also indicated that at least claim The weight of circuit-level authority is therefore clearly in
preclusion can be barred by an England-style reservation. See favor of allowing DLX’s England-style reservation in its
Kottschade v. City of Rochester, 319 F.3d 1038, 1041-42 (8th Kentucky state-court action to prevent the application of the
Cir. 2003) (“The suggestion that [an England reservation doctrine of claim preclusion in its subsequent federal-court
might prevent res judicata] has the virtue of logic and is takings action. We join our sister circuits in holding that a
tempting,” but is premature in an initial federal-court action party’s England reservation of federal takings claims in a
that is unripe under Williamson County); Front Royal, 135 state takings action will suffice to defeat claim preclusion in
F.3d at 283 (England reservation appropriate in Williamson a subsequent federal action. It is unnecessary to decide in this
County ripeness trap); Fields v. Sarasota Manatee Airport case whether or not the Second Circuit’s holding in Santini
Auth., 953 F.2d 1299, 1306 (11th Cir. 1992) (Williamson that issue preclusion is also inapplicable is the better rule,
County litigants “qualify for the exception to generally because the Kentucky Supreme Court did not decide any
applicable res judicata principles”). The Second Circuit has issues that affect DLX’s right to recovery on its federal claim.
even gone so far as to hold explicitly that issue preclusion Therefore, the doctrine of res judicata does not bar DLX’s
does not apply where a reservation has been made in the state- federal takings claim.10
court litigation necessary to ripen a takings claim under
Williamson County. See Santini v. Conn. Hazardous Waste
10
Mgmt. Serv., 342 F.3d 118, 130 (2d Cir. 2003). See also One final note on ripeness: We have recognized in the past that res
Barnes v. McDowell, 848 F.2d 725, 732 (6th Cir. 1988) (party judicata is clearly inapplicable as to claims that were unripe at the time of
who files in state court before filing in federal court, splitting a prior court proceed ing, see Katt v. Dykho use, 983 F.2d 690, 691 (6th
claims, enjoys England protection from res judicata even Cir. 1992), and this might seem to op erate to save DLX’s fede ral claims,
see Buckles v. Columbus Mun. Airport Auth., No. 02-3286, 2004 WL
without explicit reservation);9 Wicker v. Bd. of Educ., 826 346045, *3 n.1 (6th C ir. Feb. 23, 2004), but this conclusion
F.2d 442, 446 (6th Cir. 1987) (party who files in state court misunderstands the nature of ripeness. Although William son County
subsequent to federal court but before abstention order still speaks broadly in terms of when the federal right of action ripens, prong-
entitled to England reservation). two ripeness does not necessarily operate to bar the litigation of a federal
claim in the state courts because ripeness is a doctrine governing
justiciab ility in the federal courts, pursuant to Article III or prudential
concern s. See generally E R W IN C H EMERINSKY , F ED ERA L J U R IS D IC T IO N
9
§§ 2.1, 2.4 (3 d ed. 199 9). T his is borne out by the number of cases where
This prior Sixth Circuit precedent rebuts the concurrence’s plaintiffs assert federal claims in the state courts contemporaneous with
suggestion that England reservation only applies in a case where a party or even instead of their state constitutional claims. See, e.g., Lucas v.
reserves federal questions in state court following federal court abstention. Sou th Carolina Coastal C oun cil, 505 U.S. 1003 (1992) (reviewing state-
The plaintiff in Barnes v. McDo well, 848 F.2d 72 5, 732 (6th Cir. 1988), court decisio n on federal takings claim). O ur question is whether or not
had not even reserved his federal claims in state court, but “[b]y splitting the Kentucky state court would have heard DLX’s federal takings claim
on his own initiative the state and fed eral actions stem ming fro m his or dismissed it as unripe, and whether or no t DLX’s fed eral claim would
discharge, Barnes ac hieved the very same effect that he would have had have been ripe in the Kentucky state court is a question that must be
he made an England reservation.” In the takings realm, where Williamson adjudged with resp ect to K entuck y ripene ss law. It appears that the o nly
County prong-two ripeness combined with res jud icata law would ripeness requirement imposed b y the Kentucky courts on federal takings
otherwise bar all federal takings claimants from the door of the district claims is one equivalent to Williamson Coun ty prong-one ripeness. See
co urt— a result clearly not contemplated by the Court in Williamson Spanish Cove Sanitation, Inc. v. Louisville-Jefferson County Metro. Sewer
County— this sort of extension of England to unwilling state court Dist., 72 S.W.3d 918, 921 (Ky. 2002). Therefore, if DLX’s federal
litigants is necessary to avoid grave unfairness. takings claim is ripe in federal court now, it was ripe in state court at the
No. 03-5528 DLX, Inc. v. Commonwealth 21 22 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
E. Williamson County Prong-One Ripeness rejected did not have a ripe takings claim, noting, “Rejection
of exceedingly grandiose development plans does not
As noted above, Williamson County’s first ripeness logically imply that less ambitious plans will receive similarly
requirement for federal regulatory takings claims in federal unfavorable reviews.” Id. at 353 n.9. But three subsequent
court is that the state or local decisionmakers have made a Supreme Court decisions found Williamson County ripeness.
final decision, such that a federal court assessing whether or In Lucas v. South Carolina Coastal Council, 505 U.S. 1003,
not a taking has occurred can look to that decision in 1013 & n.3 (1992), the Court, over dissent, held that because
assessing what use can be made of the property. Williamson the governing body stipulated that no permit would have been
County, 473 U.S. at 186-91. Kentucky vigorously asserts that issued, the claim was not unjusticiable under Williamson
DLX has not adequately demonstrated a final decision on the County. In Suitum v. Tahoe Regional Planning Agency, 520
part of the Cabinet; DLX equally vigorously asserts that in U.S. 725 (1997), the Court noted that the requirement
fact a final decision has been made. The parties focus their “responds to the high degree of discretion characteristically
attention on the amount of vertical cover required by the possessed by land use boards in softening the strictures of the
Cabinet: DLX argues that the Cabinet is immovably settled general regulations they administer,” id. at 738, in the course
on a 250-foot vertical cover; Kentucky argues that some of holding that because in the instant case, the agency had no
amount of vertical cover between 110 feet and 250 feet may discretion over whether the plaintiff would be allowed to use
be acceptable to the Cabinet. her land, “no occasion exists for applying Williamson
County’s requirement.” Id. at 739. Finally, in Palazzolo v.
Williamson County itself concerned a developer’s Rhode Island, 533 U.S. 606 (2001), in finding a regulatory
application for a construction permit from the local planning taking in a state’s refusal to allow a landowner to develop
commission. In 1973, a predecessor in interest to the plaintiff wetlands property, the Court rejected a suggestion that “while
had submitted a preliminary design to the commission, which the Council rejected petitioner’s effort to fill all of the
was approved; the design was continuously reapproved during wetlands, and then rejected his proposal to fill 11 of the
development and construction, even after the zoning laws wetland acres, perhaps an application to fill (for instance) 5
changed, through 1980. A final plan was submitted in 1980, acres would have been approved.” Id. at 619. In doing so,
which was disapproved by the Commission; after a change in the Court examined the rejection of both proposals, studying
ownership, revised plans were submitted, which were also the grounds relied upon, and determined that no development
disapproved. These decisions were held not to be final by the would be permitted: “Further permit applications were not
Court, however, because variances could be sought for “five necessary to establish this point.” Id. at 621. Thus,
of the Commission’s eight objections to the” plan. Id. at 188. Williamson County prong-one ripeness is a factual
Until those variances were sought and rejected, the takings determination, taking into account all relevant statutes,
claim was not yet ripe. The next Term, the Court applied the ordinances, and regulations, that the decisionmaker has
ripeness requirement again in MacDonald, Sommer & Frates arrived at a final determination with respect to the permit
v. County of Yolo, 477 U.S. 340, 352 (1986), holding that a applicant’s use of her property, and that that determination is
developer who had only submitted one proposal that had been one which will allow a court to determine whether a
regulatory taking has taken place. This circuit has also
recognized a “futility exception,” which is in substance
time of the state-court litigation. similar to Palazzolo’s rule, whereby a plaintiff need not seek
No. 03-5528 DLX, Inc. v. Commonwealth 23 24 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
a variance from a regulation where it would be an “idle and would not have approved a permit that left only a
futile act”; the exception only applies where a landowner has 240-foot vertical cover, isn’t it?
“submitted at least one meaningful application for a A. Yes.
variance.” Bannum, Inc. v. City of Louisville, 958 F.2d 1354,
1363 (6th Cir. 1992) (internal citations and quotation marks J.A. at 359 (Tr. of Admin. Hr’g). In its reply brief, DLX
omitted); see also Seguin v. City of Sterling Heights, 968 F.2d argues that no previous case requires a plaintiff to submit
584, 587-88 (6th Cir. 1992) (refusing to decide whether scientific surveys before finality will be found, and asserts
futility exists). that DLX could have proven no set of scientific facts that
would have convinced the decisionmaker to allow DLX’s
DLX argues that its application for a permit providing less permit.
than 250 feet of vertical cover would have been futile, and
points to testimony elicited during the administrative hearing Because resolution of this question requires factual inquiry,
from the Cabinet reviewer, Larry Peterson (“Peterson”). and the question is one on which the district court did not
Kentucky responds that Peterson’s testimony actually reveals pass, we decline to resolve this factual question on appeal.
that the officer might have been willing to approve less Assuming all of DLX’s allegations in its federal complaint to
vertical cover, if DLX had submitted additional data be true, namely, “The actions of the Commonwealth rendered
supporting such a move. It seems at first blush that Kentucky more than one million tons of high quality coal unmineable,”
has the better of this argument — DLX’s futility argument is J.A. at 7 (Compl. ¶ 14), jurisdiction exists; to deny
based on a mischaracterization of Peterson’s testimony, and jursidiction based on a factual attack seems inappropriate
examining that testimony reveals that he would have been without further proceedings below. We therefore choose to
receptive to a permit application stipulating less vertical cover rely on Eleventh Amendment immunity in affirming the
accompanied by additional data: district court.11
Q. So it is fair to say, isn’t it, that if your concern was
connection of the pressure dome fractures to the
maximum stress relief fractures that no permit less
than 250 feet would have been acceptable?
...
A. Unless they demonstrated through some other data,
which they were given opportunity to do, that the
fractures weren’t that deep or my concerns weren’t 11
Although we wo uld no rmally decline to decide the constitutional
that justified, yes. question — whethe r Eleventh Amendme nt immunity protects a state
Q. But based on the data that you did have? against a federal takings claim in a federal court — in favor of the factual
A. Yes. question, see, e.g., Adams v. City of Battle Creek, 250 F.3d 980 , 986 (6th
Q. We have been all through that. The data that you Cir. 2001) (citing Ashwand er v. Tenne ssee V alley A utho rity, 297 U.S.
did have, including the data that said most of the 288, 347 (1936) (Brandeis, J., concurring)), we believe the procedural
posture of this case mandates that, rather than subject the parties to further
water moved within 100 feet of the surface, based on litigation on an ultimately irrelevant issue, we affirm the district court on
the data that you did have, it is fair to say that you this ground.
No. 03-5528 DLX, Inc. v. Commonwealth 25 26 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
F. Eleventh Amendment Immunity open,14 relying on dicta in two Supreme Court takings cases,
First English Evangelical Lutheran Church v. County of Los
Finally, Kentucky12 argues that it is immune from § 1983 Angeles, 482 U.S. 304, 314 (1987), and City of Monterey, 526
suit under the Eleventh Amendment13 as 42 U.S.C. § 1983 U.S. at 714 (1999) (Kennedy, J., plurality opinion) (“Even if
does not abrogate its immunity. See Quern v. Jordan, 440 the sovereign immunity rationale retains its vitality in cases
U.S. 332, 338-41 (1979) (reaffirming Edelman v. Jordan, 415 where [the Fifth] Amendment is applicable, cf. First English
U.S. 651 (1974)). This is something of a mischaracterization . . .”). See, e.g. RICHARD H. FALLON ET AL ., HART &
of the applicable law; “[t]he barrier [is] not . . . Eleventh WECHSLER’S THE FEDERAL COURTS AND THE FEDERAL
Amendment immunity . . . . The stopper [is] that § 1983 SYSTEM [hereinafter HART & WECHSLER], at 379 & n.32 (4th
creates no remedy against a State.” Arizonans for Official ed. 1996), Vicki C. Jackson, The Supreme Court, the Eleventh
English v. Arizona, 520 U.S. 43, 69 (1997). Treating DLX’s Amendment, and State Sovereign Immunity, 98 YALE L.J. 1,
claim as a self-executing reverse condemnation claim, 115 & nn.453-54 (1988); Thomas W. Merrill, The Landscape
however, we conclude that the Eleventh Amendment’s grant of Constitutional Property, 86 VA . L. REV . 885, 981 & n.351
of immunity protects Kentucky from that claim as well. The (2000); Carlos Manuel Vásquez, What is Eleventh
Supreme Court has explicitly stated that just compensation Amendment Immunity?, 106 YALE L.J. 1683, 1709 & n.119-
“is, like ordinary money damages, a compensatory remedy 21 (1997).
. . . [and therefore] legal relief,” and moreover, that a federal-
court suit alleging a taking seeks “not just compensation per But closer examination of each of these authorities reveals
se but rather damages for the unconstitutional denial of such that they are concerned not with abrogating the states’
compensation,” City of Monterey v. Del Monte Dunes, 526 Eleventh Amendment immunity in federal court, but with
U.S. 687, 710-11 (1999); therefore, the Ex Parte Young noting that the Fifth Amendment’s requirement of just
exception is inapplicable. In response, DLX points to compensation forces the states to provide a judicial remedy in
commentators who have suggested the question remains
14
DLX also argues that our decision in Arnett v. Mye rs, 281 F.3d 552
(6th C ir. 200 2), is binding precedent that the Eleventh Amendment is no
bar to a Fifth Amendment claim against a state in federal court, and that
12 if the Eleventh Amendment does not prevent the Supreme Court from
There is no dispute that each defendant — Kentucky, the Cab inet, hearing such cases as Palazzolo v. Rhode Island, 533 U.S. 606, 619-26
and Secretary B ickford — is “the state” for the purposes of determining (2001), on certiorari fro m state courts, it do es not preve nt a suit in the
their susceptibility to suit. district court against a state. Both of these arg uments lack merit. In
13
Arn ett, the plaintiffs clearly only sought declaratory and injunctive relief,
“Eleventh Amendm ent immunity is an issue of jurisdiction, but the thus allowing the case under the Ex Parte Young exception. As for
issue is no longer classified as simply a question of subject matter DL X’s second contention, “It was long ago settled that a writ of error to
jurisdiction.” Ern st v. Ro berts, No. 02-2287, ___ F.3d ___, 2004 WL review the final judgment of a state court, even when a State is a formal
1792631, *3 n.4 (6th C ir. Aug. 1 2, 20 04). The refore, a motion under party [defendant] and is successful in the inferior co urt, is not a suit within
Rule 12(b)(1 ) to dismiss for lack of subject matter jurisdiction may not be the meaning of the Amendment.” Mc Kesson C orp. v. Div. of Alcoho lic
procedurally correct, but all that is required to p roperly raise this Beverages & Tobacco, 496 U.S. 18, 27 (1990) (quoting General Oil Co.
“affirmative defense to jurisdiction” is a motion citing to “the Eleventh v. Crain, 209 U.S. 211 , 233 (1908) (Harlan, J., co ncurring)) (alteration in
Amendment itself.” Id. at *3, *15. original).
No. 03-5528 DLX, Inc. v. Commonwealth 27 28 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
their own courts. “[T]he Constitution mandates the Court specifically preserved Reich’s promise of a state-court
availability of effective remedies for ‘takings’ and for the remedy, noting, “The obligation arises from the Constitution
coercive collection of taxes, and accordingly requires courts itself; Reich does not speak to the power of Congress to
to provide those remedies, ‘the sovereign immunity States subject States to suits in their own courts.” Id. at 740. Thus,
traditionally enjoy in their own courts notwithstanding.’” where the Constitution requires a particular remedy, such as
HART & WECHSLER, supra, at 379 (quoting Reich v. Collins, through the Due Process Clause for the tax monies at issue in
513 U.S. 106, 110 (1994)). Reich explicitly holds that the Reich, or through the Takings Clause as indicated in First
requirement of a remedy for unconstitutional taxes does not English, the state is required to provide that remedy in its own
trump “the sovereign immunity States enjoy in federal court, courts, notwithstanding sovereign immunity. See SDDS, Inc.
under the Eleventh Amendment.” 523 U.S. at 110. First v. South Dakota, 650 N.W.2d 1, 8-9 (S.D. 2002) (“South
English makes clear that the Fifth Amendment Takings Dakota’s sovereign immunity is not a bar to SDDS’s Fifth
Clause is a self-executing remedy, notwithstanding sovereign Amendment takings claim.”); Boise Cascade Corp. v.
immunity. See 482 U.S. at 316 n.9. Therefore, had DLX Oregon, 991 P.2d 563, 565-69 (Or. 1999) (relying on First
brought a federal claim with its state claim in state court, the English in holding that “at least some constitutional claims
Kentucky courts would have had to hear that federal claim, are actionable against a state, even without a waiver or
and likely could not have required exhaustion as a congressional abrogation of sovereign immunity, due to the
prerequisite to hearing the federal claim, see Felder v. Casey, nature of the constitutional provision involved”). But see
487 U.S 131, 146-47 (1988), but this court is powerless to Manning v. Mining & Minerals Div. of the Energy, Minerals,
hear it. See John G. & Marie Stella Kenedy Mem’l Found. v. & Natural Res. Dep’t, 2004-NMCA-52, ¶ 4-¶ 12 (Ct. App.
Mauro, 21 F.3d 667, 674 (5th Cir. 1994) (Eleventh 2004) (rejecting Boise Cascade), cert. granted, No. 28,500,
Amendment bars Fifth Amendment inverse condemnation 2004-NMCERT-005 (May 11, 2004).
claim brought in federal district court); Robinson v. Ga. Dep’t
of Transp., 966 F.2d 637 (11th Cir. 1992) (same); Broughton III. CONCLUSION
Lumber Co. v. Columbia River Gorge Comm’n, 975 F.2d 616,
618-20 (9th Cir. 1992) (same); Citadel Corp. v. Puerto Rico Because Kentucky enjoys sovereign immunity in the
Highway Auth., 695 F.2d 31, 33 n.4 (1st Cir. 1982) (same); federal courts from DLX’s federal takings claim, the district
Garrett v. Illinois, 612 F.2d 1038, 1040-41 (7th Cir. 1980) court was correct to dismiss the DLX’s complaint for want of
(takings claim filed in federal court against the state barred by jurisdiction. The judgment of the district court is therefore
Eleventh Amendment). AFFIRMED.
Although Alden v. Maine, 527 U.S. 706 (1999), might seem
to foreclose the requirement that states be susceptible to suit
in their own courts on takings claims, a close reading of Alden
reveals that it would present no bar to such a claim. In Alden,
the Court held only “that the powers delegated to Congress
under Article I of the United States Constitution do not
include the power to subject nonconsenting States to private
suits for damages in state courts.” Id. at 712. The Alden
No. 03-5528 DLX, Inc. v. Commonwealth 29 30 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
____________________ that the state court wrongly decided the issues before it.
See Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 25 (1987)
CONCURRENCE (Marshall, J., concurring); Anderson v. Charter Township of
____________________ Ypsilanti, 266 F.3d 487, 492 (6th Cir. 2001).
BALDOCK, Circuit Judge, concurring. I respectfully In this case, DLX’s federal takings claim is “inextricably
concur in the Court’s judgment of dismissal only. Although intertwined” with the Kentucky state court judgment.
the Court’s Eleventh Amendment analysis appears sound, in Specifically, the Kentucky Supreme Court dismissed DLX’s
my opinion we need not reach the Eleventh Amendment state takings claim for want of jurisdiction based on its
question. Rather, the Kentucky Supreme Court’s decision application of federal law; namely, the standards set forth in
implicates the Rooker-Feldman doctrine thereby precluding Williamson County Reg’l Planning Comm’n v. Hamilton
the necessity of resolving the myriad of issues raised in this Bank, 473 U.S. 172 (1985). See Commonwealth v. DLX, Inc.,
case. In the alternative, because the “England-reservation” 42 S.W.3d 624, 627 (Ky. 2001). DLX then filed a federal
doctrine is inapplicable, res judicata bars DLX’s federal takings claim in district court. To ensure DLX’s takings
takings claim. I will discuss each issue in turn. claim was ripe for review, the district court, like the Kentucky
Supreme Court, applied the Supreme Court’s two-prong
I. ripeness test from Williamson. Under Williamson, a Fifth
Amendment takings claim is not ripe for review until (1) the
Under the Rooker-Feldman doctrine, lower federal courts government entity charged with implementing the regulations
do not have jurisdiction to review state court decisions; only has reached a final decision inflicting an actual, concrete
the United States Supreme Court has jurisdiction to correct injury, and (2) if a State provides an adequate procedure for
state court judgments. See Rooker v. Fidelity Trust Co., 263 seeking just compensation, the property owner has used the
U.S. 413, 415-16 (1923); District of Columbia Court of procedure and been denied just compensation. 473 U.S. at
Appeals v. Feldman, 460 U.S. 462, 476 (1983).1 The Rooker- 193-95. The ripeness test is conjunctive: both prongs must be
Feldman doctrine deprives lower federal courts of jurisdiction satisfied.
to engage in appellate review of state court decisions or to
adjudicate federal claims that are “inextricably intertwined” Accordingly, the district court first sought to determine
with a state court judgment. See Peterson Novelties, Inc. v. whether a final decision inflicting an actual, concrete injury
City of Berkley, 305 F.3d 386, 390 (6th Cir. 2002). A federal existed under prong one. The district court indicated,
claim is “inextricably intertwined” with a state court however, a close reading of the Kentucky Supreme Court
judgment when the federal claim succeeds only to the extent opinion revealed that the court had already decided
Williamson prong one and determined no final decision, and
thus no injury existed. See DLX, Inc., 42 S.W.3d at 626-27.
1
The Supreme Co urt’s lack of jurisdiction to review the Kentucky In my opinion, the district court properly read the Kentucky
Supreme Court’s judgment in this case as a resu lt of DL X’s failure to Supreme Court’s opinion. In DLX, Inc., the Kentucky
raise its federal claims in state court is not fatal to the application of Supreme Court dismissed DLX’s state takings claim for lack
Rooker-Feldman. See Feldman, 460 U.S. at 484 n.16 (“B y failing to raise
his claims in state court a plaintiff may forfeit his right to obtain review
of subject matter jurisdiction. See id. at 627. The court
of the state-court decisio n in any fed eral co urt.”). reasoned the state agency had not yet arrived at a final,
No. 03-5528 DLX, Inc. v. Commonwealth 31 32 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
definitive position inflicting an injury because DLX failed to doctrines (i.e., exhaustion and finality), see Williamson, 473
exhaust its administrative remedies. See id. The Kentucky U.S. at 192, I nevertheless agree with the district court’s
Supreme Court relied upon the Williamson decision to reach conclusion that the Kentucky Supreme Court’s decision
its conclusion that no final decision inflicting an injury implicates the Rooker-Feldman doctrine because the
existed. See id. at 626-27. The Kentucky Supreme Court Kentucky Supreme Court decided Williamson prong one and
explained that “until a statute has been applied, there can be indicated it lacked jurisdiction over DLX’s takings claim
no unconstitutional application . . .[and] it is the based on the lack of a final decision.2 See DLX, Inc., 42
administrative action which determines the extent, if any, of S.W.3d at 626-27. The district court thus would have had to
the constitutional injury.” Id. at 626. Immediately thereafter, reapply Williamson and conclude the Kentucky Supreme
the court noted “[t]he United States Supreme Court addressed Court “got it wrong,” see Anderson, 266 F.3d at 492, to
this same issue in [Williamson].” Id. (emphasis added). The proceed any further in its analysis. In other words, under
court then quoted Williamson’s first prong at length: Williamson’s first prong, the district court was required to
determine whether a final decision imposing an injury
Our reluctance to examine taking claims until such a existed. The Kentucky Supreme Court, however, had already
final decision has been made is compelled by the very determined no such decision or injury had occurred. Thus,
nature of the inquiry required by the Just Compensation the only way DLX could assert a successful federal takings
Clause. Although the question of what constitutes a claim was for the district court to rule contrary to the
taking for purposes of the Fifth Amendment has proved Kentucky Supreme Court. Rooker-Feldman bars such federal
to be a problem of considerable difficulty, . . . the Court review of state court judgments.
consistently has indicated that among the factors of
particular significance in the inquiry are the economic The Court in this case attempts to avoid Rooker-Feldman
impact of the challenged action and the extent to which by distinguishing between DLX’s state and federal takings
it interferes with reasonable investment-backed claims. See Court’s Op. at 8. The Court’s analysis does not
expectations . . . . Those factors simply cannot be persuade me, however, because the claims are
evaluated until the administrative agency has arrived at indistinguishable. See Anderson, 266 F.3d at 495 (holding
a final, definitive position regarding how it will apply the Rooker-Feldman barred jurisdiction because the requirements
regulations at issue to the particular land in question. of the state takings clause were indistinguishable from the
Id. (quoting Williamson, 473 U.S. at 190-91) (emphasis
added) (internal quotation and citation omitted). 2
The Court in this case correctly notes that the Kentucky Supreme
The district court, after considering the Kentucky Supreme Court based its holding on the failure to exhaust ad ministrative remedies,
see DLX, Inc., 42 S.W .3d at 627, but that exhaustion is “not a compo nent
Court’s analysis, reasonably concluded Rooker- of a federal takings claim.” See Co urt’s Op. at 8. That the Kentucky
Feldman applied. The district court reasoned it would have Supreme Court may have misapplied Williamson, however, is of no
to review the Kentucky Supreme Court’s conclusion that momen t. The purpose of Rooker-Feldman is to preclude lower federal
DLX did not have a final decision, and hold the opposite, in courts from telling state co urts they co nduc ted an incorrect analysis or
order to satisfy Williamson’s first prong. While the Kentucky reached the wrong conc lusion. See Gottfried v. Medica l Plann ing Serv s.,
142 F.3d 326, 33 0 (6th Cir. 1998) (noting only the Supreme Co urt has
Supreme Court appears to have commingled two distinct jurisdiction to correct state court judgm ents); see also 28 U.S.C. § 1257.
No. 03-5528 DLX, Inc. v. Commonwealth 33 34 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
requirements of the Fifth Amendment Takings Clause). As “England reservation” doctrine. See Court’s Op. at 11.3 As
in Anderson, little, if any, substantive difference exists the Court correctly notes, DLX did not raise its federal
between the requirements of the Kentucky Takings Clause, takings claim in state court. Instead, DLX “reserved” its
see Ky. Const. § 242, and the Fifth Amendment Takings federal claim in its state complaint for later adjudication in
Clause in this case. In fact, the Kentucky Supreme Court has federal court. See id. at 4. Res judicata normally bars such
relied upon Supreme Court precedent interpreting the Fifth procedural tactics. See Donovan v. Thames, 105 F.3d 291,
Amendment Takings Clause to determine what constitutes a 295 (6th Cir. 1997) (“Under Kentucky law, res judicata, or
taking under Kentucky law. See Commonwealth v. Stearns claim preclusion, may be used to preclude entire claims that
Coal and Lumber Co., 678 S.W.2d 378, 381 (Ky. 1984). were brought or should have been brought in a prior action.”)
Moreover, the Court in this case notes a state takings claim (emphasis added) (internal citation omitted). The Court,
and federal takings claim are nearly identical for purposes of however, concludes DLX’s purported reservation was proper
claim preclusion law. See Court’s Op. at 13 n.5; see also id. under the principles established in England v. Louisiana State
at 14 (noting state constitutional takings claim “overlap Bd. of Med. Exam’r, 375 U.S. 411 (1964). I disagree because
substantially” with federal takings claim). The Court also the Court expands the England-reservation doctrine beyond
concedes Rooker-Feldman would likely apply if the Kentucky its intended scope.
Supreme Court had reached the merits of DLX’s state takings
claim. See id. at 9 n.2. In the end, the crux of this case is In England, the plaintiffs initially sought to enjoin
DLX’s allegation of one taking and one injury requiring just application of a state statute in federal court. The district
compensation. The Kentucky Supreme Court already court abstained to allow the state courts the opportunity to
determined, under Williamson prong one, no final decision interpret the statute. See England, 375 U.S. at 413. The
existed, and thus, no taking or injury had occurred. For the plaintiffs thereafter commenced state proceedings, but were
district court to hold otherwise would violate Rooker- unsuccessful. Upon returning to federal court, the plaintiffs
Feldman. revived their constitutional claims; however, the defendant
argued the claims were precluded. The Supreme Court held
In sum, the case, in my opinion, should be dismissed under preclusion did not bar the plaintiffs’ federal claims because a
the Rooker-Feldman doctrine. The purpose of the Rooker- party remitted to state court by an abstention order has the
Feldman doctrine is to avoid duplicative appeals and right to return to federal court. See id. at 415. Accordingly,
proscribe lower federal courts review of state court decisions. under the England-reservation doctrine, a plaintiff who finds
Here, DLX availed itself of state procedures and cannot now himself in state court involuntarily due to a district court’s
take a second bite at the judicial apple in federal court. abstention order may, in certain circumstances, reserve his
federal issues for later adjudication in federal court. See id.
II. at 421-22.
Aside from the Rooker-Feldman issue, I disagree with the
Court’s res judicata analysis and its application of the
3
Because the Court refers to bo th claim and issue preclusion as “res
judicata,” I do the same.
No. 03-5528 DLX, Inc. v. Commonwealth 35 36 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
The England-reservation doctrine thus applies only in a The Court unnecessarily attempts to expand the England-
case where a party reserves federal questions in state court reservation doctrine beyond the scope of federal abstention in
following federal court abstention. See id. at 421; see also this case. According to the Court, “given Williamson
Wright, Miller & Cooper, Federal Practice and Procedure: County’s ripeness requirements, DLX could not have chosen
Jurisdiction 2d § 4471.1 at 247 (2002) (noting “[t]he core of to file a federal-court action first; therefore, the interaction of
the England-reservation rule remains unscathed. A party who Williamson County’s ripeness requirements and the doctrine
clearly reserves federal questions following ‘Pullman’ of claim preclusion could possibly operate to keep every
abstention . . . can return to federal court for decision of the regulatory-takings claimant out of federal court.” Court’s Op.
federal issues, free of preclusion.”). Moreover, in order for at 14. The Court then applies the England-reservation
the England-reservation doctrine to apply, the federal action doctrine and, to avoid claim preclusion, declares “[t]he weight
must be brought first “affording the federal court the of circuit-level authority is therefore clearly in favor of
opportunity to decide whether to abstain. A plaintiff who allowing DLX’s England-style reservation.” Id. at 18.
elects to go to state court first is likely to be precluded from
a second federal action, even if an express reservation is To begin, the Court’s conclusion that “every regulatory
attempted.” Wright & Miller, supra § 4471.1 at 250. In Allen takings claimant” would be excluded from federal court is not
v. McCurry, 449 U.S. 90, 101-02 n.17 (1980), the Supreme entirely accurate. Takings claimants who properly raise their
Court explained why an England-reservation is inapplicable federal claims in state proceedings may seek review in the
to cases first filed in state court rather than federal court: United States Supreme Court if dissatisfied with the results
they obtain from state court. See 28 U.S.C. § 1257. Next,
The holding in England depended entirely on this courts have generally rejected use of the England-reservation
Court’s view of the purpose of abstention in such a case: doctrine in the takings context and many courts have declined
Where a plaintiff properly invokes federal-court to create an exception rendering res judicata and collateral
jurisdiction in the first instance on a federal claim, the estoppel inapplicable in Fifth Amendment takings cases.
federal court has a duty to accept that jurisdiction. See Wright & Miller, supra § 4471.1 at 253 (citing cases); see
Abstention may serve only to postpone, rather than to also Santini v. Connecticut Hazardous Waste Mgmt. Serv.,
abdicate, jurisdiction, since its purpose is to determine 342 F.3d 118, 128 (2d Cir. 2003) (citing cases). Discussing
whether resolution of the federal question is even this issue, Wright & Miller reasons:
necessary, or to obviate the risk of a federal court’s
erroneous construction of state law. The question whether filing a state action first waives the
opportunity to reserve federal questions for federal
(emphasis added). The procedural posture of this case differs adjudication is tested by situations in which rules other
significantly from England. Here, DLX did not initially file than abstention doctrine require a plaintiff to go first to
its takings claim in federal court, but first filed its claim in state court. A clear illustration is provided by the
state court. Therefore, a federal court never had the [Williamson] rule that a regulatory taking claim is not
opportunity to abstain and thus, the England-reservation ripe until the plaintiff has exhausted available state
doctrine is inapplicable. judicial compensation remedies. Attempted reservation
of federal issues has been rejected, or at least frowned
upon, perhaps because the purpose of this ripeness
No. 03-5528 DLX, Inc. v. Commonwealth 37 38 DLX, Inc. v. Commonwealth No. 03-5528
of Kentucky, et al. of Kentucky, et al.
doctrine is to provide state courts an opportunity to executing remedy in state courts and state compensation
supervise state regulatory practices. procedures are constitutionally required. See First English
Evangelical Lutheran Church v. County of Los Angeles, 482
See supra § 4471.1 at 253; see also Wilkinson v. Pitkin U.S. 304, 316 n.9 (1987). Based upon these antecedent
County Bd., 142 F.3d 1319, 1325 n.4 (10th Cir. 1998) (noting precepts, Williamson’s ripeness test compels that a state court
concern that the ripeness requirement “may, in actuality, make a federal constitutional ruling because the very purpose
almost always result in preclusion of federal claims, of state compensation procedures is to address the federal
regardless of whether reservation is permitted”); Palomar constitutional question. Allowing the reservation of the
Mobilehome Park Ass’n v. City of San Marcos, 989 F.2d 362, federal question in state court would undermine the role, as
364 (9th Cir. 1993) (explaining that mere fact that Williamson the Supreme Court has described, of state courts in
requires takings claimants to first file in state court “does not adjudicating federal takings claims. As one commentator
prevent the doctrine of res judicata from barring subsequent explained:
federal action”); Peduto v. City of N. Wildwood, 878 F.2d
725, 729 (3d Cir. 1989) (same); Griffin v. Rhode Island, 760 Some federal courts have suggested that a property
F.2d 359, 360 n.1 (1st Cir. 1985) (explaining England- owner can reserve the right to litigate federal issues in a
reservation was inapplicable and that “[s]ection 1983 does not federal forum under the doctrine of England v. Louisiana
override state preclusion law by allowing plaintiffs to first State Board of Medical Examiners, but this ought not to
proceed to judgment in state courts and then turn to federal work. The England doctrine exists to further the purpose
courts for adjudication of federal claims.”). In Allen, 449 of federal abstention. . . . The doctrine, however, does not
U.S. at 104, the Supreme Court stated simply: “There is, in apply in the context of the Fifth Amendment which, as
short, no reason to believe that Congress [through § 1983] construed by the Supreme Court, requires state courts to
intended to provide a person claiming a federal right an rule on federal constitutional grounds.
unrestricted opportunity to relitigate an issue already decided
in state court simply because the issue arose in a state Thomas E. Roberts, Fifth Amendment Taking Claims in
proceeding in which he would rather not have been engaged Federal Court, 24 Urb. Law. 479, 480 (1992).
in at all.”
In sum, the Court erred in applying the England-reservation
Perhaps most importantly, allowing a claimant to reserve its doctrine in this case. A plaintiff, in my view, simply cannot
federal takings claim in state proceedings undermines the make an England-reservation in non-abstention cases.
very purpose of Williamson’s ripeness requirements. The Instead, res judicata applies to bar DLX’s federal claim. We
ripeness requirements for federal takings claims stems from generally presume state courts are capable of adjudicating
both Article III and the Fifth Amendment. See Williamson, federal claims along with state claims. See Migra v. Warren
473 U.S. at 186-87, 190-91; Arnett v. Myers, 281 F.3d 552, City School Dist. Bd. of Educ., 465 U.S. 75, 85-86 (1984);
562 (6th Cir. 2002). The ripeness requirements are of see also Donovan, 105 F.3d at 295. Moreover, the Supreme
constitutional dimension because they assist in the Court has clearly explained that states are required to
determination of whether an injury has occurred for purposes adjudicate takings claims because, if a state provides just
of Article III’s case or controversy requirement. See Arnett,
281 F.3d at 562. Further, the Fifth Amendment is a self-
No. 03-5528 DLX, Inc. v. Commonwealth 39
of Kentucky, et al.
compensation, resort to a federal forum may be avoided.
See Williamson, 473 U.S. at 194.4
Based on the foregoing, I respectfully concur only in the
Court’s judgment of dismissal.
4
One final note: After concluding Rooker-Feldman and res judicata
do not ap ply, the C ourt en gages in a Williamson ripeness analysis but does
not resolve Williamson prong one. See Court’s Op. at 22. I do not
believe we have the luxury of sidestepping the ripeness issue. As the
Court notes, rip eness is a justiciab ility doctrine partially rooted in Article
III’s case or controv ersy requirement. See id. at 19 n.8. Consequently,
the doctrine raises threshold jurisdictional issues that may not be assumed.
See Steel Co. v. Citizens for a Better Env’t., 523 U.S. 83, 94 (1998).
Further, whethe r the Court can d ismiss a p otentially unripe cla im under
the Eleventh Amendment raises a difficult issue. The ripeness doctrine
and the Eleventh Amendment both have jurisdictional bases; however,
ripeness canno t be waived. See Florida Ass’n of Rehab. Facilities, Inc.
v. Florida Dep’t of Health and Rehab. Serv., 225 F.3d 1208, 1227 n.14
(11th Cir. 2000 ). Thus, we should decide whether a claim is ripe before
addressing the Eleventh Amendment. See id. (noting [a]lthough [courts
have] described the issue of Eleventh Amendme nt immunity as itself one
of subject matter jurisdiction, “m ootness- like standing and ripeness -
raises an even more basic question of jurisdiction that cannot be waived
and goes to the very heart of the ‘case and controversy’ requirement of
Article III” that m ust be d ecided first.) (emphasis added) (internal
citations omitted ).