Rockstead, Shirley v. City Crystal Lake ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-1286
SHIRLEY A. ROCKSTEAD and CAROL J. HENDERSON,
Plaintiffs-Appellants,
v.
CITY OF CRYSTAL LAKE,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 C 4485—James B. Moran, Judge.
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ARGUED OCTOBER 31, 2006—DECIDED OCTOBER 31, 2006Œ
OPINION APRIL 10, 2007
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Before POSNER, WOOD, and EVANS, Circuit Judges.
POSNER, Circuit Judge. The Constitution does not forbid
government to take private property for public use; it
merely requires that, if it does so, it pay the owner just
compensation. Therefore the Constitution is not violated
until the government refuses to compensate the owner.
Williamson County Regional Planning Commission v. Hamilton
Bank, 473 U.S. 172, 194-95 and n. 13 (1985). When, as
Œ
With a notation that an opinion would follow.
2 No. 06-1286
alleged in this case, the government (a town in Illinois)
takes the property without a condemnation proceeding,
the owner must, if the government refuses to pay, file a
suit in state court—what is called an “inverse condemna-
tion” suit—to obtain the compensation due him, and he
must exhaust his state judicial remedies, if necessary by
appealing an adverse decision. Daniels v. Area Plan Com-
mission, 306 F.3d 445, 454-55 (7th Cir. 2002). He must
proceed in that way because unless and until the state
courts turn him down, his right to just compensation has
not been infringed. Gamble v. Eau Claire County, 5 F.3d
285, 285-86 (7th Cir. 1993).
The plaintiffs started down that path, but before com-
pleting their state-court proceeding (which remains
pending) filed the present suit, in federal court, seeking
just compensation under federal constitutional law. They
justify this short-circuiting of the state courts on the ground
that state law is so clearly against them that it would be
futile to proceed to final judgment in those courts. The
district court disagreed and granted the town’s motion to
dismiss.
The plaintiffs own a parcel of land that on its west side is
adjacent to a railroad right of way and on its north side to
storm-water detention ponds and a waste water treat-
ment facility; the ponds and the treatment facility are
owned by Crystal Lake. The plaintiffs’ land drained
through a ditch in the railroad right of way until the town
installed a pipeline in the ditch at an angle that cut off the
plaintiffs’ drainage, resulting in intermittent but recurring
flooding of their land from the ponds that transformed
it from productive farmland into worthless wetlands. It
is the resulting impairment of the value of their land
that the plaintiffs claim is a taking entitling them to just
compensation.
No. 06-1286 3
They argue that under Illinois law, as authoritatively
declared in People ex rel. Pratt v. Rosenfield, 77 N.E.2d 697,
699-700 (Ill. 1948), it is plain that a suit for inverse con-
demnation (“inverse” because brought by the landowner,
complaining of the taking, rather than brought by the
condemnor to obtain title to the land) will not lie for
damage caused by intermittent flooding, whatever the
consequences of the flooding. And so the state trial court
ruled in the pending state court litigation, before the
plaintiffs, contending that the intermittent flooding of
their property resulted in a taking as a matter of federal
constitutional law, turned to federal court. The state
judge’s ruling was interlocutory because other claims
and parties remain in the state litigation, but the plaintiffs
could have sought the judge’s leave to appeal the ruling
under Illinois’s counterpart to Fed. R. Civ. P. 54(b). See Ill.
S. Ct. R. 304(a); In re Marriage of Lentz, 403 N.E.2d 1036,
1039 (Ill. 1980). They still can obtain appellate review of the
ruling, when the state litigation concludes. But they say
there’s no point in continuing in state court because the
outcome is foreordained by state law.
If a state statute or constitutional provision provided
that inverse condemnation was inapplicable to an impair-
ment of land values that was due to intermittent flooding,
recourse to state remedies would indeed be pointless
and would therefore not be required. Williamson County
Regional Planning Commission v. Hamilton Bank, supra, 473
U.S. at 197; Daniels v. Area Plan Commission, supra, 306 F.3d
at 456-58. But the situation is different when as in this
case the obstacle to the remedy is a state common law
doctrine. SGB Financial Services, Inc. v. Consolidated City of
Indianapolis, 235 F.3d 1036, 1037-39 (7th Cir. 2000); Samaad
v. City of Dallas, 940 F.2d 925, 934 (5th Cir. 1991); Austin v.
4 No. 06-1286
City & County of Honolulu, 840 F.2d 678, 680-81 (9th Cir.
1988). Judges do not make statutes or constitutions and
cannot change them, but they do make, and they can—and
do—change, common law doctrines. Such doctrines (such
as the intermittent-flooding doctrine of the Pratt decision)
tend, moreover, to be flexible in application. The “black
letter” rules that restaters and treatise writers derive
from common law decisions are usually standards rather
than hard-and-fast rules—generalizations that yield to the
particulars of the individual case. Holmes went too far
when he stated without qualification that “general proposi-
tions do not decide concrete cases,” Lochner v. New York,
198 U.S. 45, 76 (1905) (dissenting opinion), but one sees
what he was driving at. So when a question of the mean-
ing or application of a state common law doctrine is at
issue, “instead of asking a federal judge to guess what
a state court is likely to do, why not ask the state court?”
SGB Financial Services, Inc. v. Consolidated City of Indianapo-
lis, supra, 235 F.3d at 1038.
The Illinois cases that hold that intermittent flooding
does not create the sort of damage for which compensa-
tion is required rest on the common sense view that
ordinarily such flooding does not do permanent damage.
Illustrative is Luperini v. County of Du Page, 637 N.E.2d
1264, 1269 (Ill. App. 1994), where we read that “the evi-
dence did not establish that plaintiffs were prevented
from the use of their premises because of permanent
accumulations of water.” Many of us have had our base-
ments flooded from time to time but we do not expect
such incidents to cause a permanent reduction in the
value of the house. Flood waters recede and the flooded
buildings or land normally recover their previous value.
But the situation has changed with the rise of severe
legal restrictions (especially those imposed by the Clean
No. 06-1286 5
Water Act, 33 U.S.C. §§ 1251 et seq.) on the use that a
property owner may make of land declared to be wetlands.
E.g., Palazzolo v. Rhode Island, 533 U.S. 606, 621 (2001);
Rapanos v. United States, 126 S. Ct. 2208, 2225-27 (2006)
(plurality opinion); Kelly v. EPA, 203 F.3d 519, 520-22 (7th
Cir. 2000); Hoffman Homes, Inc. v. Administrator, 999 F.2d
256, 258 (7th Cir. 1993); Smith v. City of Clearwater, 383 So.
2d 681, 684-85 (Fla. App. 1980). Such a declaration,
while good news for certain birds and other types of
animal and for the health of the environment in general, is
bad news for the owner of the property, who may find
himself forbidden to build improvements on it or other-
wise put it to what the market would consider a produc-
tive use. E.g., Bayou Des Familles Development Corp. v.
United States, 130 F.3d 1034, 1039-40 (Fed. Cir. 1997);
Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1180-82
(Fed. Cir. 1994). Intermittent flooding the cumulative
effect of which is to transform an owner’s property into
permanent wetlands is hard to distinguish from permanent
flooding that puts the land permanently underwater. Soggy
and submerged are not synonyms but in the modern era
of wetlands protection may have the same effect on
property values.
We see a glimmering of recognition of this point in
Luperini v. County of DuPage, supra. The case involved the
same kind of intermittent flooding as this case—flooding
due to the county’s having installed a storm sewer on
property adjacent to the plaintiffs’ property that diverted
water onto their property. In ruling against the plaintiffs
in their inverse condemnation suit on the ground that
“where the public improvement [the storm sewer] causes
only temporary accumulations of water on the subject
property, a taking has not occurred,” the court noted
6 No. 06-1286
evidence that “the plaintiffs’ property had been subject
to occasional flooding prior to the storm sewer being
installed and that an undefined portion of the property
was previously classified as jurisdictional wetlands.” 637
N.E.2d at 1268. The implication is that if the flooding
created “jurisdictional wetlands,” this might be deemed a
taking under Illinois law. There was also evidence that
despite the intermittent flooding the plaintiffs could
continue to use the property as they had been doing,
albeit at a higher cost; and there was also evidence that
they might be able to eliminate the problem created by
the storm sewer by installing a covered conduit convey-
ance system. Id. at 1269. All this evidence may just have
been icing on the cake, but the court’s recital of it sug-
gests that had the evidence been more favorable to the
plaintiffs they might have won.
The Supreme Court of Illinois has not weighed in on the
issue since the Pratt case in 1948, more than half a century
ago. It is premature to conclude that if faced with a case
such as this it would deny relief on the basis of a mechani-
cal application of the “temporary accumulations” doctrine.
For us to rule otherwise would actually do a disfavor
to property owners such as these plaintiffs, who, in order
to bring the case within a “futility” exception find them-
selves arguing against themselves, as when they say in
their brief: “The matter is not remotely debatable. The
Owners have no remedy under Illinois inverse condemna-
tion law.” The first sentence is definitely wrong, and the
second sentence may well be wrong. But when the plain-
tiffs, disappointed in this court, resume the litigation in
the state court, they will find those sentences quoted
against them by their adversaries.
No. 06-1286 7
A “futility” exception broad enough to embrace this
case not only would induce owners to shoot themselves
in the foot, but would reflect an exaggerated conception
of the rigidity of common law doctrines, make the right
to sue in federal court depend on uncertain predictions
about what state courts would do in a similar case, and
curtail the evolution of state common law by keeping
cases that challenge the existing doctrine out of state
court where they could influence the law.
We did say in the SGB case that “in principle one could
imagine a precedent with the same effect as the lack of an
inverse-condemnation law. Suppose, for example, the
Supreme Court of Indiana had held that regulatory tak-
ings as a class are never compensable under the state’s
inverse-condemnation law.” SGB Financial Services, Inc. v.
Consolidated City of Indianapolis, supra, 235 F.3d at 1039; see
also Bateson v. Geisse, 857 F.2d 1300, 1306 (9th Cir. 1988);
Austin v. City & County of Honolulu, supra, 840 F.2d at 680-
81. We have found only one case to fit SGB’s example—Del
Monte Dunes at Monterey, Ltd. v. City of Monterey, 920 F.2d
1496, 1506-07 (9th Cir. 1990), which allowed a landowner
to bypass the state courts because the state’s highest court
had held that landowners could not seek compensation for
a regulatory taking through inverse condemnation pro-
ceedings (or otherwise). Agins v. City of Tiburon, 598 P.2d 25
(Cal. 1979). But ours is not such a case; it is a case in which
state law is uncertain because of the antiquity of the ruling
state supreme court decision, and the intervening change
in the legal status of wetlands. Recall the intimation in
Luperini that flooding that creates “jurisdictional” (legally
protected) wetlands might be deemed a compensable
taking under Illinois law.
8 No. 06-1286
So the plaintiffs’ federal case was rightly dismissed, and
that raises the question of what will happen to their
federal claim pressed futilely on us. In state court they
were seeking relief under Illinois state law, not, so far as
we are aware, under the federal Constitution. Although
the Williamson line of cases that requires the property
owner to seek compensation in the state courts speaks in
terms of “exhaustion” of remedies, that is a misnomer. For
if, as the present plaintiffs will have to do, the property
owner goes through the entire state proceeding, and he
loses, he cannot maintain a federal suit. The failure to
complain of the taking under federal as well as state law
is a case of “splitting” a claim, thus barring by virtue of
the doctrine of res judicata a subsequent suit under fed-
eral law. For the general principle, see Torcasso v. Standard
Outdoor Sales, Inc., 626 N.E.2d 225, 228-29 (Ill. 1993), and
People ex rel. Burris v. Progressive Land Developers, Inc., 602
N.E.2d 820, 824-25 (Ill. 1992), and for its application to
cases such as this see American Nat’l Bank & Trust Co. v.
City of Chicago, 636 F. Supp. 374, 378-80, 384 (N.D. Ill. 1986)
(Illinois law); Wilkinson v. Pitkin County Board of County
Commissioners, 142 F.3d 1319, 1322-25 (10th Cir. 1998) (per
curiam); Palomar Mobilehome Park Ass’n v. City of San
Marcos, 989 F.2d 362, 364-65 (9th Cir. 1993). The litigation
in state court is the end of the road, see 28 U.S.C. § 1738,
unless the state itself allows relitigation of the constitu-
tional question. San Remo Hotel, L.P. v. City & County of
San Francisco, 545 U.S. 323, 341-48 (2005).
It is unclear whether the plaintiffs have even raised
their federal claim in the pending state court proceeding.
(They have not pressed it.) If they have not done so but
still can, they would be well advised to do so.
AFFIRMED.
No. 06-1286 9
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—4-10-07