Citadel Corporation v. Puerto Rico Highway Authority, 695 F.2d 31, 1st Cir. (1983)
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Scribd Government DocsCitadel Corporation v. Puerto Rico Highway Authority, 695 F.2d 31, 1st Cir. (1983)
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Scribd Government Docs695 F.
2d 31
CITADEL CORPORATION, Plaintiff, Appellant,
v.
PUERTO RICO HIGHWAY AUTHORITY, et al., Defendants,
Appellees.
No. 82-1395.
United States Court of Appeals,
First Circuit.
Argued Oct. 4, 1982.
Decided Dec. 22, 1982.
Rehearing Denied Feb. 2, 1983.
Robert H. Rout, Lakeville, Conn., for plaintiff, appellant.
Marta Quinones de Torres, Asst. Sol. Gen., San Juan, P.R., with whom
Miguel Pagan, Acting Sol. Gen. and Americo Serra, Asst. Sol. Gen., Dept.
of Justice, San Juan, P.R., were on brief, for defendants, appellees.
Before COFFIN, Chief Judge, TIMBERS, Senior Circuit Judge,* and
BOWNES, Circuit Judge.
PER CURIAM.
In a prior action, the District Court for the District of Puerto Rico enjoined
various officials of the Commonwealth of Puerto Rico from depriving appellant
Citadel Corporation of its property in contravention of the Fifth Amendment
(Citadel I ). The court in that case, however, denied appellant's claim for
damages. In this second action, appellant seeks monetary relief for injuries
arising out of the same events, but in this action relief is sought from
governmental entities not joined as defendants in the first action. The district
court dismissed the instant action on the ground of collateral estoppel, holding
that the issues in Citadel I and Citadel II were identical.1
We agree that the instant action should be dismissed, but on the ground of
failure to state a claim cognizable in a federal court, rather than on the ground
of collateral estoppel.
I.
COLLATERAL ESTOPPEL CLAIM
3
The district court in the instant case held that Citadel I laid appellant's claims to
rest. Appellant had based its first action directly on the Taking Clause of the
Fifth Amendment, incorporated in the Fourteenth Amendment, as well as on 42
U.S.C. Sec. 1983 (1976). That action sought damages and an injunction
enjoining the allegedly unconstitutional "freeze" on its property. Governmental
agencies had planned to build a highway in the vicinity of appellant's property.
In the mid 1960's these agencies proscribed further development on property
situated in the path of the proposed highway. Some ten years later, however,
plans had not been finalized nor had money been allotted for the construction.
The district court in the first action held a full bench trial on appellant's claims.
The court decided in favor of appellant on all but the claim for damages.
Neither side appealed from the final judgment, although appellant's motion
before trial to join additional defendants, including the defendants in the instant
action, had been denied on the ground that it was not timely.2
Appellant commenced this second action against the Commonwealth of Puerto
Rico, the Puerto Rico Highway Authority, and the Puerto Rico Land Authority
while the first action was pending.3 Appellant makes no claim that it did not
receive a fair opportunity to litigate its case fully in Citadel I. The district court
held that Citadel I precluded appellant from relitigating the same issues in
Citadel II. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331-33 (1979).
Although the factual issues may have been identical, defendants' different
identities in the two actions make reliance on collateral estoppel inappropriate.
While the traditional mutuality requirement for issue preclusion has been
relaxed, e.g., Blonder-Tongue Laboratories, Inc. v. University of Illinois
Foundation, 402 U.S. 313, 332-37 (1971), affirmative use of collateral estoppel
by a nonparty still must be premised on the identity of issues in the two actions.
See generally Restatement (Second) of Judgments Sec. 68 (Tent. Draft No. 4,
1977). Appellees have not demonstrated that the issue of defendants' liability in
Citadel II is the same as that in Citadel I. The district court in the first action
may have declined to award damages against the defendant public officials for
any number of reasons that would not immunize the governmental entities in
the second action. The district court's failure in Citadel I to specify its grounds
for denying damages makes this likely. The issue of the governmental entities'
liability for alleged unconstitutional action not having been litigated, collateral
estoppel does not bar appellant's second action. The critical question therefore
is whether appellant has asserted a cognizable theory that would render the
governmental entities liable for damages. We turn now to a consideration of
this question.
II.
6ABSENCE OF A CLAIM COGNIZABLE IN A FEDERAL COURT
7
We held in Pamel Corp. v. Puerto Rico Highway Authority, 621 F.2d 33 (1st
Cir.1980), that damage actions against governmental entities stemming from
land use policies were not cognizable in a federal court. Plaintiff in Pamel, like
appellant in the instant case, sought damages equivalent to the value of
property allegedly "taken" as a result of the restrictive zoning policies of the
Puerto Rico Highway Authority. Id. at 34. We characterized plaintiff's claim in
Pamel as an inverse condemnation action, i.e., an action seeking fair
compensation for the government's alleged unconstitutional extinguishment of
plaintiff's property rights. While recognizing that "[r]egulation of property use
may be so oppressive or arbitrary that it crosses the wavering line separating a
valid exercise of the police power from an exercise of the eminent domain
power", id. at 35, we determined that the proper remedy in such a case was not
the awarding of the value of the diminished property right. There are strong
policy arguments against any court requiring the state to purchase the property
over which it has imposed excessive regulation. See Note, Inverse
Condemnation: Its Availability in Challenging the Validity of a Zoning
Ordinance, 26 Stan.L.Rev. 1439, 1452 (1974). Those arguments are even
stronger when the court is a federal one. As we stated in Pamel:
8
"[f]ederal
enforcement of the inverse condemnation remedy would be a singularly
inappropriate intrusion into the states' traditional domains of property law and land
use policy. The federal constitutional right can be secured to the individual without
forcing the state to purchase his property. Voiding the offending restriction will
make the owner whole. Moreover, once the constitutional line has been drawn, the
state or local authority administering the complex structure of land use controls
should be free to decide whether the expected benefits from the restriction are worth
the cost of the required compensation."
621 F.2d at 36 (citations omitted).4
9
Appellant invites us to limit Pamel to situations in which plaintiffs challenge an
invalid zoning restriction. We decline the invitation. Under appellant's theory,
Pamel would be inapplicable to the case at hand in which appellant alleges an
unconstitutional deprivation due to wrongful conduct by governmental
officials. The distinction is not persuasive. Whether the conduct is negligent or
not, the gravamen of the inverse condemnation claim remains the
unconstitutional deprivation of property. Resort still can be made to a tort
action in the state courts. The governmental freeze on appellant's property is
sufficiently similar to the restrictive zoning in Pamel to bring this case within
our holding in Pamel. Both cases involve allegations that state governmental
agencies unconstitutionally deprived plaintiffs of property through land use
controls. 5 Federal courts may enjoin such unconstitutional conduct on the part
of states in an inverse condemnation proceeding, but they may not award
damages. The Commonwealth of Puerto Rico's unconstitutional "freeze" on
appellant's property therefore does not subject the governmental entities to an
action for damages in a federal court.
10
We affirm the judgment of the district court dismissing the instant action, but
we do so on the grounds stated in this opinion.
11
Affirmed.
Of the Second Circuit, by designation
Citadel Corp. v. Puerto Rico Highway Authority (Citadel II), No. 79-733
(D.P.R. March 23, 1982)
The motion to join additional defendants was filed more than two years after
plaintiff commenced the action. Citadel Corp. v. Rafael Hernandez Colon
(Citadel I), No. 76-1159 (D.P.R. Jan. 8, 1979) (order denying motion to add
defendants)
Appellant filed the second complaint commencing the instant action on March
19, 1979, apparently not including the individual defendants it had attempted to
join in Citadel I
Since our decision in Pamel, the Supreme Court has decided San Diego Gas &
Electric Co. v. City of San Diego, 450 U.S. 621 (1981). It appears that at least
eight of the Justices may disagree with our unwillingness to characterize
oppressive regulation as a taking, see 450 U.S. at 628 n. 8, id. at 651-53
(Brennan, J., dissenting), but only four would find that such a taking requires
compensation, see id. at 653-58 (Brennan, J., dissenting). It may be that Justice
Rehnquist's concurrence should be taken as a fifth vote in favor of
compensation, see id. at 633-34 (Rehnquist, J., concurring), but deriving
enough direction from his brief comment in support of "much of what is said"
by Justice Brennan to abandon our position that the constitution does not
require compensation in this case seems to be carrying judicial tea leaf reading
to an uncalled-for extreme. In any event, none of the Justices addressed the
issue of federal court ordered compensation, since the lower court in San Diego
Gas was a state court. Even if the constitution is read to require compensation
in an inverse condemnation case, the Eleventh Amendment should prevent a
federal court from awarding it. See Quern v. Jordan, 440 U.S. 332 (1979);
Edelman v. Jordan, 415 U.S. 651 (1974); Knight v. State of New York, 443
F.2d 415 (2d Cir.1971); Beck v. State of California, 479 F.Supp. 392
(C.D.Cal.1979); Nasralah v. Barcelo, 465 F.Supp. 1273 (D.P.R.1979)
5
Arguably, Pamel might be distinguished on the ground that there the cause of
action was based on 42 U.S.C. Sec. 1983, while the instant case also is based
directly on a violation of the Fourteenth Amendment. We find such distinction
not dispositive. The same concerns which impel the result in the Sec. 1983
context likewise should govern in a "Bivens " action. Cf. Monell v. New York
City Dept. of Social Services, 436 U.S. 658, 712-13 (1978) (Powell, J.,
concurring) (liability of municipality should be the same whether predicated on
Sec. 1983 claim or implied from the Fourteenth Amendment)
