In re:SDDS, INC. v. ( 1996 )

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No. 96-2705
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In re: SDDS, Inc., a South *
Dakota Corporation, * Petition for Writ
* of Mandamus
Petitioner. *
___________
Submitted: August 26, 1996
Filed: October 3, 1996
___________
Before MAGILL, JOHN R. GIBSON, and BEAM, Circuit Judges.
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MAGILL, Circuit Judge.
South Dakota Disposal Systems, Inc. (SDDS) moved the district court
to enjoin the State of South Dakota and various state officials in their
official capacities, including Mark W. Barnett, Attorney General of the
State of South Dakota, Walter D. Miller, Governor of the State of South
Dakota, and Joyce Hazeltine, Secretary of the State of South Dakota
(Defendants) from relitigating in the South Dakota state courts certain
issues previously decided by this Court. The district court denied this
motion, and SDDS now petitions this Court for a writ of mandamus, directing
the district court to issue the injunction. Defendants object, arguing
that this relief is improper under both the Eleventh Amendment and the
Anti-Injunction Act, 28 U.S.C. § 2283. We disagree, and conclude that
injunctive relief is proper in the circumstances of this case. Construing
SDDS's petition as an appeal of the district court's denial of injunctive
relief, we reverse.
I.
On the last occasion during which these parties were before us, we
stated that it was "the latest in a seemingly never-ending series of cases
arising from SDDS's six-year-long struggle to develop a large-scale
[multistate solid waste disposal, or MSWD] facility near Edgemont, South
Dakota." SDDS, Inc. v. State of S.D., 47 F.3d 263, 265 (8th Cir. 1995)
(SDDS VI). This description was unfortunately prescient; one-and-a-half
years after penning those words, litigation continues in both state and
federal courts concerning SDDS's efforts to construct and operate the MSWD
facility. In this latest incarnation of the case, we are called upon to
determine if the Defendants are attempting to relitigate issues decided
previously by this Court and, if so, whether the Defendants should be
enjoined from attempting such relitigation.
The facts of this case have been stated and restated by a variety of
courts; see SDDS VI, 47 F.3d at 265-67; SDDS, Inc. v. State of S.D., 994
F.2d 486, 488-91 (8th Cir. 1993) (SDDS III); SDDS, Inc. v. State of S.D.,
843 F. Supp. 546, 548-52 (D.S.D. 1994) (SDDS V), rev'd, SDDS VI, 47 F.3d
at 265; Matter of 1990 Renewal Application of SDDS, 507 N.W.2d 702, 702-03
(S.D. 1993) (SDDS IV); SDDS, Inc. v. State, 481 N.W.2d 270, 271-72 (S.D.
1992) (SDDS II); Matter of SDDS, Inc., 472 N.W.2d 502, 504-06 (S.D. 1991)
(SDDS I); SDDS, Inc. v. State of S.D., Civil Case No. 93-324 (S.D. 6th Jud.
Cir. Ct. Jan. 17, 1996) (SDDS VII),1 and only a brief summary need be
provided here. SDDS purchased land in Fall River County, South Dakota, in
1988, with the intention of constructing the "Lonetree" facility, an MSWD
site. In 1989, SDDS was successful in obtaining from the South Dakota
Board of Minerals and Environment (Board) a one-year permit to site,
construct, and operate the MSWD facility. In 1990, the Board granted SDDS
a five-year renewal of its permit.
1
This is, of course, not a complete list of prior judicial
recitations of the facts of this case.
-2-
Both permits were challenged in South Dakota state courts.2 In SDDS I, the
South Dakota Supreme Court ruled that the one-year permit was invalid
because the Board had made insufficient findings of fact. See id., 472
N.W.2d at 513. In SDDS IV, the South Dakota Supreme Court held that,
because the one-year permit had been declared invalid, the five-year
renewal was void ab initio. See id., 507 N.W.2d at 704. In 1991, on
remand after SDDS I, the Board made the required specified findings that
the proposed MSWD facility was environmentally safe and was in the public
interest. See SDDS VI, 47 F.3d at 265 n.5 (detailing subsequent
administrative history).3
During the course of the litigation over the Board's initial grant
of permits to SDDS, the South Dakota electorate decided two ballot
initiatives. The first, Initiative Measure No. 1, was approved in 1990,
and required legislative approval of large-scale solid waste disposal
sites. SDDS unsuccessfully challenged Initiative Measure No. 1 in the
South Dakota trial court, see SDDS, Inc. v. State of S.D., Civil Case No.
90-412 (S.D. 6th Cir. Ct. Oct. 31, 1991), and did not appeal to the South
Dakota Supreme Court. The South Dakota legislature approved SDDS's MSWD
site by
2
Under South Dakota law, an aggrieved party may appeal an
adverse administrative decision to the state courts. See SDCL 1-
26-30. "'A final determination of an agency decision is reached
when the reviewing court, after deciding the correctness of the
matter on review, affirms the decision or remands it to the
agency for reconsideration and a decision in accord with that
court's directive.'" Matter of Exploration Permit Renewal, Etc.,
323 N.W.2d 858, 860 (S.D. 1982) (quoting Matter of Silver King
Mines, Permit EX-5, 315 N.W.2d, 689, 693 (S.D. 1982) (Morgan, J.,
dissenting)).
3
It does not appear that any South Dakota state court has
addressed the merits of the Board's 1991 findings that the MSWD
facility was environmentally safe and in the public interest.
Rather, upon judicial review, the case was remanded to the Board
"for the opportunity to reissue Original Permit" because the
original permits had been invalidated. See Br. in Support of
Resp't's Answer at 4. SDDS never received reissued permits.
-3-
passing 1991 Senate Bill 169. This bill was signed by the South Dakota
governor, and was to take effect on July 1, 1991. See SDDS II, 481 N.W.2d
at 272 (determining effective date of 1991 Senate Bill 169).
The other ballot initiative decided by the South Dakota electorate
was a referendum on Senate Bill 169, requiring voter approval of SDDS's
MSWD site. See SDDS VI, 47 F.3d at 266. The electorate vetoed the MSWD
facility, which "shut down" SDDS's completion of the Lonetree site. See
4
SDDS IV, 507 N.W.2d at 703. SDDS challenged the referendum measure in
federal court, arguing that it offended the dormant commerce clause. We
reversed the district court's grant of summary judgment to the defendants
twice, first holding that the unsuccessful challenge to Initiative Measure
No. 1 in the South Dakota trial court did not act to collaterally estop the
challenge to the referendum, see SDDS III, 994 F.2d at 494, and later
holding that the referendum violated the dormant commerce clause. See SDDS
VI, 47 F.3d at 272 (reversing SDDS V).
During the course of this wide ranging litigation, SDDS never opened
its proposed MSWD site. In 1994, it sold the land planned for the
development of the MSWD and went out of business. SDDS brought suit
against the Defendants in South Dakota state court to recover an alleged
$5.6 million dollar loss in development costs, arguing that the losses
resulted from an uncompensated "taking" by the Defendants through operation
of the unconstitutional referendum, in violation of the Fifth and
Fourteenth Amendments. The South Dakota state trial court granted summary
judgment to the Defendants, holding that SDDS had no property right in
operating an
4
At the time the referendum was decided by the South Dakota
voters, SDDS was still operating under its five-year renewal
permit. It was several years after the referendum placed "Senate
Bill 169 in limbo," SDDS IV, 507 N.W.2d at 703, long after SDDS
incurred its alleged injuries, that the South Dakota Supreme
Court declared SDDS's five-year renewal permit "void ab initio."
Id. at 704.
-4-
MSWD site, and that the referendum was not a proximate cause of SDDS's
losses. See SDDS VII, Mem. Op. at 11, 18, 24-25. The appeal of SDDS VII
is pending before the South Dakota Supreme Court.
Contending that the Defendants were attempting to relitigate issues
decided by this Court in SDDS VI, SDDS sought an injunction in the federal
district court against the Defendants. The district court summarily denied
5
injunctive relief, and SDDS now petitions this Court for a writ of
mandamus. SDDS requests that we require the district court to issue an
injunction against the Defendants, forbidding them from relitigating in the
South Dakota state courts the issues of (1) whether SDDS had a legitimate
claim of entitlement to a permit to operate an MSWD, and (2) whether the
referendum was the proximate cause of SDDS's dissolution. The Defendants
object to the issuance of the writ, arguing that the standards for a writ
of mandamus have not been satisfied, that the Eleventh Amendment prohibits
this suit, that the Anti-Injunction Act forbids issuance of the writ, and
that injunctive relief is not warranted by the facts of the case. We
address each of these arguments in turn.
5
The district court stated:
On April 11, 1996, SDDS filed a motion for the issuance
of an order to show cause, for a speedy hearing, and
for a preliminary and a permanent injunction pursuant
to the Declaratory Judgments Act and the All Writs Act.
The state defendants responded on May 6, 1996. SDDS
filed a reply on May 23, 1996. Essentially, SDDS's
claim for injunctive relief seeks to have this Court
enjoin a proceeding before the South Dakota Supreme
Court. This Court declines to take such action.
Accordingly, having considered the matter, it is hereby
ORDERED that SDDS's motion for an order to show cause
and for injunctive relief (Docket #133) is denied.
SDDS, Inc. v. State of S.D., Civil No. 91-5121 (D.S.D. May 28,
1996), reprinted in I Appellant's App. at Tab 12.
-5-
II.
The issuance of a writ of mandamus "is a drastic remedy to be invoked
only in extraordinary situations," Melahn v. Pennock Ins., Inc., 965 F.2d
1497, 1501 (8th Cir. 1992) (quotations omitted), and may issue "only if a
petitioner is able to establish a clear and indisputable right to the
relief sought, the defendant has a nondiscretionary duty to honor that
right, and the petitioner has no other adequate alternative administrative
or judicial remedy." In re Lane, 801 F.2d 1040, 1042 (8th Cir. 1986)
(quotations and citations omitted). The Defendants argue that a writ of
mandamus is inappropriate to require a district court to issue an
injunction, because such relief is left to the discretion of the district
court. See id. ("Where a matter is committed to discretion, it cannot be
said that a litigant's right to a particular result is clear and
indisputable." (quotations and citations omitted)).
We need not reach the question of whether a writ of mandamus may
issue to correct a district court's abuse of discretion in denying
injunctive relief. A denial of an injunction is an immediately appealable
interlocutory order, see 28 U.S.C. § 1292(a)(1). Where the liberal
standards for notice of appeal have been met in a case, a petition for a
writ of mandamus may be construed as a notice of appeal from an immediately
appealable order by a district court. See United States v. Gundersen, 978
F.2d 580, 583-84 (10th Cir. 1992) (construing petition for mandamus as
notice of appeal, and citing cases); United States v. Green, 499 F.2d 538,
540 n.5 (D.C. Cir. 1974) (per curiam) (citing cases). Here, SDDS's
petition for mandamus "was the functional equivalent of a notice of appeal
[because] it fulfilled [Fed. R. App. P.] 3's requirements concerning
notice," Gundersen, 978 F.2d at 583 (analyzing Smith v. Berry, 502 U.S. 544
(1992)). SDDS's petition specified the party taking the appeal, designated
the district court order appealed from, and named the court to which the
appeal
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was taken. See id.; see also Fed. R. App. P. 3(c). In all of the
circumstances of this case, therefore, we believe it is appropriate to
construe SDDS's petition for a writ of mandamus as a notice of appeal.
III.
The Eleventh Amendment generally bars suits brought against the
states in federal courts. While the specific language of the Eleventh
Amendment refers only to "any suit in law or equity, commenced or
prosecuted against one of the United States by Citizens of another State,
or by Citizens or Subjects of any Foreign State," U.S. Const. amend. XI,
we have understood the Eleventh Amendment to stand not so much
for what it says, but for the presupposition which it confirms.
That presupposition, first observed over a century ago in Hans
v. Louisiana, 134 U.S. 1 (1890), has two parts: first, that
each State is a sovereign entity in our federal system; and
second, that it is inherent in the nature of sovereignty not to
be amenable to the suit of an individual without its consent.
For over a century we have reaffirmed that federal jurisdiction
over suits against unconsenting States was not contemplated by
the Constitution when establishing the judicial power of the
United States.
Seminole Tribe of Fla. v. Florida, 116 S. Ct. 1114, 1122 (1996) (citations
and quotations omitted). The immunity recognized by the Eleventh Amendment
extends to both suits for monetary damages and those for declaratory or
injunctive relief; "The Eleventh Amendment does not exist solely in order
to prevent federal court judgments that must be paid out of a State's
treasury; it also serves to avoid the indignity of subjecting a State to
the coercive process of judicial tribunals at the instance of private
parties." Id. at 1124. South Dakota and its state officials sued in their
official capacities would, therefore, normally be immune from suit in the
federal courts.
-7-
In Ex parte Young, 209 U.S. 123 (1908), however, the Supreme Court
established a fundamental exception to the Eleventh Amendment's immunity
doctrine:
Ex parte Young recognized that suits may be brought in federal
court against state officials in their official capacities for
prospective injunctive relief to prevent future violations of
federal law. The doctrine of Ex parte Young is based on the
idea that the power of federal courts to enjoin continuing
violations of federal law is necessary to vindicate the federal
interest in assuring the supremacy of that law.
Fond Du Lac Band of Chippewa Indians v. Carlson, 68 F.3d 253, 255 (8th Cir.
1995) (quotations and citations omitted). See also Denke v. South Dakota
Dep't of Social Servs., 829 F.2d 688, 689 (8th Cir. 1987) ("Eleventh
amendment analysis is an area dominated by formalistic rules, often neither
intuitive nor strictly rational. However, over years of development,
important exceptions to state immunity from suit have been recognized which
allow citizens to vindicate rights infringed upon by state authorities.
Extremely important in this regard is the substantial exception to the
scope of the eleventh amendment represented by the case of Ex Parte Young,
209 U.S. 123 (1908)[,] and its progeny.").
Defendants did not contend that SDDS VI was improperly heard by this
Court in violation of the Eleventh Amendment, and we do not believe that
any such argument could have been successful. As a suit for prospective
declaratory relief from South Dakota's ongoing violation of the dormant
commerce clause, the Defendants could not have enjoyed immunity under the
Eleventh Amendment in SDDS VI. See Ex parte Young, 209 U.S. at 159 ("the
use of the name of the State to enforce an unconstitutional act to the
injury of complainants is a proceeding without the authority of and one
which does not affect the State in its sovereign or governmental
capacity").
The question presented is therefore whether the Defendants,
-8-
who had been properly sued for declaratory relief in a prior suit, can now
assert Eleventh Amendment immunity from this suit for prospective
injunctive relief which seeks only to effectuate our earlier judgment. An
affirmative answer would allow these Defendants, and all future state
defendants, to effectively ignore judgments rendered in the federal courts,
generating needless relitigation in the state courts, and rendering our
judgments largely nugatory and advisory.6 This is an intolerable result,
6
Indeed, it is clear that this is precisely what the
Defendants in this case have attempted to do to our judgment in
SDDS VI almost from the moment the decision was filed. Upon our
remand of the case to the district court for a determination of
attorney's fees, the Defendants stated:
All that has been obtained for the Plaintiff[ in SDDS
VI], however, is a declaratory judgment that the
referendum was unconstitutional. The court of appeals
let stand this court's important rulings on the due
process and equal protection issues raised by
Plaintiffs.
Plaintiff has, in essence, obtained a judgment
which can do it no good. [FN2 In its response to
Defendants' submission on the "prevailing party" issue,
Plaintiff claims in a footnote that the ruling of the
court of appeals may have some application in the state
"inverse condemnation" case, but Plaintiff does not
explain how the court of appeals ruling on the commerce
clause issue can have any application to the inverse
condemnation case. Additionally, it is important to
note that the state courts could agree with this
court[']s ruling (which the court of appeals let stand)
that Plaintiff had no property interest which could be
unlawfully taken.] Plaintiff has in fact accomplished
nothing more than obtaining "the moral satisfaction of
knowing that a federal court concluded [its] rights had
been violated. . . . Farrar vs. Hobbey, [506 U.S. 103,
114] (1992), quoting Hewitt vs. Helms, 482 [U.S.] 755,
762 (1987). In these circumstances, a substantial
reduction in the amount awarded, or [no] award at all,
see Farrar, 506 U.S. at 115, is appropriate.
Resp. to Mot. to Determine Award of Att'ys' Fees & Costs & Req.
for Hr'g at 13-14, reprinted in I Appellant's App. at Tab 7
(ellipses in original). Contrary to the Defendants'
mischaracterizations of SDDS VI, we did not "let stand" any
-9-
and
portion of the district court decision in SDDS V; rather, we
reversed the district court, and
remanded the case to the district court "with instructions to
enter judgment in favor of SDDS." SDDS VI, 47 F.3d at 272.
Similarly, in opposing SDDS's requested injunctive relief in
the district court, the Defendants urged the district court to
disregard our decision in SDDS VI by stating that:
SDDS also argues that the Eighth Circuit decision is
binding precedent on the state courts. While the
United States Supreme Court has the authority to enter
decisions binding on the South Dakota Supreme Court,
the lower federal courts do not have such power.
State Defs.' Br. In Supp. of Resistance to Pl.'s Mot. for Order
to Show Cause & for Speedy Hr'g & for Prelim. & Permanent Inj. at
14, reprinted in I Appellant's App. at Tab 10. Contrary to the
Defendants' rather unique interpretation of federalism, the
judgments of this Court are, in fact, entitled to the same res
judicata and collateral estoppel effect in the South Dakota state
courts as judgments rendered by those courts. See, e.g., City of
Tacoma v. Tacoma Taxpayers, 357 U.S. 320, 334 (1958).
-10-
one which is not, we believe, mandated by the Eleventh Amendment. We
therefore hold that the Eleventh Amendment does not bar a suit in the
federal court for injunctive relief to prohibit a state defendant from
relitigating in a state court issues previously decided in a federal
court.7
7
The Defendants, citing Green v. Mansour, 474 U.S. 64
(1985), argue that the instant suit for injunctive relief is in
fact a "demand that this Court direct the South Dakota courts to
grant SDDS a monetary award to be paid from the South Dakota
state treasury." Br. In Supp. of Resp't's Answer at 13. We
disagree. Green was an action for declaratory relief for an
alleged past violation of constitutional rights; "the award of a
declaratory judgment in this situation would be useful in
resolving the dispute over the past lawfulness of respondent's
action only if it might be offered in state-court proceedings as
res judicata on the issue of liability, leaving to the state
courts only a form of accounting proceeding whereby damages or
restitution would be computed." Green, 474 U.S. at 73. By
contrast, the suit before us has been brought to effectuate our
judgment in SDDS VI, a "[r]emed[y] designed to end a continuing
violation of federal law [which was] necessary to vindicate the
federal interest in assuring the supremacy of that law." Id. at
68.
-11-
IV.
Embodying fundamental precepts of federalism and comity between
federal and state courts, the Anti-Injunction Act provides that:
A court of the United States may not grant an injunction to
stay proceedings in a State court except as expressly
authorized by Act of Congress, or where necessary in aid of its
jurisdiction, or to protect or effectuate its judgments.
28 U.S.C. § 2283.8 The Supreme Court has "expressly rejected the view that
the anti-injunction statute merely states a flexible doctrine of comity,
and [has] made clear that the statute imposes an absolute ban upon the
issuance of a federal injunction against a pending state court proceeding,
in the absence of one of the recognized exceptions . . . ." Mitchum v.
Foster, 407 U.S. 225, 228-29 (1972) (citing Atlantic Coast Line R.R. v.
Locomotive
8
In Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 146 (1988),
the Supreme Court explained the purpose of the Anti-Injunction
Act:
The Act, which has existed in some form since 1793, see
Act of Mar. 2, 1793, ch. 22, § 5, 1 Stat. 335, is a
necessary concomitant of the Framers' decision to
authorize, and Congress' decision to implement, a dual
system of federal and state courts. It represents
Congress' considered judgment as to how to balance the
tensions inherent in such a system. Prevention of
frequent federal court intervention is important to
make the dual system work effectively. By generally
barring such intervention, the Act forestalls the
inevitable friction between the state and federal
courts that ensues from the injunction of state
judicial proceedings by a federal court. Due in no
small part to the fundamental constitutional
independence of the States, Congress adopted a general
policy under which state proceedings should normally be
allowed to continue unimpaired by intervention of the
lower federal courts, with relief from error, if any,
through the state appellate courts and ultimately [the
United States Supreme Court].
(quotations and citations omitted).
-12-
Eng'rs, 398 U.S. 281, 286-87 (1970) (note omitted)).
Included in the Anti-Injunction Act are specific, enumerated
exceptions. These exceptions, which "are designed to ensure the
effectiveness and supremacy of federal law," Chick Kam Choo v. Exxon Corp.,
486 U.S. 140, 146 (1988), include the relitigation exception. This
exception
was designed to permit a federal court to prevent state
litigation of an issue that previously was presented to and
decided by the federal court. It is founded in the well-
recognized concepts of res judicata and collateral estoppel.
Id. at 147. See also NBA v. Minnesota Pro. Basketball, Ltd. Partnership,
56 F.3d 866, 871 (8th Cir. 1995) ("The legislative policy that permits a
federal court to enjoin state court action when a federal court has decided
a suit on its substantive merits has equal force when a critical underlying
issue unrelated to the substantive merits of the action has been litigated
to finality." (quotations and citations omitted)). As with all of the
statutory exceptions, the relitigation exception is "narrow and [is] not
to be enlarged by loose statutory construction." Chick Kam Choo, 486 U.S.
at 139 (quotations and citations omitted).
We review de novo the applicability of the relitigation exception.
See NBA, 56 F.3d at 871. In order to enjoin a state court from
relitigating an issue, the issue must "actually have been decided by the
federal court." Chick Kam Choo, 486 U.S. at 148. To determine if this
strict and narrow prerequisite has been met, we must assess "the precise
state of the record and what the earlier federal order actually said; [we
may not] render a post hoc judgment as to what the order was intended to
say." Id. (citing Atlantic Coast, 398 U.S. at 290 (emphasis in original)).
In an extended discussion, the district court in SDDS V held
-13-
that SDDS had no protected property interest in operating an MSWD facility,
and that the referendum had no effect on SDDS's ability to operate an MSWD.
The district court stated:
Under South Dakota law, SDDS needs two things in order to
operate its Lonetree facility: (1) a valid permit and (2)
legislative approval from the South Dakota Legislature. See
SDCL 34A-6-1.4 to 34A-6-1.13 (solid waste disposal facilities
must obtain permits); and SDCL 34A-6-53 to 34A-6-56 (solid
waste disposal facilities handling in excess of 200,000 tons of
waste annually must get legislative approval for their
operations).
At the time of the Referendum in November 1992, SDDS's
one-year permit had expired. In any event, that one-year
permit was void because the [Board], in issuing the permit,
failed to make specific findings of fact that the Lonetree
facility was in the public interest and that the facility met
five specified environmental prerequisites.
Although the [Board] had issued SDDS a five-year renewal
permit and the Legislature had passed S.B. 169 approving the
operation of the Lonetree facility, the five-year permit was
invalid because it was based upon an invalid one-year permit.
The five-year renewal permit was void ab initio. In other
words, SDDS has never had a valid permit to operate the
Lonetree facility. Without a valid permit, SDDS has no
constitutionally protected property interest in operating the
facility. Both of SDDS's due process claims fail.
The Court notes that SDDS's remaining commerce clause and
equal protection claims rest solely on the effect of the
Referendum, the validity of the Initiated Measure having
already been decided by [the South Dakota state court].
Furthermore, because SDDS has never had a valid permit to
operate its Lonetree facility, S.B. 169 and the subsequent
Referendum "vetoing" that bill have no practical effect. By
the very unambiguous terms of the Initiated Measure,
legislative approval may only be granted to a facility that is
operational "pursuant to solid waste permit." SDCL 34A-6-53.
SDDS has never had a valid permit. The legislature cannot have
granted approval of the Lonetree facility if the facility had
no permit to operate. It logically follows that if the
legislature was not in a position to grant approval to the
Lonetree facility, then the enabling legislation (S.B. 169) was
of no effect. The Referendum would also be of no effect. If
the Referendum had no effect, the
-14-
commerce clause and the equal protection clause are not
implicated.
SDDS V, 843 F. Supp. at 553-54 (citations and notations omitted).
The Defendants, in their brief to this Court in SDDS VI, argued
strenuously that we affirm these holdings. See Appellee's Br. in No. 94-
1688, at 10-17, 41, reprinted in part in I Appellant's App. at Tab 2.9
SDDS, of course, strongly urged that we reverse the district court on these
points. See Appellant's Reply Br. in No. 94-1688, at 2-10, reprinted in
I Appellant's App. at Tab 3.10
9
For example, the Defendants previously argued that South
Dakota's
laws regulating solid waste facilities have changed
since SDDS obtained its original 1989 permit. South
Dakota's solid waste regulations were entirely
rewritten in July of 1990, and have been amended once
before the November 1992 Referendum and once after.
Appellee's Appendix G. Since the September 1991
findings issued by the Board were based on the original
1989 record, the September 1991 findings do not address
or consider these regulatory changes. The Board must
determine compliance with these new regulatory
requirements before a solid waste permit can issue;
this determination was never made and SDDS is therefore
not entitled to a permit.
Appellee's Br. in No. 94-1688, at 14-15, reprinted in I
Appellant's App. at Tab 2. See also id. at 41 ("More importantly
the Referendum's disapproval of Senate Bill 169 did not impact
SDDS's ability to accept out of state waste because SDDS could
not accept any waste, regardless of the source, until it obtained
new state solid waste permits." (emphasis in original)).
10
For example, SDDS previously argued that
the procedural defect in the [Board's] original
decision --the lack of findings that resulted in the
remand in SDDS I--had been cured by the time of the
Referendum. . . . [O]n remand the [Board] entered
extensive findings responsive to the [South Dakota]
Supreme Court's mandate and concluded that SDDS had met
"all requirements" for the issuance of a solid waste
-15-
In SDDS VI, we reversed the district court's judgment. See 47 F.3d
at 272. In so doing, we explicitly accepted SDDS's arguments on both of
these contested issues, and we explicitly rejected the Defendants'
positions. Regarding the protected property interest in operating the
MSWD, we stated:
In 1991, S.D.Codified Laws § 34A-6-1.13 was amended and the
implementing regulations were rewritten. Although the ultimate
question of whether the facility was environmentally safe and
in the public interest remained the same, several factors
weighing into the agency's decision changed. On remand after
SDDS I, the agency made the specific findings required by its
revised regulations. The agency found the Lonetree facility to
be environmentally safe, using language that parallels the
applicable regulation. Appellant's App. at 117 (Finding # 52,
parallelling S.D.Admin.R. 74:27:17:01). The agency found the
facility to be in the public interest. Appellant's App. at 121
(Finding # 72). Both findings were preceded by numerous
supporting factual findings. The revised [Board] findings also
contain a specific legal conclusion that all requirements for
the permit had been met. Appellant's App. at 122 (Conclusions
of law # 3 & # 4).
SDDS VI, 47 F.3d at 265 n.5 (emphasis added).11 This determination that
all of the factual predicates and legal requirements for SDDS's permit had
been met was necessarily dispositive of SDDS's property interest in the
permit itself. See Littlefield v. City of Afton, 785 F.2d 596, 602 (8th
Cir. 1986) ("We hold that appellants have a property interest in the
building permit because they complied with all the legal requirements
contained in the
permit under the relevant laws and regulations of South
Dakota.
Appellant's Reply Br. in No. 94-1688, at 7, reprinted in
Appellant's App. at Tab 3 (note omitted). See also id. at 3
("[t]he State attempts to avoid the consequence of its admission
concerning the Referendum's 'practical effect,' by engaging in an
inventive but, unfortunately, distorted analysis of the state
court litigation").
11
We note that these factual determinations by an
administrative agency must be given "great weight" by South
Dakota courts. See SDCL 1-26-36.
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ordinances of the City of Afton. Appellants need not comply with illegal
conditions in order to have a property interest in the permit." (emphasis
in original)), holding limited in part on other grounds, Lemke v. Cass
County, Neb., 846 F.2d 469, 470-71 (8th Cir. 1987) (per curiam) (en banc)
(holding that "[w]hether a substantive due process claim may arise from a
denial of a zoning permit is an open question in this circuit and need not
be decided in this case").12
Regarding the effect of the referendum on SDDS, we stated in SDDS VI
that:
Despite the fact that it has previously conceded that "[t]he
practical effect of the referendum was to prohibit the
construction" of the Lonetree facility, Appellant's App. at 39,
South Dakota now argues that because the [Board] permit had
been revoked, the referendum had no impact, discriminatory or
otherwise, on Lonetree. However, if this court were to ignore
South Dakota's intermediary actions and look only to the
result, it would reward South Dakota for acting
unconstitutionally. Moreover, the administrative permit was
voided due to a procedural defect, not because of any finding
that the Lonetree facility was environmentally dangerous.
Thus, Lonetree could reapply for the administrative permit, and
the referendum at the very least made the Lonetree
12
In adopting the factual findings of the Board in SDDS VI,
we did not then--and need not now--address the issue of whether
those findings were entitled to claim preclusive effect. See
Astoria Federal Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 109-
10 (1991) ("Although administrative estoppel is favored as a
matter of general policy, its suitability may vary according to
the specific context of the rights at stake, the power of the
agency, and the relative adequacy of agency procedures."). Put
bluntly, here we are not concerned with determining the accuracy
of our decision in SDDS VI, but rather in insuring its
effectiveness. See, e.g., Moe v. Moe, 496 N.W.2d 593, 595 (S.D.
1993) (res judicata applies "whether the court was correct at the
time or not"). If the Defendants were dissatisfied with our
adjudication of their case in SDDS VI, their options were to
request rehearing by this Court en banc or to petition the United
States Supreme Court for a writ of certiorari. They may not,
however, collaterally challenge our decisions in the South Dakota
state courts. See City of Tacoma, 357 U.S. at 334.
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project more difficult and expensive to accomplish.
Id. at 270 n.10 (citations and quotations omitted).13
The issues which the Defendants now wish to relitigate in the state
courts were, therefore, actually and finally decided by this Court in SDDS
VI. Under South Dakota's rules of claim preclusion or collateral estoppel,
we conclude that this Court's decision in SDDS VI bars the Defendants from
relitigating these settled issues in subsequent litigation in the state
courts. See, e.g., Moe v. Moe, 496 N.W.2d 593, 595 (S.D. 1993):
[I]f the prior final judgment or order had been rendered by a
court of competent jurisdiction, it is conclusive as to all
rights, questions, or facts directly involved and actually, or
by necessary implication, determined therein, whether the court
was correct at the time or not.
We apply four factors to determine whether the doctrine
of [claim preclusion] bars this appeal: (1) whether the issue
decided in the former adjudication is identical with the
present issue; (2) whether there was a final judgment on the
merits; (3) whether the parties are identical; and (4) whether
there was a full and fair opportunity to litigate the issues in
the prior adjudication.
(citations and quotations omitted). See also Black Hills Novelty Co. v.
South Dakota Comm'n, 520 N.W.2d 70, 73 (S.D. 1994) (describing elements of
collateral estoppel). In this case, all of these elements have
unquestionably been met: the issues are the same, the parties are the same,
there was a final judgment on the
13
Indeed, our ruling echoed that of the South Dakota Supreme
Court in SDDS IV, 507 N.W.2d at 703, which found that the
referendum "placed Senate Bill 169 in limbo and shut down the
[Lonetree] facility pending the outcome of the general election."
See also SDDS III, 994 F.2d at 489 ("S.B. 169 was, therefore,
effectively vetoed by the citizens of South Dakota and the
Lonetree project has been unable to proceed since.").
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merits in SDDS VI, and the record amply reveals that the Defendants were
not only given, but took every opportunity, to fully and fairly litigate
these issues before us. Because the Defendants are barred by claim
preclusion from relitigating the issues of (1) whether SDDS had a
legitimate claim of entitlement to a permit to operate an MSWD, and (2)
whether the referendum was the proximate cause of SDDS's dissolution, the
relitigation exception to the Anti-Injunction Act permits injunctive relief
to prevent them from so relitigating these issues in the South Dakota state
courts.14
V.
We recognize, however, that "[t]he fact that an injunction may issue
under the Anti-Injunction Act does not mean that it must issue. The
injunction must be an otherwise proper exercise of the [court's] equitable
power." Daewoo Elecs. v. Western Auto Supply Co., 975 F.2d 474, 478 (8th
Cir. 1992). We review the district court's denial of injunctive relief for
abuse of discretion. See Goff v. Harper, 60 F.3d 518, 520 (8th Cir. 1995).
"Abuse of
14
Under the Full Faith and Credit Act, 28 U.S.C. § 1738, we
are bound by a state court's application of its res judicata
rules to our judgments. See Parsons Steel, Inc. v. First Ala.
Bank, 474 U.S. 518, 524 (1986):
We believe that the Anti-Injunction Act and the Full
Faith and Credit Act can be construed consistently,
simply by limiting the relitigation exception of the
Anti-Injunction Act to those situations in which the
state court has not yet ruled on the merits of the res
judicata issue. Once the state court has finally
rejected a claim of res judicata, then the Full Faith
and Credit Act becomes applicable and federal courts
must turn to state law to determine the preclusive
effect of the state court's decision.
Because the South Dakota trial court did not rule on the claim
preclusive effect of SDDS VI, see SDDS VII, Mem. Op. at 2 n.3, 5,
20-21, we are not precluded from protecting our judgment in SDDS
VI under the relitigation exception to the Anti-Injunction Act.
See Daewoo Elecs. v. Western Auto Supply Co., 975 F.2d 474, 479
(8th Cir. 1992).
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discretion occurs if the district court rests its conclusion on clearly
erroneous factual findings or if its decision relies on erroneous legal
conclusions." Hosna v. Groose, 80 F.3d 298, 303 (8th Cir. 1996)
(quotations and citations omitted), pet. for cert. filed, No. 95-9498 (June
28, 1996). See also Walser v. Toyota Motor Sales, U.S.A., Inc., 43 F.3d
396, 401 (8th Cir. 1994) ("We will not disturb a district court's
discretionary decision if that decision remains within the range of choice
available to the district court, accounts for all relevant factors, does
not rely on any irrelevant factors, and does not constitute a clear error
of judgment." (quotations and citations omitted)).
In analyzing SDDS's motion for injunctive relief, the district court
stated that:
Essentially, SDDS's claim for injunctive relief seeks to have
this Court enjoin a proceeding before the South Dakota Supreme
Court. This Court declines to take such action.
SDDS, Inc. v. State of S.D., Civil No. 91-5121 (D.S.D. May 28, 1996),
reprinted in I Appellant's App. at Tab 12. While this description
overstates the degree of relief requested by SDDS--which sought to enjoin
the relitigation of specific issues, rather than a blanket injunction of
all consideration of its dispute with the Defendants by the South Dakota
Supreme Court--it does represent a proper concern by the district court for
a core element of federalism, embodied by the Anti-Injunction Act, that the
federal courts should not interfere with the state courts' operation. See,
e.g., Southwest Airlines Co. v. Texas Int'l Airlines, 546 F.2d 84, 91 (5th
Cir. 1977) ("few public interests have a higher claim upon the discretion
of a federal chancellor than the avoidance of needless friction with state
policies" (analyzing abstention doctrine and Anti-Injunction Act) (quoting
Railroad Comm'n v. Pullman Co., 312 U.S. 496, 500 (1941))), cert. denied,
434 U.S. 832 (1977); but see United States v. Rural Elec. Convenience Co-
Op.
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Co., 922 F.2d 429, 439 (7th Cir. 1991) ("we do not believe that comity and
federalism should be considered 'public interest' factors that militate
against the issuance of an injunction").
The district court's analysis fails, however, to consider the factors
which support the issuance of injunctive relief in this case. In Dataphase
Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981) (en banc),
this Court held that:
Whether a preliminary injunction should issue involves
consideration of (1) the threat of irreparable harm to the
movant; (2) the state of the balance between this harm and the
injury that granting the injunction will inflict on other
parties litigant; (3) the probability that movant will succeed
on the merits; and (4) the public interest.
Applying the Dataphase factors to the case before us, we conclude that the
district court abused its discretion in denying injunctive relief.
Requiring SDDS to relitigate in the state court issues previously decided
by this Court constitutes an irreparable harm. See, e.g., Daewoo, 975 F.2d
at 478 (affirming district court's finding that petitioner "would suffer
irreparable harm if injunctive relief were not issued because it would face
relitigation of claims already adjudicated in its favor").15
While issuing the injunction in this case will foreclose the
opportunity for the Defendants to relitigate issues in the state court, we
do not believe that this is a legitimate harm which must
15
A petitioner seeking to enjoin a criminal or quasi-
criminal state court proceeding must demonstrate a threat of
"great and immediate irreparable injury that cannot be eliminated
by his defense to the state proceeding." Goodrich v. Supreme
Court of S.D., 511 F.2d 316, 317 (8th Cir. 1975) (refusing to
enjoin state court disbarment proceeding (citing Younger v.
Harris, 401 U.S. 37, 46 (1971))). Where a petitioner seeks to
enjoin a state court's civil proceeding, however, we have only
required a showing of "irreparable harm" to allow a grant of
injunctive relief. See Daewoo, 975 F.2d at 478 (analyzing
Goodrich).
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be balanced. As noted above, the Defendants had one full and fair
opportunity to litigate these issues in the federal forum, and the rules
of equity do not require that they be given a second bite at the apple in
the state forum in order to obtain a more favorable result. See, e.g.,
Hart Steel Co. v. Railroad Supply Co., 244 U.S. 294, 299 (1917) ("This
doctrine of res judicata is not a mere matter of practice or procedure
inherited from a more technical time than ours. It is a rule of
fundamental and substantial justice, of public policy and of private peace,
which should be cordially regarded and enforced by the courts to the end
that rights once established by the final judgment of a court of competent
jurisdiction shall be recognized by those who are bound by it in every way,
wherever the judgment is entitled to respect." (quotations and citation
omitted)).
The third and fourth Dataphase elements also support issuance of an
injunction in this case. As discussed above, SDDS successfully litigated
in SDDS VI the issues currently contested by the Defendants; SDDS's success
on the merits of the underlying issue is therefore already secured. In
addition, the public policy concerns of finality and repose informing our
res judicata jurisprudence strongly supports the protection of our previous
judgment. While the interference with a state court proceeding is
generally opposed by public policy, this "injunction will promote judicial
economy and protection of parties from harassing, duplicative litigation,
interests which the federal and state courts share." Daewoo, 975 F.2d at
479 (citation omitted).
We find no merit in the Defendants' remaining arguments opposing the
granting of injunctive relief. We therefore reverse the district court's
denial of injunctive relief in this case, and remand to the district court
for an order enjoining the Defendants from relitigating in the South Dakota
state courts the issues of (1) whether SDDS had a legitimate claim of
entitlement to a permit to operate an MSWD, and (2) whether the referendum
was the
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proximate cause of SDDS's dissolution.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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