Windward Partners, a Registered Hawaii Partnership v. George Ariyoshi, Governor of the State of Hawaii , 693 F.2d 928 ( 1982 )

SCHROEDER, Circuit Judge:

Windward Partners seeks damages arising out of the purchase by the state of Hawaii, under threat of condemnation, of property on which plaintiffs held an option to purchase. The state’s purchase was expressly made subject to the option. Defendants are the owner of the purchased property, her attorney, and various state officials.

Windward’s complaint alleges five causes of action. Three of these causes are based in contract and are directed to property owner Marks and attorney Kay. Both compensatory and punitive damages are sought under these claims. Another cause of action is directed primarily to the state defendants and alleges deprivation of civil rights under color of state law, redressable under 42 U.S.C. § 1983 in connection with an alleged taking of appellants’ option rights. The remaining cause of action alleges a conspiracy between the governor and Marks and Kay to announce the state’s purchases under threat of condemnation in order to prevent appellants from obtaining financing to exercise the option. Plaintiff alleges that the defendants are liable under section 1983 for conspiracy to deprive plaintiff of a federally protected property interest.

We address the conspiracy count first. There is, and can be no allegation that the object of the conspiracy was to condemn the option right. The option was not condemned. In any event, Hawaii courts have never recognized an option as a compensable property interest. However, even assuming that the option was a com-pensable interest, and assuming further that the private defendants and the governor conspired to make it impossible for the plaintiff to obtain financing to exercise the option in this case, there is no authority to support the proposition that an inverse condemnation occurred.

We have been cited to no jurisdiction which has held that such a financing opportunity is a compensable property interest. Moreover, announcement of an intent to condemn is not, in and of itself, an inverse condemnation. More direct and substantial interference with the use and enjoyment of property must be shown. See Richmond Elks Hall Ass’n v. Richmond Development Agency, 561 F.2d 1327, 1330-31 (9th Cir. 1977); Thompson v. Tualatin Hills Park & Recreation Dist., 496 F.Supp. 530, 541-42 (D.Or.1980). See generally, 2 J. Sackman, Nichols’ Law of Eminent Domain § 6.39[5] (rev. 3d ed. 1981). The conspiracy count fails to state a claim on which relief can be granted.

The district court also dismissed Windward’s section 1983 cause of action against the state defendants for failure to state a claim. Although the district court’s order does not identify the particular inadequacies of the claims, it is apparent that the court did not consider Windward’s option on the subject property to be a constitutionally secured interest that was taken by the state without just compensation. We find it unnecessary to reach this issue because Windward’s claims against the state defendants are barred by the eleventh amendment.

There can be no doubt that the true purpose of Windward’s action is to recover money from the state treasury. Windward’s failure to name the state as defendant is therefore immaterial to the state defendants’ eleventh amendment immunity. Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974); Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 65 S.Ct. 347, 350, 89 L.Ed. 389 (1945). As stated by the Court in Ford, “[w]hen the action is in essence one for the recovery of money from the state, the state is the real, substantial party in interest and is entitled to invoke its sovereign immunity from suit even though individual officers are nominal defendants.” Id. In spite of the fact that state officials rather than the state itself were named as defendants, it is clear that the object and intended effect of this inverse condemnation type suit was to recover damages from the state treasury and not from the various state officials personally. See Beck v. State of California, 479 F.Supp. 392, 396-97 (C.D.Cal.1979). It was therefore barred by the eleventh amendment as to all the state defendants.

The framing of plaintiff’s claims as a § 1983 action does not change our conclusion. In Quern v. Jordan, 440 U.S. 332, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979), the Supreme Court held that section 1983 does not abrogate or “override” the sovereign immunity of the states under the eleventh amendment.

Windward does not contest the ap-pellees’ argument that the state is the real party in interest, that section 1983 does not limit the state’s invocation of the eleventh amendment, and that the limitations of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1907), do not apply. Windward argues instead that the state has waived its immunity by Article I, § 20 of the state constitution, which reads: “Private property shall not be taken or damaged for public use without just compensation.” Windward characterizes this provision as “self-executing” and, as such, establishing the state’s consent to be sued.

The state defendants correctly respond that , waiver should be found “only where stated ‘by the most express language or by such overwhelming implications from the [statutory] text as [will] leave no room for any other reasonable construction.’ ” Edelman v. Jordan, 415 U.S. at 673, 94 S.Ct. at 1361 (quoting Murray v. Wilson Distilling Co., 213 U.S. 151, 171, 29 S.Ct. 458, 464, 53 L.Ed. 742 (1909)); Quern v. Jordan, 440 U.S. at 345, 99 S.Ct. at 1146-47. See generally L. Tribe, American Constitutional Law § 3-36, at 134-38 (1978). However, even assuming that the state constitutional provision is sufficiently clear to waive immunity, the provision would confer jurisdiction only upon Hawaii state courts and would not extend to the federal courts. Kennecott Copper Corp. v. State Tax Comm'n, 327 U.S. 573, 577-79, 66 S.Ct. 745, 747-48, 90 L.Ed. 862 (1946); Ford Motor Co. v. Department of Treasury, 323 U.S. at 465-66, 65 S.Ct. at 351.

Because the eleventh amendment strips us' of jurisdiction to consider Windward’s claims against the state defendants, we are thus unable to decide the contractual claims against the private individuals. Windward has alleged no independent federal jurisdictional grounds for those claims, and there remain no federal causes to which they may pend. See Aldinger v. Howard, 427 U.S. 1, 14-15, 96 S.Ct. 2413, 2420, 49 L.Ed.2d 276 (1976).

Affirmed.