Cappel v. State
298 Neb. 445
| Neb. | 2017Background
- The Cappels are Nebraska landowners who irrigate with surface-water appropriations from the Frenchman Valley Irrigation District and groundwater from wells in the Middle Republican NRD.
- The Republican River Compact allocates surface water among Nebraska, Kansas, and Colorado; DNR must assure Nebraska’s compliance.
- In 2013–2015 DNR forecasted Compact depletions, declared "Compact Call Years," and issued closing notices that curtailed surface-water irrigation use; Cappels kept paying taxes/assessments and continued some irrigation by groundwater.
- Cappels sued DNR and its director in state district court alleging: (1) inverse condemnation (state/federal takings), (2) procedural and substantive due process violations, (3) damages under 42 U.S.C. § 1983, and (4) restitution/refunds of occupation and water taxes.
- District court dismissed the amended complaint without leave to amend under Neb. Ct. R. Pldg. § 6-1112(b)(6). On appeal, Nebraska Supreme Court affirmed dismissal of the inverse-condemnation claim but held the § 1983, due process, and restitution claims were barred by sovereign immunity and must be dismissed for lack of subject-matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DNR closing notices and Compact administration constituted an inverse condemnation (physical or regulatory taking) | DNR’s closing notices and Compact administration deprived Cappels of vested water rights and economically viable use | Water appropriations are usufructuary and limited by the Compact and state police power; no compensable vested property right was taken | No taking: rights limited by Compact; Cappels failed to allege a compensable vested property interest (affirmed) |
| Whether Cappels stated a regulatory‑takings claim under Penn Central/Lingle | Reduced crop production and economic viability from curtailment establish a regulatory taking | Curtailment regulates access to a public resource (water) under Compact/federal law, not a deprivation of private property rights | No regulatory taking: use restriction of public water resource subject to Compact; Penn Central factors not reached because no compensable property interest existed (affirmed) |
| Whether Cappels may recover money damages under 42 U.S.C. § 1983 and for federal due process violations | § 1983 and due process permit money damages against DNR and its director for constitutional deprivations | State sovereign immunity bars § 1983 and direct constitutional money-judgment suits against the State; suit against officer in official capacity is suit against the State | § 1983 and federal due process damage claims barred by sovereign immunity; district court lacked subject-matter jurisdiction and dismissal with directions to dismiss is required (reversed in part/remanded) |
| Whether Cappels can obtain restitution/refund of occupation and water taxes from the State | Taxes paid during curtailed years should be reimbursed by the State | Tax refund/restitution claims are money judgments against the State and barred by sovereign immunity; statutory refund procedures exist and were not pursued | Restitution claim barred by sovereign immunity; plaintiffs failed to allege use of statutory refund procedures, so dismissal for lack of jurisdiction required (reversed in part/remanded) |
Key Cases Cited
- Hill v. State, 296 Neb. 10 (Neb. 2017) (appropriators lacked compensable property interest when water use limited by Compact)
- Village of Memphis v. Frahm, 287 Neb. 427 (Neb. 2014) (definition of inverse condemnation)
- Scofield v. State, 276 Neb. 215 (Neb. 2008) (summary of Lingle and regulatory‑takings categorical rules)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (U.S. 1978) (framework for non‑categorical regulatory takings)
- Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (U.S. 2005) (clarified regulatory‑takings law and categories)
- Will v. Michigan Dep’t of State Police, 491 U.S. 58 (U.S. 1989) (official‑capacity suit is against the State)
- FDIC v. Meyer, 510 U.S. 471 (U.S. 1994) (state agencies immune from certain suits for money damages)
- Davis v. State, 297 Neb. 955 (Neb. 2017) (sovereign immunity is jurisdictional; courts must address jurisdiction)
- Keating v. Neb. Pub. Power Dist., 660 F.3d 1014 (8th Cir. 2011) (when watershed cannot supply all permit holders, permittees lack entitlement to use surface water)