Cappel v. State
298 Neb. 445
| Neb. | 2017Background
- The Cappels are Nebraska farmers who hold surface-water appropriations from the Frenchman Valley Irrigation District and pump groundwater in the Republican River Basin; they were subject to DNR’s integrated management plan and surface-water controls.
- In 2013–2015 the Nebraska DNR forecasted Compact shortfalls, declared "Compact Call Years," and issued closing notices that curtailed surface-water irrigation to secure Nebraska’s compliance with the Republican River Compact.
- The Cappels were prevented from using river water those years (but continued to pump groundwater and pay irrigation-related taxes/assessments) and later sued the DNR and its director in state district court seeking money damages, restitution of taxes, and relief under 42 U.S.C. § 1983, inverse condemnation, and due process theories.
- The district court dismissed the amended complaint under Neb. Ct. R. Pldg. § 6-1112(b)(6) (failure to state a claim); it found no taking and no due-process violation, but concluded it had subject-matter jurisdiction.
- On appeal, the Nebraska Supreme Court affirmed dismissal of the inverse-condemnation claim for failure to state a claim, but reversed in part and held the § 1983, due-process monetary, 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) | Cappels: closing notices and DNR administration effectively deprived them of water rights/use and economic viability, so a taking occurred | DNR: actions were lawful regulation to meet Compact obligations and did not deprive vested private property rights | No taking; dismissal for failure to state a takings claim affirmed |
| Whether § 1983 claim against DNR and director can proceed | Cappels: deprivation of federal rights supports § 1983 damages | DNR: State agencies and official-capacity suits are the State and are immune from § 1983 damages absent waiver or congressional abrogation | § 1983 claim barred by sovereign immunity; district court erred by not dismissing for lack of jurisdiction |
| Whether plaintiffs may obtain money damages for alleged federal due-process violations directly under the Constitution | Cappels: due-process violations entitled them to money relief | DNR: money damages for federal constitutional violations must be pursued under § 1983 (if at all); the State retains sovereign immunity | Direct constitutional damages not available; § 1983 is exclusive remedy for such claims, but it is barred by sovereign immunity; due-process money claims dismissed for lack of jurisdiction |
| Whether restitution (refund of occupation and water taxes) is recoverable from the State in this suit | Cappels: taxes paid while curtailed should be refunded by State | DNR: money-judgment claims against State are barred by sovereign immunity; refund procedures exist in statutes and must be followed | Restitution claim is a money judgment against the State and barred by sovereign immunity; dismissal for lack of jurisdiction directed |
Key Cases Cited
- Hill v. State, 296 Neb. 10 (holding water-appropriation limits imposed to secure Compact compliance are not compensable vested property rights)
- Will v. Michigan Dep’t of State Police, 491 U.S. 58 (state agencies and official-capacity suits are treated as suits against the State for immunity purposes)
- FDIC v. Meyer, 510 U.S. 471 (sovereign immunity is jurisdictional and § 1983 does not authorize suits against a State)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (framework for non-categorical regulatory takings analysis)
- Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (clarified regulatory takings categories and the proper takings inquiry)
- Scofield v. State, 276 Neb. 215 (discussing per se and Penn Central takings analyses)
- Davis v. State, 297 Neb. 955 (sovereign immunity is a jurisdictional bar that courts must address)
- Keating v. Nebraska Pub. Power Dist., 660 F.3d 1014 (recognizing that when water supply cannot serve all permit holders, entitlement to use terminates)