Cappel v. State
298 Neb. 445
| Neb. | 2017Background
- The Cappels (landowners and water appropriators in the Republican River Basin) sued the Nebraska Department of Natural Resources (DNR) and its director after DNR declared "Compact Call Years" (2013–2015) and issued closing notices curtailing surface-water irrigation to meet Nebraska’s obligations under the Republican River Compact.
- The Cappels alleged (a) a § 1983 claim for deprivation of federally protected rights, (b) inverse condemnation (physical and regulatory takings) under the U.S. and Nebraska Constitutions, (c) procedural and substantive due process violations, and (d) restitution for occupation and water taxes paid.
- DNR moved to dismiss under Neb. Ct. R. Pldg. § 6-1112(b)(1) (lack of subject-matter jurisdiction) and (b)(6) (failure to state a claim). The district court dismissed the amended complaint under (b)(6) without leave to amend, finding no compensable taking and no due-process or § 1983 liability.
- On appeal, the Nebraska Supreme Court concluded the inverse-condemnation claim failed for lack of a compensable property interest, but held that the § 1983, due-process (money damages), and restitution claims were barred by sovereign immunity and therefore should have been dismissed for lack of subject-matter jurisdiction.
- The court affirmed dismissal of the inverse-condemnation claim on the merits and reversed in part to direct dismissal for lack of jurisdiction as to claims barred by sovereign immunity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1983 claim against DNR and director is permissible | Cappels: DNR actions violated federal rights; § 1983 permits damages | DNR: State sovereign immunity bars § 1983 suits against the State and its agencies | Held: Barred by sovereign immunity; dismissal for lack of subject-matter jurisdiction required |
| Whether closing notices/Compact administration constitute inverse condemnation (physical or regulatory taking) | Cappels: Closing notices and DNR administration physically/regulatorily deprived them of water rights and economic use | DNR: Water appropriations are public rights subject to Compact and regulation; no compensable vested property interest | Held: No compensable property interest (Hill controlling); inverse-condemnation claim fails on the merits |
| Whether due-process claims allow money damages against the State | Cappels: DNR deprived them of procedural/substantive due process, entitling them to damages | DNR: Money-judgment claims against the State are barred by sovereign immunity; federal damages governed by § 1983 (which is barred) | Held: Money-damage due-process claims are barred by sovereign immunity and duplicative of § 1983; dismiss for lack of jurisdiction |
| Whether restitution (refund of occupation/water taxes) is recoverable from State | Cappels: Entitled to restitution for taxes/assessments for years subject to closing notices | DNR: Money claim against State barred by sovereign immunity; statutory refund procedures exist and were not invoked | Held: Barred by sovereign immunity; plaintiffs failed to allege compliance with statutory refund procedures; dismissal for lack of jurisdiction |
Key Cases Cited
- Hill v. State, 296 Neb. 10 (affirming dismissal of similar inverse-condemnation claim and holding water rights limited by Compact)
- Davis v. State, 297 Neb. 955 (sovereign immunity is jurisdictional; courts must address jurisdiction)
- Will v. Michigan Dep’t of State Police, 491 U.S. 58 (official-capacity suits are suits against the State; § 1983 not available against State for money damages)
- FDIC v. Meyer, 510 U.S. 471 (sovereign immunity principles and jurisdictional consequences)
- Scofield v. State, 276 Neb. 215 (discussion of regulatory takings categories and Penn Central framework)
- Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (categorical rule for total regulatory takings)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (multi-factor test for noncategorical regulatory takings)
- Keating v. Nebraska Pub. Power Dist., 660 F.3d 1014 (Eighth Circuit: when watershed cannot supply all permit holders, no legitimate entitlement to use surface water)