Kingman, City of v. Kingman Airport Authority Incorporated
3:17-cv-08272
| D. Ariz. | Jan 17, 2018Background
- City of Kingman (Kingman) leased the Kingman Airport to Kingman Airport Authority (KAA) since 1992 under a lease with a 2028 term and provisions for termination and eminent-domain compensation.
- Kingman adopted Resolution 5113 (Nov. 7, 2017) finding KAA in breach and authorized acquisition of the leasehold via Arizona condemnation statutes; Kingman offered to acquire the leasehold for $0 plus assumption of obligations and threatened condemnation.
- KAA filed a federal suit seeking injunctive relief, alleging state action to condemn violated the Contracts Clause (federal and state) and Arizona condemnation law; that suit was later dismissed for lack of jurisdiction.
- Kingman filed a state-court eminent-domain action; KAA removed to federal court asserting federal-question jurisdiction because the Contracts Clause claim is necessarily implicated.
- The district court considered whether contracts between state actors can be shielded from eminent domain under the Contracts Clause (reserved-powers doctrine vs. U.S. Trust heightened scrutiny) and whether federal jurisdiction exists; the court found no viable federal Contracts Clause claim and remanded the case to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court has jurisdiction because the state condemnation action necessarily raises a federal Contracts Clause claim | Kingman: state condemnation is valid; federal jurisdiction absent because Contracts Clause cannot bar eminent domain here | KAA: Contracts Clause claim is implicated and provides federal-question jurisdiction; lease between state actors should be reviewed under U.S. Trust heightened scrutiny | Court: No federal Contracts Clause claim proper—reserved-powers doctrine bars using Contracts Clause to prevent eminent domain; remand to state court |
| Whether a lease between two state actors surrenders eminent-domain power (reserved-powers doctrine applies) | Kingman: reserved-powers doctrine prevents Contracts Clause challenge; state/subdivision cannot contract away eminent domain | KAA: Distinction because both parties are state actors; contract not a surrender; U.S. Trust test should apply | Court: Applied reserved-powers doctrine—Contracts Clause cannot be used to block condemnation even between subdivisions; KAA’s federal claim fails |
| Whether KAA’s removal was frivolous and warrants Rule 11 sanctions | Kingman: removal was frivolous and sanctions are appropriate | KAA: removal was colorable and nonfrivolous | Court: Denied Rule 11 sanctions; removal was colorable though unsuccessful |
| Whether the district court should immediately adjudicate Kingman’s application for immediate possession before resolving jurisdiction | Kingman: urged immediate attention and priority under Arizona law | KAA: (implicit) court must decide jurisdiction first; federal procedure controls in federal forum | Court: Refused to address possession until jurisdiction resolved; Arizona prioritization is procedural and does not control in federal court |
Key Cases Cited
- West River Bridge Co. v. Dix, 47 U.S. 507 (U.S. 1848) (establishes that eminent-domain power cannot be contracted away)
- U.S. Trust Co. v. New Jersey, 431 U.S. 1 (U.S. 1977) (announces three-step Contracts Clause heightened-scrutiny test)
- Matsuda v. City & Cty. of Honolulu, 512 F.3d 1148 (9th Cir. 2008) (applies reserved-powers doctrine and U.S. Trust framework in Contracts Clause context)
- Gunn v. Minton, 568 U.S. 251 (U.S. 2013) (limits removal jurisdiction where federal issue is not necessarily raised in state-law claim)
- Herman Family Revocable Trust v. Teddy Bear, 254 F.3d 802 (9th Cir. 2001) (federal courts must remand where basis for federal jurisdiction is lacking)
- Holgate v. Baldwin, 425 F.3d 671 (9th Cir. 2005) (Rule 11 standard: baselessness and reasonableness of inquiry)