Lacano Investments, LLC v. Joe Balash, 2014 U.S. App. LEXIS 16709

Background

Plaintiffs Lacano Investments, Nowell Avenue Development, and Ava Eads claim federal land patents conveying fee title to streambeds in Alaska and allege those beds are privately owned.
Alaska DNR determined in 2010–2011 that the overlying waterways were navigable in 1959 (statehood) and remain navigable, and concluded the streambeds are state-owned under the Submerged Lands Act.
Plaintiffs sued Alaska officials in federal court seeking declaratory and injunctive relief: a declaration that 43 U.S.C. §1301(f) preserves their patent title and an injunction preventing Defendants from claiming state ownership.
Defendants moved to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1); the district court granted the motion and denied leave to amend.
On appeal the Ninth Circuit reviewed jurisdiction de novo and affirmed, holding the Eleventh Amendment bars the suit because it is functionally equivalent to a quiet title action implicating submerged‑lands sovereignty.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the federal court has subject‑matter jurisdiction over Plaintiffs’ suit challenging Alaska’s navigability/ownership determinations	Plaintiffs: allegations that their patents confer private title mean the lands are not state submerged lands, so the complaint pleads a justiciable federal controversy	Defendants: Eleventh Amendment sovereign immunity and Ex parte Young doctrine preclude federal jurisdiction because relief sought is functionally a quiet‑title action affecting state sovereign interests	Held: No jurisdiction — complaint is the functional equivalent of a quiet title action over submerged lands and barred by Eleventh Amendment (Coeur d’Alene)
Whether Plaintiffs’ complaint avoided dismissal by treating legal conclusions about title as factual allegations	Plaintiffs: court must accept all complaint allegations as true in a facial 12(b)(1) attack	Defendants: courts do not accept legal conclusions; DNR letters attached show state asserted ownership	Held: Legal conclusions are not accepted as true; documentary evidence shows state claim of ownership, so jurisdictional dismissal appropriate
Whether Ex parte Young permits prospective declaratory/injunctive relief against state officers here	Plaintiffs: Ex parte Young allows federal suits seeking prospective relief for ongoing federal‑law violations	Defendants: Coeur d’Alene is a narrow exception where Young does not apply to claims close to quiet title over submerged lands	Held: Coeur d’Alene exception controls; Ex parte Young does not overcome Eleventh Amendment in this case
Whether denial of leave to amend was an abuse of discretion	Plaintiffs: should be allowed to amend to plead around jurisdictional defects	Defendants: amendment would be futile because Coeur d’Alene forecloses any complaint seeking relief equivalent to quiet title over submerged lands	Held: Denial was not an abuse; amendment would be futile

Key Cases Cited

Ex parte Young, 209 U.S. 123 (1908) (permits suits for prospective relief against state officers for federal‑law violations)
Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261 (1997) (Eleventh Amendment bars suits that are the functional equivalent of quiet title to submerged lands)
Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635 (2002) (Young inquiry described as asking whether complaint alleges ongoing federal‑law violation and seeks prospective relief)
Va. Office for Prot. & Advocacy v. Stewart, 562 U.S. 673 (2011) (affirming core Coeur d’Alene principle limiting Ex parte Young)
Safe Air for Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004) (distinguishing facial and factual jurisdictional attacks)
Colony Cove Props., LLC v. City of Carson, 640 F.3d 948 (9th Cir. 2011) (standard of review for jurisdictional dismissal)
Doe v. Holy See, 557 F.3d 1066 (9th Cir. 2009) (court need not accept legal conclusions pleaded as facts)