RODNEY CAPPEL ET AL., APPELLANTS AND CROSS-APPELLEES, V. STATE OF NEBRASKA DEPARTMENT OF NATURAL RESOURCES, AN EXECUTIVE DEPARTMENT AND AGENCY OF THE STATE OF NEBRASKA, AND JEFF FASSETT, IN HIS OFFICIAL CAPACITY AS DIRECTOR OF THE DEPARTMENT OF NATURAL RESOURCES, APPELLEES AND CROSS-APPELLANTS.
No. S-16-1037
Nebraska Supreme Court
Filed December 22, 2017
298 Neb. 445
___ N.W.2d ___
Motions to Dismiss: Appeal and Error. A district court‘s grant of a motion to dismiss is reviewed de novo. - Motions to Dismiss: Pleadings: Appeal and Error. When reviewing an order dismissing a complaint, the appellate court accepts as true all facts which are well pled and the proper and reasonable inferences of law and fact which may be drawn therefrom, but not the plaintiff‘s conclusion.
- Actions: Public Officers and Employees. A suit against a state official in his or her official capacity is not a suit against the official, but, rather, a suit against the official‘s office.
- Actions. A suit against a state agency is a suit against the State.
- Eminent Domain: Words and Phrases. Inverse condemnation is a shorthand description for a landowner suit to recover just compensation for a governmental taking of the landowner‘s property without the benefit of condemnation proceedings.
- Actions: Eminent Domain. The initial question in an inverse condemnation case is whether a compensable taking or damage has occurred.
- Eminent Domain: Property. A takings analysis begins with an examination of the nature of the owner‘s property interest.
- Waters: Property. The right to appropriate surface water is not an ownership of property. Instead, the water is viewed as a public want and the appropriation is a right to use the water.
Irrigation Districts: Waters. Rights of irrigation in Nebraska are limited in their scope by the language of their creation and subject to reasonable regulations subsequently adopted by virtue of the police power of the State. - Constitutional Law: Actions: Legislature.
Neb. Const. art. V, § 22 , provides that the State may sue and be sued and that the Legislature shall provide by law in what manner and in what courts suits shall be brought. - Constitutional Law: Legislature: Immunity: Waiver.
Neb. Const. art. V, § 22 , permits the State to lay its sovereignty aside and consent to be sued on such terms and conditions as the Legislature may prescribe. - ____: ____: ____: ____.
Neb. Const. art. V, § 22 , is not self-executing, but instead requires legislative action for waiver of the State‘s sovereign immunity. - Immunity: Waiver. Waiver of sovereign immunity is found only where stated by the most express language of a statute or by such overwhelming implications from the text as will allow no other reasonable construction.
- Jurisdiction: Appeal and Error. An appellate court has an independent duty to decide jurisdictional issues on appeal, even if the parties have not raised the issue.
- Actions: Jurisdiction. Lack of subject matter jurisdiction may be raised at any time by any party or by the court sua sponte.
- Jurisdiction: Appeal and Error. When a trial court lacks the power, that is, jurisdiction, to adjudicate the merits of a claim, an appellate court also lacks the power to adjudicate the merits of the claim.
- Taxation: Irrigation Districts: Waters.
Neb. Rev. Stat. § 46-141 (Reissue 2010) allows taxpayers to request a refund for water taxes paid by filing a request in the office of the secretary of the district. - Taxation: Waters.
Neb. Rev. Stat. § 2-3226.05(2) (Cum. Supp. 2016) allows taxpayers to request a local refund of occupation taxes after following the applicable procedures.
Appeal from the District Court for Hitchcock County: JAMES E. DOYLE IV, Judge. Affirmed in part, and in part reversed and remanded with directions.
Stephen D. Mossman, Ryan K. McIntosh, and Patricia L. Vannoy, of Mattson Ricketts Law Firm, for appellants.
Douglas J. Peterson, Attorney General, Justin D. Lavene, and Kathleen A. Miller for appellees.
KELCH, J.
INTRODUCTION
This case involves the administration of the Republican River Compact. Appropriators Rodney Cappel; Steven Cappel; Cappel Family Farm LLC; C & D Cappel Farms, L.L.C.; and Midway Irrigation, Inc. (collectively the Cappels) appeal the order of the district court for Hitchcock County that dismissed their complaint without leave to amend, upon the motion of the State of Nebraska Department of Natural Resources and Jeff Fassett, its director (collectively the DNR). The DNR cross-appeals. We hold that the Cappels failed to state a claim for inverse condemnation, but we conclude that the district court erred in failing to find that it lacked subject matter jurisdiction over the Cappels’ remaining claims for relief under
BACKGROUND
The Cappels own farmland throughout the Republican River Basin. They irrigate their farmland with ground water from wells located within the Middle Republican Natural Resources District and receive surface water appropriations from the Frenchman Valley Irrigation District. As such, they are subject to the integrated management plan and associated surface water controls adopted jointly by the Middle Republican Natural Resources District and the DNR.
The administration of water in the Republican River Basin is subject to the Republican River Compact (hereinafter the Compact), which is an interstate compact between Nebraska, Kansas, and Colorado that regulates the consumption of the basin‘s waters and allocates a certain amount of surface water
In January 2013 through 2015, the DNR‘s hydrologic forecast indicated that without essential action, Nebraska‘s consumption of water from the Republican River would exceed its allocation under the Compact. Accordingly, the DNR declared a “Compact Call Year” and issued closing notices to holders of surface water permits for each of those years. As a result of the closing notices, the Cappels were barred from using the surface waters of the Republican River and its tributaries to irrigate their crops. However, the Cappels were still obligated to pay the costs associated with owning irrigated acres, including taxes and assessments. And DNR did not curtail ground water use, which allegedly continued to deplete streamflow in the Republican River Basin to the future detriment of surface water users. The Cappels themselves had drilled new irrigational wells because they could not irrigate their land with surface water.
The Cappels did not challenge the DNR‘s 2013 through 2015 compact call year orders or corresponding closing notices as provided in
The DNR filed a motion to dismiss under Neb. Ct. R. Pldg. § 6-1112(b)(1) and (6), alleging lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. Following a hearing, the district court issued a written order dismissing the amended complaint pursuant to § 6-1112(b)(6), without leave to amend. It determined beyond a doubt that the Cappels could plead no set of facts that would entitle them to relief under their theories of recovery and that amendment would be futile. Specifically, the district court found that it had subject matter jurisdiction, because the Cappels’ claims were not barred by the State‘s sovereign immunity and therefore overruled the DNR‘s motion based on § 6-1112(b)(1). However, it determined that neither the closing notices nor the adopted integrated management plans amounted to a physical or regulatory taking. Additionally, the district court held that the closing notices and adopted plans did not violate the Cappels’ due process rights and that the Cappels had failed to state a claim under
The Cappels filed this appeal in the Nebraska Court of Appeals, and the DNR cross-appealed. We moved the case to our docket and denied the DNR‘s motion for summary affirmance.
ASSIGNMENTS OF ERROR
The Cappels assign, combined and restated, that the district court erred in holding that (1) the issuance of closing notices was not an exercise of eminent domain and did not constitute a physical or regulatory taking, (2) the DNR‘s administration of the Republican River did not constitute a regulatory taking, (3) the DNR did not deprive the Cappels of their due process
The DNR cross-appeals and assigns that the district court erred when it held that the Cappels’ claims brought under
STANDARD OF REVIEW
[1,2] A district court‘s grant of a motion to dismiss is reviewed de novo.1 When reviewing an order dismissing a complaint, the appellate court accepts as true all facts which are well pled and the proper and reasonable inferences of law and fact which may be drawn therefrom, but not the plaintiff‘s conclusion.2
ANALYSIS
The Cappels brought claims (1) under
42 U.S.C. § 1983 ACTION
The Cappels’ first claim against the DNR was brought under
Sovereign immunity is jurisdictional in nature, and courts have a duty to determine whether they have subject matter jurisdiction over a matter.3 Thus, the district court‘s jurisdiction to address whether the Cappels stated a claim upon which relief can be granted depended on whether the Cappels’ § 1983 claim is barred by sovereign immunity.
Section 1983 provides a civil remedy for deprivations of federally protected rights, statutory or constitutional, caused by persons acting under color of state law.4 But it does not necessarily provide a remedy for litigants seeking such remedy against a state.5 The enactment of § 1983 did not abrogate the State‘s 11th Amendment immunity,6 which bars such suits unless the State has waived its immunity or unless Congress has exercised its undoubted power under
INVERSE CONDEMNATION
[5-7] The Cappels’ second claim is for inverse condemnation. Inverse condemnation is a shorthand description for a landowner suit to recover just compensation for a governmental taking of the landowner‘s property without the benefit of condemnation proceedings.13 In this regard, the Cappels seek damages under the
In their complaint, the Cappels assert two takings: a physical taking of property rights to appropriate the water at issue 11
The issue of whether the Cappels sufficiently alleged a compensable vested property interest is controlled by our recent opinion in Hill v. State.17 In Hill, water appropriators filed an inverse condemnation action against the State and the DNR after the DNR had issued orders and sent closing notices to water appropriators under circumstances similar to those presented here. We affirmed the district court‘s dismissal of the inverse condemnation claim, explaining that the appropriators failed to establish that a compensable vested property right was taken. We concluded that the appropriators’ rights to use the water were subject to the Compact (the equivalent of federal law) and thus found that those rights were not a compensable property interest when limited for the purpose of ensuring Nebraska‘s compliance with the Compact. We further found that the DNR does not have a duty to regulate ground water; thus, a failure by the DNR to regulate ground water pumping that affects the Republican River Basin does not give rise to a cause of action for inverse condemnation.
Nor do we find merit in the Cappels’ claim that the actions of the DNR constitute a regulatory taking, as there has been no deprivation of a compensable property right under Hill. In Scofield v. State,18 we explained the types of regulatory takings recognized by the U.S. Supreme Court:
The U.S. Supreme Court in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 125 S. Ct. 2074, 161 L. Ed. 2d 876 (2005), clarified the law surrounding regulatory takings claims and . . . identified two types of regulatory actions that constitute categorical or per se takings: “First, where government requires an owner to suffer a permanent physical invasion of her property—however minor—it must provide just compensation.” Compensation is required for physical takings “however minimal the economic costs [they] entail[],” because they “eviscerate[] the owner‘s right to exclude others from entering and using her property—perhaps the most fundamental of all property interests.” The “second categorical rule applies to regulations that completely deprive an owner of ‘all economically beneficial us[e]’ of her property.” The complete elimination of a property‘s value is the determinative factor in this category because the total deprivation of beneficial use is, from the landowner‘s point of view, the equivalent of a physical appropriation.
The Court in Lingle stated that outside these two relatively narrow categories, and the special context of land-use exactions, regulatory takings challenges are governed by the standards set forth in Penn Central Transp. Co. v. New York City, 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978). Thus, under a Penn Central inquiry, relief is possible from a regulatory taking which does not deprive the owner of all economic use of the property.
To determine whether a party may obtain relief from a regulatory taking, Penn Central Transp. Co. v. New York City19 sets forth several factors designed to allow careful examination and weighing of all relevant circumstances.
The Cappels claim to have been deprived of the economic benefit of their property by a reduction in the production of crops, which means they have not alleged facts that show they have been deprived of all economically beneficial use of their property due to the DNR‘s actions. But the Cappels argue that they have pled a reduction in economic viability which would constitute a regulatory taking subject to a determination pursuant to Penn Central Transp. Co.
To support their position, the Cappels rely on Scofield and Penn Central Transp. Co., where the Penn Central Transp. Co. factors were applied on appeal. These cases share a common theme: They both involved a regulation that directly affected private property, but neither involved an overriding federal law, such as the Compact. For example, in Penn Central Transp. Co., the regulation limited how the owner could use its private property by prohibiting construction of an office building on a site designated as a landmark. In Scofield, the regulation changed private property previously used for recreation into a wildlife refuge.
We observe that the Cappels could still irrigate, albeit not from the river, and were still irrigating by use of ground water
Accordingly, the Cappels’ assignments of error relating to their inverse condemnation claim are without merit.
DUE PROCESS
For the Cappels’ third and fourth claims, they seek damages for alleged violations of procedural and substantive due process under the Due Process Clauses of the
[10-13] The Cappels’ claim for a money judgment against the State under
Regarding the Cappels’ federal constitutional claims, we find that a due process violation does not create an independent cause of action for money damages. Although the Due Process Clauses in the
[14-16] Again, sovereign immunity is jurisdictional in nature.32 While neither party has raised the issue of sovereign
RESTITUTION
The Cappels’ fifth and last claim is for restitution of occupation and water taxes levied against their property. On appeal, the Cappels assign that the district court erred in dismissing that claim.
[17,18] In essence, the Cappels’ restitution claim is a claim for a money judgment against the State, which would be subject to Nebraska‘s sovereign immunity.36 Here, the Cappels cite no authority showing that the Legislature has waived the DNR‘s sovereign immunity to allow it to be sued for reimbursement of taxes levied and collected by other entities. Instead, as the DNR points out, the Legislature has enacted
CONCLUSION
For the foregoing reasons, we find that the Cappels’ § 1983 claim, due process claims, and restitution claim are barred by sovereign immunity and that the district court erred by not dismissing them for lack of subject matter jurisdiction. Regarding the Cappels’ remaining inverse condemnation claim, we conclude that the district court did not err in dismissing it for failure to state a claim upon which relief can be granted. Accordingly, we affirm in part, and in part reverse and remand to the district court with directions to dismiss for lack of subject matter jurisdiction the Cappels’ § 1983 claim, due process claims, and restitution claim.
AFFIRMED IN PART, AND IN PART REVERSED AND REMANDED WITH DIRECTIONS.
WRIGHT, J., not participating.
