PENNZOIL CO. v. TEXACO INC.
No. 85-1798
Supreme Court of the United States
Argued January 12, 1987—Decided April 6, 1987
481 U.S. 1
Laurence H. Tribe argued the cause for appellant. With him on the briefs were John L. Jeffers, G. Irvin Terrell, Paul M. Bator, Douglas A. Poe, Kenneth S. Geller, W. James Kronzer, Joseph D. Jamail, Harry M. Reasoner, Simon H. Rifkind, Arthur L. Liman, and Mark A. Belnick.
David Boies argued the cause for appellee. With him on the brief were Thomas D. Barr, Francis P. Barron, Paul J. Curran, Milton J. Schubin, Randolph S. Sherman, Ira S. Sacks, Charles Alan Wright, and William F. Baxter.*
JUSTICE POWELL delivered the opinion of the Court.
The principal issue in this case is whether a federal district court lawfully may enjoin a plaintiff who has prevailed in a trial in state court from executing the judgment in its favor pending appeal of that judgment to a state appellate court.
*Briefs of amici curiae urging affirmance were filed for the State of Alabama et al. by Robert T. Stephan, Attorney General of Kansas, Wayne E. Hundley, First Deputy Attorney General, Charles A. Graddick, Attorney General of Alabama, Charles M. Oberly III, Attorney General of Delaware, Jim Smith, Attorney General of Florida, William J. Guste, Jr., Attorney General of Louisiana, Hubert H. Humphrey III, Attorney General of Minnesota, William L. Webster, Attorney General of Missouri, Ted Schwinden, Attorney General of Montana, Toney Anaya, Attorney General of New Mexico, Robert Abrams, Attorney General of New York, Michael Turpen, Attorney General of Oklahoma, Kenneth O. Eikenberry, Attorney General of Washington, and Archie G. McClintock, Attorney General of Wyoming; for the State of Alaska by Harold M. Brown, Attorney General, and Ronald W. Lorensen, Deputy Attorney General; for the American Federation of Labor and Congress of Industrial Organizations et al. by John W. McKendree, Laurence Gold, and George Kaufmann; for the Business Council of New York State, Inc., et al. by John Carter Rice, Gregg R. Potvin, and John W. McKendree; and for the National Association for the Advancement of Colored People by David S. Tatel, Allen R. Snyder, Walter A. Smith, Jr., and Grover G. Hankins.
Getty Oil Co. and appellant Pennzoil Co. negotiated an agreement under which Pennzoil was to purchase about three-sevenths of Getty‘s outstanding shares for $110 a share. Appellee Texaco Inc. eventually purchased the shares for $128 a share. On February 8, 1984, Pennzoil filed a complaint against Texaco in the Harris County District Court, a state court located in Houston, Texas, the site of Pennzoil‘s corporate headquarters. The complaint alleged that Texaco tortiously had induced Getty to breach a contract to sell its shares to Pennzoil; Pennzoil sought actual damages of $7.53 billion and punitive damages in the same amount. On November 19, 1985, a jury returned a verdict in favor of Pennzoil, finding actual damages of $7.53 billion and punitive damages of $3 billion. The parties anticipated that the judgment, including prejudgment interest, would exceed $11 billion.
Although the parties disagree about the details, it was clear that the expected judgment would give Pennzoil significant rights under Texas law. By recording an abstract of a judgment in the real property records of any of the 254 counties in Texas, a judgment creditor can secure a lien on all of a judgment debtor‘s real property located in that county. See
Even before the trial court entered judgment, the jury‘s verdict cast a serious cloud on Texaco‘s financial situation. The amount of the bond required by Rule 364(b) would have been more than $13 billion. It is clear that Texaco would not have been able to post such a bond. Accordingly, “the business and financial community concluded that Pennzoil would be able, under the lien and bond provisions of Texas law, to commence enforcement of any judgment entered on the verdict before Texaco‘s appeals had been resolved.” App. to Juris. Statement A87 (District Court‘s Supplemental Finding of Fact 40, Jan. 10, 1986). The effects on Texaco were substantial: the price of its stock dropped markedly; it had difficulty obtaining credit; the rating of its bonds was lowered; and its trade creditors refused to sell it crude oil on customary terms. Id., at A90-A98 (District Court‘s Supplemental Findings of Fact 49-70).
The District Court rejected all of these arguments. 626 F. Supp. 250 (1986). It found the Anti-Injunction Act inapplicable because Texaco‘s complaint rested on
The District Court justified its decision to grant injunctive relief by evaluating the prospects of Texaco‘s succeeding in its appeal in the Texas state courts. It considered the merits of the various challenges Texaco had made before the Texas Court of Appeals and concluded that these challenges “present generally fair grounds for litigation.” Ibid. It then evaluated the constitutionality of the Texas lien and bond requirements by applying the test articulated in Mathews v. Eldridge, 424 U. S. 319 (1976). It concluded that application of the lien and bond provisions effectively would deny Texaco a right to appeal. It thought that the private interests and the State‘s interests favored protecting Texaco‘s right to appeal. Relying on its view of the merits of the state-court appeal, the court found the risk of erroneous deprivation “quite severe.” 626 F. Supp., at 257. Finally,
On appeal, the Court of Appeals for the Second Circuit affirmed. 784 F. 2d 1133 (1986). It first addressed the Rooker-Feldman doctrine and rejected the portion of the District Court‘s opinion that evaluated the merits of the state-court judgment. It held, however, that the doctrine did not completely bar the District Court‘s jurisdiction. It concluded that the due process and equal protection claims, not presented by Texaco to the Texas courts, were within the District Court‘s jurisdiction because they were not “inextricably intertwined” with the state-court action. Id., at 1144 (quoting District of Columbia Court of Appeals v. Feldman, supra, at 483, n. 16).
Next, the court considered whether Texaco had stated a claim under § 1983. The question was whether Texaco‘s complaint sought to redress action taken “under color of” state law,
Finally, the court held that abstention was unnecessary. First, it addressed Pullman abstention, see Railroad Comm‘n of Texas v. Pullman Co., 312 U. S. 496 (1941). It rejected that ground of abstention, holding that “the mere possibility that the Texas courts would find Rule 364 [concerning the supersedeas bond requirements] unconstitutional as applied does not call for Pullman abstention.” 784 F. 2d, at 1149. Next, it rejected Younger abstention. It thought that “[t]he state interests at stake in this proceeding differ in both kind and degree from those present in the six cases in which the Supreme Court held that Younger applied.” Ibid. Moreover, it thought that Texas had failed to “provide adequate procedures for adjudication of Texaco‘s federal claims.” Id., at 1150. Turning to the merits, it agreed with the District Court that Texaco had established a likelihood of success on its constitutional claims and that the balance of hardships favored Texaco. Accordingly, it affirmed the grant of injunctive relief.8
Pennzoil filed a jurisdictional statement in this Court. We noted probable jurisdiction under
The courts below should have abstained under the principles of federalism enunciated in Younger v. Harris, 401 U. S. 37 (1971). Both the District Court and the Court of Appeals failed to recognize the significant interests harmed by their unprecedented intrusion into the Texas judicial system. Similarly, neither of those courts applied the appropriate standard in determining whether adequate relief was available in the Texas courts.
A
The first ground for the Younger decision was “the basic doctrine of equity jurisprudence that courts of equity should not act, and particularly should not act to restrain a criminal prosecution, when the moving party has an adequate remedy at law.” Id., at 43. The Court also offered a second explanation for its decision:
“This underlying reason ... is reinforced by an even more vital consideration, the notion of ‘comity,’ that is, a proper respect for state functions, a recognition of the fact that the entire country is made up of a Union of separate state governments, and a continuance of the belief that the National Government will fare best if the States and their institutions are left free to perform their separate functions in their separate ways.... The concept does not mean blind deference to ‘States’ Rights’ any more than it means centralization of control over every important issue in our National Government and its courts. The Framers rejected both these courses. What the concept does represent is a system in which there is sensitivity to the legitimate interests of both State and National Governments, and in which the National Government, anxious though it may be to vindicate and protect federal rights and federal interests, always endeavors to do so in ways that will not unduly interfere with the legitimate activities of the States.” Id., at 44.
Another important reason for abstention is to avoid unwarranted determination of federal constitutional questions. When federal courts interpret state statutes in a way that raises federal constitutional questions, “a constitutional determination is predicated on a reading of the statute that is not binding on state courts and may be discredited at any time—thus essentially rendering the federal-court decision advisory and the litigation underlying it meaningless.” Moore v. Sims, 442 U. S. 415, 428 (1979). See Trainor v. Hernandez, 431 U. S. 434, 445 (1977).9 This concern has special significance in this case. Because Texaco chose not to present to the Texas courts the constitutional claims asserted in this case, it is impossible to be certain that the governing Texas statutes and procedural rules actually raise these claims. Moreover, the Texas Constitution contains an
Texaco‘s principal argument against Younger abstention is that exercise of the District Court‘s power did not implicate a “vital” or “important” state interest. Brief for Appellee 24-32. This argument reflects a misreading of our precedents. This Court repeatedly has recognized that the States have important interests in administering certain aspects of
“A State‘s interest in the contempt process, through which it vindicates the regular operation of its judicial system, so long as that system itself affords the opportunity to pursue federal claims within it, is surely an important interest. Perhaps it is not quite as important as is the State‘s interest in the enforcement of its criminal laws, Younger, supra, or even its interest in the maintenance of a quasi-criminal proceeding such as was involved in Huffman, supra. But we think it is of sufficiently great import to require application of the principles of those cases.” Id., at 335.
Our comments on why the contempt power was sufficiently important to justify abstention also are illuminating: “Contempt in these cases, serves, of course, to vindicate and preserve the private interests of competing litigants, ... but its purpose is by no means spent upon purely private concerns. It stands in aid of the authority of the judicial system, so that its orders and judgments are not rendered nugatory.” Id., at 336, n. 12 (citations omitted).
The reasoning of Juidice controls here. That case rests on the importance to the States of enforcing the orders and judgments of their courts. There is little difference between the State‘s interest in forcing persons to transfer property in response to a court‘s judgment and in forcing persons to respond to the court‘s process on pain of contempt. Both Juidice and this case involve challenges to the processes by which the State compels compliance with the judgments of its
B
Texaco also argues that Younger abstention was inappropriate because no Texas court could have heard Texaco‘s constitutional claims within the limited time available to Texaco. But the burden on this point rests on the federal plaintiff to show “that state procedural law barred presentation of [its] claims.” Moore v. Sims, 442 U. S., at 432. See Younger v. Harris, 401 U. S., at 45 (“‘The accused should first set up and rely upon his defense in the state courts, even though this involves a challenge of the validity of some statute, unless it plainly appears that this course would not afford
Moreover, denigrations of the procedural protections afforded by Texas law hardly come from Texaco with good grace, as it apparently made no effort under Texas law to secure the relief sought in this case. Cf. Middlesex County Ethics Comm. v. Garden State Bar Assn., supra, at 435 (rejecting on similar grounds an assertion about the inhospitability of state procedures to federal claims).
The “open courts” provision of the Texas Constitution,
Against this background, Texaco‘s submission that the Texas courts were incapable of hearing its constitutional claims is plainly insufficient. Both of the courts below found that the Texas trial court had the power to consider constitutional challenges to the enforcement provisions.14 The Texas Attorney General filed a brief in the proceedings below, arguing that such relief was available in the Texas courts. See Brief for Intervenor-Appellant in Nos. 86-7046, 86-7052 (CA2), pp. 32-33. Texaco has cited no statute or case clearly indicating that Texas courts lack such power.15 Accordingly, Texaco has failed to meet its burden on this point.16
In sum, the lower courts should have deferred on principles of comity to the pending state proceedings. They erred in accepting Texaco‘s assertions as to the inadequacies of Texas procedure to provide effective relief. It is true that this case presents an unusual fact situation, never before addressed by the Texas courts, and that Texaco urgently desired prompt relief. But we cannot say that those courts, when this suit was filed, would have been any less inclined than a federal court to address and decide the federal constitutional claims. Because Texaco apparently did not give the Texas courts an opportunity to adjudicate its constitutional claims, and because Texaco cannot demonstrate that the Texas courts were not then open to adjudicate its claims, there is no basis for concluding that the Texas law and procedures were so deficient that Younger abstention is inappropriate. Accordingly, we conclude that the District Court should have abstained.
III
In this opinion, we have addressed the situation that existed on the morning of December 10, 1985, when this case was filed in the United States District Court for the Southern District of New York. We recognize that much has transpired in the Texas courts since then. Later that day, the Texas trial court entered judgment. See n. 5, supra. On February 12 of this year, the Texas Court of Appeals substantially affirmed the judgment. See ibid. We are not unmindful of the unique importance to Texaco of having its challenges to that judgment authoritatively considered and resolved. We of course express no opinion on the merits of
IV
The judgment of the Court of Appeals is reversed. The case is remanded to the District Court with instructions to vacate its order and dismiss the complaint. The judgment of this Court shall issue forthwith.
It is so ordered.
JUSTICE SCALIA, with whom JUSTICE O‘CONNOR joins, concurring.
I join the opinion of the Court. I write separately only to indicate that I do not believe that the so-called Rooker-Feldman doctrine deprives the Court of jurisdiction to decide Texaco‘s challenge to the constitutionality of the Texas stay and lien provisions. In resolving that challenge, the Court need not decide any issue either actually litigated in the Texas courts or inextricably intertwined with issues so litigated. Under these circumstances, I see no jurisdictional bar to the Court‘s decision in this case.
JUSTICE BRENNAN, with whom JUSTICE MARSHALL joins, concurring in the judgment.
Texaco‘s claim that the Texas bond and lien provisions violate the Fourteenth Amendment is without merit. While Texaco cannot, consistent with due process and equal protection, be arbitrarily denied the right to a meaningful opportunity to be heard on appeal, this right can be adequately vindicated even if Texaco were forced to file for bankruptcy.
I also agree with his conclusion that the District Court was not required to abstain under the principles enunciated in Younger v. Harris, 401 U. S. 37 (1971). Post, at 30, n. 2. I adhere to my view that Younger is, in general, inapplicable to civil proceedings, especially when a plaintiff brings a § 1983 action alleging violation of federal constitutional rights. See Huffman v. Pursue, Ltd., 420 U. S. 592, 613 (1975) (BRENNAN, J., dissenting) (Younger held “that federal courts should not interfere with pending state criminal proceedings, except under extraordinary circumstances” (emphasis in original)); Juidice v. Vail, 430 U. S. 327, 342 (1977) (BRENNAN, J., dissenting) (“In congressional contemplation, the pendency of state civil proceedings was to be wholly irrelevant. ‘The very purpose of § 1983 was to interpose the federal courts between the States and the people, as guardians of the people‘s federal rights‘“) (quoting Mitchum v. Foster, 407 U. S. 225, 242 (1972)).
The State‘s interest in this case is negligible. The State of Texas—not a party in this appeal—expressly represented to the Court of Appeals that it “has no interest in the outcome of the state-court adjudication underlying this cause,” except in its fair adjudication. 784 F. 2d 1133, 1150 (CA2 1986); Brief for Intervenor-Appellant in Nos. 86-7046, 86-7052, p. 2. The Court identifies the State‘s interest as enforcing “the authority of the judicial system, so that its orders and judgments are not rendered nugatory.” Ante, at 13 (quoting Juidice v. Vail, supra, at 336, n. 12). Yet, the District Court found that “Pennzoil has publicly admitted that Texaco‘s assets are sufficient to satisfy the Judgment even without liens or a bond.” App. to Juris. Statement A116
Indeed, the interest in enforcing the bond and lien requirement is privately held by Pennzoil, not by the State of Texas. The Court of Appeals correctly stated that this “is a suit between two private parties stemming from the defendant‘s alleged tortious interference with the plaintiff‘s contract with a third private party.” 784 F. 2d, at 1150. Pennzoil was free to waive the bond and lien requirements under Texas law, without asking the State of Texas for permission. See Yandell v. Tarrant State Bank, 538 S. W. 2d 684, 687 (Tex. Civ. App. 1976); United Benefit Fire Insurance Co. v. Metropolitan Plumbing Co., 363 S. W. 2d 843, 847 (Tex. Civ. App. 1962). “Since Texas law directs state officials to do Pennzoil‘s bidding in executing the judgment, it is the decision of Pennzoil, not that of the state judiciary, to utilize state agents to undertake the collection process, and the state officials can act only upon Pennzoil‘s unilateral determination.” 784 F. 2d, at 1147. The State‘s decision to grant private parties unilateral power to invoke, or not invoke, the State‘s bond and lien provisions demonstrates that the State has no independent interest in the enforcement of those provisions.
Texaco filed this § 1983 suit claiming only violations of federal statutory and constitutional law. In enacting § 1983, Congress “created a specific and unique remedy, enforceable in a federal court of equity, that could be frustrated if the federal court were not empowered to enjoin a state court proceeding.” Mitchum v. Foster, supra, at 237. Today the Court holds that this § 1983 suit should be filed instead in Texas courts, offering to Texaco the unsolicited advice to bring its claims under the “open courts” provision of the Texas Constitution. This “blind deference to ‘States’ Rights‘” hardly shows “sensitivity to the legitimate inter-
Furthermore, I reject Pennzoil‘s contention that District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), and Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), forbid collateral review in this instance. In Rooker and Feldman, the Court held that lower federal courts lack jurisdiction to engage in appellate review of state-court determinations. In this case, however, Texaco filed the
I reach this conclusion on the narrow facts before us. Thus, this case is different from the more troublesome situation where a particular corporate litigant has such special attributes as an organization that a trustee in bankruptcy, in its stead, could not effectively advance the organization‘s interests on an appeal. Moreover, the underlying issues in this case—arising out of a commercial contract dispute—do not involve fundamental constitutional rights. See, e. g., Henry v. First National Bank of Clarksdale, 595 F.2d 291, 299-300 (CA5 1979) (bankruptcy of NAACP would make state appellate review of First Amendment claims “so difficult” to obtain that federal injunction justified), cert. denied sub nom. Claiborne Hardware Co. v. Henry, 444 U.S. 1074 (1980).
Given the particular facts of this case, I would reverse the judgment of the Court of Appeals and remand the case with instructions to dismiss the complaint.
While I join in the Court‘s disposition of this case, I cannot join in its reasoning. The Court addresses the propriety of abstention under the doctrine of Younger v. Harris, 401 U.S. 37 (1971). There is no occasion to decide if abstention would have been proper unless the District Court had jurisdiction. Were I to reach the merits I would reverse for the reasons stated in the concurring opinions of JUSTICES BRENNAN and STEVENS, in which I join. But I can find no basis for the District Court‘s unwarranted assumption of jurisdiction over the subject matter of this lawsuit, and upon that ground alone I would reverse the decision below.
Appellee Texaco, a Delaware corporation with its principal place of business in New York, was sued in the Texas state courts by appellant Pennzoil, a Delaware corporation with its principal place of business in Texas. Because there was no diversity of citizenship, Texaco could not remove Pennzoil‘s action to Federal District Court, and the action was tried in the state court. After the adverse jury verdict, Texaco filed a complaint in the United States District Court for the Southern District of New York seeking to enjoin the execution of the Texas judgment, which was not yet final at the time the federal complaint was filed. Texaco filed its federal action without seeking relief from the bonding requirement in any Texas court. The Federal District Court in which Texaco filed sits in another State, more than halfway across the country from the locale in which the case was tried, in which the appeal would take place, and in which the judgment would be executed. Even if Texaco had possessed the power of removal on diversity grounds, it still would not have been entitled to proceed in the forum to which it brought its request for post-trial relief.
Counsel for Texaco suggested at oral argument that venue was proper in the Southern District of New York because Texaco‘s corporate headquarters is located in that District, and it was there that a Chapter 11 petition would be filed
The District Court found that venue was proper in the Southern District of New York on the ground that “[t]he claims arose in this District.” 626 F. Supp. 250, 252 (1986). The District Court did not explain how Texaco‘s claims, which challenged a Texas state-law bonding provision limiting Texaco‘s opportunity to stay execution of a Texas judgment against property located in Texas, could be said to arise in the Southern District of New York. Pennzoil‘s failure to move to dismiss for lack of venue, and to contest the District Court‘s venue determination in the Court of Appeals, precludes any disposition on that ground here, but the clear absence of venue in the District Court further strengthens the odor of impermissible forum shopping which pervades this case.
But no matter in which federal court Texaco‘s complaint was filed, jurisdiction to hear the case would have been lacking. It is a well-settled principle that federal appellate review of judgments rendered by state courts can only occur in this Court, on appeal or by writ of certiorari. See District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 416 (1923); see also Atlantic Coast Line R. Co. v. Locomotive Engineers, 398 U.S. 281, 296 (1970). Both the Court of Appeals and appellee here recognize the relevance of this rule. See 784 F.2d 1133, 1141-1142 (CA2 1986); Brief for Appellee 44. It is said, however, that this principle applies only to review of the substance of state judgments, and that the federal action now before us involved solely a constitutional challenge to procedures for enforcement of the state judgment, totally apart from the merits of the state-court action itself. Id., at 45-46; 784 F.2d, at 1144-1145. In the circumstances of the present case I find this asserted distinction completely unconvincing.
As we have said, “[i]f the constitutional claims presented to a United States district court are inextricably intertwined” with the merits of a judgment rendered in state court, “then the district court is in essence being called upon to review the state-court decision. This the district court may not do.” District of Columbia Court of Appeals v. Feldman, supra, at 483-484, n. 16. While the question whether a federal constitutional challenge is inextricably intertwined with the merits of a state-court judgment may sometimes be difficult to answer, it is apparent, as a first step, that the federal claim is inextricably intertwined with the state-court judgment if the federal claim succeeds only to the extent that the state court wrongly decided the issues before it. Where federal relief can only be predicated upon a conviction that the state court was wrong, it is difficult to conceive the federal proceeding as, in substance, anything other than a prohibited appeal of the state-court judgment.
The opinions of the District Court and the Court of Appeals in this case illustrate this problem. As the Court of Appeals noted, “[m]any of the judge‘s conclusions [in the District Court] with respect to the merits of the Texas action, despite his lip-service disclaimer, constitute what amounts to an impermissible appellate review of issues that have already been adjudicated by the Texas trial court.” 784 F.2d, at 1143.
“Only if Texaco‘s appeal were patently frivolous would we be justified in holding that any threatened harm to it from effective denial of its right of appeal could be labelled inconsequential. The issue before us, therefore, is not whether Texaco should have prevailed on the merits in the Texas action but whether its Texas appeal presents non-frivolous issues for resolution.” Id., at 1153.
But the courts below, by asking whether Texaco was frivolous in asserting that the trial court erred or whether Texaco should have prevailed in the Texas trial court, undertook a review of the merits of judgments rendered by a state court. As the Court of Appeals recognized, the issuance of an injunction depended upon the finding that Texaco had significant claims to assert in its state-court appeal. Because determination of Texaco‘s claim for an injunction necessarily involved some review of the merits of its state appeal, Texaco‘s constitutional claims were inextricably intertwined with the merits of the Texas judgment, and thus the District Court lacked jurisdiction over Texaco‘s complaint in the first instance.
As Justice Holmes observed: “Great cases like hard cases make bad law. For great cases are called great, not by reason of their real importance in shaping the law of the future, but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment.” Northern Securities Co. v. United States, 193 U.S. 197, 400 (1904) (dissenting opinion). The history of this lawsuit demonstrates that great sums of money, like great cases, make bad law. Because a wealthy business corporation has been ordered to pay damages in an amount hitherto unprecedented, and finds its continued survival in doubt, we and the
Had the sole proprietor of a small Texas grocery sued in the Southern District of New York to enjoin the enforcement of the Texas bonding provision in order to facilitate appeal in Texas from a state-court judgment in the amount of $10,000, the result below would surely have been different, even if inability to meet the bonding requirement and to stay execution of judgment meant dissolution of the business and displacement of employees. The principles which would have governed with $10,000 at stake should also govern when thousands have become billions. That is the essence of equal justice under law. I concur in the judgment of the Court.
JUSTICE BLACKMUN, concurring in the judgment.
I, too, conclude, as do JUSTICE BRENNAN and JUSTICE STEVENS, that a creditor‘s invocation of a State‘s post-judgment collection procedures constitutes action under color of state law within the reach of
I, however, refrain from joining the opinion of either JUSTICE BRENNAN or JUSTICE STEVENS when they would hold, as JUSTICE STEVENS does, that no due process violation in this context is possible or, as JUSTICE BRENNAN does, that room must be left for some constitutional violations in post-judgment procedures, but only when the organization seeking the appeal has “special attributes as an organization” or when the underlying dispute involves “fundamental constitutional rights.” Ante, at 22 (BRENNAN, J., concurring in judgment). Those conclusions, I fear, suffer somewhat from contortions due to attempts to show that a due process violation in this case is not possible or is hardly possible.* Thus, I would not disturb the Court of Appeals’ conclusion that Texaco‘s due process claim raised a “fair groun[d] for litigation” because “an inflexible requirement for impressment of a lien and denial of a stay of execution unless a supersedeas bond in the full amount of the judgment is posted can in some circumstances be irrational, unnecessary, and self-defeating,
I conclude instead that this case presents an example of the “narrowly limited ‘special circumstances,‘” Zwickler v. Koota, 389 U.S. 241, 248 (1967), quoting Propper v. Clark, 337 U.S. 472, 492 (1949), where the District Court should have abstained under the principles announced in Railroad Comm‘n of Texas v. Pullman Co., 312 U.S. 496 (1941). Although the Pullman issue was not pressed before us (but see Brief for Appellant 42-43), it was considered by the Court of Appeals and rejected. 784 F.2d, at 1148-1149. In particular, the court determined that “there [was] nothing unclear or uncertain about the Texas lien and bond provisions” and that abstention was not demanded when there was only a “mere possibility” that the Texas courts would find such provisions unconstitutional. Ibid. I disagree. If the extensive briefing by the parties on the numerous Texas statutes and constitutional provisions at issue here suggests anything, see Brief for Appellant 23-32 and accompanying notes; Brief for Appellee 32-44 and accompanying notes; Reply Brief for Appellant 3-11 and accompanying notes, it is that on the unique facts of this case “unsettled questions of state law must be resolved before a substantial federal constitutional question can be decided,” Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 236 (1984), because “the state courts may interpret [the] challenged state statute[s] so as to eliminate, or at least to alter materially, the constitutional question presented.” Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471, 477 (1977); see also ante, at 11-12, and n. 11. The possibility of such a state-law resolution of this dispute seems to me still to exist.
JUSTICE STEVENS, with whom JUSTICE MARSHALL joins, concurring in the judgment.
In my opinion Texaco‘s claim that the Texas judgment lien and supersedeas bond provisions violate the Fourteenth Amendment is plainly without merit. The injunction against
Pennzoil argues that Texaco‘s challenge fails because States are under no constitutional duty to provide for civil appeals. Our precedents do tend to support this proposition.4
Thus, the real question is whether Texas is constitutionally required to suspend the execution of money judgments without the posting of a bond or security. The proposition that stays of execution are available as a matter of federal constitutional right was rejected long ago. In Louisville & Nashville R. Co. v. Stewart, 241 U.S. 261 (1916), Justice Holmes
Texaco nonetheless argues that once Texas has decided to grant stays of executions to some appellants, it cannot deny stays to others on arbitrary grounds. See Lindsey v. Normet, 405 U.S. 56, 77 (1972) (opportunity for appeal “cannot be granted to some litigants and capriciously or arbitrarily denied to others without violating the Equal Protection Clause“). In this case, Texaco claims that denial of a stay pending a bond or posting of security was arbitrary because (1) it is impossible for it to secure a bond for the amount required by Rule 364 of the Texas Rules of Civil Procedure; (2) posting security under Rule 14c would have a devastating effect on its financial position; and (3) neither a bond nor security is really necessary because Texaco‘s vast resources provide ample assurance that Pennzoil will be able to collect its judgment in full after the appellate process has run its course. See Brief for Appellee 11.
I agree that it might be wise policy for Texas to grant an exception from the strict application of its rules when an appellant can satisfy these three factors. But the refusal to do so is certainly not arbitrary in the constitutional sense. A provision for such exemptions would require the State to establish rules and to hold individualized hearings whenever relevant allegations are made. Texas surely has a rational
Admittedly, Texaco makes a sympathetic argument, particularly when it describes the potential adverse impact of this litigation on its employees, its suppliers, and the community at large. But the exceptional magnitude of those consequences is the product of the vast size of Texaco itself—it is described as the fifth largest corporation in the United States—and the immensity of the transaction that gave rise to this unusual litigation. The character of harm that may flow from this litigation is not different from that suffered by other defeated litigants, their families, their employees, and their customers. The price of evenhanded administration of justice is especially high in some cases, but our duty to deal equally with the rich and the poor does not admit of a special exemption for multibillion-dollar corporations or transactions.
Notes
So far as we know, Texaco has never presented to the Texas courts the challenges it makes in this case against the bond and lien provisions under federal law. Three days after it filed its federal lawsuit, Texaco did ask the Texas trial court informally for a hearing concerning possible modification of the judgment under Texas law. That request eventually was denied, because it failed to comply with Texas procedural rules. The Court of Appeals stated that Texaco has “a liquidation value of $22 billion and a net worth of about $23 billion.” 784 F.2d, at 1152; see also id., at 1155; Brief for Appellee 6. As the Court points out, the judgment against Texaco, including prejudgment interest, totaled approximately $11 billion. Ante, at 4.
“[I]t is hereby ... ORDERED that defendant, Pennzoil Company, its employees, agents, attorneys and servants, and all persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are jointly and severally enjoined and restrained, pending the trial and ultimate disposition of this action, or the further order of this Court, from taking any action of any kind whatsoever to enforce or attempt to enforce the Judgment entered in an action in the District Court for the 151st Judicial District of Texas entitled Pennzoil Company v. Texaco Inc., including, without limitation, attempting to obtain or file any judgment lien or abstract of judgment related to said Judgment (pursuant to
The order also required Texaco to post a bond of $1 billion to secure the grant of the preliminary injunction. Id., at A53. See R. Lynn, Appellate Litigation 385 (1985) (collecting provisions on requirements to obtain stay of execution pending appeal). A judgment creditor‘s interest in the judgment can be adversely affected during the appellate process in a variety of ways. For example, the debtor may purposely dissipate its assets, or subsequent secured creditors may attach the debtor‘s property.
The relevance of the open courts provision to this case is not limited to its indication that the Texas courts may well accept Texaco‘s challenge on state constitutional grounds, obviating the need for consideration of the federal constitutional questions. As we explain infra, at 15-16, this provision also undercuts Texaco‘s claim that no Texas court was open to hear its constitutional claims.
Also, the language of Rule 364 suggests that a trial court could suspend the bond requirement if it concluded that application of the bond requirement would violate the Federal Constitution. Rule 364(a) provides: ”Unless otherwise provided by law or these rules, an appellant may suspend the execution of the judgment by a good and sufficient bond” (emphasis added). Texaco has failed to demonstrate that Texas courts would not construe the phrase “otherwise provided by law” to encompass claims made under the Federal Constitution. We cannot assume that Texas courts would refuse to construe the Rule, or to apply their inherent powers, to provide a forum to adjudicate substantial federal constitutional claims.