Date: 08-08-2008

Case Style: B. Willis, C.P.A., Inc. v. BNSF Railway Corp., Union Pacific Railroad Company, Public Service Company of Oklahoma

Case Number: 06-5015

Judge: Ebel

Court: United States Circuit Court for the Tenth Circuit on appeal from the Northern District of Oklahoma

Plaintiff's Attorney: William T. Dickson, Tulsa, Oklahoma, for Plaintiff-Appellant B. Willis, C.P.A., Inc.

Defendant's Attorney: Stratton Taylor, Taylor, Burrage, Foster, Mallett, Downs & Ramsey, Claremore, Oklahoma (Hugh D. Rice and William P. Tunnell, Rainey, Ross, Rice & Binns, Oklahoma City, Oklahoma; Mark H. Ramsey and Clinton D. Russell, Taylor, Burrage, Foster, Mallett, Downs & Ramsey, Tulsa, Oklahoma; and Robert D. Hart, Gibbs, Armstrong, Borochoff, Mullican & Hart, Tulsa, Oklahoma, with him on the briefs), for Defendants-Appellees BNSF Railway Corporation, Union Pacific Railroad Company and Public Service Company of Oklahoma.

Description: In 1992, Defendant-Appellee Public Service Company of Oklahoma (“PSO�) used the eminent domain authority granted to it under Oklahoma law to condemn an easement across property owned by Plaintiff-Appellant B. Willis, C.P.A., Inc. (“Willis�). Willis, in turn, invoked remedies available under Oklahoma law, first to challenge, before a state court judge, the necessity for PSO to condemn this easement for a public use; and second to challenge, in a jury trial, the amount of compensation awarded Willis for the easement. Pursuant to Oklahoma law, PSO took possession of the easement while Willis’ challenges to the condemnation proceedings were ongoing and, since 1995, has operated a rail line across Willis’ property.

Willis commenced this federal litigation while those state proceedings remained pending, asserting federal and state law claims in this federal action that challenged aspects of the state condemnation case. The district court dismissed these claims, concluding that prior federal proceedings precluded one of Willis’ claims and that Willis’ other claims would not be ripe for adjudication as long as the state court condemnation action remained ongoing. While the district court’s decision was before this court on appeal, however, the state courts finally resolved Willis’ challenge to the necessity of PSO’s condemning the easement, concluding that PSO had established a public necessity sufficient to warrant condemnation of the easement.

Because this decision conclusively resolved the material issues presented by most of Willis’ claims asserted in this federal action, Oklahoma issue preclusion principles preclude Willis from pursuing all but portions of two of its claims. The two exceptions are 1) aspects of Willis’ due process/equal protection claim, to the extent that Willis alleges PSO acted in concert with the state trial judge to deprive Willis of an initial hearing and discovery to challenge the public necessity of the easement; and 2) Willis’ trespass claim, to the extent that claim alleges that PSO removed limestone and coal from below the surface of the easement.

We AFFIRM the district court’s dismissal of all but these aspects of Willis’ due process/equal protection and trespass claims, but we REMAND those precluded claims with directions that the district court dismiss them with prejudice. As to those portions of Willis’ due process/equal protection and trespass claims that are not precluded, because the state proceedings challenging the amount of compensation awarded for the easement are still pending, those claims are not yet ripe for adjudication. We, therefore, AFFIRM the dismissal of those claims, but REMAND them to the district court to clarify that their dismissal is without prejudice.

I. BACKGROUND

A. Prior litigation between the parties

Willis owns property in Oolagah, Rogers County, Oklahoma. PSO operates a power plant nearby. Defendant Union Pacific owns a rail line that runs adjacent to this power plant.

To fuel its plant, PSO purchases coal from the Powder River Basin in Wyoming and contracts with Defendant BNSF Railway Corporation (“BNSF�) to transport the coal to the Oolagah plant. Because BNSF did not own or operate a rail line adjacent to the plant, however, it had to subcontract with Union Pacific to complete delivery. PSO believed that it could obtain much better shipping terms if BNSF also had a rail line running to the power plant, because then the two railroads would have to compete for PSO’s shipping business. Therefore, PSO sought to build a rail line, approximately ten miles long, connecting the power plant to an already-existing BNSF line. That new line ran through Willis’ property.

When Willis refused to grant PSO an easement across its property to build and operate this rail line, PSO, in October 1992, began proceedings to condemn the easement under Oklahoma’s eminent domain provisions. The Oklahoma Constitution permits the condemnation of private property for a public use. See Okla. Const. art. 2, § 24.3 And Okla. Stat. tit. 27, § 7 expressly gives a power company, such as PSO, “the right of eminent domain in the same manner and by like proceedings as provided for railroad corporations� under Oklahoma law.4

Oklahoma law further sets forth specific procedures, see Okla. Stat. tit. 66, §§ 51-66, by which a railroad or power company can condemn private property for “a lawful public use.� Pub. Serv. Co. of Okla. v. B. Willis, C.P.A., Inc., 941 P.2d 995, 999 (Okla. 1997) (citing Okla. Const. art. 2, §§ 23, 24).

Acting pursuant to these eminent domain procedures, PSO filed a petition in a Rogers County state court to condemn the easement across Willis’ property. The state court then appointed a three-member commission, which determined “just compensation� PSO should pay Willis for the easement. Okla. Stat. tit. 66, § 53(A), (C);5 see also City of Stigler v. Crumley, 99 P.3d 253, 254 (Okla. Civ. App. 2004). Willis objected, not only to the amount of compensation the three-member commission awarded, but to the validity of the condemnation itself, asserting that PSO was not taking the easement for a public use.6 See Willis, 941 P.2d at 997.

Notwithstanding Willis’ objection challenging the public need for PSO to take an easement across Willis’ property, the state trial court denied Willis discovery on this issue and, without conducting an evidentiary hearing, held “that [PSO’s] simple allegation of necessity in the [condemnation] petition was sufficient to sustain PSO’s case� for condemning the easement; that is, because PSO had statutory authority to condemn property under Okla. Stat. tit. 27, § 7, Willis had no right to contest PSO’s taking the easement across Willis’ property.

Willis, 941 P.2d at 997-98. Willis appealed that determination. See id. at 998. Despite Willis’ pending appeal, Okla. Stat. tit. 66, § 56 permitted PSO to take possession of the easement by paying the court clerk, on Willis’ behalf, the amount of compensation the appointed three-member commission had awarded Willis.7 See Pub. Serv. Co. of Okla. v. B. Willis, C.P.A., Inc., 155 P.3d 845, 848-49 (Okla. Civ. App. 2006), cert. denied, 128 S. Ct. 66 (2007). PSO then built a railroad track and bridge across approximately 1,069 feet of Willis’ property.

After completing construction of the track, PSO entered into an “Industrial Track and Operating Agreement� with BNSF in March 1995. Under that agreement, BNSF maintains this rail line and runs coal trains across it to PSO’s power plant.

Even though the rail line had already been built, Willis’ state appeal continued. In March 1995, the Oklahoma Court of Civil Appeals held that the allegation of necessity PSO made in its condemnation petition was sufficient to state a prima facie case for PSO’s taking the easement across Willis’ property, but that the trial court had abused its discretion in denying Willis discovery to support its effort to rebut PSO’s prima facie condemnation case. See Willis, 941 P.2d at 998. Not obtaining all the relief it sought, Willis appealed this decision to the Oklahoma Supreme Court.

While Willis pursued that appeal, it also returned to the state trial court to challenge PSO’s and BNSF’s continued use of the easement, asserting that PSO had no legal right yet to the easement across Willis’ property. Willis, therefore, demanded that PSO and BNSF immediately abandon the easement and stop running coal trains across Willis’ land. The state trial court rejected Willis’ position and, instead, issued a temporary injunction enjoining Willis from interfering with PSO’s and BNSF’s continued use of the easement while the Oklahoma Supreme Court considered Willis’ appeal.

In 1997, the Oklahoma Supreme Court decided Willis’ appeal, vacating the decision of the Oklahoma Court of Civil Appeals and remanding the condemnation action to the state trial court for further proceedings. See id. at 997. In doing so, the Oklahoma Supreme Court disagreed with the Court of Civil Appeals and held instead that PSO’s mere filing of a [condemnation] petition does not establish a prima facie case [for condemnation]. It is well-settled that the condemnor has the initial burden of proof on the issues in a condemnation proceeding and meets that burden to the extent of making a prima facie case of necessity by introduction into evidence of a resolution of necessity from the condemning authority [PSO], whereupon the burden of proof shifts to condemnee [Willis] to show that the taking is not necessary. Id. at 999. The Oklahoma Supreme Court concluded that, in this case, because PSO had “never attempted to have its resolution [of necessity] admitted into evidence by the trial court,� PSO had never met its “initial burden� in the condemnation proceeding. Id.

The Oklahoma Supreme Court further held that, on remand, once PSO meets its initial burden, Oklahoma law provides a landowner such as Willis with the right and opportunity to contest the condemnor’s right to take his property. There is a right to a hearing on all aspects of the plaintiff’s right to condemnation upon timely and proper exceptions to the report of commissioners which challenge the condemnor’s right to take the intended particular property. Before an entity having eminent domain authority can appropriate private land to its use, all the steps legally requisite must have been taken.

Id. at 999-1000. In light of Willis’ right to a hearing, the Oklahoma Supreme Court determined that the state trial court had erred by denying Willis “an opportunity to challenge PSO’s asserted but unproven right to take [Willis’] property as well as the right to conduct discovery� on that issue. Id. at 1000. Following the Oklahoma Supreme Court’s decision remanding the eminent domain proceeding to the state trial court, Willis again argued to the trial court that PSO’s and BNSF’s continued use of the easement during the ongoing eminent domain proceeding was no longer lawful because PSO had never met its initial burden of showing that its exercise of eminent domain in this case was lawful. Willis thus again demanded that PSO and BNSF immediately abandon the rail line running across Willis’ property. Willis also requested that the trial court vacate the injunction the court had previously entered enjoining Willis from interfering with the operation of the coal trains across the easement during the state condemnation proceedings. The state trial court, however, again rejected Willis’ argument and instead left the previously issued injunction “in place pending the outcome of a hearing on [Willis’] objections� to PSO’s taking Willis’ property.

This meant that PSO and BNSF could continue to operate coal trains on the rail line crossing Willis’ property while the state trial court further considered PSO’s petition seeking condemnation of the easement.

Willis pursued an interlocutory appeal of that decision. But the Oklahoma Court of Appeals upheld the trial court’s decision to leave the injunction in place, concluding that, although “[a]fter issuance of [the] mandate in the prior appeal [decided by the Oklahoma Supreme Court], the trial court was required to give [Willis] a[] meaningful[] evidentiary hearing on the issues of necessity and public use, . . . [i]t was not require[d] to undo all that had transpired before then.�

“The first appeal resolved only [Willis’] right to an evidentiary hearing, and the question whether PSO established a prima facie case of necessity by alleging necessity in its original petition.� The Oklahoma Supreme Court denied Willis’ petition for a writ of certiorari challenging that decision of the Oklahoma Court of Civil Appeals.

Despite the fact that the state condemnation proceedings remained ongoing, Willis instituted two actions in the federal district court for the Northern District of Oklahoma collaterally challenging those state court proceedings.8 Underlying the claims Willis asserted in those federal actions was Willis’ continued belief, already rejected by the state courts, that PSO and BNSF were not entitled to use the easement over Willis’ property while the state condemnation action remained unsettled.

In the first of these federal actions,9 Willis asserted claims under 42 U.S.C. § 1983, as well as an Oklahoma state law trespass claim, alleging Willis “was constitutionally entitled to a final judicial determination on condemnation before PSO could take possession of the easement over [Willis’] property.� B. Willis, C.P.A., Inc. v. Pub. Serv. Co. of Okla., No. 97-5107, 1999 WL 335207, at *2 (10th Cir. May 27, 1999) (unpublished) (emphasis added), cert. denied, 528 U.S. 1003 (1999). The district court denied Willis relief. See id.

On appeal from that decision, this court rejected on the merits Willis’ facial constitutional challenge to the Oklahoma condemnation scheme, upholding the aspect of that scheme that permitted the condemnor to take possession of the property sought to be condemned before the condemnation proceedings were finally resolved. See id. at *2-*3. This court also rejected Willis’ claim that the state trial court’s enjoining Willis from interfering with PSO’s and BNSF’s continued use of the easement violated Willis’ First Amendment freedom of speech.10 See id. at *4.

This court, however, dismissed without prejudice Willis’ claims against BNSF for trespass and Willis’ constitutional claims alleging the Oklahoma eminent domain proceedings denied Willis just compensation, due process, and equal protection of the law. See id. at *2, *4. We concluded those claims would not be ripe for adjudication until the state condemnation proceeding was concluded. Id. at *2.

In the second of these federal actions, Willis similarly asserted, among other claims, that the state trial judge and PSO had violated Willis’ First Amendment right to free speech when the court, in 1997, held Willis in contempt for violating the injunction precluding Willis from interfering with PSO’s use of the easement while the state condemnation proceedings remained ongoing. See B. Willis, C.P.A., Inc. v. Goodpaster, 183 F.3d 1231, 1233-34 (10th Cir.), cert. denied, 528 U.S. 1046 (1999). The contempt citation resulted when, after the Oklahoma Supreme Court remanded the condemnation proceedings to the state trial court, Willis’ attorney wrote PSO and BNSF and demanded that they cease running trains across Willis’ property until the second condemnation hearing was completed. See id. at 1233. This court affirmed the district court’s decision rejecting Willis’ First Amendment claim on the merits. See id. at 1233-35. Having failed to obtain relief in these two federal actions, Willis next filed a petition with the federal Surface Transportation Board (“STB�) in February 2001, seeking a declaration that the rail line PSO had already constructed across Willis’ property was subject to the STB’s exclusive jurisdiction. See B. Willis, C.P.A., Inc., No. 34013, 2001 WL 211240, at *1 (S.T.B. Mar. 5, 2001) (unpublished). If it was, then it was Willis’ contention that PSO had unlawfully constructed that line without first obtaining the required certificate of public convenience and necessity from the STB. See B. Willis, C.P.A., Inc., No. 34013, 2001 WL 1168090, at *1-*2 (S.T.B. Oct. 1, 2001) (unpublished). In that federal administrative proceeding, however, the STB determined that the rail line running across Willis’ property was a private rail line, over which the STB did not have jurisdiction. See id. at *2-*3. The Circuit Court for the District of Columbia affirmed the STB’s determination, see B. Willis, C.P.A., Inc. v. Surface Transp. Bd., 51 Fed. App’x 321 (D.C. Cir. Nov. 26, 2002) (per curiam) (unpublished), and the United States Supreme Court denied Willis’ petition for a writ of certiorari, see 540 U.S. 811 (2003). During all of these federal proceedings, the state condemnation action remained ongoing.

B. This litigation

The specific federal litigation underlying this appeal stems from two consolidated cases Willis commenced after failing to obtain any relief in his previous three federal actions. In the first such case underlying this appeal, Willis sued BNSF in Oklahoma state court in February 2004, asserting state law tort and contract claims. Willis based those claims on Willis’ continued belief that BNSF was wrongfully possessing the easement across Willis’ property, in light of the Oklahoma Supreme Court’s earlier decision to remand the state eminent domain action to the state trial court for discovery and a hearing.11 BNSF removed this litigation to federal court pursuant to the federal court’s diversity jurisdiction, 28 U.S.C. § 1332.

In August 2004, Willis commenced another action in federal court, this time asserting a claim under the Interstate Commerce Commission Termination Act (“ICCTA�)12 against BNSF, Union Pacific, and PSO, and claims under 42 U.S.C. § 1983, as well as state law tort and property claims, against PSO and BNSF, again claiming their continued use of the easement across Willis’ property was wrongful.13 The district court consolidated these two actions.

In June 2005, the district court dismissed all of Willis’ state law and 42 U.S.C. § 1983 claims, under Fed. R. Civ. P. 12(b)(1), concluding those claims would not be ripe for adjudication as long as the state condemnation proceeding remained pending. Later, in January 2006, the district court granted BNSF, PSO and Union Pacific summary judgment on the remaining ICCTA claim, concluding that the earlier federal proceedings before the STB precluded Willis from reasserting that claim in these proceedings. Willis now appeals both district court decisions.

C. Determination, in the state condemnation proceeding, that PSO had established the existence of a public use warranting condemnation of the easement

The state condemnation proceeding has remained ongoing during all of this federal litigation. In October 2004, seven years after the Oklahoma Supreme Court remanded the condemnation case for further proceedings, the state trial court conducted a hearing, after which the court concluded that PSO had sufficiently established that its condemnation of Willis’ property was for a public use or necessity. See Willis, 155 P.3d at 847. On September 19, 2006, the Oklahoma Court of Civil Appeals affirmed. See id. at 852. While the instant appeal was pending before this court, the Oklahoma Supreme Court denied Willis’ petition for a writ of certiorari and the United States Supreme Court did the same. See Willis v. Pub. Serv. Co. of Okla., 128 S. Ct. 66 (2007). Those state proceedings finally determined not only that PSO had established a public necessity justifying its condemnation of an easement across Willis’ property, but also that PSO’s and BNSF’s possession of the easement during the state condemnation proceedings was lawful.14 See Brink v. Bartlett, 294 P. 106, 107 (Okla. 1930) (noting judgment became final after United States Supreme Court denied a petition for a writ of certiorari); cf. Walker v. Telex Corp., 583 P.2d 482, 484 (Okla. 1978) (noting court of appeals’ decision became final after petitioner withdrew petition for certiorari filed with Oklahoma Supreme Court).

II. APPELLATE JURISDICTION

As a threshold matter, Defendants have filed with this court a motion to dismiss this appeal for lack of appellate jurisdiction.15 We disagree. This court has jurisdiction to consider this appeal from the district court’s final judgment entered in this case. See 28 U.S.C. § 1291.

Willis did file its notice of appeal prematurely. The district court dismissed most of Willis’ claims on June 23, 2005, leaving only Willis’ ICCTA preemption claim still pending against all three Defendants. BNSF and PSO, but not Union Pacific, moved for summary judgment on that remaining claim. On January 3, 2006, the district court granted those two defendants summary judgment.

On January 17, 2006, Willis filed its notice of appeal. But the district court had not yet entered a final, appealable order because Willis’ ICCTA claim remained pending against Union Pacific. See Jackson v. Volvo Trucks N. Am., Inc., 462 F.3d 1234, 1238 (10th Cir. 2006) (noting that “a judgment . . . that does not dispose of all claims is not considered a final appealable decision under [28 U.S.C.] § 1291�).

On January 27, 2006, Union Pacific requested summary judgment on that remaining claim. The district court granted the motion on January 31, 2006, and on that same day entered judgment “terminating this matter.�

The district court’s final decision, on January 31, 2006, ripened Willis’ prematurely filed notice of appeal. “[A]n otherwise nonfinal decision becomes final and appealable if the district court adjudicates all remaining claims against all remaining parties before the appellate court acts to dismiss the appeal on the merits for lack of jurisdiction.� Harbert v. Healthcare Servs. Group, Inc., 391 F.3d 1140, 1146 (10th Cir. 2004) (citing Lewis v. B.F. Goodrich Co., 850 F.2d 641, 645 (10th Cir. 1988) (en banc)); see also Jackson, 462 F.3d at 1238; Ashley Creek Phosphate Co. v. Chevron USA, Inc., 315 F.3d 1245, 1263 (10th Cir. 2003). This court, therefore, has jurisdiction to consider an appeal from the district court’s January 3, 2006, order, which was the decision named in the prematurely filed notice of appeal. See Harbert, 391 F.3d at 1144-45, 1146. And, because the premature notice of appeal referred to both the January 3, 2006 decision, “as well as the prior orders of the Court that did not dispose of all of the claims brought by Plaintiff,� this court also has jurisdiction to review the district court’s earlier decision dismissing most of Willis’ claims as unripe. Cf. Breeden v. ABF Freight Sys., Inc., 115 F.3d 749, 752 (10th Cir. 1997) (holding premature notice of appeal that, pursuant to Fed. R. App. P. 4(a)(4), ripened after trial court denied Fed. R. Civ. P. 59(e) motion, was sufficient to give court of appeals jurisdiction to consider “any orders specified in the original notice�). Willis’ prematurely filed notice of appeal, however, was not sufficient to give this court jurisdiction to consider an appeal from the district court’s final judgment, dated January 31, 2006. See Nolan v. U. S. Dep’t of Justice, 973 F.2d 843, 846 (10th Cir. 1992). To preserve that decision for appeal, Willis needed to file another notice of appeal. See Ashley Creek Phosphate Co., 315 F.3d at 1263; EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1250 (10th Cir. 1999). Willis failed to do so. Nevertheless, this court can treat Willis’ amended docketing statement, filed with this court on February 9, 2006, after the district court’s final decision, as the “functional equivalent� of a second notice of appeal. See Smith v. Barry, 502 U.S. 244, 245, 248-49 (1992) (treating a pro se litigant’s appellate brief as the “functional equivalent� of a timely filed notice of appeal); see also Haney v. Addison, 175 F.3d 1217, 1219 (10th Cir. 1999) (treating a pro se litigant’s amended docketing statement as a notice of appeal, although noting that “we strongly discourage this practice�); Grimsley v. MacKay, 93 F.3d 676, 678 (10th Cir. 1996) (permitting docketing statement filed in counselled case to correct notice of appeal’s failure to name party appealing, as required by Fed. R. App. P. 3); cf. Berrey v. Asarco Inc., 439 F.3d 636, 641-42 (10th Cir. 2006) (deeming counselled litigant’s “motion to certify district court’s order� to be functional equivalent of timely filed notice of appeal).

This court can do so, however, only if Willis’ amended docketing statement gives the proper notice required under Fed. R. App. P. 3: “Notices ‘shall specify the party or parties taking the appeal; shall designate the judgment, order or part thereof appealed from; and shall name the court to which the appeal is taken.’� Smith, 502 U.S. at 248 (quoting Fed. R. Civ. P. 3(c)); see also Berrey, 439 F.3d at 642. Willis’ amended docketing statement meets all three of these requirements.

It specifically refers to the district court’s January 31, 2006 decision; identifies Willis as the appealing party; and names this court as the court to which Willis is appealing.

Furthermore, Willis filed that document in a timely manner, within thirty days of the district court’s January 31, 2006 decision. See Fed. R. App. P. 4(a)(1)(A); see also Berrey, 439 F.3d at 641. In light of that, Willis’ amended docketing statement was sufficient to give this court jurisdiction to consider Willis’ appeal from the district court’s January 31, 2006 decision granting Union Pacific summary judgment on the ICCTA claim. This court, therefore, has jurisdiction under 28 U.S.C. § 1291 to consider on appeal all of the district court’s decisions entered in this case.16

III. DISCUSSION

Satisfied that this court has jurisdiction, we turn to the merits of Willis’ appeal. The district court dismissed most of Willis’ claims because they were not yet ripe for adjudication in light of the ongoing state condemnation proceeding.17

That state proceeding remains ongoing as to the issue of whether the compensation awarded Willis is adequate. But the state courts have now finally determined that PSO established a public use that necessitated its condemning the easement across Willis’ property and that PSO’s and BNSF’s possession and use of the easement during the state condemnation proceeding was lawful. The state courts’ decisions finally resolving these two issues preclude Willis from pursuing the claims it is asserting in this federal action, with two exceptions.18 See Arizona v. California, 530 U.S. 392, 412 (2000) (noting court’s raising res judicata sua sponte may be appropriate in special circumstances to avoid unnecessary judicial waste); United States v. Sioux Nation, 448 U.S. 371, 432 (1980) (Rehnquist, J., dissenting) (noting court may dismiss, sua sponte, on basis of res judicata); Burrell v. Armijo, 456 F.3d 1159, 1176 (10th Cir. 2006) (McConnell, J., concurring in judgment) (noting court can raise preclusion on its own motion, citing cases), cert. denied, 127 S. Ct. 1132 (2007); 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4405 (2d ed. 2002) (noting it is possible that a court may raise preclusion on its own motion; further noting that “[p]reclusion even can be raised by an appellate court for the first time on appeal�); see also Lowell Staats Mining Co. v. Philadelphia Elec. Co., 878 F.2d 1271, 1274 (10th Cir. 1989) (noting district court applied res judicata sua sponte). But see Jicarilla Apache Nation v. Rio Arriba County, 440 F.3d 1202, 1208 n.3 (10th Cir. 2006) (declining to raise res judicata sua sponte); cf. Okla. Dep’t of Pub. Safety v. McCrady, 176 P.3d 1194, 1199 n.21 (Okla. 2007) (noting that, while “it is uncommon� for appellate court to apply preclusion principles, it “is not unheard of�). These two exceptions are 1) Willis’ due process/equal protection claim, to the extent that claim is based upon a theory other than Willis rearguing that PSO unlawfully possessed and used the easement during the state condemnation proceeding, and 2) Willis’ trespass claim alleging PSO removed limestone and coal from below the surface easement.

A. Relevant legal principles

In concluding that most of Willis’ claims were not yet ripe for adjudication, the district court relied upon Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985), as well as this court’s decision in Willis’ earlier appeal, Willis, 1999 WL 335207. Williamson County held that a claim asserting an unconstitutional taking19 or the deprivation of due process resulting from a condemnation proceeding will not be ripe for adjudication until the state or local condemnation proceedings are final.20 See 473 U.S. at 185-86, 194-95, 197, 199-200; see also San Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323, 327 (2005). And “whether an unconstitutionally improper taking occurred cannot be determined until both the taking and compensation have been legally evaluated.� Wilkinson v. Pitkin County Bd. of County Comm’rs, 142 F.3d 1319, 1323 (10th Cir. 1998) (per curiam) (emphasis added); see also San Remo Hotel, 545 U.S. at 327 (noting that Williamson County held that “‘takings claims are not ripe until a State fails to provide adequate compensation for the taking,’� quoting Williamson County, 473 U.S. at 195); Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. 725, 733-34 (1997). In this case, because the state court has not yet finally resolved the question of just compensation for the easement, Willis’ claims challenging that state condemnation proceeding are still not ripe for adjudication.

Even so, Williamson County will not preclude the application of relevant preclusion principles.21 See Wilkinson, 142 F.3d at 1323-24 (holding complying with Williamson County’s ripeness requirement will not negate application of preclusion principles). And here, because the state court has finally concluded both that PSO has established a public use warranting its condemnation of an easement across Willis’ property and that PSO’s and BNSF’s use of that easement during the state condemnation proceedings was lawful, those final determinations preclude Willis from pursuing all but two of the claims it asserts in this federal action.22

“Under 28 U.S.C. § 1738, the preclusive effect of a state judgment is governed by the rules of preclusion of that state.�23 Valley View Angus Ranch, Inc. v. Duke Energy Field Servs., Inc., 497 F.3d 1096, 1100 (10th Cir. 2007) (footnote omitted); see also Wilkinson, 142 F.3d at 1322. “As a general rule� under Oklahoma law, “the doctrine of preclusion operates to enjoin successive attempts to relitigate the same issue in different forums.�24 State ex rel. Dep’t of Transp. v. Little, 100 P.3d 707, 719 (Okla. 2004). Further, Oklahoma law recognizes the “well established rule that where two actions involving the same issues, between the same parties, are pending at the same time in different courts, a final judgment in one will be res judicata, or a bar in the other.� Hixson v. Cook, 379 P.2d 677, 684 (Okla. 1962). Oklahoma law specifically affords preclusive effect to condemnation proceedings. See Okla. City v. Cooper, 420 P.2d 508, 511-12 (Okla. 1966); see also Elliott v. City of Guthrie, 725 P.2d 861, 862-63 & 863 n.7 (Okla. 1986); Graham v. City of Duncan, 354 P.2d 458, 464 (Okla. 1960); Fischer v. Okla. City, 174 P.2d 244, 246-47 (Okla. 1946).

Although “[t]he issue (collateral estoppel) and claim (res judicata) preclusion doctrines are often used interchangeably because they are closely related and both promote the same general public policy concerns,� Tibbetts v. Sight ‘n Sound Appliance Ctrs., Inc., 77 P.3d 1042, 1060 n.31 (Okla. 2003) (Opala, C.J., dissenting in part), in this case issue preclusion is the most relevant preclusion doctrine. “In accordance with the doctrine of issue preclusion (previously known as collateral estoppel), once a court has decided an issue of fact or law necessary to its judgment, the same parties or their privies may not relitigate that issue in a suit brought upon a different claim.� McCrady, 176 P.3d at 1199 (footnote omitted). To invoke issue preclusion, “there need not be a prior adjudication on the merits (as is often the case with res judicata) but only a final determination of a material issue common to both cases.�25 Id. Further, the doctrine of issue preclusion “may not be invoked if the party against whom the earlier decision is interposed did not have a full and fair opportunity to litigate the critical issue in the previous case.� Id. (quotation omitted).

B. Applying these legal principles to Willis’ claims asserted in this federal action

1. Willis’ state law claims alleging that PSO and BNSF wrongfully possessed and used the easement across Willis’ property during the state condemnation proceeding Willis asserts state law claims against both PSO and BNSF premised on Willis’ belief that PSO and BNSF wrongfully possessed and used the easement across Willis’ property during the state condemnation proceedings.26 The state courts’ final determination that PSO established a public use sufficient to warrant its condemning an easement across Willis’ property and the Oklahoma courts’ determination that PSO and BNSF did not wrongfully possess the easement during the state condemnation proceedings now preclude these claims. PSO, of course, is the same party that initiated the state condemnation action. And BNSF is in privity with PSO. “Privity is usually defined as mutual or successive relationships to the same rights of property.� Sautbine v. Keller, 423 P.2d 447, 457 (Okla. 1966) (quotation omitted). However, “[t]here are no hard and fast rules; the existence of privity depends upon the circumstances and requires a person so identified in interest with another that he represents the same legal right.� Wilson v. City of Tulsa, 91 P.3d 673, 677 (Okla. Civ. App. 2004) (quotation omitted); see also Hildebrand v. Gray, 866 P.2d 447, 450-51 (Okla. Civ. App. 1993). In this case, BNSF’s use of the easement running across Willis’ property, and BNSF’s right to use that easement, both stem from its contract with PSO. And PSO’s right to access the easement across Willis’ property stems from its ability to condemn and use that easement. Under these circumstances, then, BNSF and PSO are in privity. Cf. State ex rel. Trimble v. Kindrick, 852 P.2d 758, 760-61 (Okla. Civ. App. 1992) (concluding corporate entity which received the deed to a hospital sold to a second corporate entity stood in privity with the second corporate entity in actions challenging sale of hospital).

The Oklahoma Court of Civil Appeals determined, in the state condemnation proceeding, that PSO was entitled to take possession of the easement across Willis’ property after PSO paid the amount of compensation the three-member commission awarded Willis, after the state trial court entered its initial decision in that case. See Willis, 155 P.3d at 848-50. In reaching this conclusion, the state appellate court specifically rejected Willis’ contention that PSO was a trespasser at the time PSO built the railroad track across Willis’ property and began operating trains across it. See id.

The state condemnation proceedings, therefore, resolved the issue at the heart of all of the state law claims that Willis asserts in this federal action, save one. As part of the trespass claim Willis asserted against PSO, Willis alleged that, although “PSO sought only to condemn a surface easement and explicitly disclaimed any interest in the subsurface minerals,� PSO nevertheless “sever[ed] and remove[d] coal and limestone from below the surface of the property.� See generally Kirby-Smith Mach., Inc. v. City of Okla. City, 19 P.3d 331, 333 (Okla. Civ. App. 2000) (noting “[e]asements are limited to the particular purpose for which they are created�) (quotation omitted). The state eminent domain proceedings, so far as we can tell, did not specifically address that issue.

The Oklahoma Court of Civil Appeals’ decision is now final, after both the Oklahoma Supreme Court and the United States Supreme Court denied Willis’ petition for a writ of certiorari, see Willis v. Pub. Serv. Co., 128 S. Ct. 66 (2007).

Lastly, Willis does not specifically assert, in its supplemental brief, that it did not have a full and fair opportunity to litigate the issue of whether PSO, and BNSF through its contractual relationship with PSO, wrongfully possessed and used the easement across Willis’ property during the state condemnation proceedings. For these reasons, then, the state condemnation proceedings preclude Willis from further pursuing his state law claims premised on allegations that PSO and BNSF wrongfully possessed the easement across Willis’ property.

The state condemnation proceedings do not, however, preclude Willis from pursuing its trespass claim to the extent that it alleges that PSO wrongfully removed limestone and coal from underneath PSO’s surface easement across Willis’ property.

2. Willis’ ICCTA claim

Willis asserts a claim seeking a declaratory judgment, see 28 U.S.C. § 2201, that the ICCTA preempts Oklahoma’s eminent domain statutes, as applied to PSO’s condemnation of an easement across Willis’ property, because in obtaining this easement, PSO is attempting to regulate interstate rail transportation. Willis asserted this claim against all three defendants, PSO, BNSF and Union Pacific. The final determinations made by the Oklahoma courts in the state condemnation proceeding preclude Willis from further pursuing this claim. PSO is the same party that initiated the state condemnation proceeding.

And, as discussed above, BNSF is in privity with PSO under the circumstances of this case. Union Pacific owned the already existing track adjacent to PSO’s power plant but is not otherwise involved in PSO’s condemnation action. Willis, nevertheless, named Union Pacific as an “interested party� to its declaratory judgment claim based upon the ICCTA. Willis apparently did so because the Declaratory Judgment Act, 28 U.S.C. § 2201(a), provides, in pertinent part, that “[i]n a case of actual controversy within its jurisdiction, . . . any court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.� (Emphasis added.) Willis believed that the Declaratory Judgment Act required Willis to name all parties “interested� in its claim and further believed that Union Pacific was an interested party because PSO’s new track across Willis’ property had diverted business from Union Pacific. Under these circumstances, we will deem Union Pacific to be in privity with PSO for purposes of this claim.

In the state condemnation action, Willis argued that the state trial court “was without jurisdiction to enter its November 2004 Order because federal regulation of railroads preempts any assertion of State authority over the rail spur constructed by PSO.� Willis, 155 P.3d at 850. The Oklahoma Court of Civil Appeals determined that Willis’ earlier federal action before the STB precluded Willis from relitigating this issue. See id. In reaching this conclusion, the Oklahoma appellate court noted that the STB, in the earlier federal administrative proceedings, had determined that it did not have jurisdiction over PSO and its rail line running across Willis’ property because PSO was not a rail carrier and because PSO’s rail spur was a private track. See id. In light of that earlier administrative determination, the Oklahoma appellate court held that, “[a]bsent federal jurisdiction over PSO in its construction and operation of this rail spur, there is no basis for federal preemption of the proceedings in the [state] Trial Court.� Id. at 851.

The state appellate court’s determination is final. And Willis does not specifically assert, in its appellate brief, that it did not have a full and fair opportunity to litigate this issue before the Oklahoma appellate court.27

Therefore, the state appellate court’s determination precludes Willis’ ICCTA preemption claim asserted here.

3. Willis’ state and federal law claims challenging the conduct of the state condemnation proceedings

Willis asserts several claims against PSO and BNSF challenging the general manner in which the Oklahoma courts conducted the state condemnation proceedings.

a. Willis’ due process/equal protection claim against BNSF

Willis alleged, under 42 U.S.C. § 1983, that BNSF deprived Willis of both due process and equal protection because, no later than the Oklahoma Supreme Court’s decision in Willis, 941 P.2d 995, “BNSF was aware that its possession and use of Willis’ property was wrongful and in violation of Willis’ constitutional rights.� In addition, Willis alleged that BNSF is liable for punitive damages because BNSF violated Willis’ due process and equal protection rights “deliberately, wantonly, intentionally and maliciously.�

As previously discussed, BNSF is in privity with PSO, and PSO was a party to the state condemnation action. In that condemnation action, the Oklahoma Court of Civil Appeals finally determined that PSO, and thus BNSF through its contractual relationship with PSO, was entitled to possess the easement after PSO paid the determined amount of compensation to the court clerk on Willis’ behalf. See Willis, 155 P.3d at 848-50. Willis does not specifically assert, in its supplemental brief, that it did not have a full and fair opportunity to litigate this issue. Thus, the Oklahoma courts’ determination precludes Willis’ due process/equal protection claim against BNSF.

b. Willis’ due process/equal protection claim against PSO

Willis alleges, under 42 U.S.C. § 1983, that PSO, acting under color of state law, seized the easement across Willis’ property in violation of Willis’ federal due process and equal protection rights. Specifically, Willis asserted that PSO accomplished this seizure “by knowingly and deliberately prevailing on the state district court to [exercise] its jurisdiction corruptly and issue an order that contradicted what the state district court admitted it knew the law to be and permit PSO to seize Willis’ property without giving Willis the process due in violation of Willis’ rights under the Oklahoma Constitution.� Further, Willis contends that PSO is liable for punitive damages because PSO violated Willis’ due process and equal protection rights “deliberately, wantonly, intentionally and maliciously.�

Willis’ due process and equal protection claims are difficult to pin down.

In its opening brief, Willis asserted that “neither PSO nor BNSF had any right to be on or had any rights in Willis’ property until� the state trial court’s November 15, 2004, order, following the Oklahoma Supreme Court’s remand. “Until that date, they were trespassing on the property as state actors under color of state law in violation of both Willis’ state law property rights under the Oklahoma Constitution and Willis’ federally protected rights to due process and equal protection of the law.� To the extent that this is the basis for Willis’ due process and equal protection claims, the state courts finally resolved those issues against Willis when the state court held that PSO and BNSF did not wrongfully possess and use the easement during the state condemnation proceedings.

In its supplemental brief, however, Willis also asserts that its due process and equal protection claims asserted against PSO are based instead upon the state trial court initially depriving Willis of discovery and a hearing, the reasons for which the Oklahoma Supreme Court remanded the state condemnation action to the state trial court. In addition, in what appears to be an effort to allege that PSO acted under color of state law, as is required for liability under § 1983, Willis further alleged that PSO acted in concert with the state trial judge to deprive Willis of due process and equal protection.28 The state condemnation proceedings, as far as we can tell, did not specifically address and resolve such a claim. To the extent that this is the basis for Willis’ due process and equal protection claim, the already resolved state court matters do not preclude it. The same is true for Willis’ claim for punitive damages stemming from these alleged constitutional violations. Nevertheless, because those claims stem from the ongoing state condemnation proceedings, they are not yet ripe for adjudication.

We, therefore, affirm the district court’s decision to dismiss these due process/equal protection claims without prejudice.

* * *

http://ca10.washburnlaw.edu/cases/2008/07/06-5015.pdf

Outcome: For the foregoing reasons, final determinations that Oklahoma courts have made in the state condemnation proceedings preclude Willis from pursuing all of the state and federal claims Willis asserts in this action, with only two limited exceptions. Final determinations made in the state proceedings do not preclude 1) Willis’ state law trespass claim to the extent it alleges that PSO wrongfully removed coal and limestone from beneath the surface easement; and 2) Willis’ due process/equal protection claim asserted against PSO, to the extent that claim is based upon allegations other than that PSO wrongfully possessed and used the easement across Willis’ property during the state condemnation proceedings.

These two viable claims are, nevertheless, not yet ripe for adjudication. We, therefore, AFFIRM the district court’s decision to dismiss them and REMAND for the district court to dismiss these two claims without prejudice. The rest of Willis’ claims are precluded. We, therefore, AFFIRM the district court’s decision to dismiss those claims, but REMAND for the district court to dismiss those claims with prejudice. See MACTEC, Inc. v. Gorelick, 427 F.3d 821, 827, 830-33 (10th Cir. 2005) (affirming dismissal of precluded claim with prejudice).

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