Aerojet-General Corp. v. Askew
| Decision Date | 21 April 1975 |
| Docket Number | AEROJET-GENERAL,No. 74--1192,74--1192 |
| Parties | CORPORATION, Plaintiff-Appellee, v. Reubin O'Donovan ASKEW, Governor of State of Florida, et al., Defendants. Metropolitan Dade County, Florida, et al., including its Board of CountyCommissioners and Stuart Simon, its County Attorney, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Page 710
v.
Reubin O'Donovan ASKEW, Governor of State of Florida, et
al., Defendants.
Metropolitan Dade County, Florida, et al., including its
Board of CountyCommissioners and Stuart Simon, its
County Attorney, Defendants-Appellants.
Fifth Circuit.
Rehearing and Rehearing En Banc
Denied May 30, 1975.
Page 712
Stuart Simon, Dade County Atty., Alan T. Dimond, Asst. County Atty., Thomas C. Britton, Lawrence R. Metsch, Miami, Fla., Barry S. Richard, Deputy Atty. Gen., Dept. of Legal Affairs, William L. Rogers, Asst. Atty. Gen., Tallahassee, Fla., Marion E. Sibley, Sp. Asst. Atty. Gen., Miami Beach, Fla., for defendants-appellants.
George W. Wright, Jr., Karl B. Block, Jr., Fred N. Kellner, Miami, Fla., James Wm. Moore, New Haven, Conn., for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of Florida.
Before BELL, AINSWORTH and RONEY, Circuit Judges.
AINSWORTH, Circuit Judge:
Important questions concerning the doctrine of res judicata and the Contract Clause of the United States Constitution are presented in this much-litigated dispute over title to a large tract of land in Dade County, Florida. The judgment appealed from is the result of two lawsuits. Aerojet-General Corporation brought an action in the United States District Court for the Northern District of Florida against Metropolitan Dade County, Florida, the Board of Trustees of the Internal Improvement Trust Fund (a Florida state agency), and the Board of Education of the State of Florida, seeking declaratory and injunctive relief to prevent defendants from instituting
Page 713
prosecuting suits in Florida state courts to deny Aerojet's title to the land involved. Jurisdiction was asserted on the basis of diversity of citizenship and the existence of a federal question. See 28 U.S.C. §§ 1331, 1332. The second suit was filed by Metropolitan Dade County against Aerojet-General Corporation in a Florida state district court to quiet title to the subject land. It was removed to the United States District Court for the Southern District of Florida by Aerojet on allegations of diversity of citizenship and existence of a federal question. See 28 U.S.C. § 1441. Subsequently the case was transferred to the Northern District. The suits were then consolidated and reciprocal motions for summary judgment were filed by the parties, there being no dispute as to the material facts. The District Court rendered judgment in favor of Aerojet, confirming its title to the land involved. 366 F.Supp. 901 (1973). Only Dade County has appealed. We affirm.I. Background of the Present Appeal
On December 21, 1961, plaintiff Aerojet-General Corporation entered into a written agreement with the Board of Trustees of the Internal Improvement Trust Fund and the Board of Education of the State of Florida 1 by which Aerojet was granted a ten-year leasehold in 25,313 acres of land in Dade County, Florida, and an option to purchase the land for $50 per acre at any time during the term of the lease, subject to certain qualifications. 2
In 1965 the Florida State Legislature enacted a statute requiring that the Trustees, upon deciding to sell stateowned land to private parties, first afford an opportunity to the county in which the land is located to receive such lands. F.S.A. § 253.111 (1975). 3 On September 8, 1969, Aerojet notified the Trustees of its intention to exercise its option to purchase the leased property, but the Trustees refused to convey the land to Aerojet as provided in the agreement.
Aerojet then brought a diversity suit against the Trustees and the Board of Education in the United States District Court for the Northern District of Florida seeking specific performance of the option agreement to purchase the land. The principal defense was failure of consideration in that Aerojet's manufacturing plant built on the land involved was not in full operation but was in inactive status due to the current slowdown in solid fuel rocket development. The defendant state boards did not, however, raise as a defense their obligation to the counties under the 1965 Florida statute
Page 714
(F.S.A. § 253.111) in disposing of state lands. On September 21, 1970, the District Court granted Aerojet's motion for summary judgment, Aerojet-General Corporation v. Kirk, N.D.Fla., 1970, 318 F.Supp. 55, and ordered the defendants to convey the land to Aerojet. The defendant state boards appealed, and we affirmed the judgment of the District Court on December 9, 1971. 5 Cir., 453 F.2d 819, cert. denied, 409 U.S. 892, 93 S.Ct. 110, 34 L.Ed.2d 149 (1972).On June 20, 1972, because of the state boards' failure to transfer title in the land to Aerojet, the District Court appointed the Clerk of the United States District Court for the Southern District of Florida as a Commissioner for the purpose of executing a deed to the land in favor of Aerojet. The deed was executed immediately, and Aerojet transmitted a cashier's check for $1,246,308.88 in payment thereof to the Trustees.
Earlier, on June 9, 1972, defendant-appellant Metropolitan Dade County, Florida brought a mandamus action in the Supreme Court of Florida against the state boards to compel them to convey the land to it, based on the 1965 enactment of the Florida Legislature requiring that public lands be offered first to the local county before being sold to private parties. F.S.A. § 253.111 (1975). The County alleged that any right which Aerojet had to acquire the land was superseded by the County's right under the Florida statute. The state boards offered no opposition to this suit, and even more, by written pleading waived notice of hearing and affirmatively consented to the entry of the alternative writ of mandamus. Accordingly, the Supreme Court of Florida issued the requested writ of mandamus on October 11, 1972, and the Trustees, in compliance therewith, executed a deed to the land to Dade County on October 31, 1972.
On June 20, 1972, the same day that the District Court appointed the Clerk as a Commissioner to execute the deed to the land to Aerojet, the present action was initiated in the District Court by Aerojet against the state boards and Dade County. Aerojet sought an injunction against further prosecution of the mandamus action by Dade County against the state boards in the Florida Supreme Court and against any other actions regarding the disputed lands, on the ground that any assertion of rights under F.S.A. § 253.111 was barred by the prior federal court judgment under the principle of res judicata. Alternatively, Aerojet sought a judgment declaring that F.S.A. § 250.111 was inapplicable to its lease-option contract--or if applicable, was violative of the Contract Clause of the United States Constitution.
The defendants' response to Aerojet's plea of res judicata was that, since federal jurisdiction had been invoked on the basis of diversity of citizenship, the District Court was obliged to follow state law. Defendants contended that the Florida Supreme Court's decision in their mandamus action was the definitive statement of Florida law on whether the prior federal court judgment was res judicata. They argued that the state court could not have reached the question whether F.S.A. § 253.111 required that the County be offered the land without implicitly holding that the prior federal court suit was not a bar, at least as to the County.
On October 31, 1972, the day the Trustees executed the deed to the land in favor of Dade County, Aerojet and the County appeared before the District Court at an emergency hearing. The Court enjoined Dade County from recording its newly acquired deed and from instituting any action to quiet title to the property, and enjoined Aerojet from conveying any part of the disputed land.
On January 8, 1973, the District Court stayed further proceedings in Aerojet's suit for injunctive and declaratory relief and abstained from further action in anticipation of clarification by the state courts of Florida of the statutory issues involved in the case. Aerojet immediately appealed to this Court from the entry of this order. On January 10, 1973, Dade County, no longer under a
Page 715
prohibitory injunction from the federal district court, initiated its quiet title suit in Florida state court against Aerojet, which, as we have already stated, was later removed by Aerojet to the United States District Court for the Southern District of Florida.On March 5, 1973, this Court rendered its decision on Aerojet's appeal from the District Court's order, and held that in view of Aerojet's removal of the County's quiet title suit there was no longer any reason for abstention. 476 F.2d 184. The District Court was ordered to reinstate its injunction against suits challenging Aerojet's title and to proceed with the merits of Aerojet's claims. (The Court also suggested that the quiet title suit be transferred to the Northern District to be consolidated with Aerojet's suit--which, as we have said, was done.)
On November 21, 1973, the District Court rendered its decision in favor of Aerojet. Aerojet-General Corporation v. Askew, N.D.Fla., 1973, 366 F.Supp. 901. The Court held that F.S.A. § 253.111 unconstitutionally impaired the obligation of contract as applied to Aerojet's contract, and that under the doctrine of res judicata the original federal court judgment of September 21, 1970 barred all the defendants from asserting the provisions of F.S.A. § 253.111 as a defense to Aerojet's action to effectuate the prior judgment.
II. Res Judicata and the Prior Federal Court Judgment
A. Choice of Law: Federal or State
The District Court apparently conceded that the Florida law of res judicata governs the question whether the prior federal court judgment (rendered on September 21, 1970) barred Dade County from raising the provisions of F.S.A. § 253.111 as a...
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