Asarco Incorporated v. Kadish, 87-1661

• Decision Date: 30 May 1989
• Docket Number: No. 87-1661,87-1661
• Parties: ASARCO INCORPORATED, et al., Petitioners v. Frank KADISH, et ux., et al
• Court: U.S. Supreme Court

490 U.S. 605

109 S.Ct. 2037

104 L.Ed.2d 696

ASARCO INCORPORATED, et al., Petitioners

v Frank KADISH, et ux., et al.

No. 87-1661.

Argued Feb. 27, 1989.

Decided May 30, 1989.

Syllabus

Among other things, the New Mexico-Arizona Enabling Act of 1910 granted Arizona certain lands, excluding mineral lands, in trust for the support of public schools, and, in § 28, provided that granted lands cannot be sold or leased except upon compliance with certain conditions regarding advertising, bidding, and appraisal. Arizona incorporated these conditions into Article 10 of its Constitution. After this Court held the original mineral land exclusion inapplicable to lands not known to be mineral at the time of the grant, Wyoming v. United States, 255 U.S. 489, 41 S.Ct. 393, 65 L.Ed. 742 (1921), Congress passed the Jones Act in 1927, extending the terms of the original grant to encompass all mineral lands. The Enabling Act was also amended in 1936 and 1951 to clarify the procedures for leasing granted lands for specific purposes. The latter amendment expressly extinguished the § 28 restrictions on leases of granted lands for the development of hydrocarbon substances. Arizona's own law governing mineral leases on state lands does not require that the lands be advertised, appraised, or leased for their full appraised value. Ariz.Rev.Stat.Ann. § 27-234(B). Respondents, individual taxpayers and a state teachers association, brought a state-court suit against the State Land Department and others, seeking a declaration that § 27-234(B) is void on the ground that it does not comply with the provisions of § 28 or § 10 of the Arizona Constitution and requesting appropriate injunctive relief. Petitioners, mineral lessees of state school lands, intervened as defendants. The trial court upheld the statute. The State Supreme Court reversed, ruling that § 27-234(B) is "unconstitutional and invalid as it pertains to nonhydrocarbon mineral leases," and remanded the case for the trial court, inter alia, to enter a judgment declaring § 27-234(B) invalid and to consider what further relief might be appropriate.

Held: The judgment is affirmed.

155 Ariz. 484, 747 P.2d 1183, affirmed.

Justice KENNEDY delivered the opinion of the Court with respect to Parts I, II-A, II-B-2, II-C, III, and IV, concluding that:

1. This Court has jurisdiction to review the decision below. Pp. 610-612, 617-633.

(a) The Arizona Supreme Court issued a final judgment within the meaning of 28 U.S.C. § 1257, despite the fact that it remanded the case for the trial court to determine appropriate further relief. On remand the trial court does not have before it any federal question whether past or current leases are valid, since respondents, on appeal, withdrew their request for an accounting and payment of sums due under past leases. In addition, the trial court's further actions cannot affect the State Supreme Court's ruling that § 27- 34(B) is invalid. Thus, the judgment below comes within two of the exceptions to the finality requirement set out in Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 479, 480, 95 S.Ct. 1029, 1039, 43 L.Ed.2d 328 (1975): (1) the federal issue is conclusive and the outcome of further proceedings is preordained, and (2) the federal questions that could come to this Court have been adjudicated by the state court, and the remaining issues will not give rise to any further federal question. Pp. 611-612.

(b) When a state court has issued a judgment interpreting federal law in a case in which the plaintiffs in the original action lacked standing to sue under the principles governing the federal courts, this Court may exercise its jurisdiction on certiorari if the state-court judgment causes direct, specific, and concrete injury to the parties who petition for this Court's review, as long as the requisites of an Article III case or controversy are also met. Here, petitioners possess standing to invoke federal-court authority, since they have alleged that the decision below poses a serious and immediate threat to their leases' continuing validity, that such injury can be traced to the state court's erroneous interpretation of federal statutes, and that the injury can be redressed by a favorable decision in this Court. Moreover, the requisites of a case or controversy are met, since the parties remain adverse, and the judgment below altered tangible legal rights. It would be inappropriate for this Court to vacate the judgment below on the ground that respondents lacked federal standing when they brought suit initially, and to remand for appropriate proceedings, since such a course would render nugatory the state proceedings and have the effect of imposing federal standing requirements on the state courts whenever they adjudicate federal law issues, whereas established traditions and this Court's decisions recognize that state courts are not bound by Article III and yet have it within both their power and proper role to render binding judgments on federal-law issues, subject only to review by this Court. It would also be inappropriate for this Court simply to order dismissal, leaving petitioners free to bring a declaratory judgment action in federal court raising the same claims, since such a disposition would be likely to defeat the normal preclusive effects of the state court's judgment on the ground that that court's conclusions about federal law were not subject to any federal review. Such a course would also represent an unnecessary partial inroad on the Rooker-Feldman doctrine's construction of § 1257 as barring direct review in lower federal courts of a decision reached by the highest state court, District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), particularly since petitioners have already presented this Court with a case or controversy justiciable under federal standards. Pp. 617-624.

(c) The decision below is not based on an adequate and independent state ground that would defeat review of the federal issue by this Court. Although the state court's opinion mentioned the State Constitution several times and directed the trial court to declare § 27-234(B) "unconstitutional," its discussion focused solely on the federal statutes without ever mentioning the State Constitution apart from the Enabling Act. Moreover, the state court explicitly considered itself bound by this Court's decisions to adopt the plaintiffs' construction, and described Article 10 of the State Constitution as simply a "rescript" of § 28 of the Enabling Act. Thus, the opinion's references to the State Constitution merely reflect a holding which rests on the state court's interpretation of federal law, and do not divorce the state constitutional issue from the federal-law questions. Pp. 624-625.

2. Section 27-234(B) is invalid as to nonhydroca bon mineral leases, since the sale or lease of mineral lands granted to Arizona under the federal statutes must substantially conform to the mandatory requirements set out in the Enabling Act. Pp. 625-633.

(a) The grant of all lands under the Enabling Act is conditioned, by the statute's clear and express language, upon the specific requirements for leasing or selling those lands. Petitioners' reliance on Neel v. Barker, 27 N.M. 605, 204 P. 205 (1922), for the proposition that since mineral lands were originally exempt from the 1910 grant, the Enabling Act's provisions do not apply to lands later determined to be mineral in nature, is flawed in two respects. First, Neel did not take into account this Court's decision in Wyoming v. United States, supra, that unknown mineral lands were within the grant. Second, since those lands were within the 1910 grant, they could not be regarded as unburdened by its mandatory conditions. Pp. 627-628.

(b) The lands granted under the Jones Act are also subject to the Enabling Act conditions. To read that Act's § 1(a) language which declares that the grant of mineral lands thereunder "shall be of the same effect as prior grants" of nonmineral lands—as only assuring that title to the lands passed and vested in the same manner and with the same validity as titles under the Enabling Act would render the language redundant, since the statute subsequently directly addresses the vesting of titles. Instead, that language achieved Congress' objective of extending the 1910 grant to mineral lands and confirming their title to the States. Similarly, § 1(b)—which states that though mineral lands may be sold, the rights to mine and remove the minerals themselves may only be leased "as the State legislature may direct"—is not blanket authority for States to lease minerals on whatever terms they wish as long as the leases' proceeds go to the schools. Rather, it authorizes the States to regulate the methods by which mineral leases are made and to specify necessary or desirable additional terms, as long as the leases comply with the Enabling Act's dispositional requirements. Pp. 628-631.

(c) The 1936 and 1951 amendments to the Enabling Act confirm that Congress never removed the original conditions contained in the Act. In the amendments, Congress reiterated the formulation that lands could be leased for certain purposes as the state legislature "may direct" and as it "may prescribe." The 1936 amendment did not alter the application of § 28 to "all lands," and the 1951 amendment, because it expressly extinguished the § 28 restrictions as to hydrocarbon leases, but not as to other mineral leases, tends to confirm that the original restrictions remain in force as to nonhydrocarbon leases. Pp. 631-633.

Justice KENNEDY, joined by THE CHIEF JUSTICE, Justice STEVENS, and Justice SCALIA, concluded in Part II-B-1 that the suit would have been dismissed at the outset if federal standing-to-sue rules were to apply, since neither respondent taxpayers nor respondent teachers association, the...