Hammond v. Baldwin
| Decision Date | 03 April 1989 |
| Docket Number | No. 87-5992,87-5992 |
| Citation | 866 F.2d 172 |
| Parties | Jerry HAMMOND, Plaintiff, Jane Allen Offutt and William N. Offutt, IV, M.D., Intervening Plaintiffs- Appellants, v. Charlotte BALDWIN, Mary Helen Miller, Donald F. Harker, Jr., in their official capacities, Defendants-Appellees, Toyota Motor Manufacturing, USA, Inc., Intervening Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Theodore E. Cowen, Miller, Griffin and Marks, Lexington, Ky., Robert S. Miller (argued), for intervening plaintiffs-appellants.
Eric L. Ison (argued), Greenebaum, Doll & McDonald, Louisville, Ky., James A. Kegley, Greenebaum, Doll & McDonald, Lexington, Ky., for intervenor-appellee, Toyota.
Arthur Lee Williams (argued), Office of General Counsel, Frankfort, Ky., for defendants-appellees, M.H. Miller, R. McCann, D. Harker.
Before MILBURN and BOGGS, Circuit Judges, and CONTIE, Senior Circuit Judge.
This is an appeal from a dismissal under Fed.R.Civ.P. 12(b)(6) of the Offutts' Sec. 1983 claim against the present and former Kentucky Secretaries of the Natural Resources and Environmental Protection Cabinet, the Director of the Kentucky Division of Water, an agency within that Cabinet, and Toyota Motor Manufacturing, USA, Inc. (Toyota). The plaintiffs claim that the trial judge erred in his findings of fact and in his dismissal of their claims of: 1) bias on the part of the state agencies and courts; 2) wrongful withholding of information by the state; and 3) deprivation of due process in general. The trial judge dismissed on the grounds that the plaintiffs failed to exhaust their state administrative remedies. The plaintiffs claim that exhaustion would be futile here because of the state's bias. We affirm.
In November and December, 1985, a contract was negotiated between the Commonwealth of Kentucky (Kentucky) and Toyota. The contract is in the form of a letter signed by Toyota representatives, Kentucky Governor Collins and Kentucky Secretary of Commerce Knicely. The letter was part of an incentive package from Kentucky to Toyota to get Toyota to build its new plant in Scott County, Kentucky. The plaintiffs own a farm downstream from the site of the Toyota sewage plant, which is now completed, and property in nearby Georgetown, Kentucky. The constitutionality of this incentive package was upheld in Hayes v. State Property and Buildings Commission, 731 S.W.2d 797 (Ky.1987).
The contract between Kentucky and Toyota provides that the state would use its regulatory powers to get suppliers of wastewater treatment to install facilities in the manner referred to in earlier correspondence between Kentucky and Toyota; that the state would "use its best efforts" to expedite the review of permits; and that the state would "use its best efforts" to get any suits relating to the facility resolved "as quickly as possible at minimum cost to Toyota." Kentucky and Toyota have complied with this contract to date.
The Scott County Water Board agreed to build a waste water plant. Such facility comes within the purview of the Clean Water Act. 33 U.S.C. Sec. 1251. Thus, a permit is required both for discharge and construction. The EPA issues permits unless state agencies agree to do so in conformance with EPA regulations. 33 U.S.C. Sec. 1342. Kentucky has taken over this authority.
In the spring of 1986, Georgetown's Water Board applied for a discharge permit. However, the initial plan allegedly was harmful to the Offutts' water supply and property. Kentucky had guaranteed the cost of the facility within certain financial and temporal limits; thus, the Offutts allege that Kentucky had a financial stake in the issuance of the permit. The plaintiffs hired experts who documented the amount of pollution, some carcinogenic, that would result from implementation of the initial plan, as well as the absence of numerical standards for some pollutants, which the Offutts claim posed a significant threat to the ground and surface waters. The Scott County Board of Adjustments required that the effluent be piped differently than initially planned, and that numerical standards be established. The Offutts thought that this signaled success, and so, ceased their efforts at this point.
However, representatives of organized labor funded a suit by Mr. Hammond, et al., who initially filed the instant suit. The state then issued a construction permit without first meeting the Board of Adjustments' order and without numerical limits. Hammond petitioned the Cabinet for administrative hearings on the construction permit, and the Offutts "actively participated." The Offutts claim that they "went through" the administrative process at this point. The permit was granted; construction is now complete.
The Offutts claim that their allegations of hazard are uncontested and also claim a denial of access to information. In addition, they claim that they were denied their right to submit proof before an agency or court which is not a party to the contract with Toyota.
In July 1986, Hammond sued to enjoin the construction. The Scott County Circuit Court dismissed this claim. Hammond appealed that dismissal, and the appeal was dismissed by the Kentucky Court of Appeals on February 9, 1987. On September 22, 1986, the construction permit was issued. On October 13, 1986, Hammond, along with the Offutts, filed a petition with the Cabinet challenging the construction permit on the administrative level. On October 23, 1986, Hammond filed this suit in the Eastern District of Kentucky. No action has been taken by any plaintiff on the administrative level since the Fall of 1986, though further procedures were available. The Offutts claim that any administrative procedure would be conducted by the Kentucky Cabinet of Natural Resources, which the Offutts claim is a party to the contract and, thus, is necessarily biased.
On January 15, 1987, the Offutts intervened in this suit, as did Toyota shortly thereafter. On April 6, 1987, Hammond and the Offutts filed an amended complaint which mentions only the construction permit, thus limiting this appeal to that permit. In addition, the amended complaint included Toyota as a defendant. On May 8, 1987, Hammond settled and voluntarily dismissed all claims, leaving the Offuts as the only plaintiffs in the suit.
The Offutts then sought discovery. Kentucky refused to comply with some of the requests because "[p]reliminary drafts, notes, correspondence with private individuals ... [p]reliminary recommendations, and preliminary memoranda ..." are exempt from disclosure under the Kentucky Open Records Act. Ky.Rev.Stat.Ann. Sec. 61.878(1)(g) & (h) (Baldwin 1976).
The Offutts claim that they have suffered irreparable injury, both to their land and to their right to an unbiased tribunal. They claim that mandamus would not be effective because the Kentucky courts have held that they do not have the power to intervene during the pendency of administrative proceedings. In addition, the Offutts claim that Kentucky has been and is acting arbitrarily and capriciously, and, thus, the Offutts have no meaningful opportunity to be heard.
The defendants moved to dismiss the complaint under Fed.R.Civ.P. 12(b)(6) and the plaintiffs moved for summary judgment. On July 29, 1987, Judge Bertelsman agreed to dismiss the Offutts' complaint; he entered his order on August 7, 1987. Judge Bertelsman relied on his determination that the Offutts were required to exhaust their administrative remedies and had not done so. He held not that exhaustion is a prerequisite to a Sec. 1983 claim, but that there was no deprivation on which to base a claim until the state had made a final decision.
On appeal, the plaintiffs reassert their claims of bias and denial of access to information, alleging that their rights to procedural and substantive due process have been violated. 1 They claim that they are relieved of the exhaustion requirement because their allegation of bias makes any further state procedure futile. In addition, they claim that abstention would not be appropriate because their state remedies are inherently inadequate.
The standard of review of a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6) is that, to be granted, there must be no set of facts which would entitle the plaintiff to recover. Landers v. Jefferson County, Kentucky, 842 F.2d 332 (6th Cir.1988). Matters outside the pleadings are not to be considered, and all well-pleaded facts must be taken as true. Riestenberg v. Broadview Federal Savings and Loan, 843 F.2d 1392 (6th Cir.1988).
The trial judge was correct that exhaustion of state administrative remedies is not required in Sec. 1983 suits. However, "[t]he question whether administrative remedies must be exhausted is conceptually distinct ... from the question whether an administrative action must be final before it is judicially reviewable." Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 192, 105 S.Ct. 3108, 3119, 87 L.Ed.2d 126 (1985). The trial judge held that there could be no deprivation on which to base a due process claim until the agency had made a final decision. That he used the vocabulary of exhaustion is merely a semantic difference; in substance, he was correct.
While the policies underlying the two concepts often overlap, the finality requirement is concerned with whether the initial decisionmaker has arrived at a definitive position on the issue that inflicts an actual, concrete injury; the exhaustion requirement generally refers to administrative and judicial procedures by which an injured party may seek review of an adverse decision and obtain a remedy if the decision is found to be unlawful or otherwise inappropriate.
Id. at 193, 105 S.Ct. at 3120. Clearly, Judge Bertelsman found that no "actual, concrete injury" exists in the present case because there...
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