KLK, Inc. v. U.S. Dept. of Interior

• Decision Date: 13 September 1994
• Docket Number: No. 93-35464,93-35464
• Parties: KLK, INC., Plaintiff-Appellee, v. UNITED STATES DEPARTMENT OF the INTERIOR, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 454

35 F.3d 454

30 Fed.R.Serv.3d 789

KLK, INC., Plaintiff-Appellee, v. UNITED STATES DEPARTMENT OF the INTERIOR, Defendant-Appellant.

No. 93-35464.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 4, 1994.

Decided Sept. 13, 1994.

Jacques B. Gelin, U.S. Dept. of Justice, Washington, DC, for defendant-appellant.

Joseph W. Sheehan, Fairbanks, AK, for plaintiff-appellee.

Appeal from the United States District Court for the District of Alaska.

Before: PREGERSON, CANBY, and BOOCHEVER, Circuit Judges.

BOOCHEVER, Circuit Judge:

The Department of the Interior appeals interlocutorily from the district court's order that a plaintiff in an inverse condemnation action under the Mining in the Parks Act, 16 U.S.C. Secs. 1901-12 (1988), is entitled to a jury determination of just compensation. We review the question of entitlement to a jury trial in a federal court de novo. SEC v. Rind, 991 F.2d 1486, 1493 (9th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 439, 126 L.Ed.2d 372 (1993). We reverse.

BACKGROUND

KLK owned several unpatented mining claims in the Denali National Park and Preserve in Alaska. The Department of the Interior ("DOI") effected a "taking" of five of KLK's claims in January 1992, when it did not approve KLK's mining plans of operation. Without approval of the plans, no mining operations can be conducted in the National Park System.

Pursuant to Section 11 of the Mining in the Parks Act ("MPA"), 16 U.S.C. Sec. 1910, KLK brought an inverse condemnation ¹ action against the DOI in the United States district court seeking just compensation for the five mining claims. The only issues in dispute were the dates on which the claims were taken and their fair market values. KLK sought a jury determination of "just compensation," and despite the DOI's attempts to strike KLK's jury demand, the district court ordered the issue of just compensation submitted to a jury. The DOI moved for certification of an interlocutory appeal of this order, and the district court certified the appeal. We permitted the appeal under 28 U.S.C. Sec. 1292(b) (1988).

DISCUSSION

I

The MPA contains a congressional waiver of sovereign immunity. It entitles a party "who believes he has suffered a loss" by operation of the MPA, or regulations or orders issued pursuant to the MPA, to bring an inverse condemnation action in the United States district court to recover just compensation. ²

2] Before the enactment of Sec. 1910, such an inverse condemnation action for any amount over $10,000 could be brought only in the Court of Federal Claims, pursuant to the Tucker Act, 28 U.S.C. Secs. 1346, 1491 (1988). Thus, in enacting Sec. 1910, the United States not only reaffirmed that it might properly be sued, it also further waived the condition that inverse condemnation suits for more than $10,000 could be brought only in the Court of Federal Claims. All claims arising under Sec. 1910 may be brought in the district court, even if the suit involves an amount exceeding $10,000.

KLK contends that Congress's waiver of sovereign immunity in the MPA contained a grant of a right to a jury determination of just compensation. There is no general right to a trial by jury in actions against the federal government, however. Lehman v. Nakshian, 453 U.S. 156, 160, 101 S.Ct. 2698, 2701, 69 L.Ed.2d 548 (1981). And when Congress waives sovereign immunity, that waiver "does not, by itself, grant a right to trial by jury." In re Young, 869 F.2d 158, 159 (2d Cir.1989) (per curiam). Instead, a "plaintiff has a right to trial by jury only where that right is one of 'the terms of [the Government's] consent to be sued.' " Lehman, 453 U.S. at 160, 101 S.Ct. at 2701 (quoting United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 953-54, 47 L.Ed.2d 114 (1976)). Congress typically has conditioned any waiver of sovereign immunity on the plaintiff's relinquishing any claim to a jury trial, and exceptions to such a condition may not be implied. Lehman, 453 U.S. at 161, 101 S.Ct. at 2107-08. See also Doe v. Attorney Gen. of the United States, 941 F.2d 780, 789 (9th Cir.1991) ("the courts have consistently refused ... to ignore a condition on a sovereign immunity waiver when the statute and legislative history either were silent or indicated congressional intent not to grant the right requested").

Thus, the Supreme Court has held that "[s]ince there is no generally applicable jury trial right that attaches when the United States consents to suit, the accepted principles of sovereign immunity require that a jury trial right be clearly provided in the legislation creating the cause of action." Lehman, 453 U.S. at 162 n. 9, 101 S.Ct. at 2702 n. 9. Accordingly, KLK has a right to a jury determination of just compensation only if Congress "clearly and unequivocally departed from its usual practice" and granted a right to a jury determination of just compensation. Id. at 162, 101 S.Ct. at 2701-02. ³

II

In determining whether Congress has made an exception to its traditional denial of jury trials in actions against the United States, we consider, as we do with any waiver of sovereign immunity, congressional intent "as manifested in the statute's language and legislative history." Doe, 941 F.2d at 788. Here, nowhere in the language of Sec. 1910 or, indeed, anywhere in the MPA, is there any indication that Congress intended to provide a jury determination of just compensation. Section 1910 simply allows a plaintiff to bring an inverse condemnation action in the district court and states that just compensation Accordingly, faced with a silent statute and a legislative history indicating congressional intent not to grant the right to a jury determination of just compensation, we conclude that Congress did not in fact depart from its traditional practice of conditioning its waiver of sovereign immunity on plaintiff's relinquishing any claim to a jury. KLK is not entitled to a jury determination of just compensation.

"shall be awarded" if the court finds that a compensable taking occurred. Furthermore, the legislative history suggests that Congress intended the court, not a jury, to make the determination of just compensation. See 1976 U.S.C.C.A.N. 2487, 2492 (stating that "the court is to award just compensation if it finds ... a compensable taking of property") (emphasis added).

III

The district court, in holding that a jury determination of just compensation was appropriate, relied on Fed.R.Civ.P. 71A(h). Rule 71A(h) provides that in most actions involving the exercise of the power of eminent domain, a jury trial of the question of just compensation is permitted in the discretion of the district court at the demand of a party. ⁴ Fed.R.Civ.P. 71A(h). The district court's reliance on this rule in this case was misplaced.

Rule 71A provides procedures for traditional condemnation proceedings, initiated by the government under 40 U.S.C. Sec. 257, not for inverse condemnation actions. See Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 3, 4 and n. 2, 104 S.Ct. 2187, 2190, 2191 and n. 2, 81 L.Ed.2d 1 (1984); Fed.R.Civ.P. 71A(a). Although the concept of "just compensation" is the same in traditional and inverse condemnation proceedings, the actions are sufficiently different so that procedures applicable to one type of action do not necessarily apply to the other. For example, in an inverse condemnation action, just compensation is based on the value of the land at the time it is seized, while in a traditional condemnation, the land is valued at the time the condemnation proceeding occurs. United States v. Clarke, 445 U.S. 253, 258, 100 S.Ct. 1127, 1130, 63 L.Ed.2d 373 (1980). More importantly, because the government has already taken possession of the land in an inverse condemnation proceeding, it is obligated to accept the price determined, whereas in a traditional condemnation proceeding the government is not committed to buying the property if the price is too high. United States v. 156.81 Acres, 671 F.2d 336, 339 (9th Cir.), cert. denied, 459 U.S. 1086, 103 S.Ct. 569, 74 L.Ed.2d 931 (1982). Thus, because the proceedings differ in ways that may have a significant effect on the obligations of the parties and the outcome of the case, it is improper to assume that Congress intended to give landowners the same rights in inverse condemnation actions as they have in traditional condemnation actions.

Furthermore, the existence of Rule 71A does not undercut the rule that the right to a jury trial must be clearly expressed in the relevant legislation. Rule 71A does not govern inverse condemnation actions, and Congress gave no indication that it considered the Rule or any of its proscribed procedures in enacting Sec. 1910. Thus, Rule 71A(h) does not provide any indication of congressional intent to provide a jury for the determination of just compensation under Sec. 1910. Moreover, Congress's failure in the MPA to indicate dissatisfaction with juries should not be interpreted as authority for the district court to grant jury trials in inverse condemnation proceedings. See Lehman, 453 U.S. at 162 and n. 9, 101 S.Ct. at 2702 and n. 9.

Finally, we reject the argument that Congress must have considered procedures designed for straight condemnations when creating The district court also referred to our decision in Franquez v. United States, 604 F.2d 1239 (9th Cir.1979), as a basis for its decision. Franquez held that the district court had the discretion to order a jury trial, even where the statute authorizing the actions to recover just compensation did not expressly permit one. We found that by the exercise of the district court's discretionary power under Fed.R.Civ.P. 83 to prescribe additional rules for the conduct of its business, the district court could extend the reach of Rule 71A(h) to the inverse condemnation actions brought by Guamanians pursuant to 48 U.S.C. Sec. 1424c(a) (1977), to recover just compensation for land taken by the United...