Lacano Invs., LLC v. Balash

• Decision Date: 28 August 2014
• Docket Number: No. 13–35854.,13–35854.
• Citation: 765 F.3d 1068
• Parties: LACANO INVESTMENTS, LLC, Nowell Avenue Development, and Ava L. Eads, on behalf of themselves and the class they seek to represent, Plaintiffs–Appellants, v. Joe BALASH, Commissioner, Alaska Department of Natural Resources, in his official capacity, Brent Goodrum, Director, Division of Minding Land & Water, Alaska Department of Natural Resources, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

765 F.3d 1068

LACANO INVESTMENTS, LLC, Nowell Avenue Development, and Ava L. Eads, on behalf of themselves and the class they seek to represent, Plaintiffs–Appellants,

v.Joe BALASH, Commissioner, Alaska Department of Natural Resources, in his official capacity, Brent Goodrum, Director, Division of Minding Land & Water, Alaska Department of Natural Resources, Defendants–Appellees.

No. 13–35854.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 3, 2014.

Filed Aug. 28, 2014.

Gina Marie Cannan (argued), Steven J. Lechner, Mountain States Legal Foundation, Lakewood, CO; Eric Twelker, Juneau, AK, for Plaintiffs–Appellants.

Jessica Moats Alloway (argued), Assistant Attorney General, State of Alaska Department of Law, Anchorage, AK; Vanessa Maria Lamantia, Assistant Attorney General, State of Alaska Department of Law, Juneau, AK, for Defendants–Appellees.

Appeal from the United States District Court for the District of Alaska, Timothy M. Burgess, District Judge, Presiding. D.C. No. 1:12–CV–00014–TMB.

Before: J. CLIFFORD WALLACE, KIM McLANE WARDLAW, and MORGAN CHRISTEN, Circuit Judges.

OPINION

WALLACE, Circuit Judge:

Plaintiffs–Appellants Lacano Investments, LLC, Nowell Avenue Development, and Ava L. Eads, allege that they hold land patents that were issued by the federal government many years before Alaska entered the Union. The patents give title to certain streambeds in Alaska. In 2010 and 2011, the Alaska Department of Natural Resources determined that the waterways above these streambeds were navigable in 1959, the year Alaska was admitted to the Union, and remain navigable. Under the Submerged Lands Act of 1953, all land beneath such waterways belongs to the State of Alaska. See43 U.S.C. § 1311(a) (“[i]t is determined and declared to be in the public interest that (1) title to and ownership of the lands beneath navigable waters within the boundaries of the respective States ... are, subject to the provisions hereof, recognized, confirmed, established, and vested in and assigned to the respective States”); Act to Provide for the Admission of the State of Alaska into the Union, Pub.L. No. 85–508, 72 Stat. 339, 343 § 6(m) (1958) (“[t]he Submerged Lands Act of 1953 shall be applicable to the State of Alaska and the said State shall have the same rights as do existing States thereunder”). The Department sent letters to Plaintiffs with the navigability determinations and its conclusion that the streambeds are “state-owned.”

According to Plaintiffs, Alaska's determination that the waterways have been navigable since 1959 does not disturb the title to the land that was granted to them by the federal patents. Plaintiffs sued the Alaska officials who made the navigability determinations in federal court. Plaintiffs allege that they retain title to the disputed lands because, under the Submerged Lands Act, streambeds that had already been patented by the federal government were not granted to Alaska upon its statehood. See43 U.S.C. § 1301(f) (“[t]he term ‘lands beneath navigable waters' [that belongsto the states] does not include the beds of streams in lands ... if such streams were not meandered in connection with the public survey of such lands under the laws of the United States and if the title to the beds of such streams was lawfully patented or conveyed by the United States”). Plaintiffs sought a declaratory judgment that the navigability determinations, and thus the conclusions that the streambeds were state-owned, violated 43 U.S.C. § 1301(f), as well as an injunction prohibiting Defendants from claiming title to the lands beneath the waterways.

The state officials moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(1), for lack of subject matter jurisdiction. The district court agreed, and dismissed the action with prejudice.

Plaintiffs filed a timely notice of appeal. We review a district court's decision to grant a motion to dismiss for lack of subject matter jurisdiction de novo. Colony Cove Props., LLC v. City of Carson, 640 F.3d 948, 955 (9th Cir.2011). We review the district court's denial of leave to amend for abuse of discretion. Airs Aromatics, LLC v. Opinion Victoria's Secret Stores Brand Mgmt., Inc., 744 F.3d 595, 598 (9th Cir.2014). We have jurisdiction under 28 U.S.C. § 1291, and affirm.

I.

The state officials moved to dismiss the complaint. The “jurisdictional attack” in their motion was “facial,” which means that the state officials “assert[ ] that the allegations contained in [the] complaint are insufficient on their face to invoke federal jurisdiction,” but the officials do not “dispute[ ] the truth of the allegations.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004). In this facial attack, we must accept all of the factual allegations in the complaint as true. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir.2004).

Plaintiffs argue that because we must accept all of their factual allegations as true, we must reverse the district court, insofar as the complaint alleges that the lands are by definition not submerged, state-owned, lands under federal law. In other words, Plaintiffs argue that because we accept the allegations in the complaint as true, at this stage of the litigation we must conclude that Alaska has no interest in the lands under Plaintiffs' complaint, which means that it was error to dismiss the complaint for lack of subject matter jurisdiction.

While we do accept all of the factual allegations in the complaint as true, id., we do not accept legal conclusions in the complaint as true, even if “cast in the form of factual allegations.” Doe v. Holy See, 557 F.3d 1066, 1073 (9th Cir.2009) (citation omitted). Plaintiffs' complaint does not include factual allegations that the streambeds are privately owned under the Submerged Lands Act. Instead, the complaint contains only legal conclusions to that effect: “[t]he Alaska Statehood Act delineates the terms under which statehood was granted” and thus Plaintiffs' lands are “exempted from the Submerged Lands Act”; “Plaintiff Lacano is the fee simple owner of record ...”; “Plaintiff Nowell is the fee simple owner of record ...”; “Plaintiff Eads is the fee simple owner ...”.

Further, we also “may look beyond the complaint and consider extrinsic evidence.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1141 n. 5 (9th Cir.2003). Attached to the complaint are the letters sent by the Department of Natural Resources, upon which the complaint relies to explain the basis of Plaintiffs' action. Those letters demonstrate Alaska'sclaim of ownership to the disputed properties.

Thus, Plaintiffs cannot avoid a motion to dismiss under Rule 12(b)(1) merely because they asserted in their complaint that Alaska does not own the streambeds. See, e.g., W. Mohegan Tribe and Nation v. Orange Cnty., 395 F.3d 18, 20, 23 (2d Cir.2004) (dismissing a complaint for lack of subject matter jurisdiction despite “accepting the factual allegations contained in the complaint as true” where the complaint asserted that the plaintiffs, rather than the State of New York, held title to disputed lands).

II.

We next consider whether state sovereign immunity bars Plaintiffs' action. The Eleventh Amendment bars federal courts from hearing certain “suit[s]” filed by individual citizens against a state without the consent of the state. U.S. Const. amend. XI; see generally Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890). But that Amendment does not bar actions when citizens seek only injunctive or prospective relief against state officials who would have to implement a state law that is allegedly inconsistent with federal law. See generally Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). “The Ex parte Young doctrine is founded on the legal fiction that acting in violation of the Constitution or federal law brings a state officer into conflict with the superior authority of the Constitution, and he is in that case stripped of his official or representative character and is subjected in his person to the consequences of his individual conduct.” Cardenas v. Anzai, 311 F.3d 929, 935 (9th Cir.2002) (internal quotation marks omitted) (citing Young, 209 U.S. at 159–60, 28 S.Ct. 441). Not all actions that solely seek prospective relief against state officials fall within the Young exception, however. See Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 117 S.Ct. 2028, 138 L.Ed.2d 438 (1997).

A.

In Coeur d'Alene, the Coeur d'Alene Tribe sued the State of Idaho and state officers who enforced Idaho law in federal court, alleging an interest under federal law in lands submerged under navigable waterways within the original boundaries of the Coeur d'Alene Reservation. Id. at 264–65, 117 S.Ct. 2028. Those lands had been “long deemed by [Idaho] to be an integral part of its territory.” Id. at 282, 117 S.Ct. 2028. The Tribe brought title claims, sought a declaratory judgment to establish its right to use and occupy the lands, and sought an injunction prohibiting Idaho from infringing upon its rights to the land. Id. at 265, 117 S.Ct. 2028. The “underlying dispute” was “[w]hether the Coeur d'Alene Tribe's ownership extends to the banks and submerged lands of [ ][L]ake [Coeur d'Alene] and various ... rivers and streams [within the boundaries of the Coeur d'Alene Reservation] ... or instead ownership is vested in the State of Idaho.” Id. at 264, 117 S.Ct. 2028.

Idaho moved to dismiss the complaint on Eleventh Amendment sovereign immunity grounds. Id. at 265, 117 S.Ct. 2028. When the case reached the Supreme Court, a five-Justice majority agreed that the Eleventh Amendment barred the action. Id. at 288, 117 S.Ct. 2028; id. at 296–97, 117 S.Ct. 2028 (O'Connor, J., concurring).

Justice Kennedy's principal opinion was joined in part by four other members of the Supreme Court. The principal opinion recognized that “[a]n allegation of an ongoing violation of federal law where the requested...