Scheehle v. Justices of Supreme Court of Ariz.

• Decision Date: 15 November 2007
• Docket Number: No. 05-17063.,05-17063.
• Citation: 508 F.3d 887
• Parties: Mark V. SCHEEHLE, Plaintiff-Appellant, v. JUSTICES OF the SUPREME COURT OF ARIZONA; Rebecca White Berch; Andrew D. Hurwitz; Charles E. Jones; Ruth V. McGregor; Michael D. Ryan; Judges of the Superior Court of the State of Arizona, In and for the County of Maricopa; Colin F. Campbell; Margaret H. Downey; Michael A. McVey; Jonathan H. Schwartz, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

508 F.3d 887

Mark V. SCHEEHLE, Plaintiff-Appellant, v. JUSTICES OF the SUPREME COURT OF ARIZONA; Rebecca White Berch; Andrew D. Hurwitz; Charles E. Jones; Ruth V. McGregor; Michael D. Ryan; Judges of the Superior Court of the State of Arizona, In and for the County of Maricopa; Colin F. Campbell; Margaret H. Downey; Michael A. McVey; Jonathan H. Schwartz, Defendants-Appellees.

No. 05-17063.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 18, 2007.

Filed November 15, 2007.

Mark V. Scheehle, of Prescott Valley, AZ, for plaintiff-appellant Mark V. Scheehle.

Terry Goddard, Arizona Attorney General, and Paula S. Bickett (argued), Chief Counsel-Civil Appeals, of Phoenix, AZ, for the defendants-appellees.

Appeal from the United States District Court for the District of Arizona; Stephen M. McNamee, District Judge, Presiding. D.C. No. CV-98-01095-SMM.

Before: JANE R. ROTH,^* SIDNEY R. THOMAS, and CONSUELO M. CALLAHAN, Circuit Judges.

CALLAHAN, Circuit Judge:

Mark V. Scheehle, an Arizona tax lawyer, challenges as an unconstitutional taking the Arbitrator Appointment System of the Maricopa County Superior Court ("Appointment System"), which requires that an experienced attorney serve as an arbitrator for up to two days a year with minimal compensation. Following a decision by the Arizona Supreme Court that the Appointment System was permissible under Arizona law, the district court reaffirmed its grant of defendants' motion for summary judgment. We now affirm. We hold that Scheehle's constitutional challenge to the Appointment System is properly considered under the regulatory takings test set forth in Penn Central Transportation Company v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978), and applying that test, we conclude that the impact of the Appointment System on Scheehle does not amount to a taking for which Scheehle is entitled to compensation under the Fifth Amendment.

I.

Arizona law requires that each superior court, by rule of court, provide for the arbitration of cases in which the amount in controversy does not exceed $65,000. Ariz.Rev.Stat. § 12-133. At the time this action was filed, the Local Rules of Practice for the Superior Court of Maricopa County required that all attorneys who reside in the county and have been active members of the Arizona Bar for five years serve as arbitrators.¹ Attorneys who served as arbitrators under the Appointment System were paid a flat fee of $75 for each day in which they actually conducted an arbitration hearing. The Superior Court rules further provided that an attorney who had served as an arbitrator for two or more days during the year could be excused.

Scheehle has been a member of the Arizona Bar since 1981, and a certified tax specialist since 1988. In September 1996, Scheehle was appointed as the arbitrator in a motor vehicle personal injury action. He served as an arbitrator and submitted a report to the Maricopa Superior Court in December 1997. In July 1997, Scheehle was appointed as the arbitrator in a second motor vehicle personal injury suit and accepted the appointment. In October 1997, while still serving as the arbitrator in the second action, Scheehle was appointed as the arbitrator in a third personal injury action.

Scheehle decided to challenge the authority of the Arizona courts to require that he serve as an arbitrator. He returned the file to the Presiding Arbitration Judge of the Maricopa County Superior Court with a letter declining to serve as an arbitrator. He also expressed his unwillingness to serve as an arbitrator in any subsequent case, and his belief that the Appointment System was unconstitutional and violated Arizona law. The judge responded by holding a telephone conference at which Scheehle placed his objections on the record. The judge further encouraged Scheehle to apply for relief for good cause shown from the particular assignment, but Scheehle declined, choosing to challenge the Appointment System as a whole. Scheehle was allowed to file a brief in support of his position. In January 1998, the Presiding Arbitration Judge entered an order rejecting Scheehle's arguments and imposing a $900 sanction on Scheehle for refusing the arbitrator appointment.²

Scheehle chose to initially challenge the sanction order by filing a Petition for Special Action with the Arizona Supreme Court, but the Arizona Supreme Court declined to accept jurisdiction over the petition. Scheehle then filed a complaint in the United States District Court for the District of Arizona naming the justices of the Arizona Supreme Court as the lead defendants. The complaint alleged that the Appointment System amounted to (1) an unconstitutional taking of property rights under the Fourteenth Amendment, (2) a denial of due process under the Fourteenth Amendment, (3) a denial of equal protection under the Fourteenth Amendment, (4) a denial of rights of freedom of speech and freedom of association under the Fourteenth Amendment, (5) involuntary servitude in violation of the Thirteenth Amendment, and (6) violation of the separation of powers doctrine. The complaint also asserted supplemental state law claims.

On January 28, 2000, the district judge issued an order granting summary judgment to defendants on all of Scheehle's claims under the Constitution and dismissing his supplemental state law claims. The district court concluded:

Plaintiff's claims under the United States Constitution must fail. The limited service required of attorneys by the Maricopa system is too minimal to constitute a compensable taking of property. Plaintiff has raised no evidence of a procedural flaw in his treatment by the Maricopa courts, nor has he supported his equal protection arguments. Plaintiff's First and Thirteenth Amendment claims have no basis in facts or in existing law.

Scheehle filed an appeal with this court asserting that the Appointment System constituted a taking of his property without compensation in violation of the Fifth Amendment and violated his rights under the Equal Protection Clause of the Fourteenth Amendment. Although we initially affirmed the district court's grant of summary judgment, we subsequently vacated that opinion³ and certified a question concerning the propriety of the Appointment System to the Arizona Supreme Court. After the Arizona Supreme Court answered the certified question, we remanded the case to the district court. Scheehle v. Justices of the Supreme Court of Arizona, 315 F.3d 1191 (9th Cir.2003).

On remand, the district court, at Scheehle's request, again certified a question concerning the propriety of the Appointment System under Arizona law to the Arizona Supreme Court. The Arizona Supreme Court accepted the certification and held that it had "authority to promulgate a court rule authorizing the superior courts in each county of this state to require active members of the state bar to provide limited service as arbitrators." Scheehle v. Justices of the Supreme Court of Arizona, 211 Ariz. 282, 285, 120 P.3d 1092, 1095 (2005).

Following receipt of the Arizona Supreme Court's opinion, the district court denied Scheehle's motion for reconsideration of summary judgment and entered judgment. The case is again before us on Scheehle's timely appeal from the judgment.

II.

We review the district court's grant of summary judgment de novo. Thomas v. City of Beaverton, 379 F.3d 802, 807 (9th Cir.2004). However, this is not a situation where there are any outstanding questions of fact. Rather, the provisions of the Appointment System are known, as is the authority for the system under Arizona law. Thus, Scheehle's claim that the Appointment System violates the Just Taking Clause of the Fifth Amendment is ripe for determination.

Scheehle asserts that the Appointment System implicates two distinct types of property interests: (1) his services as a lawyer, and (2) his out-of-pocket costs necessarily incurred in arbitrating a case. He contends that he is deprived "of the economic benefit of his labor when his services are taken for public use as an arbitrator." He notes that numerous courts have recognized that a lawyer has a property interest in his or her law practice, as well as the funds a lawyer must expend in order to practice law. From this premise, Scheehle reasons that "a court appointment compelling an attorney to serve as an arbitrator is a taking of property for which just compensation is required." Scheehle further asserts that cases addressing real property takings that apply the regulatory takings test are not applicable to his case because the time and effort an attorney "devotes to serving as an arbitrator can never be recovered, and the attorney is deprived of all economically beneficial use of such time and effort."

A. Scheehle has not shown that he is entitled to compensation under the regulatory takings test.

There is no question that the Appointment System deprived Scheehle of something. The question is whether the deprivation is of a nature or amount such as to constitutionally require compensation. In Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 125 S.Ct. 2074, 161 L.Ed.2d 876 (2005), Justice O'Connor sets forth the framework to Scheehle's contentions. She noted:

The Takings Clause of the Fifth Amendment, made applicable to the States through the Fourteenth, see Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979, . . . (1897), provides that private property shall not "be taken for public use, without just compensation." As its text makes plain, the Takings Clause "does not prohibit the taking of private property, but instead places a condition on the exercise of that power." First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 107 S.Ct. 2378, 96 L.Ed.2d 250, . . . (1987). In other words, it "is designed not to limit the governmental interference with property rights per se, but rather to secure compen...