Seven Up Pete Venture v. Schweitzer (Governor MT)

Apr 21: In the U.S. Court of Appeals, Ninth Circuit, Case No. 06-35384. The Appeals Court indicates that the primary question before the court is whether the Eleventh Amendment precludes Federal jurisdiction over an action seeking compensation under the Fifth and Fourteenth Amendments for a taking of property by a State.

Seven Up Pete Venture (the Venture) and other plaintiffs acquired leases of Montana State property for the purpose of mining gold, silver and other trace minerals. Subsequently, voters of Montana enacted Initiative 137 (I-137), which banned open-pit mining for gold or silver by the cyanide heap leaching process. The Venture then brought the reverse condemnation action in Federal district court against the Governor of Montana and the Director of the Montana Department of Environmental Quality in their official capacities.

They argued that Initiative 137 effected a regulatory taking of their property, for which the State of Montana must pay just compensation under the Fifth and Fourteenth Amendments of the United States Constitution. At the same time, the Venture brought a reverse condemnation action in Montana State court. The Venture then obtained a stay of the Federal proceedings pending resolution of the State claims. After the Montana Supreme Court rejected the Venture’s claims, the district court dismissed the Federal takings claims under the Eleventh Amendment and, in the alternative, under the "doctrine of issue preclusion." The Venture then appealed that dismissal.

The Ninth Circuit said in its ruling, "We join a number of our sister circuits and hold that the Eleventh Amendment bars a reverse condemnation action brought in federal court against state officers in their official capacities. We therefore affirm the district court’s dismissal of the Venture’s takings claims on that ground without reaching the question of issue preclusion."

Access the complete opinion (click here).