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Property Lawsuit May Set Precedent
By Tania Soussan
Copyright © 2006 Albuquerque Journal; Journal Staff Writer
New Mexicans can sue the state for "taking" their property without just compensation, the state Supreme Court ruled last month in a decision likely to have an impact across the country.
In a 3-2 ruling, the justices said the family of late Catron County rancher Richard Manning can pursue its $6.5 million claim that state agencies effectively took their property by enforcing mining regulations.
"I think it's an extremely important move forward in people having their own property rights," Manning's son, Dirk Manning, said in a telephone interview from his Deming home last week.
The case has been closely watched across the country because it is the first detailed ruling on the issue and will probably set a precedent.
"It will likely cause other states to hesitate in trying to make the same argument that 'We're the state and we're immune to the Constitution,' '' said J. David Breemer, attorney for the Pacific Legal Foundation. "It's important because it affirms property owners do have a right under the Constitution to seek restitution in state court."
The legal foundation, a Sacramento, Calif.-based group that fights government regulation and defends constitutional rights, filed a brief supporting the Mannings.
The New Mexico Supreme Court said people can sue the state directly in state court for damages. That ruling overturned part of a Court of Appeals decision and sent the case back for reconsideration.
The higher court did not consider whether the Mannings have a valid takings claim, only whether they have a right to pursue it.
Case's history
The case— and related legal actions— have been winding through New Mexico courts since the 1990s.
The late Richard Manning, a Catron County rancher and leader of the anti-federal local control movement, owned a mine and gold and silver ore processing mill on Gila National Forest land outside of Mogollon.
The southwestern New Mexico mine operated from 1979 to 1985. In 1992, Manning started preparing to reopen his Challenge Mining Co. operation.
In 1993, the operating and reclamation plans, both required by the Forest Service, expired. Also that year, the state passed the New Mexico Mining Act, increasing regulatory requirements to ensure mined lands are reclaimed.
After state and federal workers entered the mill site through a gap in the fence to inspect it in 1993, Manning brought criminal trespass charges against them. The charges were dismissed.
Manning also sued the Forest Service, seeking relief from its demand for an updated operating plan. U.S. District Judge Bruce Black in 1996 rejected that petition and issued an injunction, saying Manning had to submit an operating plan and post an acceptable bond with the Forest Service before reopening the mill.
In 1998, Manning filed the takings suit against New Mexico, claiming that enforcement of the Mining Act made it impossible for him to operate. That case led to the recent Supreme Court ruling.
'Like a football'
Dirk Manning said his father "was like a football" between the federal government and the state. He couldn't reopen the mine without federal approval and he couldn't get federal approval without state approval.
In addition, Manning argued he couldn't determine the state bonding and reclamation requirements for the mine unless it was operating and the state wouldn't let him operate until he met the state reclamation requirements.
Dirk Manning said his father invested $6.5 million or more in Challenge Mining and the state "essentially regulated him out of business."
Manning died in 2004 at the age of 67.
The Supreme Court justices did not address the question of whether New Mexico's Environment Department and Mining and Minerals Division did take Manning's property through regulation.
"It is truly unknown whether the Mannings will ever benefit," said Cedar Crest attorney Jerry Walz, who is representing the state.
The state District Court originally rejected the lawsuit in 2002, saying it was not "ripe" for consideration because Manning had never taken steps to lift the 1996 federal injunction.
Now, the Mannings must cross that hurdle with the state Court of Appeals before arguing their takings claim.
N.M. case goes further
The Manning case is based on the Fifth Amendment to the U.S. Constitution, which bars the government from taking private property, either directly or through regulation, without justly compensating the owner.
New Mexico argued it cannot be sued because it is protected by constitutional immunity. The New Mexico justices agreed states have immunity from claims for damages based on legislation passed by Congress.
However, "The Mannings' claim does not rely at all on congressional action," Chief Justice Richard Bosson wrote in the majority opinion. "Rather, the just compensation claim stems directly from the text of the Constitution."
Bosson also said case law supports the Mannings' right to pursue their claim in state court.
The South Dakota Supreme Court and the Oregon Court of Appeals, for example, have come to the same conclusion in similar cases. Those cases, however, didn't address the issue in as much detail as the New Mexico decision, attorneys said.
Justice Pamela Minzner, writing for the dissent, didn't disagree with Bosson's findings but said the court should not have tackled the complex constitutional question. Instead, the justices should merely have found the Manning case not ripe, she said.
Because the Mannings never filed an operating plan with the Forest Service, state regulations were not the only obstacle to them reopening the mine. They also never received a final decision from the state, Minzner wrote.
Cutting-edge case
The New Mexico Supreme Court decision bucks a legal trend in other states and the U.S. Supreme Court.
Over the past several years, decisions have narrowed the circumstances in which states can be sued, said Pete V. Domenici Jr., attorney for the Mannings.
"The court's decision clearly goes against the federal trend of protecting states' sovereign immunity," Walz agreed. "It creates a new cause of constitutional action which we did not have before."
He said the case was being watched by California and other states around the country and by the U.S. Attorney General's Office in Washington, D.C., "because it is such an important, cutting-edge constitutional case."
The state is considering asking the U.S. Supreme Court to review the case, Walz said.
Although South Dakota and Oregon courts have issued similar rulings, the New Mexico case offers a much more detailed and clear-cut analysis that will make it an important precedent, Domenici said.
"This is a real important constitutional protection," he said.
Dirk Manning said his father would have been pleased because what he wanted from the case was to make sure New Mexicans' property rights were protected.
"It's something that would be applicable to many different people in many different situations," he said.
By Tania Soussan
Copyright © 2006 Albuquerque Journal; Journal Staff Writer
New Mexicans can sue the state for "taking" their property without just compensation, the state Supreme Court ruled last month in a decision likely to have an impact across the country.
In a 3-2 ruling, the justices said the family of late Catron County rancher Richard Manning can pursue its $6.5 million claim that state agencies effectively took their property by enforcing mining regulations.
"I think it's an extremely important move forward in people having their own property rights," Manning's son, Dirk Manning, said in a telephone interview from his Deming home last week.
The case has been closely watched across the country because it is the first detailed ruling on the issue and will probably set a precedent.
"It will likely cause other states to hesitate in trying to make the same argument that 'We're the state and we're immune to the Constitution,' '' said J. David Breemer, attorney for the Pacific Legal Foundation. "It's important because it affirms property owners do have a right under the Constitution to seek restitution in state court."
The legal foundation, a Sacramento, Calif.-based group that fights government regulation and defends constitutional rights, filed a brief supporting the Mannings.
The New Mexico Supreme Court said people can sue the state directly in state court for damages. That ruling overturned part of a Court of Appeals decision and sent the case back for reconsideration.
The higher court did not consider whether the Mannings have a valid takings claim, only whether they have a right to pursue it.
Case's history
The case— and related legal actions— have been winding through New Mexico courts since the 1990s.
The late Richard Manning, a Catron County rancher and leader of the anti-federal local control movement, owned a mine and gold and silver ore processing mill on Gila National Forest land outside of Mogollon.
The southwestern New Mexico mine operated from 1979 to 1985. In 1992, Manning started preparing to reopen his Challenge Mining Co. operation.
In 1993, the operating and reclamation plans, both required by the Forest Service, expired. Also that year, the state passed the New Mexico Mining Act, increasing regulatory requirements to ensure mined lands are reclaimed.
After state and federal workers entered the mill site through a gap in the fence to inspect it in 1993, Manning brought criminal trespass charges against them. The charges were dismissed.
Manning also sued the Forest Service, seeking relief from its demand for an updated operating plan. U.S. District Judge Bruce Black in 1996 rejected that petition and issued an injunction, saying Manning had to submit an operating plan and post an acceptable bond with the Forest Service before reopening the mill.
In 1998, Manning filed the takings suit against New Mexico, claiming that enforcement of the Mining Act made it impossible for him to operate. That case led to the recent Supreme Court ruling.
'Like a football'
Dirk Manning said his father "was like a football" between the federal government and the state. He couldn't reopen the mine without federal approval and he couldn't get federal approval without state approval.
In addition, Manning argued he couldn't determine the state bonding and reclamation requirements for the mine unless it was operating and the state wouldn't let him operate until he met the state reclamation requirements.
Dirk Manning said his father invested $6.5 million or more in Challenge Mining and the state "essentially regulated him out of business."
Manning died in 2004 at the age of 67.
The Supreme Court justices did not address the question of whether New Mexico's Environment Department and Mining and Minerals Division did take Manning's property through regulation.
"It is truly unknown whether the Mannings will ever benefit," said Cedar Crest attorney Jerry Walz, who is representing the state.
The state District Court originally rejected the lawsuit in 2002, saying it was not "ripe" for consideration because Manning had never taken steps to lift the 1996 federal injunction.
Now, the Mannings must cross that hurdle with the state Court of Appeals before arguing their takings claim.
N.M. case goes further
The Manning case is based on the Fifth Amendment to the U.S. Constitution, which bars the government from taking private property, either directly or through regulation, without justly compensating the owner.
New Mexico argued it cannot be sued because it is protected by constitutional immunity. The New Mexico justices agreed states have immunity from claims for damages based on legislation passed by Congress.
However, "The Mannings' claim does not rely at all on congressional action," Chief Justice Richard Bosson wrote in the majority opinion. "Rather, the just compensation claim stems directly from the text of the Constitution."
Bosson also said case law supports the Mannings' right to pursue their claim in state court.
The South Dakota Supreme Court and the Oregon Court of Appeals, for example, have come to the same conclusion in similar cases. Those cases, however, didn't address the issue in as much detail as the New Mexico decision, attorneys said.
Justice Pamela Minzner, writing for the dissent, didn't disagree with Bosson's findings but said the court should not have tackled the complex constitutional question. Instead, the justices should merely have found the Manning case not ripe, she said.
Because the Mannings never filed an operating plan with the Forest Service, state regulations were not the only obstacle to them reopening the mine. They also never received a final decision from the state, Minzner wrote.
Cutting-edge case
The New Mexico Supreme Court decision bucks a legal trend in other states and the U.S. Supreme Court.
Over the past several years, decisions have narrowed the circumstances in which states can be sued, said Pete V. Domenici Jr., attorney for the Mannings.
"The court's decision clearly goes against the federal trend of protecting states' sovereign immunity," Walz agreed. "It creates a new cause of constitutional action which we did not have before."
He said the case was being watched by California and other states around the country and by the U.S. Attorney General's Office in Washington, D.C., "because it is such an important, cutting-edge constitutional case."
The state is considering asking the U.S. Supreme Court to review the case, Walz said.
Although South Dakota and Oregon courts have issued similar rulings, the New Mexico case offers a much more detailed and clear-cut analysis that will make it an important precedent, Domenici said.
"This is a real important constitutional protection," he said.
Dirk Manning said his father would have been pleased because what he wanted from the case was to make sure New Mexicans' property rights were protected.
"It's something that would be applicable to many different people in many different situations," he said.
