Jackson Sawmill Company, Inc. v. United States

580 F.2d 302, 1978 U.S. App. LEXIS 10212
CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 12, 1978
Docket77-1768
StatusPublished
Cited by14 cases

This text of 580 F.2d 302 (Jackson Sawmill Company, Inc. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jackson Sawmill Company, Inc. v. United States, 580 F.2d 302, 1978 U.S. App. LEXIS 10212 (8th Cir. 1978).

Opinion

580 F.2d 302

JACKSON SAWMILL COMPANY, INC., a corporation, Allen G.
Bohmer, Dr. Paul T. Scoggins, and the Reverend
Daniel D. McKee, Appellants,
v.
The UNITED STATES of America, the Honorable William T.
Coleman, Individually and as Secretary of Transportation of
the United States, the Honorable Daniel Walker, Governor of
the State of Illinois, Langhorne M. Bond, Individually and
as Secretary of the Department of Transportation of the
State of Illinois, the Department of Transportation of the
State of Illinois, the City of East St. Louis, William
Mason, Individually and as Mayor of the City of East St.
Louis, Jack Curtis, Individually and as Chairman of the
State Highway Commission of Missouri, the State Highway
Commission of Missouri, the Illinois State Toll Highway
Authority, the Honorable Joseph Teasdale, Governor of the
State of Missouri, the State of Missouri and the State of
Illinois, Appellees.

No. 77-1768.

United States Court of Appeals,
Eighth Circuit.

Submitted April 11, 1978.
Decided July 12, 1978.

Kenneth F. Teasdale, Armstrong, Teasdale, Kramer & Vaughan, St. Louis, Mo., for appellant; by Richard A. Oertli and Timothy K. Kellett, St. Louis, Mo., on brief.

Paul J. Bargiel, Asst. Atty. Gen., Chicago, Ill., for appellees, State of Illinois, et al.; William J. Scott, Atty. Gen., Stephen R. Swofford, and Patricia Rosen, Asst. Attys. Gen., Chicago, Ill., on brief.

Andrew Vrtjak, Asst. Atty. Gen., Oakbrook, Ill., for appellee, Illinois State Toll Highway Authority; William J. Scott, Atty. Gen., Chicago, Ill., and Walter K. Pyle, Asst. Atty. Gen., Oakbrook, Ill., on brief.

Thomas M. Pearson, Asst. Counsel, Missouri State Highway Commission, Kirkwood, Mo., for Missouri appellees; John D. Ashcroft, Atty. Gen., and J. Paul Allred, Asst. Atty. Gen., Jefferson City, Mo., Bruce A. Ring, Chief Counsel, State Highway Bldg., Jefferson City, Mo., on brief.

Joseph B. Moore, Asst. U. S. Atty., St. Louis, Mo., for Federal appellees; Robert D. Kingsland, U. S. Atty., St. Louis, Mo., on brief.

Before BRIGHT and ROSS, Circuit Judges, and TALBOT SMITH, Senior District Judge.*

BRIGHT, Circuit Judge.

Holders of municipal bonds issued by the City of East St. Louis, Illinois (the City), brought this class action against several federal, state, and local government entities after the City defaulted on the bonds. The district court1 dismissed the bondholders' second amended complaint under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. The bondholders then brought this appeal. The basic issue raised on appeal is whether the dismissal was premature given the liberal construction of pleadings mandated by the Federal Rules of Civil Procedure. This question necessarily implicates two considerations: (a) whether the state defendants are entitled to absolute immunity under the eleventh amendment, and (b) whether the complaint states a cause of action against the other defendants, assuming all the allegations in the complaint are true.

I. Background.

The bondholders alleged the following facts in their complaint. In the early 1950's, traffic volume increased substantially between the cities of St. Louis, Missouri, and East St. Louis, Illinois, connected by bridges across the Mississippi River. In spite of the burgeoning problem, the states of Illinois and Missouri and the United States failed or refused to build new bridges.

The City determined, however, that it would construct an expressway extension on the eastern approach of the Veterans Memorial Toll Bridge (subsequently renamed the Martin Luther King Toll Bridge, to which we refer as the King Bridge) in order to ease the traffic problem on its side of the river. To implement the improvements, the City entered into an agreement with the Department of Transportation of the State of Illinois that called for the City to pay for a portion of these highway improvements and Illinois to pay for the remainder. The City was also encouraged to make the improvements by the State of Illinois and the United States, which arranged to include the expressway extension in the Interstate Highway System.

In order to finance the City's portion of the construction cost of the extension and to refinance bonds previously issued to build the bridge,2 the City, as authorized by Illinois law, executed a trust agreement with the St. Louis Union Trust Company providing for the issuance of $15.5 million worth of municipal bonds. According to the appellants, the trust agreement expressly provided that the toll rates of the bridge would be subject to regulation by the United States and that the United States had participated in an agreement with the Department of Transportation of Illinois and the City to provide for construction of the extension. Finally, the trust agreement called for payment of both principal and interest on the bonds wholly from tolls and other bridge revenues but stipulated that the City would not permit construction of a rival bridge within the city limits that would divert traffic and diminish revenues. Relying on the latter guarantee and the actions and implied good faith of the City, the State of Illinois, and the United States, the appellants purchased the City's bonds.

At some time after January 1, 1956, however, defendant city, state, and federal governments determined to build a new bridge across the Mississippi connecting St. Louis and East St. Louis. This bridge, the Poplar Street Bridge, opened on November 10, 1967, and was constructed in such a manner that it was easily accessible from all of the major federally-financed highways leading to East St. Louis. Traffic over the King Bridge diminished, and by January 1, 1974, declining revenue forced the City to default on the bridge bonds.

The bondholders thereafter commenced the present class action on June 30, 1976, against the City, the States of Illinois and Missouri, the United States, and several state, local, and federal officials. For relief, the bondholders sought

an order compelling defendants to condemn the MLK Bridge and to compensate the bondholders thereof, and to take over and to integrate said MLK Bridge into the interstate traffic needs of the cities of St. Louis and East St. Louis and the surrounding areas in the State of Illinois and Missouri; or in the alternative for damages suffered as a result of defendants' actions in the sum of the principal and interest owed as of the date of judgment; and for an order for reasonable attorney's fees and costs of court.

This appeal follows from the district court's dismissal, on August 4, 1977, of bondholders' second amended complaint for failure to state a claim on which relief can be granted under Rule 12(b)(6).

II. The Issues.

The dismissed complaint contained two causes of action.3

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Bluebook (online)
580 F.2d 302, 1978 U.S. App. LEXIS 10212, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jackson-sawmill-company-inc-v-united-states-ca8-1978.