United States v. Sid-Mars Restaurant & Lounge, Inc.

644 F.3d 270, 2011 U.S. App. LEXIS 12235, 2011 WL 2418604
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 17, 2011
Docket09-30869
StatusPublished
Cited by10 cases

This text of 644 F.3d 270 (United States v. Sid-Mars Restaurant & Lounge, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Sid-Mars Restaurant & Lounge, Inc., 644 F.3d 270, 2011 U.S. App. LEXIS 12235, 2011 WL 2418604 (5th Cir. 2011).

Opinions

LESLIE H. SOUTHWICK, Circuit Judge:

Sid-Mar’s Restaurant filed suit in state court demanding compensation from the State of Louisiana for the commandeering of its real property following Hurricane Katrina. While the state court litigation was pending, the United States initiated condemnation proceedings involving part of the same property in the United States District Court for the Eastern District of Louisiana. To avoid potentially conflicting judgments, the United States sought a stay of the state court proceeding. The district court entered a stay, and Sid-Mar’s appealed.

We AFFIRM.

BACKGROUND

From 1967 until destroyed by Hurricane Katrina on August 29, 2005, Sid-Mar’s Restaurant & Lounge in Metairie, Louisiana was owned and operated by the Burgess family. Sid-Mar’s was adjacent to the 17th Street Canal and just outside of the Lake Pontchartrain Hurricane Protection Levee System. After Hurricane Katrina, the Burgesses desired to rebuild in the same location.

In the aftermath of Katrina, the Department of the Army and the Orleans Levee District entered into a Cooperation Agreement. Among other terms, the state agreed to provide the federal government with a right of entry to all lands deemed necessary for various rehabilitation projects. On January 27, 2006, a supplement to the Cooperation Agreement was executed. It provided for the construction of “interim gated closure structures and integrated pumping capacity near the confluence of Lake Pontchartrain with the 17th Street Outfall Canal.” This was followed on February 10, 2006, by then-Govemor Kathleen Blanco’s executive order commandeering the use of specific real proper[272]*272ty for the project. Among the real property commandeered was the land on which Sid-Mar’s formerly stood. The federal government first entered the commandeered property in March 2006 to begin the construction project. It has occupied the property since this time.

On June 2, 2006, the Burgesses and Sid-Mar’s (collectively referred to as “Sid-Mar’s”) filed a lawsuit in state court against the State of Louisiana seeking just compensation for the taking of its real property. The United States was not named as a defendant.

On June 3, 2009, three years and one day after the state suit was filed and while it was still pending, the United States filed two Complaints in Condemnation in federal district court. One was on a .088 acre tract, the other on a .166 acre tract. Those suits were later consolidated. The entities said to have interests in the property were Sid-Mar’s, the Sheriff as ex-officio Tax Collector for Jefferson Parish, the State of Louisiana, and certain unknown owners. These parcels were among those subject to Sid-Mar’s state court action. The United States simultaneously filed a Declaration of Taking and deposited in the registry of the court the sum it estimated to be just compensation. The declaration and the deposit vested title in the United States to the real property it sought to condemn. See 40 U.S.C. § 3114(b).

Two days after the federal condemnation proceedings began, Sid-Mar’s filed for a partial summary judgment in state court. Sid-Mar’s argued it had acquired title by adverse possession and was the sole owner when the State of Louisiana commandeered the property in 2006. The State responded in part by arguing that Sid-Mar’s title was unclear. A hearing was set for July 21, 2009.

The day before the scheduled hearing, the United States filed a motion in the condemnation suit to stay the state court proceedings. It argued that a stay was necessary to aid and protect the federal court’s jurisdiction. The district court agreed and on July 21 enjoined the defendants from prosecuting the state court suit until authorized by a later order of the federal court. Sid-Mar’s timely filed an interlocutory appeal. See 28 U.S.C. § 1292(a)(1).

DISCUSSION

Sid-Mar’s makes two claims on appeal: the Anti-Injunction Act precluded the issuance of this stay, and even if not prohibited, the issuance of a stay was not proper on the facts of this case. We will consider both arguments.

A. Applicability of Anti-Injunction Act

The Anti-Injunction Act prohibits federal courts from enjoining state court proceedings. 28 U.S.C. § 2283. Congress enacted the prohibition in 1793, in part “to work out lines of demarcation between” the independent court systems of the national government and of each state. Atlantic Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs, 398 U.S. 281, 286, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970).

There are three statutory exceptions that permit the issuance of an injunction. See 28 U.S.C. § 2283. None of them apply here. The Supreme Court has interpreted the Anti-Injunction Act to allow the United States to obtain a stay even when it cannot meet any of the exceptions. Leiter Minerals, Inc. v. United States, 352 U.S. 220, 225-26, 77 S.Ct. 287, 1 L.Ed.2d 267 (1957). The Court held that Congress did not intend the Anti-Injunction Act to apply “when it is the United States which seeks a stay to prevent threatened irreparable injury to a national interest.” Id. An [273]*273injunction is not automatically proper, though, merely because the United States seeks it. We will discuss this point in the last section of our opinion.

The district court issued a stay in reliance on Leiter Minerals. It concluded that the federal suit was the only one that “can finally determine the basic issue in the litigation,” which was the amount and recipients of compensation. The court also noted that the summary judgment motion pending in the state court sought to have Sid-Mar’s found to be the owner of the property. Were that finding made, it would “undermine[ ] this Court’s ability to determine to whom compensation should be paid as part of the federal takings procedure.” Consequently, a stay was proper.

Sid-Mar’s argues that the district court erred by holding that the Leiter Minerals doctrine applies when the United States is the party seeking a stay. Instead, Sid-Mar’s asserts that for Leiter Minerals to apply, there must be a federal interest that predates the state court litigation and requires protection from irreparable injury. The federal interest, Sid-Mar’s argues, did not exist until the United States brought its condemnation suit three years after the state court litigation. We will explain why we place an earlier date on the federal interest. Sid-Mar’s also argues Leiter Minerals does not control because state interests predominate over federal ones; the federal government’s title to property is not at issue in the state suit; there is no risk of inconsistent judgments in the two suits; the state litigation was pending for three years before the federal condemnation action was commenced; and the relevant flood-control project combines local, state, and federal interests.

Sid-Mar’s identifies distinctions that can be made between the facts of the present case and those in Leiter Minerals. We consider Sid-Mar’s arguments regarding the reasons Leiter Minerals

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644 F.3d 270, 2011 U.S. App. LEXIS 12235, 2011 WL 2418604, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-sid-mars-restaurant-lounge-inc-ca5-2011.