SDDS, Inc. v. South Dakota

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________

No. 96-2705
___________

In re: SDDS, Inc., a South Dakota, *
Corporation, * Petition for Writ of Mandamus
*
Petitioner. *

____________

Nos. 98-3588/99-1034/99-1035
____________

SDDS, Inc., *
*
Appellee/Cross-appellant, *
*
v. *
*
State of South Dakota, *
*
Appellant/Cross-appellee. *
* Appeals and Cross-Appeal from the
Mark W. Barnett, Attorney General of * United States District Court
the State of South Dakota; Joyce * for the District of South Dakota
Hazeltine, Secretary of State of South *
Dakota; George S. Mickelson, *
Governor of the State of South Dakota, *
*
Defendants. *
*
Action for the Environment, *
*
Intervenor Defendant. *
 ___________

Submitted: May 8, 2000

Filed: September 15, 2000
___________

Before McMILLIAN, JOHN R. GIBSON and BEAM, Circuit Judges.
___________

McMILLIAN, Circuit Judge.

This matter began in 1991 with a complaint filed in the United States District
Court for the District of South Dakota by SDDS, Inc. (SDDS), against the State of
South Dakota (the State), seeking declaratory and injunctive relief pursuant to
42 U.S.C. § 1983. Since then, the case has come before this court on three separate
occasions, see SDDS, Inc. v. State of South Dakota, 994 F.2d 486 (8th Cir. 1993)
(SDDS III); id., 47 F.3d 263 (8th Cir. 1995) (SDDS VI); id., 97 F.3d 1030 (8th Cir.
1996) (SDDS VIII), and related litigation has been ongoing in the South Dakota state
courts. Now, on this fourth visit to the Eighth Circuit, the parties present us with the
following: (1) an appeal by the State from the district court order denying the State's
motion pursuant to Fed. R. Civ. P. 60(b) to set aside prior federal court judgments;
(2) an appeal by the State and cross-appeal by SDDS from an order of the district court
awarding SDDS attorneys' fees and costs; and (3) a petition to recall, clarify, and
supplement the mandate issued pursuant to our decision in SDDS VIII. For reasons
stated below, we affirm the orders of the district court,1 and we deny SDDS's petition
to recall the mandate.

1
The Honorable Richard H. Battey, Chief Judge, United States District Court for
the District of South Dakota.

-2-
 The background facts have been stated in our prior opinions. See SDDS VIII,
97 F.3d at 1032-34. Briefly summarized, this litigation arises out of an unsuccessful
effort by SDDS to construct and operate a multistate solid waste disposal (MSWD)
facility near Edgemont, South Dakota. Opposition to the MSWD facility prompted,
among other things, two ballot initiatives. The second ballot initiative, or referendum,
effectively ended SDDS's plan to develop the MSWD facility. See id. at 1033 ("The
electorate vetoed the MSWD facility, which 'shut down' SDDS's MSWD site."). SDDS
brought the present § 1983 action against the State and numerous state officials
(collectively the defendants) in federal district court alleging that the second ballot
initiative violated the dormant commerce clause. SDDS also filed an action against the
defendants in South Dakota state court to recover just compensation for an alleged de
facto "taking," or inverse condemnation, of its property by way of the referendum.

For nearly ten years, the two cases – one in federal court, the other in state court
– followed long, convoluted, and intertwined procedural journeys. Along the way, we
twice reversed summary judgment dispositions by the district court in favor of the
defendants. See SDDS III, 994 F.2d at 494; SDDS VI, 47 F.3d at 272. Consistent
with our decision in SDDS VI, the district court, on April 24, 1995, entered judgment
in favor of SDDS and against the defendants, declaring that the second ballot initiative
violated the dormant commerce clause and assessing costs to the defendants. In SDDS
VIII, 97 F.3d at 1041-42, we instructed the district court to enter an order enjoining the
defendants from relitigating certain specified issues in the state court proceedings.
After the mandate for SDDS VIII issued on November 15, 1996, the district court
issued the required injunction on December 12, 1996. The South Dakota Supreme
Court held that the state courts were bound by the district court’s order granting the
defendants injunctive relief, notwithstanding its disagreement with that order on the
merits, and, on May 18, 1998, the United States Supreme Court denied the defendants'
resulting petition for a writ of certiorari. See SDDS, Inc. v. State, 569 N.W.2d 289,
293-95 & n.9 (S.D. 1997) (SDDS IX), cert. denied, 523 U.S. 1118 (1998) (SDDS X).

-3-
 On June 9, 1998, the State moved pursuant to Fed. R. Civ. P. 60(b)(4) to set
aside the district court's judgments of April 24, 1995, and December 12, 1996, on the
ground that those prior final decisions were void because they were entered in violation
of the Eleventh Amendment. On August 24, 1998, the district court denied the State's
Fed. R. Civ. P. 60(b) motion. See SDDS v. State of South Dakota, No. CIV. 91-5121
(D.S.D. Aug. 24, 1998). SDDS then moved in the district court for attorneys' fees and
costs incurred in opposing the State's Fed. R. Civ. P. 60(b) motion, and the State
opposed SDDS's request. On November 6, 1998, the district court awarded SDDS
attorneys' fees and costs, but not the full amount of attorneys' fees requested.
See SDDS v. State of South Dakota, No. CIV. 91-5121 (Nov. 6, 1998).

Appeal No. 98-3588

The State appeals from the district court’s order of August 24, 1998, denying the
State’s Fed. R. Civ. P. 60(b) motion. Upon careful review, we hold that the district
court did not err in denying the State relief pursuant to Fed. R. Civ. P. 60(b)(4) because
the State did not seek review, by petition for writ of certiorari, of either SDDS VI or
SDDS VIII and instead has attempted to collaterally attack those final decisions by way
of a Rule 60(b) motion in the district court. Just as a Rule 60(b) motion cannot be used
to relitigate the merits of a district court's prior judgment in lieu of a timely appeal, nor
can it be used to collaterally attack a final court of appeals' ruling in lieu of a proper
petition for review in the United States Supreme Court. Cf. Kocher v. Dow Chemical
Co., 132 F.3d 1225, 1229 (8th Cir. 1997) ("A party may not use a Rule 60(b)(4) motion
as a substitute for a timely appeal. In other words, if a party fails to appeal an adverse
judgment and then files a Rule 60(b)(4) motion after the time permitted for an ordinary
appeal has expired, the motion will not succeed merely because the same argument
would have succeeded on appeal."). Moreover, while the Eleventh Amendment
provides the State with a defense, it does not automatically deprive the federal courts
of original jurisdiction. See Wisconsin Dep't of Corrections v. Schacht, 524 U.S. 381,
389 (1998) ("The Eleventh Amendment . . . does not automatically destroy original

-4-
jurisdiction. Rather, the Eleventh Amendment grants the State a legal power to assert
a sovereign immunity defense should it choose to do so. The State can waive the
defense."). As in the present case, "[a] state may . . . waive its Eleventh Amendment
immunity through its conduct. Courts have inferred a waiver when the State has made
a general appearance in federal court and defended a lawsuit on the merits." Hankins
v. Finnel, 964 F.2d 853, 856 (8th Cir.) (citations omitted), cert. denied, 506 U.S. 1013
(1992). In the present case, the State for many years actively and vigorously litigated
the merits of SDDS's claims in federal court, never once raising an Eleventh
Amendment immunity defense until after the mandates had been issued and our
decisions in SDDS VI and SDDS VIII were final. In light of the State's conduct, it
would appear that the State has waived any sovereign immunity defense it may have
had to the claims addressed in SDDS VI and SDDS VIII. The district court's order of
August 24, 1998, is affirmed.

Cross-appeals Nos. 99-1034/1035

The State also appeals the district court's November 6, 1998, award of attorneys’
fees and costs, again relying on the argument that the underlying judgments were void
on Eleventh Amendment grounds. SDDS cross-appeals, arguing that the district court
abused its discretion in failing to award the full amount of attorneys' fees requested.

Upon review, we note that the State's appeal from the award of attorneys' fees
and costs assumes success on its appeal from the district court's August 24, 1998,
decision, involving the merits of the State’s belated Eleventh Amendment defense.
Having affirmed the August 24, 1998, order, we find no basis for reversing the district
court's decision to award SDDS attorneys' fees and costs. (It would, of course, defy
logic to permit the State to invoke its Eleventh Amendment argument to now preclude
SDDS from recovering attorneys' fees and costs which were incurred in defeating that
very argument.)

-5-
 Furthermore, on careful review of the district court's determination of SDDS's
reasonable attorneys' fees, we hold that the district court did not abuse its discretion in
declining to award SDDS’s entire request. The district court's order of November 6,
1998, is affirmed.

Petition to recall the mandate

In the spring of 1999, the inverse condemnation case in South Dakota state court
proceeded to trial before a jury on the issue of SDDS's damages. On April 6, 1999, the
jury found that SDDS's damages amounted to $10.1 million. The State moved for
judgment notwithstanding the verdict (JNOV) or a new trial, and, on January 6, 2000,
the state trial court held a hearing on the motion. Ruling from the bench, the state trial
court denied the State's motion for JNOV but granted a new trial on the basis of
instructional error. Thereafter, on February 23, 2000, SDDS challenged that ruling by
filing a petition in this court requesting that we recall, clarify, and supplement our
mandate in SDDS VIII. In essence, SDDS argues that the state trial court has
misconstrued the federal injunction, and we should therefore reopen and revise our
earlier decision in order to compel a different ruling by the state court. SDDS describes
the relief it seeks as follows: "This would necessarily consist [of] an additional
direction to the district court to enjoin the Defendants and the state trial court from
relitigating any of those issues expressly and by necessary implication decided by this
Court in SDDS VI or SDDS VIII." SDDS's Petition to Recall, Clarify and Supplement
Mandate at 12 (emphasis added). In SDDS VIIII, we directed the district court to
enjoin the defendants, not the state courts, from relitigating certain issues. The district
court complied with our directions, and the South Dakota Supreme Court ruled that the
district court’s order is binding upon the state courts. We do not, however, sit as a
court of appeals over the South Dakota courts. We have neither the power nor the
inclination to provide the extraordinary relief SDDS requests. The petition to recall the
mandate is denied.

-6-
A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

-7-