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In re SDDS, Inc.

ELR Citation: 27 ELR 20290
Nos. 96-2705, 97 F.3d 1030/(8th Cir., 10/03/1996)

The court directs a district court to enjoin South Dakota state officials from relitigating in state court issues that the federal circuit court has already decided concerning the permitting of a solid waste disposal facility. In SDDS, Inc. v. South Dakota, 25 ELR 20967 (1995), the circuit court effectively determined that a company that proposed to build and operate the facility had a property interest in its building and operating permit. In addition, the court rejected the argument that because the state later revoked the permit, a voter referendum that voided a state law approving the facility had no impact on the facility. In the company's subsequent action to recover lost development costs, the district court denied the company's motion for an injunction barring the state defendants from relitigating whether the company had a legitimate entitlement claim to the permit and whether the referendum was the proximate cause of the company's dissolution. The court first holds that it need not reach the question of whether a writ of mandamus may issue to correct the district court's abuse of discretion in denying injunctive relief, because it is appropriate to construe the company's petition for the writ as a notice of appeal. The court further holds that the Eleventh Amendment to the U.S. Constitution does not bar a suit in federal court for injunctive relief to prohibit a state defendant from relitigating in state court issues previously decided in federal court. To hold otherwise would allow state defendants to effectively ignore judgments rendered in federal court, generating needless relitigation in state courts, and rendering federal court judgments largely nugatory and advisory.

The court holds that the issues the state defendants now wish to relitigate were actually and finally decided by the circuit court in its prior opinion. The court concludes that under state rules of claim preclusion or collateral estoppel, that opinion bars defendants from relitigating these settled issues in subsequent litigation in state courts. These issues are the same as the issues decided in that opinion. The parties are the same. There was a final judgment on the merits. And the record amply reveals that defendants were not only given, but took every opportunity, to fully and fairly litigate these issues. Therefore, the relitigation exception to the Anti-Injunction Act applies. The court next holds that the district court abused its discretion in denying injunctive relief. Requiring the company to relitigate in state court issues previously decided by the circuit court constitutes irreparable harm. While issuing the injunction in this case will foreclose the opportunity for defendants to relitigate issues in state court, this is not a legitimate harm that must be balanced. In addition, the company successfully litigated the issues in the prior case, and the public policy concerns of finality and repose strongly support the protection of the court's prior judgment.

[Opinions in related litigation are published at 23 ELR 21285, 24 ELR 21318, and 25 ELR 20967.]

Counsel for Appellee
Diane M. Best, Ass't Attorney General
Attorney General's Office
500 E. Capitol St., Pierre SD 57501
(605) 773-3215

Counsel for Appellant
Edward T. Lyons Jr.
Jones & Keller
1625 Broadway, Ste. 1600, Denver CO 80202
(303) 573-1600

Before MAGILL, JOHN R. GIBSON, and BEAM, Circuit Judges.