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Seven Up Pete Venture v. Schweitzer

ELR Citation: 38 ELR 20095
Nos. No. 06-35384, (9th Cir., 04/21/2008)

The Ninth Circuit upheld the dismissal of state takings claims arising out of a state ban on open-pit mining for gold or silver by the cyanide heap leaching process. The plaintiffs, who prior to the ban had acquired leases of Montana state property for the purpose of mining gold, silver, and other trace minerals, brought a reverse condemnation action in federal district court against the governor of Montana and the director of the state's environmental agency in their official capacities. The leaseholders contended that the ban effected a regulatory taking of their property for which the state must pay just compensation under the U.S. Constitution. Simultaneously, the leaseholders brought a reverse condemnation action in state court. The leaseholders then obtained a stay of the federal proceedings pending resolution of the state claims. After the state court rejected their claims, the federal district court dismissed the federal takings claims under the Eleventh Amendment and, in the alternative, under the doctrine of issue preclusion. The leaseholders then appealed that dismissal, and the Ninth Circuit affirmed. The Eleventh Amendment bars a reverse condemnation action brought in federal court against state officers in their official capacities. Hence, the court did not reach the question of issue preclusion.