Keating v. Nebraska Public Power District
2009 WL 973373, 562 F.3d 923, 2009 U.S. App. LEXIS 8141 (2009)
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Rule of Law:
The Due Process Clause generally requires state officials to provide notice and a predeprivation hearing before depriving individuals of established property rights, such as surface water appropriation permits, unless specific exceptions apply. Failure to exhaust available postdeprivation administrative remedies does not preclude a 42 U.S.C. § 1983 claim seeking predeprivation process.
Facts:
- Since 1895, Nebraska has managed surface water rights through an appropriation system administered by the Nebraska Department of Natural Resources (DNR).
- The Nebraska Public Power District (NPPD) owns and operates the Spencer Dam on the Niobrara River and holds three surface water appropriation permits, one of which dates back to 1896 and two others from the 1920s and 1940s, all subject to Nebraska laws giving preference to domestic and agricultural water uses over power purposes.
- Appellants, Nebraska farmers and ranchers, hold surface water appropriation permits from the Niobrara River's tributaries, with priority dates of December 22, 1976, and October 26, 1981, for farming and ranching purposes.
- In the fall of 2006, the NPPD filed a complaint with the DNR, contending that surface water levels were insufficient to operate Spencer Dam.
- On May 1, 2007, the DNR issued Closing Notices to hundreds of farmers and ranchers, including appellants, ordering them to immediately stop irrigation without providing any prior notice or a hearing, and threatening criminal penalties.
- The DNR rescinded the May 1, 2007, Closing Notices within a week but subsequently issued Opening Notices warning that future closing orders might be necessary for senior permit holders.
- The Closing Notices were reinstated for the appellants on the day the district court dismissed their complaint.
Procedural Posture:
- Appellants, along with two other families, filed suit in a federal district court on May 10, 2007, asserting claims for damages and injunctive relief for violations of their due process rights under 42 U.S.C. § 1983, and sought a declaratory judgment that the DNR's actions were ultra vires under Nebraska law.
- Appellants later amended their complaint to remove the damages claims.
- The federal district court granted the appellees’ motion to dismiss, holding that the due process claim was not ripe because there were no Closing Notices in effect at the time and because appellants had failed to exhaust their administrative remedies prior to filing the complaint (by not requesting a hearing within 15 days or seeking a declaratory order from the DNR).
- The district court declined to retain jurisdiction over the state-law ultra vires claim and dismissed it without prejudice.
- Appellants appealed the district court's dismissal to the United States Court of Appeals for the Eighth Circuit.
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Issue:
Does the Due Process Clause of the Fourteenth Amendment require state officials to provide notice and a predeprivation hearing before issuing orders that immediately stop individuals from exercising their established surface water appropriation rights, and does the failure to exhaust postdeprivation or an untested predeprivation administrative remedy bar a 42 U.S.C. § 1983 procedural due process claim?
Opinions:
Majority - Shepherd, Circuit Judge
Yes, state officials generally must provide notice and a predeprivation hearing before depriving individuals of established property rights, such as surface water appropriation permits, and a claim for predeprivation process under 42 U.S.C. § 1983 is not necessarily barred by a failure to exhaust postdeprivation administrative remedies or an untested predeprivation administrative remedy. The court first clarified that the claim was not moot under the "capable-of-repetition-yet-evading-review" exception because the Closing Notices were short-lived but reissued, indicating a reasonable expectation of recurrence for the complaining parties. The court reiterated the principle from Patsy v. Board of Regents that exhaustion of state administrative remedies is generally not required as a prerequisite to bringing a 42 U.S.C. § 1983 action. It emphasized that to establish a procedural due process violation, a plaintiff must prove deprivation of "an opportunity...granted at a meaningful time and in a meaningful manner for [a] hearing appropriate to the nature of the case," as established in Boddie v. Connecticut. The opinion also cited Parratt v. Taylor for the general rule that due process requires predeprivation notice and hearing when deprivations of property are authorized by established state procedures. The court acknowledged exceptions to this rule for compelling state interests requiring quick action (Mackey v. Montrym) or random and unauthorized acts (Parratt v. Taylor), but noted the record was unclear as to their applicability here. Crucially, the court distinguished its prior holding in Wax 'n Works by stating that exhaustion of postdeprivation remedies is not required when the litigant contends they were entitled to predeprivation process, citing Zinermon v. Burch. Since the essence of appellants' action was the lack of constitutionally adequate predeprivation process, their failure to exhaust postdeprivation remedies or to utilize an unproven predeprivation declaratory order process did not justify dismissal. The court reversed the district court's dismissal and remanded the case, instructing the district court to determine if a property right deprivation occurred, if any exceptions to predeprivation process apply, and if the DNR’s declaratory order procedures are constitutionally adequate.
Analysis:
This case reinforces the fundamental importance of procedural due process, particularly the requirement for predeprivation notice and a meaningful hearing when established property rights are at stake. It clarifies the scope of the exhaustion doctrine in 42 U.S.C. § 1983 claims, emphasizing that litigants seeking predeprivation process are generally not required to exhaust postdeprivation administrative remedies. The decision provides crucial guidance for state agencies by highlighting that their administrative procedures must be constitutionally adequate to provide a meaningful predeprivation opportunity to be heard, especially when actions could lead to the immediate cessation of a vital economic activity like irrigation for farmers.
