In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 21-1599
RANDALL PAVLOCK, et al.,
Plaintiffs-Appellants,
v.
ERIC J. HOLCOMB, Governor of Indiana, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Indiana, Hammond Division.
No. 2:19-cv-00466-JD — Jon E. DeGuilio, Chief Judge.
____________________
ARGUED NOVEMBER 10, 2021 — DECIDED MAY 25, 2022
____________________
Before MANION, WOOD, and SCUDDER, Circuit Judges.
WOOD, Circuit Judge. In Gunderson v. State, 90 N.E.3d 1171
(Ind. 2018), the Indiana Supreme Court held that the State of
Indiana holds exclusive title to Lake Michigan and its shores
up to the lake’s ordinary high-water mark. See
id. at 1173.
Gunderson was an unwelcome development for plaintiffs Randall Pavlock, Kimberley Pavlock, and Raymond Cahnman,
who own beachfront property on Lake Michigan’s Indiana
shores. Believing that their property extended to the low-
2 No. 21-1599
water mark, they brought this lawsuit in federal district court
alleging that the ruling in Gunderson amounted to a taking of
their private property in violation of the Fifth Amendment.
They would like to hold the state supreme court responsible
for this alleged taking. In other words, they are asserting a
“judicial taking.”
The plaintiffs, whom we will call the Owners, sued a number of Indiana officeholders in their official capacities: Gover- nor Eric Holcomb; the Attorney General, now Todd Rokita;
the Department of Natural Resources Director, now Daniel
Bortner; and the State Land Office Director, now Jill Flachskam. (We have identified the current officeholders, none of
whom was in place when the complaint was filed, with the
exception of Governor Holcomb. We have substituted the current officials for their predecessors in accordance with Federal
Rule of Appellate Procedure 43(c)(2). We refer to the defendants collectively as the State.) The district court granted the
State’s motion to dismiss for failure to state a claim. Because
none of the named officials caused the Owners’ asserted injury or is capable of redressing it, we conclude that the Owners lack Article III standing and affirm the judgment of the
district court, though we modify it to show that it is without
prejudice.
I
A
Indiana has long held in trust the portion of Lake Michigan that lies within its borders and the submerged lands below the water. See Lake Sand Co. v. State, 120 N.E. 714, 715–16
(Ind. Ct. App. 1918). The shores of Lake Michigan are surrounded by privately-owned property. Owners of private
No. 21-1599 3
lakeshore property, including our plaintiffs, and the State dispute where the line should be drawn between the public and
private holdings. In 2014, the Pavlocks’ neighbors filed a
quiet-title action against Indiana in state court. That was the
Gunderson case, in which the Indiana Supreme Court first attempted to fix that line.
The Gunderson plaintiffs, like the Owners here, took the
position that their deeds conferred title (and thus the right to
exclude the public) past the lake’s ordinary high-water mark,
all the way down to the low-water mark. See Gunderson, 90
N.E.3d at 1175. The ordinary high-water mark is a commonly
used method of measuring the boundaries of non-tidal bodies
of water. At common law, it was defined as “the point where
the presence and action of water are so common and usual …
as to mark upon the soil of the bed a character distinct from
that of the banks, in respect to vegetation, as well as in respect
to the nature of the soil itself.”
Id. at 1181 (collecting authorities) (internal quotation marks omitted); compare
33 C.F.R. §
328.3 (2021) (defining the ordinary high-water mark for the
Army Corps of Engineers). By contrast, the low-water mark is
the lowest level reached by a lake or a river (for example, a
lake’s low point during a dry season). Low-Water Mark,
OXFORD ENGLISH DICTIONARY (3d ed. 2013).
The state supreme court sided with Indiana in Gunderson,
interpreting state law to require “that the boundary separating public trust land from privately-owned” lakefront property “is the common-law ordinary high water mark.” Gunderson, 90 N.E.3d at 1173. The court reached its decision by tracing the history of the public-trust doctrine. It began by applying the Equal-Footing doctrine, see, e.g., PPL Montana, LLC v.
Montana,
565 U.S. 576, 590–91 (2012), under which Indiana
4 No. 21-1599
received exclusive title to the lands underlying the Great
Lakes when the state was admitted to the Union in 1816.
Gunderson, 90 N.E.3d at 1176–77 (citing Martin v. Waddell’s Lessee,
41 U.S. 367, 414 (1842) (holding that when the original thirteen states “became themselves sovereign” each acquired “the
absolute right to all their navigable waters and the soils under
them for their own common use”); Utah v. United States,
403
U.S. 9, 10 (1971) (holding that, under the “‘equal footing’ principle,” later-admitted states acquired “the same property interests in submerged lands as was enjoyed by the Thirteen
Original States”); Hardin v. Jordan,
140 U.S. 371, 382 (1891) (extending public ownership over navigable waters and underlying land “to our great navigable lakes, which are treated as
inland seas.”)). Following the weight of authority, the state
supreme court concluded that “Indiana at statehood acquired
equal-footing lands inclusive of the temporarily-exposed
shores of Lake Michigan up to the natural [ordinary high-water mark].” Id. at 1181.
The Indiana Supreme Court then asked whether, at some
point between statehood and the present day, the state relinquished title to the land below Lake Michigan’s ordinary
high-water mark. This issue, it recognized, is one of state law.
See Oregon ex rel. State Land Bd. v. Corvallis Sand & Gravel Co.,
429 U.S. 363, 376–77 (1977) (explaining that, while the Equal-Footing doctrine is a matter of federal law, “subsequent
changes in the contour of the land, as well as subsequent
transfers of the land, are governed by the state law”). To answer that question, the court examined its own cases, the Lake
Preservation Act,
Ind. Code § 14-26-2-5, and other provisions
of the Indiana Code. It concluded that, with the exception of
discrete parcels not relevant here, Indiana has never relinquished title to Lake Michigan’s shores below the ordinary
No. 21-1599 5
high-water mark. Gunderson, 90 N.E.3d at 1182–85. Thus, as a
matter of state law, the court concluded that Indiana holds absolute title to the lands under Lake Michigan up to the ordinary high-water mark. Private landowners in Indiana may
thus hold title only to beachfront property above (i.e. landward of) that boundary.
Id. at 1182.
Shortly after Gunderson was decided, the Indiana General
Assembly passed House Enrolled Act (HEA) 1385, which codified the Gunderson decision. The Act stipulates that:
(a) Absent any authorized legislative conveyance before February 14, 2018, the state of Indiana owns all of Lake Michigan within the
boundaries of Indiana in trust for the use
and enjoyment of all citizens of Indiana.
(b) An owner of land that borders Lake Michigan does not have the exclusive right to use
the water or land below the ordinary high
water mark of Lake Michigan.
Ind. Code § 14-26-2.1-3. The plaintiffs argue that HEA 1385
further broadened public use of the Lake Michigan shoreline.
Gunderson held that “at a minimum, walking below the [ordinary high-water mark] along the shores of Lake Michigan” is
a protected public use, along with commerce, navigation, and
fishing. Gunderson,
90 N.E.3d at 1188. The statute, however,
expressly recognizes public uses such as boating, swimming,
and other ordinary recreational uses.
Ind. Code § 14-26-2.1-
4(b).
6 No. 21-1599
B
Because this case was resolved on a motion to dismiss, we
accept all well-pleaded factual allegations in the complaint as
true. Hardeman v. Curran, 933 F.3d 816, 819 (7th Cir. 2019).
The Owners all hold title to beachfront property on the
Lake Michigan shore. None of them was a party to Gunderson
(though Cahnman participated as amicus curiae). Like the
Gunderson plaintiffs, the Owners here allege that their property deeds cover land that extends down to Lake Michigan’s
low-water mark. Therefore, they argue, when the Indiana Supreme Court determined that the state has always held title to
the land all the way up to the ordinary high-water mark, Indiana’s highest court “took” (for Fifth Amendment purposes)
a portion of their property without just compensation. HEA
1385, they argue, was also an uncompensated taking, because
it expanded Gunderson’s easement to permit additional uses.
Faced with this unfavorable ruling from the state court,
the Owners turned to the federal court, filing this action under 42 U.S.C. § 1983 against the state defendants we mentioned, all of whom are sued in their official capacities. The
Owners want the federal court to issue a declaratory judgment stating that the Indiana Supreme Court’s decision in
Gunderson (and HEA 1385) effected an uncompensated taking
of their property between the ordinary high-water mark and
the low-water mark. They also seek a permanent injunction
barring the state defendants from enforcing Gunderson and
HEA 1385. The Owners concede that their challenge to HEA
1385 turns on their judicial-takings claim. If Gunderson stands,
it follows that the Owners never held title to the land below
the ordinary high-water mark, and the legislation therefore
had no effect on their property rights. The Owners are not
No. 21-1599 7
seeking compensation for the alleged taking; they want only
to be able to exclude members of the public from the lands
they claim.
The district court granted the State’s motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). It
held that the Owners’ claims are functionally equivalent to a
quiet-title action, and so are barred by sovereign immunity
under Idaho v. Coeur d’Alene Tribe of Idaho. See 521 U.S. 261
(1997) (establishing a narrow exception to the Ex parte Young
doctrine). The court declined to reach the question whether it
is possible to state a claim for a judicial taking. Even if the answer were yes, the court reasoned, the Owners could not
show that they ever held an “established right” to the property allegedly taken by the state court through Gunderson. See
Stop the Beach Renourishment, Inc. v. Florida Dep’t of Env’t Prot.,
560 U.S. 702, 713 (2010).
II
In this court, the Owners have tried to develop their “judicial takings” theory. They contend that the Indiana Supreme Court itself took their property through its Gunderson
decision, and no state actor has paid them for it. Before discussing this theory any further, it is helpful to provide some
context for it.
The Takings Clause of the Fifth Amendment states that
“private property [shall not] be taken for public use without
just compensation.” U.S. Const. amend. V. The Takings
Clause applies to the states through the Fourteenth Amendment, Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155,
163–65 (1980), but that does not necessarily mean that it applies to the states’ judiciaries. The Supreme Court last
8 No. 21-1599
considered the judicial-takings question in Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, but in that case, no majority of the Court agreed on
“whether, or when, a judicial decision determining the rights
of property owners can violate the Takings Clause[.]”
560 U.S.
702, 734 (2010) (Kennedy, J., concurring). Since then, neither
this court nor any of our fellow circuits have recognized a judicial-takings claim.
In Stop the Beach, only four justices endorsed the argument
that a court decision settling disputed property rights under
state law could, in some circumstances, violate the Takings
Clause. See id. at 706, 713–14. There, owners of littoral property challenged a decision of the Florida Supreme Court resolving an open question about the boundary between their
private holdings and state-owned land. The case turned on a
Florida statute that authorized local governments to restore
eroding beaches; under the statutory scheme, the state fixed
an “erosion control line” that replaced “the fluctuating mean
high-water line as the boundary between” private and state
property wherever the preservation projects took place. Id. at
709–10. Beachfront property owners sued in state court, arguing that the law deprived them of their property rights without just compensation. The Florida Supreme Court rejected
that argument, holding instead that the law did not violate
Florida’s version of the Takings Clause (which mirrors its
Fifth Amendment counterpart). See Stop the Beach, 560 U.S. at
712. The property owners appealed to the Supreme Court, arguing that the Florida Supreme Court took their property
rights “by declaring that those rights did not exist[.]” Stop the
Beach, 560 U.S. at 729.
No. 21-1599 9
Writing for four Justices, Justice Scalia urged the Court to
declare that a judicial decision resolving contested property
rights could be a taking. In his view, there was “no textual
justification” for “allow[ing] a State to do by judicial decree
what the Takings Clause forbids it to do by legislative fiat.”
Id. at 714. Justice Scalia’s plurality opinion proposed a new
test for identifying when a judicial taking occurs: “[i]f a legislature or a court declares that what was once an established
right of private property no longer exists, it has taken that
property, no less than if the State had physically appropriated
it or destroyed its value by regulation.” Id. at 715 (emphasis in
original).
Justices Kennedy and Breyer filed separate opinions concurring in part, and concurring in the judgment, in which they
expressed grave doubts about the judicial-takings concept;
Justice Stevens, the ninth Justice, took no part in the decision.
Justice Scalia’s opinion on the key point did not marshal a majority, and no “controlling principle [on the judicial takings
issue] can be gleaned” from the plurality and concurring
opinions. Gibson v. Am. Cyanamid Co., 760 F.3d 600, 615 (7th
Cir. 2014). Indeed, much of the discussion about judicial takings could be regarded as dicta, because the Court unanimously held that in any case, the relevant state-court decision
did not effect a taking because it did not “eliminate[] a right
[] established under Florida law.” Stop the Beach, 560 U.S. at
733 (“The Takings Clause only protects property rights as they
are established under state law[.]”).
Justice Kennedy (joined by Justice Sotomayor) took the
position that the state’s “vast” power to take property, so long
as it acts for a public purpose and provides just compensation,
belongs only to the democratically accountable legislative and
10 No. 21-1599
executive branches. Stop the Beach, 560 U.S. at 734–35 (Kennedy, J., concurring in the judgment). If an arbitrary or irrational judicial decision “eliminates an established property
right,” he wrote, that decision could be “invalidated under the
Due Process Clause” as a deprivation of a property right without due process. Id. at 735. The due-process constraint allows
states to make reasonable “incremental modification under
state common law” but bars courts from “abandon[ing] settled principles.” Id. at 738. But, he thought, recognizing a
claim for judicial takings implies that the courts have the
power to take property with compensation—a power “that
might be inconsistent with historical practice.” Id. at 739 (discussing the Framers’ view of the Takings Clause). Moreover,
he wrote, the judicial-takings theory would raise vexing procedural and remedial issues. Id. at 740. In a second opinion
concurring in the judgment, Justice Breyer (joined by Justice
Ginsburg) raised comity and federalism concerns, noting that
a claim for judicial takings “would create the distinct possibility that federal judges would play a major role in the shaping
of a matter of significant state interest—state property law.”
Id. at 744 (Breyer, J., concurring).
Since Stop the Beach was decided, no federal court of appeals has recognized this judicial-takings theory. What has
occurred instead is avoidance: every circuit to consider the issue has expressly declined to decide whether judicial takings
are cognizable. Instead, each court has assumed without deciding that if such a cause of action were to exist, the relevant
test would be the one Justice Scalia suggested in his Stop the
Beach plurality opinion: did some arm of the state declare that
“what was once an established right of private property no
longer exists”? 560 U.S. at 715. In each of the cases that have
reached our sister circuits, the courts have held that the
No. 21-1599 11
challenged state-court decision had not erased an established
property right. Thus, even if there were a theoretical claim for
a “judicial” taking, the plaintiffs failed. See Wells Fargo Bank v.
Mahogany Meadows Ave. Tr., 979 F.3d 1209, 1215–16 (9th Cir.
2020) (declining to answer whether judicial-takings claims are
possible when “nothing in Nevada law” showed that plaintiffs had an “established right” to disputed property); Petrie ex
rel. PPW Royalty Tr. v. Barton,
841 F.3d 746, 756 (8th Cir. 2016)
(opting not to decide whether a claim for judicial takings exists where it “would have failed” anyway); In re Lazy Days’ RV
Ctr. Inc.,
724 F.3d 418, 425 (3d Cir. 2013) (quickly discarding a
claim that a bankruptcy order was a taking because “adjudication of disputed and competing claims cannot be a taking”).
III
The Owners have a different, antecedant problem in the
case before us: that of Article III standing. See Summers v.
Earth Island Inst., 555 U.S. 488, 499 (2009) (“[T]he court has an
independent obligation to assure that standing exists, regardless of whether it is challenged by any of the parties.”). The
test for standing is a familiar one: “[a] plaintiff has standing only if he can allege personal injury fairly traceable to the
defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief.” California v. Texas, --- U.S. ---
-,
141 S. Ct. 2104, 2113 (2021) (citing cases; internal quotations
omitted). The party invoking federal jurisdiction has the burden of proving each of these requirements. Lujan v. Defs. of
Wildlife,
504 U.S. 555, 561 (1992). We are satisfied that the
Owners have alleged injury in fact, insofar as they assert that
their property was taken without just compensation. They fall
short, however, when it comes to causation and redressability.
12 No. 21-1599
A
We begin with redressability. The Owners must show that
it is “likely … that the injury will be redressed by a favorable
decision.” Lujan, 504 U.S. at 561 (internal quotations omitted).
They have not done so. None of the defendants sued has the
power to grant title to the Owners in the face of the Indiana
Supreme Court’s Gunderson decision and HEA 1385. Even if
we were to agree with the Owners, therefore, a judgment in
their favor would be toothless.
Redressability turns on the “connection between the alleged injury and the judicial relief requested.” Allen v. Wright,
468 U.S. 737, 753 n.19 (1984). The Owners’ injury stems from
the fact that, for many years, Indiana courts had not decided
where the public land of Lake Michigan ends and private
property begins. The Gunderson decision resolved that uncertainty by definitively holding that the boundary lies at the ordinary high-water mark. Essentially, the Owners think that
the state supreme court erred by making that decision (either
as a matter of state law or federal law), and they would like
us to overturn that court’s ruling. Until it is set aside, the
Owners contend, they have been deprived of their asserted
title to the land between the high- and low-water marks without just compensation.
There are a number of problems with this approach, not
least of which is that we lack authority to overrule a state supreme court. But the straightforward point is that none of the
state defendants the Owners have named—not the Governor,
not the Attorney General, not the Indiana Department of Natural Resources, and not the State Land Office—has the power
to confer title on the Owners to land that Indiana’s highest
No. 21-1599 13
court says belong to the state. No injunction we enter can fix
that problem.
Typically, a lawsuit alleging that a plaintiff “suffered a violation of his Fifth Amendment rights” is redressable through
compensation. Knick v. Township of Scott, --- U.S. ----, 139 S. Ct.
2162, 2168 (2019). But the Owners did not sue for compensation from the state of Indiana—and even if they had, it is not
clear that federal courts could provide it. The Supreme
Court’s recent decision in Knick v. Township of Scott held that
a plaintiff may “bring a ‘ripe’ federal takings claim in federal
court,” without first exhausting state remedies, “as soon as a
government takes his property for public use without paying
for it.”
Id. at 2167, 2170. But unlike Knick, which involved a
suit against a town, the Owners’ suit is against a state, and
states enjoy sovereign immunity. See Jinks v. Richland County,
538 U.S. 456, 466 (2003) (“[M]unicipalities, unlike States, do
not enjoy a constitutionally protected immunity from suit.”).
Every circuit to consider the question has held that Knick did
not change states’ sovereign immunity from takings claims
for damages in federal court, so long as state courts remain
open to those claims. See Zito v. N.C. Coastal Res. Comm’n,
8 F.4th 281, 286–88 (4th Cir. 2021); see also Ladd v. Marchbanks,
971 F.3d 574, 579 (6th Cir. 2020), cert. denied, --- U.S. ----,
141
S. Ct. 1390 (2021); Williams v. Utah Dep’t of Corr.,
928 F.3d 1209,
1214 (10th Cir. 2019); Bay Point Props., Inc. v. Miss. Transp.
Comm’n,
937 F.3d 454, 456–57 (5th Cir. 2019), cert. denied, ---
U.S. ----,
140 S. Ct. 2566 (2020). In addition, states are not “persons” for purposes of
42 U.S.C. § 1983. See Will v. Michigan
Dep’t of State Police,
491 U.S. 58, 71 (1989), and so damages are
not available using that theory. Recognizing these hurdles,
the Owners seek only equitable and declaratory relief.
14 No. 21-1599
Specifically, the Owners want an injunction barring the
State from enforcing Gunderson or HEA 1385. Assuming for
the moment that Ex parte Young’s exception to sovereign immunity applies here, see Section IV.A infra, and that we can
entertain such a request, it remains true that such an injunction would not redress the Owners’ injury. Once again, that
alleged injury comes from the fact that Gunderson recognized
that the Owners’ property interests end at the ordinary high-water mark on Lake Michigan’s shores. An injunction barring
the State from enforcing the decision would do nothing to alter the state’s title to the land.
Gunderson recognized that members of the public have a
right to walk on the beach in front of the Pavlocks’ house as
long as they stay lakeward of the high-water mark; an injunction requiring the State to refrain from any action would not
grant the Pavlocks the right to exclude. If Cahnman wants to
sell his beachfront property, he may convey land only from
the high-water mark. The requested injunction would not
give him title to submerged lands that Indiana law (confirmed
by both the state’s highest court and its legislature) says belongs to the state. To the extent the Owners’ deeds conflict
with Gunderson and HEA 1385, the latter two sources govern.
And if, for example, the Pavlocks tried to sue people who
walked on the section of beach between the high- and low-water marks for trespass, or Cahnman tried to hoodwink a
buyer by representing that he held title down to the low-water mark, an injunction against state officials would not prevent Indiana’s Recorder’s Offices from correcting that error,
or Indiana courts from applying Gunderson.
In this respect, the Owners’ judicial takings claim differs
materially from the one at issue in Cedar Point Nursery v.
No. 21-1599 15
Hassid, --- U.S. ----, 141 S. Ct. 2063 (2021), in which “the government physically [took] possession of property without acquiring title to it.”
Id. at 2071. In Cedar Point, California agricultural employers challenged a state regulation that guaranteed union organizers physical access to their property to organize farmworkers.
Id. at 2069. The Supreme Court held that
California’s access regulation was a per se physical taking requiring compensation and remanded the case for further proceedings.
Id. at 2080. The Cedar Point plaintiffs, like the Owners, sought only declaratory and injunctive relief. But unlike
our plaintiffs, the California growers’ injury was not the loss
of a dispute about who held title; it was the uncompensated
taking of property that they indisputably owned. A court
could redress that injury prospectively by enjoining enforcement of the regulation, or retrospectively by ordering just
compensation. See
id. at 2089 (Breyer, J., dissenting). Here, by
contrast, ordering any of the named state defendants not to
enforce a state property law cannot redress the Owners’ injuries, because non-enforcement will not change the content of
the underlying law itself.
B
The Owners have also failed to establish the related causation requirement for Article III standing. As the parties asserting federal jurisdiction, they must show that their alleged
injury is “fairly traceable” to a defendant’s allegedly illegal
action, “and not the result of the independent action of some
third party not before the court.” Lujan, 504 U.S. at 560 (citing
Simon v. E. Ky. Welfare Rts. Org.,
426 U.S. 26, 41–42 (1976))
(cleaned up).
The property between the high- and low-water marks is
held in public trust, but not because of any action taken by
16 No. 21-1599
these state defendants. Rather, that property is held in public
trust because the Indiana Supreme Court, an independent actor, settled the Gunderson dispute as a matter of state law, and
the state legislature then confirmed that result. The court relied on a long line of federal and state decisions recognizing
the Equal-Footing doctrine and setting the boundaries between Indiana’s public trust lands and surrounding private
property. See Gunderson, 90 N.E.3d at 1179–87. The Owners
attempt to dodge this problem by suing state officials who are
charged with enforcing state property law. As we already
have said, however, the state’s enforcement or non-enforcement has no effect on the underlying title to the land. Moreover, the Owners’ complaint does not include any allegations
showing that the state defendants’ enforcement of Gunderson
has caused any further injury that they have not already experienced as a result of the decision itself. The Owners’ injury
is therefore traceable not to the state defendants, but to the
independent actions of the Indiana Supreme Court.
C
The Owners’ causation and redressability problems highlight the federalism and comity concerns that are inherent in
the judicial-takings theory. In Gunderson, the Indiana Supreme Court resolved a state-law issue of first impression and
issued a thorough decision determining where the public-private boundary lies on the shores of Lake Michigan. If the court
is correct, then the property between the ordinary high-water
mark and the low-water mark could not have been taken, because it was never privately owned in the first place. See Conyers v. City of Chicago, 10 F.4th 704, 711 (7th Cir. 2021) (noting
that there is a “predicate requirement [in Takings cases] that
the private property [allegedly taken] must belong to the
No. 21-1599 17
plaintiff.”) The Owners may be able to say, in good faith, that
their expectations were disturbed, just as any losing party in
a state court case involving disputed property rights might
do. But it is the role of “the state court … to define rights in
land located within the states.” Fox River Paper Co. v. R.R.
Comm’n of Wis.,
274 U.S. 651, 657 (1927) (adding that “the
Fourteenth Amendment, in the absence of an attempt to forestall our review of the constitutional question, affords no protection to supposed rights of property which the state courts
determine to be nonexistent”). If the Owners never had title
to this property under Indiana law, it could not have been
“taken” by the state.
As we noted earlier, it is state property law itself, rather
than any action by the state parties, that is adverse to the
Owners’ claims. We would be unable to hold that their property was taken without also holding that Gunderson was
wrongly decided. In effect, their theory of the case would
have us sit in appellate review of the Indiana Supreme Court’s
decision about state property law—a role that would sit uneasily next to the Supreme Court’s exclusive “statutory authority to review the decisions of state courts in civil cases.”
Milchtein v. Chisholm, 880 F.3d 895, 897 (7th Cir. 2018) (citing
28 U.S.C. § 1257). We recognize, in this connection, that the
Rooker-Feldman doctrine does not apply here, because the
Owners were not parties to the Gunderson litigation. See Exxon
Mobil Corp. v. Saudi Basic Indus. Corp.,
544 U.S. 280, 284 (2005).
Nonetheless, that doctrine’s animating federalism values
counsel us to proceed cautiously when a novel legal theory
raises the specter of a lower federal court reviewing the merits
of a state supreme court’s decision.
18 No. 21-1599
IV
Before concluding, we note that the district court dismissed this case for two additional reasons. First, it held that
it lacked subject-matter jurisdiction because this case falls under a narrow exception to the Ex parte Young doctrine established by the Supreme Court’s decision in Idaho v. Coeur
d’Alene Tribe of Idaho, 521 U.S. 261 (1997). Generally, a plaintiff
may sue under Ex parte Young’s exception to the Eleventh
Amendment’s sovereign-immunity bar so long as the complaint “alleges an ongoing violation of federal law and seeks
relief properly characterized as prospective.” Verizon Md., Inc.
v. Pub. Serv. Comm’n of Md.,
535 U.S. 635, 645 (2002). In Coeur
d’Alene Tribe, however, the Supreme Court announced that
the Ex parte Young rule has a narrow exception for a “quiet
title suit against [a state] in federal court” or a suit for injunctive relief that is “close to the functional equivalent of quiet
title.” 521 U.S. at 281–82; see also ERWIN CHEMERINSKY,
FEDERAL JURISDICTION (7TH EDITION) 471, 477–78 (2016).
Pointing to some criticism of Coeur d’Alene Tribe, the Owners suggest that it was a one-way, one-day case with no further applicability, or alternatively, that it does not apply to
suits brought by private property holders rather than Tribal
nations. The State responds that Coeur d’Alene Tribe remains
good law and squarely governs this case, because it is “close
to the functional equivalent of quiet title.” Coeur d’Alene, 521
U.S. at 282.
The district court agreed with the State. In addition, it held
that even assuming the judicial-takings theory might apply
somewhere, the Owners had not managed to state a claim under it here. Recall that Justice Scalia’s proposed test for a judicial taking requires plaintiffs to show that “the property right
No. 21-1599 19
allegedly taken was established” as a matter of state law, prior
to the decision. See Stop the Beach, 560 U.S. at 728 (emphasis
added). The district court thought that the Owners’ complaint
revealed on its face that no such right was established. Prior
to Gunderson, it noted, the status of Indiana’s Lake Michigan
coastline had been ambiguous at best. The Owners have not
and could not show that the Indiana Supreme Court’s decision was a sharp or unexpected departure from a clearly established property right. Rather, the state court in Gunderson
settled an unclear and disputed issue of first impression. The
district court therefore noted that, even if it had jurisdiction
over the case, it would have dismissed the Owners’ action for
failure to state a claim under Rule 12(b)(6).
Because the Owners lack standing to sue the state defendants, we need not reach either the Coeur d’Alene issue or the
alternative ruling under Rule 12(b)(6) today. We merely note
that the Owners could not prevail without also overcoming
these additional hurdles.
V
The Owners contend that the Indiana Supreme Court’s decision in Gunderson v. Indiana unconstitutionally took their
property without compensation. Because they have sued the
Indiana Governor and several state executive officials who
neither caused the asserted injury nor can redress it, they lack
standing to sue under Article III of the Constitution. We therefore AFFIRM the district court’s dismissal of the complaint for
lack of subject-matter jurisdiction, although we modify it to a
dismissal without prejudice.
