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Gray v. City of Valley Park

June 5, 2009


On Appeal from the United States District Court for the Eastern District of Missouri.

The opinion of the court was delivered by: Beam, Circuit Judge.

Submitted: December 10, 2008

Before LOKEN, Chief Judge, BEAM and ARNOLD, Circuit Judges.

Jacqueline Gray and Windhover, Inc. (Appellants, collectively) challenge ordinances enacted by the City of Valley Park, Missouri, (City) that address illegal alien employment in the context of real estate occupation and leasing. Appellants initially filed suit in state court against the City to invalidate the ordinances. The City removed the case to federal court and the parties later filed cross motions for summary judgment. The district court*fn1 granted judgment in favor of the City, denied Appellants' motion and dismissed Appellants' Second Amended Complaint with prejudice. Because Appellants have standing and we agree with the district court regarding the absence of preclusion, we affirm.


Gray is the sole owner of Windhover, Inc., a corporation that owns rental units in the City. Intermittently, Windhover hires individuals to work at miscellaneous tasks and perform maintenance on this property. In September 2006, Gray and others sued the City in state court seeking to enjoin the enforcement of an ordinance (ordinance 1708, later repealed and amended by ordinance 1715), which concerned the same general subject matter as the two ordinances challenged in this action. See Reynolds v. City of Valley Park, No. 4:06CV01487, 2006 WL 3331082 (E.D. Mo. 2006) ("the Reynolds case"). The City removed the Reynolds case, but the district court remanded, in part because it held there was no case or controversy under the Federal Declaratory Judgment Act. Id. at *6. In February 2007, the City effectively repealed both of the ordinances at issue in the Reynolds case and replaced them with ordinance 1721 (involving the harboring of illegal aliens in rental units) and ordinance 1722 (involving the employment of unauthorized aliens). The Reynolds case nonetheless proceeded in state court and on March 12, 2007--even after the City repealed the two ordinances upon which the pending action was based, and the plaintiffs declined the opportunity to amend the action to include ordinances 1721 and 1722--the state court permanently enjoined the enforcement of the two, then-repealed ordinances. The City appealed that order and the Missouri Court of Appeals dismissed the case as moot because the enforcement provisions of the ordinances had been repealed and substituted with new executory provisions--ordinances 1721 and 1722 (at issue in the instant appeal). Reynolds v. City of Valley Park, 254 S.W.3d 264, 266 (Mo. Ct. App. 2008).

On March 14, 2007, Appellants initiated the instant action in state court, challenging ordinances 1721 and 1722. Ordinance 1722, however, is the only ordinance now at issue because the City repealed ordinance 1721 in July 2007, and the parties stipulated to a voluntary dismissal of Appellants' related claims. The City removed the case to federal district court. The district court retained the action, holding that the new ordinance imposed immediate obligations on Appellants.

Generally, ordinance 1722 prohibits all business entities in Valley Park from knowingly employing unauthorized aliens.*fn2 The ordinance sets out a procedure for lodging complaints against potential violators and requires, among other things, that those business entities that apply for a business license sign an affidavit stating that they do not knowingly employ any person who is an unlawful worker.

Both parties filed motions for summary judgment with the district court. As a result of these motions, the district court addressed issues of preclusion (based upon the effect, if any, of the state court's March 12, 2007, injunction concerning ordinances 1708 and 1715); preemption, or not, by federal immigration law; Appellants' standing to assert an equal protection claim; the status of Appellants' due process claim; and whether ordinance 1722 violates Missouri law. The district court ruled in the City's favor, determining that (1) there was no issue preclusion arising from the state court's earlier decision regarding ordinances 1708 and 1715 because ordinance 1722 was not identical; (2) federal law did not preempt ordinance 1722; (3) Appellants lacked standing to pursue an equal protection claim; (4) ordinance 1722 does not violate the Due Process Clause; and (5) ordinance 1722 does not violate Missouri law by exceeding the authority granted a fourth class city.

Only two issues are before us today: (1) whether the district court lacked jurisdiction over this matter and (2) whether this matter is precluded by the prior Missouri state court order.


In an unlikely turn of events, Appellants now claim that ordinance 1722 is not enforceable against them at all (and was never enforceable) and as a result, the district court had no subject matter jurisdiction--making the court's failure to remand a jurisdictional defect. "'[I]f a plaintiff lacks standing, the district court has no subject matter jurisdiction.'" Young America Corp. v. Affiliated Computer Services (ACS), Inc., 424 F.3d 840, 843 (8th Cir. 2005) (quoting Faibisch v. Univ. of Minn., 304 F.3d 797, 801 (8th Cir. 2002)) (alteration in original). Appellants' current claim, contrary to nearly every pleading filed by Appellants since the inception of this case in state court, is that there is no actual or imminent injury-in-fact and thus no justiciable case or controversy sufficient to satisfy federal standing requirements. To be sure, this course of argument is unorthodox. It is with restraint that we do not point out the numerous instances, in court pleadings and affidavits made under oath, where Appellants claimed imminent harm, injury to property interests and other burdens of enforcement and compliance arising from ordinance 1722. To be fair, at one point Appellants did amend their argument in support of summary judgment and sought a declaration that the ordinance did not apply to Windhover or Gray. That argument, however, was not made in the context of a challenge to standing (although a ruling in Appellants' favor on that issue would have put the issue of standing in play), but was crafted to judicially solidify the then-uncertain interpretation of ordinance 1722 as it applied to Appellants. But, that argument was merely a needle in the haystack of Appellants' allegations of imminent harm to themselves and third parties that dominated the proceedings below.*fn3 A. Judicial Estoppel

The City argues that because Appellants' current stance regarding their lack of standing is wholly at odds with the position they took before the district court, Appellants should be judicially estopped from proceeding on this theory. The doctrine of judicial estoppel provides that when "a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him." New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quotation omitted) (holding that under the doctrine of judicial estoppel, New Hampshire was equitably barred from asserting, contrary to its position in prior litigation over the states' lobster fishing rights, that the inland Piscataqua River boundary ran along the Maine shore); In re Coastal Plains, Inc., 179 F.3d 197, 205 (5th Cir. 1999); Taylor v. Food World, Inc., 133 F.3d 1419, 1422 (11th Cir. 1998); Lowery v. Stovall, 92 F.3d 219, 223 (4th Cir. 1996); In re Cassidy, 892 F.2d 637, 641 (7th Cir. 1990). This rule "generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase." Pegram v. Herdrich, 530 U.S. 211, 227 n.8 (2000). The purpose of the doctrine is to protect the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment. New Hampshire, 532 U.S. at 749-50; Monterey Dev. Corp. v. Lawyer's Title Ins. Corp., 4 F.3d 605, 609 (8th Cir. 1993).

While the circumstances under which judicial estoppel may appropriately be invoked are not reducible to any general formulation, the Supreme Court has identified several factors that typically inform the decision whether to apply the doctrine in a particular case: (1) whether a party's later position is clearly inconsistent with its earlier position; (2) whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled; and (3) whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped. New Hampshire, 532 U.S. at 750-51. There is no mechanical test, however, and ultimately, because the rule is intended to prevent improper use of ...

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