[00:00:00] Speaker 04:
We'll turn to our last case of the day, 25-7076, Robinson v. Town of Ocay.

[00:00:14] Speaker 04:
Mr. Vasquez?

[00:00:16] Speaker 01:
May it please the Court, Marco Vasquez with the appellants.

[00:00:20] Speaker 01:
The Fifth Amendment requires the government to pay compensation when it takes your property. Until the government pays with money, you have an ongoing injury. For the Robinsons, the promise of compensation was broken. So we brought two set of takings claims under the Fifth Amendment. The first says that the OK Public Works Authority took the Robinsons' real property and hasn't paid for it. That's a classic Fifth Amendment claim.

[00:00:43] Speaker 01:
The second says that the town of O.K. created an entity that has the power to take but no ability to pay. That's also a constitutional violation because you can't split the duty to pay and the power to take. Because the district court dismissed these claims and the pleadings, this court should reverse.

[00:01:02] Speaker 04:
You've got a question of statute of limitations, right? It does not, Your Honor.

[00:01:05] Speaker 01:
It does not have a question of statute of limitations because under the Supreme Court's decision of Williamson County, the Fifth Amendment claim didn't exist until the state process ends. For us, that didn't happen until March of 2023, and we never had the opportunity to bring the Fifth Amendment claim until then.

[00:01:24] Speaker 04:
But the more recent Supreme Court decision doesn't say that. It says your claim arises upon the taking.

[00:01:33] Speaker 01:
So that discusses when there's a constitutional issue. You're talking about Nick. Nick talks about when there's a constitutional injury. It doesn't talk about when the clock starts ticking. That's a different question. And for that, we looked at decisions like Herrera v. City of Espanola that asked when there's a complete and present cause of action. For us, under Williamson County, we started under Williamson County. We were in this unique situation where we started in Williamson County. We did everything the Supreme Court told us to do. We went to state court, we asserted state claims, and we won.

[00:02:03] Speaker 02:
Well, but then the court said you didn't have to do that, right? So why doesn't the claim accrue at that point?

[00:02:10] Speaker 01:
At the point of Nick, Your Honor?

[00:02:11] Speaker 02:
Yes.

[00:02:12] Speaker 01:
It doesn't accrue at the point of Nick because it wouldn't make sense given where we were in the procedural posture. So I'll back up and explain.

[00:02:18] Speaker 02:
Well, but that's fact-specific to you is what you're saying. Nick doesn't apply to you because you were too far into the process, right?

[00:02:27] Speaker 01:
Nick applies going forward as far as when the injury occurs. But the difference is that we had just won under the Oklahoma Constitution.

[00:02:38] Speaker 01:
Four weeks later, after the state court entered its judgment, the Supreme Court issued Nick. Then OK appealed. And so we're through that process. And so really the point is that no civil rights plaintiff would think at that point that we needed to assert a separate federal lawsuit to preserve Fifth Amendment claims based off facts we didn't know.

[00:02:57] Speaker 01:
And that's why there's no district court decision to have addressed these type of issues that's endorsed that. And that's not a position that OK invokes here. Their argument is that our claims accrued in 2009. And that's not possible for two reasons.

[00:03:10] Speaker 01:
Separating the claims, there's the classic takings claim that couldn't have accrued in 2009 because of Williamson County.

[00:03:16] Speaker 02:
but also the other claim against the town of okay that couldn't have accrued until 2023 because we didn't learn about it and we couldn't have learned about it and no i understand you didn't know about the fraud is what you're saying the alleged fraud we didn't know about the arrangement yes yeah but on the first i'm sorry back to your first claim the the decision comes out of the spring court and then you're saying the light bulb wouldn't go off for you because you were in the middle of appellate proceedings

[00:03:46] Speaker 01:
Yes, Your Honor. There was no complete and present cause of action during that appeal process because that was a judgment that okay had appealed. And so we had no reason to think that there was a Fifth Amendment problem in that respect going forward. And so we were really midstream under Williamson County. And the point is that civil rights plaintiffs shouldn't be punished for following the process that at every step of the stage we did exactly what the Supreme Court told us to do. So there's no statute of limitations issue.

[00:04:14] Speaker 01:
But turning to the merits, because O.K. 's main argument to avoid the merits is the Supreme Court's decision in Folsom. And that's a decision from the 1800s. But that case is about a property interest in a judgment. But we're not asserting a property interest in a judgment. We're asserting a property interest in real property. So Folsom doesn't apply.

[00:04:33] Speaker 03:
Well, what about the Fifth Circuit's decision in Arion?

[00:04:39] Speaker 03:
Why wouldn't we just do that? I mean, it seems like we...

[00:04:44] Speaker 03:
can get past the statute of limitations issues spotted in your favor, perhaps. But on the merits, what is wrong with that decision, with the Fifth Circuit's approach? Or what's different about your case that counsels against applying it here?

[00:04:56] Speaker 01:
Yes, Your Honor. There are a few differences between our case and Arien.

[00:05:00] Speaker 01:
In Arien, the plaintiffs didn't raise a claim for the underlying physical taking. That's what we do. And in Arien, the plaintiffs didn't raise a claim for creating an entity that has the power to take but no ability to pay. That was never before the Fifth Circuit. And so in those respects, Arien doesn't address the issues that are before this court. Again, we're only asserting a property interest and a judgment. not a property interest, a property interest in real property, not a property interest in a judgment. That was a second taking. The theory was there's a second taking.

[00:05:31] Speaker 01:
We don't raise that theory. There's one taking, and that was the original one. So Arian is not an obstacle.

[00:05:39] Speaker 01:
So neither Arian or Folsom addressed the issues before this court.

[00:05:43] Speaker 04:
Your only claim is that there's one taking.

[00:05:47] Speaker 04:
And the Supreme Court said in Nick...

[00:05:52] Speaker 04:
Let me get the language. The Fifth Amendment right to full compensation arises at the time of the taking.

[00:06:00] Speaker 04:
Yes, Your Honor.

[00:06:01] Speaker 04:
And under Oklahoma, there's a two-year limitations period.

[00:06:06] Speaker 04:
So any claim of any sort challenging that taking would have to be filed within two years of that taking.

[00:06:16] Speaker 01:
We still have to look at when the claim accrues. So that describes the rule going forward, yes, but it doesn't describe it.

[00:06:26] Speaker 04:
It doesn't say prospectively only. It says that's when the claim arises. The claim arises, but not when the clock starts ticking. What's different? That's a distinction I'm not familiar with.

[00:06:39] Speaker 01:
Sure. So in my mind, the kind of hypothetical I think of is, let's say you're taking a trip six months to a different state, and your property is there, and the government comes and destroys parts of your property, but you didn't have any reason to know about the destruction of your property until you got back. There was no notice. No one, no neighbor to call to tell you the government didn't kill their buses.

[00:06:58] Speaker 04:
You're saying there's a discovery rule.

[00:07:00] Speaker 01:
Yes, Your Honor.

[00:07:01] Speaker 04:
The Supreme Court doesn't suggest any...

[00:07:05] Speaker 04:
sort of tolling any discovery rule or anything like that. It says the claim arises when there's a taking.

[00:07:12] Speaker 04:
So I misunderstood you. I thought that your second claim, the conspiracy claim, was that there was a second taking, but you're saying there's only one taking that you're claiming here. That is correct, Your Honor. There's only one taking. How do you get around the Supreme Court's statement that the claim arises at the time of the taking?

[00:07:35] Speaker 01:
For two reasons. One, because we were going through the process, as I explained before. But two, we didn't learn about the arrangement, the facts giving rise to our second claim until 2023, when the OK Public Works Authority revealed for the first time that they don't have any money because it's funneled from... It goes into a bank account controlled by the town.

[00:07:58] Speaker 03:
But isn't that a tolling theory? Isn't that fraudulent concealment? Is that...

[00:08:03] Speaker 01:
So we raise equitable tolling and fraudulent concealment, Your Honor, and that's why district courts, we've had a number of the district court decisions on pages 26 to 27 who have dealt with not exactly the same situation when you win under Williamson County, but similar circumstances in which they said, one district court, Donnelly, for example, said the claim couldn't start accruing until the Williamson County process ended, but the other district court decisions that have addressed this issue said in any event, equitable tolling applies Equitable tolling is when a civil rights plaintiff has diligently pursued his or her rights and then something extraordinary stood in their way.

[00:08:38] Speaker 01:
And for us, we diligently pursued our rights. There's no question about that. But what stood in our way was the Supreme Court's decision in Williamson County that was odd and wrongly decided and improperly overturned. But we had to go through that process, and so really the point of NIC was to make it easier for civil rights plaintiffs, taking plaintiffs to come to federal court to assert those claims and not to sort of hamper those who were following the process and going through it.

[00:09:03] Speaker 03:
I might be missing your answer, but in what way do you rely on fraudulent concealment to toll in your favor in this case?

[00:09:14] Speaker 01:
We rely on fraudulent concealment with respect to our second set of claims against the town, writing, creating an entity that has the power to take but no ability to pay. That's because we had no basis to know about this arrangement until March of 2023. And the reason is because residents, the OK Public Works Authority, they send bills to residents. And residents write checks in response to the OK Public Works Authority and pay them for the service that they provide. And in the town's audit reports, it has public works authority enterprise fund that lists revenue for providing services.

[00:09:48] Speaker 01:
And so any reasonable person would see I'm paying an entity that provides services, writing checks to them, they're providing me their services, and they're representing to the public, so far as I know, that there's revenue for this. What we didn't learn about, that's actually not the case until March of 2023.

[00:10:03] Speaker 03:
And where do you invoke that? Is that just...

[00:10:06] Speaker 03:
Do you plead it? Do you plead fraudulent concealment tolling? Is that part of what should be discerned from your complaint?

[00:10:14] Speaker 01:
Yes, Your Honor. We do plead. We discussed that in our briefs before the lower court, and we discussed that before this court as well.

[00:10:23] Speaker 04:
You said there's a difference when you have a...

[00:10:27] Speaker 04:
a government agency that has the power to take but not the ability to pay.

[00:10:32] Speaker 04:
That's exactly what the situation was in Folsom, was it not? The municipality, or I can't remember what entity the defendant was, took the property, But the state statute essentially prohibited it from or prevented it from paying compensation. They could only tax enough to take care of their ordinary expenses. They couldn't tax enough to pay takings claims. So how is that different from your situation?

[00:11:05] Speaker 04:
So two main reasons. As I...

[00:11:08] Speaker 04:
As I take what you're saying, you don't have to sue.

[00:11:14] Speaker 04:
You're still continuing taking as long as they don't pay you for the taking.

[00:11:20] Speaker 01:
So fulsome is different in two main respects. Fulsome doesn't talk about taking because that was not a takings clause case. That was about a contracts clause and the due process clause. So in that respect, it was different. The difference that we have between fulsome... The due process was...

[00:11:35] Speaker 04:
taking property without due process. Wasn't that what the due process issue was?

[00:11:40] Speaker 01:
That was property interest in a judgment, Your Honor. That was the issue in Folsom, property interest in a judgment. But it wasn't about it taking, the court didn't analyze this under the Fifth Amendment, taking its clause in that framework. But in the second respect, Folsom doesn't govern here because Folsom wasn't about a separate entity that was created with part of the power of... What difference does that make?

[00:12:03] Speaker 04:
The point is that the state created an entity that could take but wasn't able to pay. Here, it's the municipality that accomplishes the same thing.

[00:12:16] Speaker 01:
The difference in that explanation, Your Honor, is that This was an entity that was created with the eminent domain power, but no ability to pay at all going forward. So that's the problem. It may be a harder question with insolvency later down the road. That may be a different question. But what we have here is an entity that was created with the power, part of it, the power of no restriction. This is what the Supreme Court has told us. It's a mandatory duty. It can't be manipulated. It can't be sidestepped by state law. And I point the court to the First Circuit's decision in financial oversight that we said in our brief.

[00:12:49] Speaker 01:
And in that case, the First Circuit explained that you can't extinguish or avoid a takings clause duty or responsibility through federal bankruptcy law. This is a duty that's required. And so if you can't do that through federal bankruptcy law, then you can't do it through state trust law either. And that's consistent with what the Supreme Court just told us in Tyler v. Hennepin County. State law is not dispositive. And the reason it's not dispositive is because if it were, the state could sidestep the taking clause requirement, which is what's happening here.

[00:13:18] Speaker 04:
You described the first circuit case as an extinguishment? Yes, Your Honor.

[00:13:24] Speaker 04:
Well, here the debt isn't being extinguished. It just can't be paid. It's still a judgment.

[00:13:32] Speaker 04:
You're not vacating the judgment in any way in this case.

[00:13:36] Speaker 04:
The city hasn't done that. It's still got a judgment against it. It wasn't vacated. Am I missing something there?

[00:13:42] Speaker 01:
Yes, Your Honor. It's not a debt. It's a duty. It's a duty to pay just compensation under the Constitution. It's not like other debts. In this case, that's the fundamental difference. I see that my time is getting low, so I'd like to reserve the remainder of my time for rebuttal.

[00:14:02] Speaker 00:
May it please the Court, my name is Max Harris. I'm here as the attorney for the Appalachian Town of O.K. and the O.K. Public Works Authority. So, We have got multiple issues here, but the state court ultimately determined that the public works authority is liable and that the town is not liable. The town was dismissed with prejudice based on a motion to dismiss that was filed, and there was no appeal filed regarding the town. Yet they've sued the town anyway in federal courts.

[00:14:33] Speaker 00:
No judgment against the town whatsoever.

[00:14:36] Speaker 00:
Another issue is, as I mentioned, there's no federal subject matter jurisdiction here. The court is hitting the nail on the head because these issues were addressed by Folsom and Ari and both. The Folsom court basically determined that yes, when You obtain a judgment against a state court entity, and you can't collect it as long as you have that ability to collect. As long as there's a pending liability against the state entity, there's no constitutional violation there.

[00:15:10] Speaker 00:
In fact, in Folsom, they stated that a party cannot be said to be deprived of his property in a judgment because at the time he is unable to collect it. Again, as long as there's that existing liability, which we have here, I mean, no one has testified, and I'm not aware of any evidence that says that the authority will never pay the judgment.

[00:15:32] Speaker 00:
It just hasn't been paid yet. I don't know whether what they're going to do or what they plan to do to try to collect on the judgment, but there is, in fact, a judgment in place.

[00:15:41] Speaker 03:
Why isn't the distinction that the appellant draws about Folsom persuasive that that case wasn't about the Fifth Amendment?

[00:15:48] Speaker 00:
It wasn't about the Fifth Amendment, it was about the Fourteenth Amendment. But it was basically the same exact thing. It was dealing with damages to property, is what they talked about in Folsom. And they said, you know, even though you can't collect, it's still not a violation. So it's very similar. But then when you look at the Aryan case, the facts are remarkably similar.

[00:16:10] Speaker 00:
In Aryan, as the court is aware, you know, you basically had this taking And they couldn't collect. It was basically, I would say, virtually impossible to collect because there was a law that basically said that the plaintiff could not collect their judgment in that case unless the governmental entity voluntarily paid. And yet they still said – and it was a Fifth Amendment claim. It was the exact same claim that the plaintiffs bring here – And they said that in short, a party cannot be said to be deprived of his property in a judgment because at the time he is unable to collect it.

[00:16:47] Speaker 00:
They cited to Folsom. And then they said, thus plaintiffs claim that their property has been taken by the SWB's failure to timely pay must fail under Folsom. So they look just, I mean. virtually identical claims to what we have here, the Fifth Amendment claim, and they relied on Folsom, the Fifth Circuit did, and stated, yeah, this is not a Fifth Amendment violation claim.

[00:17:11] Speaker 00:
And so that case is very on point. In fact, the issue they even set forth, obviously, in Folsom, and they say, finding themselves in this position, the plaintiffs in this case, like others before them, have turned to the federal courts to force payment of their state court judgment. They claim that the defendant's failure to timely satisfy a state court judgment violates the takings clause of the Fifth Amendment. The district court granted the defendant's motion to dismiss applying longstanding precedent that there is no property right to timely payment on a judgment we agree and affirm.

[00:17:47] Speaker 00:
Again, the cases are virtually identical.

[00:17:52] Speaker 00:
Interestingly enough, in Arien, they also distinguish Nick and Williamson County, and they talk about in those cases it was based on when you could bring a claim. It did not create a claim. In fact, in Arien, at 29 Federal 4th at 231 to 32, they say that whether a claim is ripe for federal adjudication as Williamson County – I'm sorry – as Williamson County and Nick decided, is very different from whether certain facts state a claim at all.

[00:18:22] Speaker 00:
So no matter how, and they've gotten creative. I'll give them credit. The plaintiffs have gotten creative in this case and of course tried to work around the Aryan and Folsom cases, but in reality they are virtually identical. Except here you don't have the impossibility of collection on the judgment. It's just whether they can collect. But again, it's completely irrelevant. There is a statute of limitations issue, as Judge Hartz mentioned. It is a two-year statute of limitations, and you're exactly right.

[00:18:53] Speaker 00:
The claim accrued back in 2009 when the...

[00:18:59] Speaker 00:
taking a curve. They did get their day in court. They got their day in court. They were before a jury. Again, as I stated earlier, the town was dismissed with prejudice and never appealed. And, of course, they got a judgment against the PWA.

[00:19:17] Speaker 00:
And so we've got the – and there's no basis to toll here for the reasons I think that Judge Hart said as well. But here, another issue that we have lurking in the background wasn't decided by the district court, but I think it's squarely in front of this court anyway because, of course, this court is aware that you can rule – you can affirm the district court for any reason based on the record before the court. An issue we raised was that you can't assign – you couldn't – The judgment in state court is held by Vicki Barnett.

[00:19:53] Speaker 00:
In the complaint filed in the federal case, the plaintiffs, the Robinsons claim that Vicki Barnett assigned that claim to them. That is barred under Oklahoma law. That's barred under 12 OS 2017D, and it's written in our brief.

[00:20:10] Speaker 00:
But 2017D literally states the assignment of claims not arising out of contract is prohibited. At the district court level, the Robinsons raised another statute that came much earlier. than the statute that I just read to you regarding why they believe this assignment issue didn't apply here. Of course, the district court didn't apply it, but here we have a claim that does not arise out of contract, and therefore it is, of course, prohibited.

[00:20:42] Speaker 00:
This is just yet another independent basis.

[00:20:44] Speaker 04:
Let me ask you about that.

[00:20:45] Speaker 00:
Go ahead.

[00:20:47] Speaker 04:
Title 60, Section 313 says...

[00:20:52] Speaker 04:
a thing in action arising out of the violation of a right of property or out of an obligation may be transferred by the owner. Why is this not a thing in action?

[00:21:03] Speaker 00:
Well, that case, as I've mentioned, was decided... That's a statute.

[00:21:08] Speaker 04:
I'm reading from a statute.

[00:21:09] Speaker 00:
I apologize. I meant to say that statute was promulgated much earlier than the 2017-D case. I'm sorry, the 2017-D statute promulgated And there's no mention of any kind of exception for what you mentioned.

[00:21:22] Speaker 04:
Generally, we try to reconcile. We try to make, if there are two statutes that are somewhat different, we try to reconcile them. And maybe say, for example, one is the more specific, the one about assigning things in action. might be considered the more specific, so it survives the enactment of a more general statute. Did you address this thing in Action Section 60, Title 60, Section 313?

[00:21:53] Speaker 04:
Did you address that?

[00:21:55] Speaker 00:
We did at the district court level. Again, the district court didn't rely on that, but I'm just telling the court that's another basis here.

[00:22:03] Speaker 04:
And your argument in the district court, I...

[00:22:06] Speaker 04:
Am I correct that you didn't mention that in your brief on appeal? I did not.

[00:22:11] Speaker 00:
I didn't mention the other statute. I don't believe I did.

[00:22:14] Speaker 04:
But your argument in district court was that section, I'll just call it section 313, was voided?

[00:22:25] Speaker 04:
by the later statute? Was that essentially your argument?

[00:22:29] Speaker 00:
I don't know if it was voided, but I think that the 2017 statute is very specific because it literally eliminates the assignment of all claims not arising out of contract.

[00:22:42] Speaker 00:
It doesn't get any more clear than that. We say that any claims arising out of contract can be assigned. Anything else cannot be assigned.

[00:22:58] Speaker 00:
Do you have any other questions for me? No, I don't.

[00:23:04] Speaker 00:
Okay, thank you.

[00:23:05] Speaker 04:
Thank you.

[00:23:06] Speaker 01:
Okay, Council, you have a minute or so.

[00:23:10] Speaker 01:
Thank you, Your Honor. We plead fraudulent concealment on paragraph 157 of our complaints for follow-up with the court's question. We're not asserting a property interest in a judgment, no matter how hard OK tries to insist that. We're not doing that, and I would point this court to its decision in Y.O. Ben, which we cite in our briefs. You have to look at the claims that the plaintiff's actually raising, and we're not asserting a property interest in the judgment. And fundamentally the problem with this arrangement is that the town pays the public works authorities bills when it feels like. So for example, the town write a check to pay the public works authorities attorneys, but it won't write a check to pay just compensation.

[00:23:46] Speaker 01:
And that's wrong. And it's wrong because the Supreme Court has told us in recent cases like Nick, Tyler, and County that this is a mandatory duty. You can't escape it. You can't avoid it. You can't look to state law exclusively to sidestep the takings clause requirement. But that's what they're doing here.

[00:24:03] Speaker 04:
and that's why last year this court said its role is to ensure just compensation and this appeal is an opportunity to do just that so the robinsons respectfully asked this court to reverse the district court's dismissal on the pleadings thank you let me ask you do you have any other ways of using the judgment can your client refuse to pay the water bill for example and say it's an offset from the judgment or have you tried to go into state court and Get an order that money received by the agency shouldn't be turned over to the city, but should be used to pay this first.

[00:24:41] Speaker 04:
Are there any other ways you can use that judgment to your advantage?

[00:24:46] Speaker 01:
Not that I'm aware of, Your Honor, but I think the key inquiry is whether or not we have Fifth Amendment claims, and we do. And Nick, in going back to cases like Heck v. Humphrey, guarantee a federal forum for the adjudication of our constitutional rights. Again, these are Fifth Amendment claims that have never been adjudicated and could never be adjudicated until now, and that's why we're asking this court to reverse. Thank you.

[00:25:05] UNKNOWN:
Thank you, counsel.

[00:25:09] Speaker 04:
Thank you, counsel. Case is submitted. Counselor excused.