ASARCO Inc. v. Kadish

Supreme Court of the United States · 1989 · Federal Courts

Federal CourtsSupreme Court review of state judgmentsStandingCase or controversyAdequate and independent state groundsArticle IIIstandingstate courts

Facts

Respondents challenged Arizona Revised Statutes § 27-234(B), which required a 5% royalty on minerals produced from state lands but did not require advertisement, appraisal, or leasing at full appraised value before leasing. The challenged lands were school trust lands granted to Arizona under the New Mexico-Arizona Enabling Act of 1910 or under the Jones Act of 1927. The Arizona Supreme Court ruled that the statute was invalid as to nonhydrocarbon mineral leases because it did not comply with the federal conditions governing disposition of those lands. Petitioners were current mineral lessees whose leases had been granted under the invalidated statute.

Issue

Whether the Supreme Court had jurisdiction to review the Arizona Supreme Court's judgment despite the original state-court plaintiffs' lack of federal standing, the remand below, and references to the Arizona Constitution; and, on the merits, whether Arizona may lease federally granted mineral trust lands without complying with the Enabling Act's mandatory leasing conditions.

Rule

State courts are not bound by Article III standing rules, but when a state court has entered judgment in a case where the original plaintiffs would have lacked standing in federal court, the Supreme Court may review that judgment on certiorari if the petitioners seeking review suffer direct, specific, and concrete injury from the state judgment and a genuine Article III case or controversy exists. As to the merits, mineral lands granted to Arizona under the Enabling Act and the Jones Act must be sold or leased in substantial conformity with the Enabling Act's mandatory restrictions, and contrary dispositions are null and void unless made in substantial conformity with that Act.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

A teachers group and several taxpayers sued in Oregon state court, arguing that a state timber-leasing statute violated a federal land-grant statute. The Oregon Supreme Court agreed and declared the statute invalid. Cascade Ridge Logging, an existing lessee whose current leases were issued under that statute, seeks certiorari in the U.S. Supreme Court.

Assume the original state-court plaintiffs would have lacked Article III standing had they filed in federal district court. Does that defect by itself prevent Supreme Court review?

Explanation. The majority held that state courts are not bound by Article III standing requirements. Even when the original plaintiffs would have lacked standing in federal court, the U.S. Supreme Court may review the state judgment if the petitioners invoking federal jurisdiction for the first time suffer direct, specific, and concrete injury from the judgment and the requisites of an Article III case or controversy are met. That is true here because the lessee is directly injured by the adverse declaratory judgment. (Derived from ASARCO Inc. v. Kadish (1989).)