Pennzoil v. Texaco, Inc., 481 U.S. 1 (1987)

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Author: Justice Brennan

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Pennzoil v. Texaco, Inc., 481 U.S. 1 (1987)

JUSTICE BRENNAN, with whom JUSTICE MARSHALL joins, concurring in the judgment.

Texaco’s claim that the Texas bond and lien provisions violate the Fourteenth Amendment is without merit. While Texaco cannot, consistent with due process and equal protection, be arbitrarily denied the right to a meaningful opportunity to be heard on appeal, this right can be adequately vindicated even if Texaco were forced to file for bankruptcy.

I believe that the Court should have confronted the merits of this case. I wholeheartedly concur with JUSTICE STEVENS’ conclusion that a creditor’s invocation of a State’s postjudgment collection procedures constitutes action under color of state law within the meaning of 42 U.S.C. § 1983. Post at 30, n. 1.

I also agree with his conclusion that the District Court was not required to abstain under the principles enunciated in Younger v. Harris, 401 U.S. 37 (1971). Post at 30, n. 2. I adhere to my view that Younger is, in general, inapplicable to civil proceedings, especially when a plaintiff brings a § 1983 action alleging violation of federal constitutional rights. See Huffman v. Pursue, Ltd., 420 U.S. 592, 613 (1975) (BRENNAN, J., dissenting) (Younger held "that federal courts should not interfere with pending state criminal proceedings, except under extraordinary circumstances" (emphasis in original)); Juidice v. Vail, 430 U.S. 327, 342 (1977) (BRENNAN, J., dissenting) ("In congressional contemplation, the pendency of state civil proceedings was to be wholly irrelevant. `The very purpose of § 1983 was to interpose the federal courts between the States and the people, as guardians of the people’s federal rights’") (quoting Mitchum v. Foster, 407 U.S. 225, 242 (1972)).

The State’s interest in this case is negligible. The State of Texas -- not a party in this appeal -- expressly represented to the Court of Appeals that it "has no interest in the outcome of the state court adjudication underlying this cause," except in its fair adjudication. 784 F.2d 1133, 1150 (CA2 1986); Brief for Intervenor-Appellant in Nos. 86-7046, 86-7052, p. 2. The Court identifies the State’s interest as enforcing "`the authority of the judicial system, so that its orders and judgments are not rendered nugatory.’" Ante at 13 (quoting Juidice v. Vail, supra, at 336, n. 12). Yet, the District Court found that "Pennzoil has publicly admitted that Texaco’s assets are sufficient to satisfy the Judgment even without liens or a bond." App. to Juris. Statement A116 (supplemental findings of fact by District Court).

Thus, Pennzoil’s interest in protecting the full amount of its judgment during the appellate process is reasonably secured by the substantial excess of Texaco’s net worth over the amount of Pennzoil’s judgment.

784 F.2d at 1155.

Indeed, the interest in enforcing the bond and lien requirement is privately held by Pennzoil, not by the State of Texas. The Court of Appeals correctly stated that this

is a suit between two private parties stemming from the defendant’s alleged tortious interference with the plaintiff’s contract with a third private party.

784 F.2d at 1150. Pennzoil was free to waive the bond and lien requirements under Texas law, without asking the State of Texas for permission. See Yandell v. Tarrant State Bank, 538 S.W.2d 684, 687 (Tex.Civ.App.1976); United Benefit Fire Insurance Co. v. Metropolitan Plumbing Co., 363 S.W.2d 843, 847 (Tex.Civ.App.1962).

Since Texas law directs state officials to do Pennzoil’s bidding in executing the judgment, it is the decision of Pennzoil, not that of the state judiciary, to utilize state agents to undertake the collection process, and the state officials can act only upon Pennzoil’s unilateral determination.

784 F.2d at 1147. The State’s decision to grant private parties unilateral power to invoke, or not invoke, the State’s bond and lien provisions demonstrates that the State has no independent interest in the enforcement of those provisions.

Texaco filed this § 1983 suit claiming only violations of federal statutory and constitutional law. In enacting § 1983, Congress

created a specific and unique remedy, enforceable in a federal court of equity, that could be frustrated if the federal court were not empowered to enjoin a state court proceeding.

Mitchum v. Foster, supra, at 237. Today the Court holds that this § 1983 suit should be filed instead in Texas courts, offering to Texaco the unsolicited advice to bring its claims under the "open courts" provision of the Texas Constitution. This "`blind deference to "States’ Rights"’" hardly shows "`sensitivity to the legitimate interests of both State and National Governments.’" Ante at 10 (quoting Younger v. Harris, supra, at 44) (emphasis added).*

Furthermore, I reject Pennzoil’s contention that District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), and Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), forbid collateral review in this instance. In Rooker and Feldman, the Court held that lower federal courts lack jurisdiction to engage in appellate review of state court determinations. In this case, however, Texaco filed the § 1983 action only to protect its federal constitutional right to a meaningful opportunity for appellate review, not to challenge the merits of the Texas suit. Texaco’s federal action seeking a stay of judgment pending appeal is therefore an action "`separable from and collateral to’" the merits of the state court judgment. National Socialist Party v. Skokie, 432 U.S. 43, 44 (1977) (quoting Cohen v. Beneficial Loan Corp. 337 U.S. 541, 546 (1949)).

While I agree with JUSTICE STEVENS that Texaco’s claim is "plainly without merit," post at 29, my reasons for so concluding are different. Since Texas has created an appeal as of right from the trial court’s judgment, it cannot infringe on this right to appeal in a manner inconsistent with due process or equal protection. See Evitts v. Lucey, 469 U.S. 387, 393 (1985). While

a cost requirement, valid on its face, may offend due process because it operates to foreclose a particular party’s opportunity to be heard,

Boddie v. Connecticut, 401 U.S. 371, 380 (1971), in this case, Texaco clearly could exercise its right to appeal in order to protect its corporate interests even if it were forced to file for bankruptcy under Chapter 11. 11 U.S.C. § 362. Texaco, or its successor in interest, could go forward with the appeal, and if it did prevail on its appeal in Texas courts, the bankruptcy proceedings could be terminated. § 1112. Texaco simply fails to show how the initiation of corporate reorganization activities would prevent it from obtaining meaningful appellate review.

I reach this conclusion on the narrow facts before us. Thus, this case is different from the more troublesome situation where a particular corporate litigant has such special attributes as an organization that a trustee in bankruptcy, in its stead, could not effectively advance the organization’s interests on an appeal. Moreover, the underlying issues in this case -- arising out of a commercial contract dispute -- do not involve fundamental constitutional rights. See, e.g., Henry v. First National Bank of Clarksdale, 595 F.2d 291, 299-300 (CA5 1979) (bankruptcy of NAACP would make state appellate review of First Amendment claims "so difficult" to obtain that federal injunction justified), cert. denied sub nom. Claiborne Hardware Co. v. Henry, 444 U.S. 1074 (1980).

Given the particular facts of this case, I would reverse the judgment of the Court of Appeals and remand the case with instructions to dismiss the complaint.

* In particular, the suggestion that Texaco could enter a Chapter 11 proceeding, pursue its appeal, and then reemerge from this proceeding to continue "business as usual," strikes me as somewhat at odds with the reality of the corporate reorganization that might occur in bankruptcy, especially on the facts of this case. Moreover, while there has been some discussion about a "special law" for multibillion-dollar corporations, I would have thought that our proper concern is with constitutional violations, not with our sympathy, or lack thereof, for a particular litigant. It might also be useful to point out an obvious, but overlooked, fact: Pennzoil, too, is not a corner grocery store.

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Chicago: Brennan, "Brennan, J., Concurring," Pennzoil v. Texaco, Inc., 481 U.S. 1 (1987) in 481 U.S. 1 481 U.S. 19–481 U.S. 23. Original Sources, accessed October 3, 2022, http://www.originalsources.com/Document.aspx?DocID=L1U7LHPIT4GP3N9.

MLA: Brennan. "Brennan, J., Concurring." Pennzoil v. Texaco, Inc., 481 U.S. 1 (1987), in 481 U.S. 1, pp. 481 U.S. 19–481 U.S. 23. Original Sources. 3 Oct. 2022. http://www.originalsources.com/Document.aspx?DocID=L1U7LHPIT4GP3N9.

Harvard: Brennan, 'Brennan, J., Concurring' in Pennzoil v. Texaco, Inc., 481 U.S. 1 (1987). cited in 1987, 481 U.S. 1, pp.481 U.S. 19–481 U.S. 23. Original Sources, retrieved 3 October 2022, from http://www.originalsources.com/Document.aspx?DocID=L1U7LHPIT4GP3N9.