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Marseilles Hydro Power, LLC v. Marseilles Land and Water Co.

February 28, 2008

MARSEILLES HYDRO POWER, LLC, PLAINTIFF-APPELLEE,
v.
MARSEILLES LAND AND WATER CO., DEFENDANT/THIRD-PARTY PLAINTIFF-APPELLANT,
v.
ILLINOIS POWER CO., AND INTERNATIONAL PAPER CO., THIRD-PARTY DEFENDANTS-APPELLEES.



Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 00 C 1164 & 04 C 1427-Harry D. Leinenweber, Judge.

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

ARGUED SEPTEMBER 5, 2007

Before EASTERBROOK, Chief Judge, and WOOD and EVANS, Circuit Judges.

. . . The gaps I mean, No one has seen them made or heard them made, But at spring mending-time we find them there.*fn1

In the spring of 2000, a gap opened in one wall of a water canal in Marseilles, Illinois, causing the wall to collapse partially. This incident gave birth to a long-running dispute between Marseilles Land and Water Company ("the canal company") and Marseilles Hydro Power LLC ("the power company"); that lawsuit has already made one trip to this court. See Marseilles Hydro Power, LLC v. Marseilles Land and Water Co., 299 F.3d 643 (7th Cir. 2002). The parties are fighting over who has the right to receive rents for the water running through the canal and who was responsible for keeping the wall in good repair. Along the way, they have argued over land deeds, obligations to provide subjacent support, and certain indentures governing the rights and duties associated with the canal. Three other parties have been swept into the fray.

Four years into the dispute, the power company filed an eminent domain action in which it sought to condemn all of the canal company's rights in the canal, in the water, in the surrounding land, and under the indentures. Third-party claims, crossclaims, and third-party crossclaims were thrown into the hopper. The original and eminent domain cases became so entangled that the district court accidentally, but understandably, entered a partial judgment in one case under the wrong docket number. Eventually, the court reached a final judgment in the eminent domain case, and it certified partial final judgments for two parts of the original case under FED. R. CIV. P. 54(b).*fn2 The net result is the consolidated appeals now before us. We affirm the judgments of the district court.

I.

The procedural history of this case was first called "long and complex" back in December 2005. Marseilles Hydro Power Co. v. Marseilles Land & Water, LLC, 2005 U.S. Dist. Lexis 34103, *4 (N.D. Ill., Dec. 16, 2005). Since then, matters have gotten worse. We summarize the high points for the convenience of the reader.

In 1876, the canal company received a charter from the Illinois General Assembly to build a dam on the Illinois River in Marseilles. In 1910, the canal company entered into an agreement with Eugene Chubbuck, the owner of a building next to the river, to supply water and maintain the canals in return for monthly rents in specified amounts (the "1910 Indentures"). When Illinois Power succeeded Chubbuck in 1924 and began to use the building for providing electrical power, the agreement was amended ("1924 Indentures"). The power plant was decommissioned in 1988 or 1989 and was conveyed to the power company in 1999; soon thereafter, the power company also acquired the interests in the Indentures. Noting that the canal had fallen into disrepair, the power company ceased paying rents to the canal company in early 1999.

This decision prompted the first, more complex lawsuit, to which we refer in this opinion as the original case (No. 00 C 1164). In February 2000, the power company sued the canal company for failing to keep the canals in good repair and slander of title. But "[s]omething there is that doesn't love a wall,/That wants it down." The retaining wall collapsed in April 2000, not long after the power company allowed the water to drain from the North Race (one of the two major parts to the canal).

In March 2003, after the trip to this court noted earlier, in which we vacated an injunction that authorized the power company to enter upon the canal company's property to repair the wall, the original case continued. The canal company counterclaimed for trespass and negligence and asserted third-party claims against Illinois Power, Field Container ("Field"), and International Paper. According to the canal company, Illinois Power is responsible for the collapse of the wall, because its power lines and guywires put too much tension on the structure. Field and International Paper were liable, it claimed, based on their alleged ownership of the wall, which was supposedly reflected in deeds of sale in 1991 and 1996 (the "Deeds"), and their failure to maintain it. In August 2003, the court dismissed International Paper from the lawsuit.

Right after International Paper left the picture, the power company received a license from the Federal Energy Regulatory Commission to recommission the power plant. This prompted it to file a second suit in February 2004, to which we refer as the eminent domain case (No. 04 C 1427), in which it sought to take the canal by eminent domain under the power granted to it by 16 U.S.C. § 814.

Both the power company and the canal company had filed cross-motions for summary judgment in the original case before the eminent domain action began. In May 2004, the district court ruled on some of those motions, concluding that the power company was a successor-in-interest under the Indentures and holding in its favor on several other issues related to the Indentures. The summary judgment did not resolve the entire dispute, however, and some of the motions lingered.

In June 2004, the canal company threatened to open the head gates to the river and flood the North Race, which had been dry since 2000. The power company secured a temporary restraining order in the eminent domain suit against such an action, but the canal company defied the order and literally opened the floodgates. This prompted Field to file a third-party counterclaim against the canal company for trespass in the original case.

The eminent domain case was resolved first, when the court entered final judgment in the power company's favor in January 2005. It awarded all of the requested land and rights to the power company and set compensation for the taking at $168,750. The canal company's appeal from that judgment, No. 05-2394, is one of the three now before us.

In October 2005, the third-party claims against Field and Illinois Power in the original case were dismissed as untimely under the statute of limitations for property damage. Unfortunately, the court accidentally entered that order under the docket number assigned to the eminent domain case, No. 04 C 1427. The district court also resolved the questions of who owned the retaining wall and who was responsible for certain obligations under the Indentures in favor of Field and Illinois Power and against the canal company. By May 2006, the court had corrected the mistaken docket entry and recorded its decision in the proper place (that is, No. 00 C 1164). At that point, however, it mistakenly cited 28 U.S.C. § 1292(b) in its effort to certify these rulings for immediate appeal. The canal company filed the second appeal before us, No. 06-1481, in order to challenge the court's decision that the statute of limitations barred its claims against Field and Illinois Power. It filed yet a third appeal, No. 06-2456, from the district court's resolution of the issues of ownership of the retaining wall, naming Field and International Paper as appellees, and obligations under the Indentures, naming the power company as appellee.

In April 2007, the parties agreed to dismiss Field from the original case voluntarily. This left the original litigants, the power company and the canal company, and two of the third-party appellees, Illinois Power and International Paper. Another third-party defendant, North American Hydro, is party to some claims that have not been finally adjudicated, and is not before this court.

II.

Before reaching the other issues, a jurisdictional question looms: is appellate jurisdiction proper over the appeals from orders entered in the original case? In attempting to certify the cases we have docketed as Nos. 06-1481 and 06-2456 as ready for immediate appeal, the district court cited 28 U.S.C. ยง 1292(b), which is for "a controlling question of law as to which there is substantial ground for difference of opinion." Neither of the cases fits that standard, because both also purport to be from a final judgment and deal with issues of fact as well as issues of law. Further, the district court did not "state [the appropriate reasons] in writing in [its] order." Id. Finally, no one asked this court to ...


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