Knick: Takings Plaintiffs Can Now Go Directly to Federal Court

Jul 16, 2019

On June 21, 2019, in a 5-4 decision along ideological lines, the U.S. Supreme Court overruled prior precedent governing claims for takings of private property without just compensation, in violation of the Fifth Amendment to the U.S. Constitution. See Knick v. Township of Scott, Pennsylvania, No. 17-647, 588 U.S. __ (2019). Chief Justice Roberts wrote the opinion.

Before Knick, a property owner injured by an unconstitutional taking was required to pursue a remedy in state court before filing suit in federal court. See Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985). The Williamson County Court expressed this as a “ripeness” requirement—that is, filing suit in federal court was premature if the injured property owner had not first “exhausted” her remedies in state court or through another available state or local procedure (such as seeking a variance from a zoning regulation). Only if the state procedure (including subsequent state court litigation challenging a state procedure) did not result in just compensation would a federal lawsuit be warranted.

Twenty years after Williamson County, however, the Court further held that once an inverse condemnation claim had been fully litigated in state court, federal courts were bound to accept the state court judgment under the Full Faith and Credit Act, 28 U.S.C. § 1738. See San Remo Hotel, L.P. v. City and County of San Francisco, California, 545 U.S. 323 (2005). This gave rise to an apparent conundrum: even if a plaintiff was denied just compensation in state court, she could not bring suit in federal court. As the Knick majority put it, “The federal claim dies aborning.”

Knick overrules Williamson County and does away the requirement that an inverse condemnation claim be brought in state court. The Knick Court concluded that, especially as modified by San Remo, the Williamson County “exhaustion” or “ripeness” requirement gave rise to a “preclusion trap,” imposed “an unjustifiable burden” on property owners seeking to exercise their constitutional rights, and relegated the Takings Clause “to the status of a poor relation among the provisions of the Bill of Rights.”

It is true that the reasoning supporting the Williamson County state-remedy requirement was less than compelling. This is possibly because Williamson County—as well as San Remo and other subsequent takings cases—shot wide of the mark. First grounded in “exhaustion” and “ripeness,” the reasoning later evolved to explain the state-remedy requirement as a “prudential” rule. None of these decisions, however, addressed the fact that what constitutes a taking “without just compensation” may not be the same in every state. Whether there has been such a taking depends in large part on a state’s land-use policy, which in turn arises from a combination of a state’s topography, industry, and population, to name just a few of the factors state and local governments consider when forging regulations affecting property. (In this era, the vast majority of claims of inverse condemnation concern the impact of land use regulations.)

Iowa contains a significant amount of agricultural land. It also contains a significant amount of land dedicated to mobile and manufactured homes. How land is regulated vis-à-vis these uses has little or no relation to how apartments and storefronts are regulated in New York City, for instance. On the surface, then, the Williamson County rationale seems to make sense. But, on the other hand—as Knick and others argued—a state’s interest in upholding its regulations could bias state courts against such challenges.

As a practical matter, for most property owners who may have claims for inverse condemnation, litigation will likely proceed more or less as before, with the exception that it will unfold in federal rather than state court. But there is now the possibility that property owners can go beyond seeking just compensation for themselves and challenge state land-use regulations as unconstitutional. This possibility could generate a significant change in state land-use regulations over the coming decades.



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