Federal Takings Claims May Now Be Filed Directly in Federal Court

The United States Supreme Court Supreme Court issued a decision on June 21, 2019, holding that landowners are no longer effectively required to exhaust state remedies before filing Fifth Amendment federal takings claims in federal court. Knick v. Township of Scott, Pa., No. 17-647 (U.S. 2019). This case, which overruled precedent established in 1985, broadens the options available to landowners who claim that a state or municipality has taken their property without just compensation. It stands to significantly impact the course of inverse condemnation litigation.

Facts

The case involved a landowner who had some family grave markers on her property. The Township in which she lived passed an ordinance requiring all cemeteries to be kept open and accessible to the public during daylight hours. A Township officer notified the landowner that she was violating the ordinance by not opening her cemetery to the public. The landowner filed an action in state court seeking an injunction and a declaratory judgment that the ordinance effected a taking of her property. In response, the township withdrew the violation notice and stayed enforcement of the ordinance during the pendency of the state court proceedings. The state court, in turn, refused to rule on the landowner’s claim, finding that there was no irreparable harm absent an ongoing enforcement action.

Litigation

The landowner did not file an inverse condemnation action seeking just compensation in state court. Instead, she filed a federal court action under 42 U.S. § 1983, alleging that the ordinance violated the Takings Clause of the Fifth Amendment. The federal district court dismissed the landowner’s claim under precedent established by the Supreme Court in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985). In Williamson, the Court had ruled that a property owner whose property had been taken by a local government had not suffered a Fifth Amendment violation and could not bring a federal takings claim until a state court had denied his claim for just compensation under state law. The Third Circuit, while stating that the ordinance was “extraordinary and constitutionally suspect” affirmed the dismissal of the landowner’s claim in light of the Williamson precedent. The Supreme Court agreed to hear the case.

Supreme Court Ruling

In overruling Williamson, a 5-4 Court held that a property owner has a claim for a violation of the Takings Clause as soon as a government takes his property for public use without paying for it. The property owner may sue the government at that time in federal court for the “deprivation of a right secured by the Constitution.” The availability of any particular compensation remedy, such as an inverse condemnation claim under state law, cannot infringe or restrict the property owner’s federal constitutional claim. In taking the major step to overrule Williamson, the Court asserted that the case was “wrong” and that its “reasoning was exceptionally ill founded.” The Court also pointed out that the state-litigation requirement had proven unworkable in practice. Williamson County had envisioned that takings plaintiffs would ripen federal claims in state court and then, if necessary, bring the federal lawsuit. In practice, however, the state court’s resolution of the inverse condemnation claim had a preclusive effect in any subsequent federal suit. As such, many takings plaintiffs did not have the opportunity to litigate their claims in a federal forum.

The Court stated in conclusion that its holding would not expose governments to new liability. Rather it would simply allow into federal court takings claims that would otherwise have been brought as inverse condemnation claims in state court. The Court also noted that, as long as just compensation remedies are available, injunctive relief against a state government (such as enjoining the enforcement of a state statute) will be foreclosed.

Impact

The impact this case will have on landowners and governments remains to be seen, but it will likely significantly change the litigation landscape. State inverse condemnation actions are routinely brought where a landowner has suffered permanent damage to property, without just compensation, because of governmental action, where a state or local law has deprived a landowner of full use or enjoyment of his or her property, without just compensation, or where a zoning or other ordinance so burdens the landowner’s use of property, as to constitute an uncompensated taking. Takings cases arising under these facts may now be filed directly in federal court, without first seeking a state court remedy. This is a wide new door to a federal forum that will, in many case, become the new first choice.