Last year, the United States Supreme Court made headlines (at least in our eminent domain world) by issuing a ruling in Knick v. Township of Scott that property owners can bypass the state courts and directly file a Fifth Amendment takings claim in federal court (you can find our write-up on Knick here). This was a stark shift from prior law, which held that a property owner had to first finalize their pursuit of compensation through any applicable state procedures. We are still feeling the effects from the Supreme Court's holding, but one question that has been raised is how does the decision impact standard direct eminent domain actions -- can a private property owner whose property is being condemned by a state public agency directly remove the case to federal court and assert there is jurisdiction under the federal takings clause? According to a recent federal district court decision, the answer is no.
In Providence City v. Thompson, No. 1:19-CV-88, 2019 WL 4932759 (D. Utah Oct. 7, 2019), a city initiated a state court eminent domain action to acquire private property to construct a road. The property owner removed the case to federal court under Knick, claiming the case now involved a federal question under the U.S. Constitution. The District Court found subject matter jurisdiction to be lacking and remanded the case back to state court.
The Court explained that while Knick eliminated the need for private owners to first exhaust their remedies in state court before filing in federal court, it did not mean that state eminent domain actions involve federal claims. The Court further explained that Knick involved a private property owner suing to recover for inverse condemnation -- not a property owner defendant against whom a direct condemnation action had been filed in state court. This made a difference because federal question jurisdiction is based on the plaintiff's complaint, and state agencies are pursuing eminent domain under their own state laws -- not under the U.S. Constitution.
So far, Thompson is the only case to address a property owner's ability to remove a direct state court eminent domain case to federal court. Other courts could reach different conclusions, but for the time being it does not appear that removal to federal court is an option for property owners in direct takings cases.
Brad Kuhn serves as Chair of Nossaman's Eminent Domain & Valuation Group. Brad is a real estate and business litigation attorney, with a particular emphasis in the transportation, energy/gas, water, land-use development, and ...
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