Should Property Owners Pursue Takings Claims in State or Federal Court?

When state and local governments impose unreasonable conditions or exactions on private property, owners pursuing a regulatory takings claim often face a maze of procedural obstacles just to have their case heard. I once described these procedural obstacles as resembling Alice's trip through Wonderland, with the parties falling in and out of state and then federal court (instead of a rabbit hole) based on procedural and substantive rules that often seem as logical as the Mad Hatter's recitals at the Tea Party. The reason for this maze stems from (i) a U.S. Supreme Court decision, Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172, 194-96 (1985), which held that landowners must first unsuccessfully seek compensation in state court before bringing a Fifth Amendment takings claim in federal court, and (ii) subsequent court decisions holding that if property owners go to state court first, they find themselves later barred from federal court because they have already litigated the issues in state court.  This Catch-22 may finally be resolved, as the U.S. Supreme Court has agreed to hear the case of Knick v. Township of Scott (Case No. 17-647) to revisit its holding in Williamson County and potentially allow owners to bring a takings claim under the U.S. Constitution directly in federal court.

Background

In Williamson County, a property owner successfully pursued a regulatory takings claim in federal court when its residential development was stopped, but the U.S. Supreme Court reversed, stating that the developer had to first pursue its claims in state court.  Later, in San Remo Hotel v. San Francisco, 545 U.S. 323 (2005), the Court held that a property owner who first pursued a takings claim in state court could not thereafter pursue the claim in federal court since the issue had already been litigated.  These decisions placed property owners in a Catch-22, with a seemingly impossible procedural hurdle to pursue takings claims in federal court.

In Knick, a local Pennsylvania government agency enacted an ordinance requiring all cemeteries to be open and accessible to the public, and later attempted to enforce the ordinance to allow the public to access a privately-owned 90-acre parcel of land that may contain an ancient burial ground.  Not wanting widespread public access to its private property, the owner sued in state court, but the court refused to rule since the government withdrew its enforcement efforts on the owner’s property.  The owner then sued in federal court, but the court held the claims were not ripe under Williamson County until the owner filed a new takings claim in state court.

Upcoming U.S. Supreme Court Decision

The owner appealed the decision all the way to the U.S. Supreme Court, which has agreed to hear the case to address the Williamson County procedural issue.  Specifically, the Court will answer the following question:  Whether the Court should reconsider the portion of Williamson County [], requiring property owners to exhaust state court remedies to ripen federal takings claims, as suggested by Justices of this Court? [].

We likely won’t obtain a decision until early 2019, but it will be interesting to see if the Court finally overrules its prior decision and allows property owners to pursue their takings claims directly in federal court. Given the widespread criticism of the procedural maze, including by the Court’s own justices, I would not be surprised to see the Williamson County rule abolished or at least significantly minimized.

  • Partner

    Brad Kuhn serves as Chair of Nossaman's Eminent Domain & Valuation Group, likely the largest group of skilled eminent domain attorneys in California and the United States.  Brad is a real estate and business litigation attorney, with ...

California Eminent Domain Report is a one-stop resource for everything new and noteworthy in eminent domain in California. We cover all aspects of eminent domain in California, including condemnation, inverse condemnation, and regulatory takings. We also keep track of current cases, project announcements, budget issues, legislative reform efforts, and report on all major California eminent domain conferences and seminars.

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