Supreme Court Shortens the Path for Takings Cases

Client Alert

Knick v. Township of Scott, U.S. Supreme Court No. 17-647 (decided 6/21/19)

In a case resolving a complex procedural question about the ability of property owners to have access to federal courts for their disputes with local government agencies, the Supreme Court overruled a 34-year-old precedent and held that property owners—like all other Americans—are entitled to use the federal courts to settle their disputes.

Manatt filed an amicus curiae brief in support of the property owner, urging the overruling of Williamson County. Our focus was on the importance of providing federal court access as a check on the uncontrolled power of the states. The majority opinion is largely based on the material we provided on this central issue.

Why it is important

In 1985, the Supreme Court established the rule that property owners who claimed that a governmental regulation had effectively taken their property within the meaning of the Fifth Amendment could not sue in federal court until after they had made their case “ripe” by first suing—and losing—the same issue under state law in state court. An apparently unforeseen consequence of that ripening process was that unfavorable conclusion of the state court litigation would then be deemed to preclude litigating the case in federal court. One bite at the apple, so to speak. As outlined in the majority opinion in Knick, the Supreme Court did not realize that was the logical upshot of its rule until 20 years later. At that point, some justices began to express concern over the rule. Now, the rule is gone. Knick directly overruled the state court litigation requirement and held that property owners may now sue directly in federal court. This can be especially important in states like California, where the state courts have not been sympathetic to property owner claims. Now, at least, property owners have the option of avoiding a generally unfriendly court system and seeking relief from different judges.

Knick: The case and its analysis

The facts of Knick are really not important. The issue is procedural. In a nutshell, however, Ms. Knick owned land in Pennsylvania on which the authorities discovered an ancient burial ground. By ordinance, all burial grounds must be open to the public. When the township told Ms. Knick that her property needed to be open to the public, the parties ended up in court. The lower federal courts dismissed her case because the decision in Williamson County Regional Planning Agency v. Hamilton Bank, 473 US 172 (1985), said that such a suit was premature before the conclusion of state court proceedings raising the same issue under state law.

Knick at the Supreme Court

The Supreme Court overruled Williamson County’s state court litigation holding. The vote was 5–4, with Chief Justice Roberts writing for the majority and Justice Kagan for the dissenters.

The majority took dead aim at Williamson, concluding that it “was not just wrong. Its reasoning was exceptionally ill founded” and it was “unworkable in practice.” As the majority described it, Williamson County simply garbled its theory by concluding that, because the Fifth Amendment did not preclude takings, but only takings without just compensation or not for a public use, such a claim could not be ripe for litigation until the state courts had entertained such a suit under comparable state law and ruled against the property owner. That was wrong, held the majority, because a taking is complete at the time of the offending governmental action, not later, at the entry of judgment against the government. Because of that, for example, interest runs on a takings award from the time of the initial invasion, not from the eventual judgment. The court that decided Williamson County “was simply confused.”

Property owners have been trying to get Williamson County overruled ever since it was decided. Indeed, one of the first critiques of that opinion was written by the undersigned while the ink on the opinion was still figuratively wet. See Michael M. Berger, Anarchy Reigns Supreme, 29 J. Urb. & Contemp. L. 39 (1985). It has been a difficult slog, but a majority of the Supreme Court finally understood. Indeed, the majority opinion is so clear and straightforward, it is hard to picture how it took so long to get the law back on track so that property owners with Fifth Amendment claims may be treated the same as other constitutional claimants rather than, as the Court put it, “second class citizens.”