OP-ED: U.S. Supreme Court decision is a game changer for takings litigation

Last month’s U.S. Supreme Court decision in Knick v. Township of Scott, Pennsylvania, involved a local ordinance that required “all cemeteries … be kept open and accessible to the general public during daylight hours;” however, the landowner on whose property the alleged cemetery sat claimed in federal court that the ordinance constituted a “taking” of her property. Since 1985, under Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, a federal takings claim must be brought in state court and denied before becoming “ripe” for federal court consideration. However, that process was frustrating to claimants because the state court decision then often precluded a separate federal consideration of the taking based on the same facts – you only get one bite at the apple.

From the Daily Journel of Commerce

Chief Justice John Roberts’ majority opinion in Knick overruled Williamson County, stating “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” so that the claim may be litigated at once in federal court under the Civil Rights Act, regardless of state post-taking remedies that may be available to the plaintiff because the right to just compensation rests on the Constitution and not any statute.

The majority opinion distinguished or criticized other elements of the Williamson County decision, stating it rested on “shaky grounds” and it resulted in “unintended consequences.” In overturning Williamson County, the majority addressed stare decisis – i.e., that an erroneous decision should not lightly be overturned because in most matters it is more important that the applicable rule of law be settled than that it be settled right, finding this rule weakest in matters of constitutional interpretation and identifying several factors to consider in deciding whether to overrule a past decision, including “the quality of (its) reasoning, the workability of the rule it established, its consistency with other related decisions, … and reliance on the decision” and found all of them militated in favor of reversing 34 years of precedent. Supporters of Roe v. Wade might want to parse the stare decisis aspects of this decision.

Justice Elena Kagan joined three other justices in dissent, defending the rationale of Williamson County that there is no violation of the Takings Clause unless and until just compensation is denied, which cannot be determined until a state court denies compensation. Under Williamson County, the state court must also determine whether a taking has occurred – a function that federal courts must now undertake, in addition to determining just compensation. The dissent also used its version of precedent, logic and pragmatism to justify Williamson County and noted that liability (with damages, attorney fees and costs) did not attach – until now, concluding: “Today’s decision thus overthrows the Court’s long-settled view of the Takings Clause. The majority declares, as against a mountain of precedent, that a government taking private property for public purposes must pay compensation at that moment or in advance. … If the government fails to do so, a constitutional violation has occurred, regardless of whether ‘reasonable, certain and adequate’ compensatory mechanisms exist.”

The dissent suggested the majority opinion rested on four ideas: a comparison between takings claims and other constitutional claims, a resort to the Takings Clause’s text, and theories about two lines Supreme Court precedent. Justice Kagan responded to each idea. The comparison and textual ideas fail because of the distinct wording of the Takings Clause that requires denial of just compensation, which allows for state post-deprivation remedies (until now). And while giving “points for creativity” in suggesting previous cases should not be read “too broadly,” Justice Kagan found this interpretive analysis an elegant way of undermining inconvenient precedent.

Justice Kagan also predicted that the majority decision will turn public servants and agencies into lawbreakers because they cannot know in advance whether regulations will ultimately be deemed a “taking” and that takings claims will flood the federal courts, lacking the check of adjudication by state courts more familiar with state and local planning and regulatory systems. Finally, Justice Kagan raised the flexibility of the standards for overruling stare decisis without listing possible other cases a subsequent court may determine to be resting on “shaky foundations” or otherwise “ill-founded.” Many observers suggest she was referring to cases dealing with abortion.

Perhaps the outcome of this case was predictable, especially after the Supreme Court ordered re-argument after Justice Brett Kavanaugh was seated. The property rights bar has long wished to proceed directly to federal court in takings claims (unless accompanied in advance with just compensation), using uncertainty of takings claims and the prospect of damages, attorney fees and costs as a bargaining tool. This decision will likely result in a sea change in the number of future takings claims and the means by which they will be dealt with by claimants, public agencies and the courts. The attention given this case may pale in comparison to that given cases involving the federal census, immigration or reapportionment; however, it is likely to be seen as one of the most significant decisions of the new Roberts-led Supreme Court.

Edward Sullivan is a retired practitioner of land use and municipal law with more than 45 years of experience. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.