On June 21, 2019, the Supreme Court of the United States decided Knick v. Township of Scott, Pennsylvania, 588 U.S. __ (Case No. 17-647), a closely-watched property rights case that was argued first in October of 2018 and again in January of 2019 after Justice Brett Kavanaugh joined the Court. Knick addressed the requirement, established in Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), that property owners must seek just compensation under state law in state court before bringing a federal takings claim under 42 U.S.C. section 1983.
In a remarkable 5-4 opinion by Chief Justice John Roberts, the Knick Court held that a government violates the Takings Clause the moment it takes private property without compensation, and the owner may assert a Fifth Amendment claim under section 1983 at that time, without first pursuing a state-law remedy. Moreover, the Court overruled the state-litigation requirement established in Williamson County 34 years ago, describing that case as based on “poor reasoning” and a “[break] with the Court’s longstanding position that a property owner has a constitutional claim to compensation at the time the government deprives him of his property” because “the Court was simply confused” about how the Takings Clause works.
In a sharply-worded dissent, Justice Elena Kagan upbraided the majority for its “portrayal,” writing that “Williamson County was rooted in an understanding of the Fifth Amendment’s Takings Clause stretching back to the late 1800s.” In departing from established precedent, while “[u]nder cover of overruling ‘only’ a single decision, today’s opinion smashes a hundred-plus years of legal rulings to smithereens.”
The case was filed by Rose Mary Knick, who owns 90 acres of land in rural Pennsylvania. Her property includes a small graveyard where ancestors of Ms. Knick’s neighbors are allegedly buried. Such family cemeteries are fairly common in Pennsylvania, where “backyard burials” have long been allowed. Scott Township passed an ordinance that required all cemeteries to be open and accessible to the public during daylight hours and authorized code enforcement officers to enter upon any property to determine the existence and location of any cemetery.
Ms. Knick filed a section 1983 action in federal court, alleging that the ordinance violated the Takings Clause of the Fifth Amendment. The District Court for the Middle District of Pennsylvania dismissed Ms. Knick’s claim under Williamson County because she had not first pursued an inverse-condemnation action in state court. The Third Circuit affirmed, despite noting that the ordinance was “extraordinary and constitutionally suspect.”
According to the Knick majority, in effectively establishing an exhaustion requirement for section 1983 takings claims when it held that a property owner must pursue state procedures for obtaining compensation before bringing a federal suit, the Court in Williamson County “was not just wrong. Its reasoning was exceptionally ill founded . . . .” The Takings Clause provides: [N]or shall private property be taken for public use, without just compensation.” It does not say: “Nor shall private property be taken for public use, without an available procedure that will result in compensation.”
The Knick majority thus reasoned that a takings plaintiff “finds himself in a Catch-22” and noted that “the guarantee of a federal forum rings hollow for takings plaintiffs, who are forced [by Williamson County] to litigate their claims in state court.” The catch, under San Remo Hotel, L. P. v. City and County of San Francisco, 545 U.S. 323 (2005), is that a state court’s resolution of a claim for just compensation under state law generally has preclusive effect in any subsequent federal suit. Thus, under that “preclusion trap,” a takings plaintiff cannot go to federal court without going to state court first; but if he goes to state court and loses, his claim will be barred in federal court.
According to the majority, Williamson County’s “state-litigation requirement relegates the Takings Clause ‘to the status of a poor relation among the provisions of the Bill of Rights.” And in a brief, if not effective, attempt to draw on principles of “originalism,” the majority explained that the Framers of the Constitution meant to prohibit the federal government from taking property without paying for it. “Allowing the government to keep the property pending subsequent compensation to the owner, in proceedings that hardly existed in 1787, was not what they envisioned.”
The majority also explained that the state-litigation requirement is based on “shaky foundations,” has been “a rule in search of a justification for over 30 years,” is “unworkable in practice,” and “imposes an unjustifiable burden on takings plaintiffs, conflicts with the rest of [the Court’s] takings jurisprudence, and must be overruled.” And in overruling that part of Williamson County, the Knick Court held that a property owner has a Fifth Amendment takings claim “as soon as a government takes his property for public use without paying for it.” Despite the “extreme assertions” of the dissent, the majority opinion underscored the Court’s holding repeatedly so that it cannot be missed:
“If a local government takes private property without paying for it, that government has violated the Fifth Amendment—just as the Takings Clause says—without regard to subsequent state court proceedings. And the property owner may sue the government at that time in federal court for the ‘deprivation’ of a right ‘secured by the Constitution.’ ”
“The fact that the State has provided a property owner with a procedure that may subsequently result in just compensation cannot deprive the owner of his Fifth Amendment right to compensation under the Constitution, leaving only the state law right.”
“The Fifth Amendment right to full compensation arises at the time of the taking, regardless of post-taking remedies that may be available to the property owner.”
“Because of ‘the self-executing character’ of the Takings Clause ‘with respect to compensation,’ a property owner has a constitutional claim for just compensation at the time of the taking.”
“Compensation under the Takings Clause is a remedy for the ‘constitutional violation’ that ‘the landowner has already suffered’ at the time of the uncompensated taking.”
“In sum, because a taking without compensation violates the self-executing Fifth Amendment at the time of the taking, the property owner can bring a federal suit at that time.”
“The state-litigation requirement of Williamson County is overruled. A property owner may bring a takings claim under § 1983 upon the taking of his property without just compensation by a local government.”
In a short concurring opinion, Justice Thomas criticized the United States for arguing that government officials should be able to implement regulatory programs “without fear” that they will later be held to have violated the Fifth amendment because the government’s “implied promise to pay compensation” renders constitutional laws and regulations that may in some instances result in the taking of individual pieces of property.
“This ‘sue me’ approach to the Takings Clause is untenable,” according to Justice Thomas, because the Fifth Amendment does not merely provide a damages remedy to a property owner willing to “shoulder the burden of securing compensation” after the government takes property without paying for it. Instead, it makes just compensation a “prerequisite” to the government’s authority to take property for public use. Justice Thomas also expressed disdain for the argument that this requirement makes some regulatory programs “unworkable in practice.” If that occurs, then “so be it—our role is to enforce the Takings Clause as written.”
Writing for the dissent, Justice Kagan explained that the Takings Clause has “dual elements” that make it different from, and unique among other constitutional rights. The Takings Clause is different because it does not prohibit takings. Rather, it allows takings of private property provided the government gives just compensation. Accordingly, when the government takes and pays fair value, “it is not violating the Constitution at all.”
Under the dissent’s reading of precedent going back over 100 years, a Fifth Amendment violation does not occur until an owner has used the government’s procedures and failed to obtain just compensation. The Knick majority thus “overthrows the Court’s long-settled view of the Takings Clause . . . against a mountain of precedent . . . .”
Overruling the state-litigation requirement of Williamson County will have two “damaging consequences,” according to the dissent. First, government regulators will often have no way to avoid violating the Constitution because there are a “nearly infinite variety of ways” for regulations to “affect property interests” and a government actor usually cannot know in advance whether implementing a regulatory program will effect a taking, much less of whose property. “Now, when a government undertakes land-use [sic] regulation . . . the responsible employees will almost inescapably become constitutional malefactors. That is not a fair position in which to place persons carrying out their governmental duties.”
Second, Knick will send to federal court cases that are better suited for state court because a claim that a land use regulation or decision violates the Takings Clause usually turns on state law issues. The decision will send “a flood of complex state-law issues to federal courts,” make federal courts a “principal player” in local and state land use disputes, and “betrays judicial federalism.”
Finally, the dissent expressed deep concern with the majority’s decision to depart from precedent, because adhering to precedent, under the doctrine of stare decisis, is “a foundation stone of the rule of law.” It is not enough that five justices believe a precedent wrong. Reversing course demands a “special justification” beyond the belief that the precedent was “wrongly decided,” and “it is hard to overstate the value, in a country like ours, of stability in the law.”
Knick is a monumental new decision in the canons of takings law. In the words of Chief Justice Roberts, the Court’s new ruling immediately “restor[es] takings claims to the full-fledged constitutional status the Framers envisioned when they included the Clause among the other protections in the Bill of Rights.” And contrary to Justice Kagan’s overstatement that the decision automatically makes government employees “constitutional malefactors”—hardly an argument for depriving takings plaintiffs their day in federal court by upholding Williamson County—Knick makes clear that government employees engaged in the practice of regulating private property do so in a larger constitutional system that is concerned with fairness to property owners. If this is unfair to land use regulators and makes some regulatory programs unworkable in practice, “so be it.” Moreover, as Justice William Brennan memorably asked in San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 661 n. 26 (1981) (Brennan, J., dissenting on behalf of four justices), “After all, if a policeman must know the Constitution, then why not a planner?”
While it is merely one case, Knick immediately indicates that this version of the Roberts Court is likely to be a friendly venue for litigants seeking to vindicate their property rights. And with at least one new petition for writ of certiorari already on file again asking the Court to finally break the longstanding circuit split on the unprincipled distinction between the treatment of legislatively-imposed conditions of approval and administratively-imposed conditions under the Nollan and Dolan rules (which we have addressed in previous posts here, here, here, here, and here) there is reason for those of us who represent landowners and developers to be optimistic.
Questions? Please contact Bryan W. Wenter, AICP of Miller Starr Regalia.
For more than 50 years, Miller Starr Regalia has served as one of California’s leading real estate law firms. Miller Starr Regalia has expertise in all types of real property matters, including full-service litigation and dispute resolution, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, exactions, title insurance, environmental law, and land use. Miller Starr Regalia attorneys also write Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. For more information, visit www.msrlegal.com.