Kyle Greene, Blog Editor, University of Cincinnati Law Review
In a recent 5-4 decision, the Supreme Court overruled precedent, now allowing property owners to immediately bring a Takings Clause federal claim when their state government takes control of their property without just compensation. The right exists regardless of whether a state procedure to apply for compensation is in place, or whether the state promises to pay sometime in the future. This Article will explain the Court’s majority reasoning in Knick v. Township of Scott and why it decided to overrule the previously controlling case of Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson. It will further describe the dissent’s concerns in the majority’s reasoning, and finally, conclude that while the majority’s decision alleviates some problems with Williamson, it also potentially subjects federal courts to have to analyze complex state law issues which they may not be best suited to handle.
I. The Overruled Precedent: William County Regional Planning Comm’n v. Hamilton Bank of Johnson City
In Williamson County, a property developer brought suit in federal court against a zoning board that rejected the developer’s proposal for a new subdivision, alleging Fifth Amendment Takings Clause violations. The Supreme Court decided the developer’s case was not yet ripe for review in a federal court because (1) the developer still had an opportunity to seek variance from an appeals board, so the taking was not yet final, and (2) the developer did not have a federal takings claim because he had not sought compensation “through the procedures the State had provided for doing so.” The Court reasoned that when a State provides adequate procedures for seeking compensation, the property owner cannot claim a violation of the Taking Clauses until its exhausts those procedures and is denied. Thus, a Takings Clause violation does not exist untill the state procedure for compensation denies the property owner of compensation.
Under the Williamson County rule of law, the Supreme Court decided San Remo Hotel, L. P. v. City and County of San Francisco. In San Remo, the plaintiffs brought their Takings Clause claim in state court as required by Williamson County. However, when the plaintiff’s claim for compensation was denied, they were unable to later bring their Fifth Amendment claim to federal court. The Court reasoned that the Full Faith and Credit Statute required the federal court to give preclusive effect to the state court’s decision, blocking any subsequent consideration of whether the plaintiff suffered a taking within the meaning of the Fifth Amendment. Therefore, under Williamson County’s state litigation requirement, a plaintiff alleging a Takings Clause violation must first bring their claim through state procedures, but if they lose, then under San Remo they will be barred from bringing a federal claim because of the obligations under the Full Faith and Credit Statute.
II. The Supreme Court’s Answer: Knick v. Township of Scott
The Supreme Court recently sought to relegate the problems with Williamson in its June 2019 decision in Knick v. Township of Scott. A woman had a family graveyard near the back of her 90 acre plot of land, as is fairly customary in Pennsylvania. Scott Township passed an ordinance that “all cemeteries . . . be kept open and accessible to the general public during daylight hours.” The Township had the authority to enter any property to determine the existence and location of cemeteries to enforce their ordinance. The Township utilized their authority and found the small graveyard in Knick’s backyard. They notified her that she was violating the ordinance by failing to open it to the public and notified her of the violation. In response, Knick sought declaratory and injunctive relief in state court, alleging that the ordinance effectively operates as a taking of her property. The Township then withdrew its violation and stayed enforcement until after the state proceedings. However, by doing so, the state court declined to rule on the claim because as long as the Township wasn’t enforcing the ordinance, she could not demonstrate irreparable harm for equitable relief. Knick, determined for relief on the issue, next brought her claim in federal court alleging the ordinance violated the Takings Clause of the Fifth Amendment.  The Third Circuit followed Williamson County and dismissed her claim because she had not exhausted state proceedings in the form of an inverse condemnation claim.
The Supreme Court saw Knick’s claim and its lengthy backstory as an opportunity to rectify the perceived problems with Williamson County. The Court pointed out the oddity that the Williamson County and San Remo cases caused by requiring plaintiffs to first exhaust a state court proceeding for compensation, but then subsequently being barred under the Full Faith and Credit Statute from winning their federal claim. The Supreme Court declared this development to be unworkable in current jurisprudence and found the state litigation requirement null and void.
The Supreme Court also reiterated that the “Fifth Amendment right to full compensation arises at the time of taking, regardless of post-taking remedies that may be available to the property owner.” The Court explained that the Fifth Amendment violation occurs as soon the government takes their property without paying for it. Even if the government promises a later payment or remedies the violation in a state proceeding, the violation still occurred. The Court analogized the Williamson County theory to that of a bank robber: “A bank robber might give the loot back, but he still robbed the bank.” Therefore, the Williamson County logic that a violation does not occur untill the plaintiff exhausts state proceedings and is still left without compensation is untenable. Instead, the Court decreed “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 immediately after the taking regardless of any promised payment or available state procedures. Thus, the government infringed on Knick’s Fifth Amendment rights when they first enforced the ordinance, and that violation exists whether or not they later decided to stay their enforcement.
III. The Dissent
Justice Kagan took issue with the Majority overruling Williamson County as it, in effect, rejects a line of cases going back to the late 1800s. Justice Kagan also challenged the majority decision reasoning that a promise of contemporaneous payment still results in taking under the Fifth Amendment, citing a long history of cases that allowed future payment for taken property.
Most interestingly, Justice Kagan’s dissent explores the practical effect of the Majority’s decision. The dissent explains that “today’s decision means that government regulators will often have no way to avoid violating the Constitution.” Because there are a lot of different ways that a regulation could affect property interests, the government will never know when it is violating the Fifth Amendment. A government actor can never know when their actions will result in a taking because there is no set formula for determining whether a government action is a taking.
Lastly, Justice Kagan explains that the Majority’s new rule will result in federal courts potentially dealing with an influx of cases that can more effectively be dealt with in state court. Now, federal courts will be forced to make rulings on complex and perhaps minute state laws (e.g. Pennsylvania’s graveyard law) to determine if the regulation is a taking. The dissent reasons that this type of state law interpretation is better suited for state courts.
While the Knick majority ruling took on to correct what they saw as an unworkable set of cases in Williamson County and San Remo, they may have caused more problems than they solved. Plaintiffs will rejoice in now having multiple avenues for relief to choose from. Moreover, they will have an easier time winning those claims as Knick made clear a violation occurs and must be remedied as soon as the taking occurs whether or not they are promised compensation in the future. However, the dissent makes sounder practical points. Governments will be walking on eggshells every time they carry out an ordinance that in any way relates to private property interests with no way of determining if it amounts to a taking. The dissent is likely correct in noting that many of these issues are better suited for state court. It is unlikely that a federal court would know more about an obscure graveyard ordinance than the local state court whose judges dealt with it for a number of years. Federal court judges should get out the statute books and brush up on the various odd state property laws of their jurisdiction because they’ll be seeing a lot more of it after the ruling in Knick.
Knick v. Township of Scott, No. 17-647, 2019 WL 2552486 (U.S. June 21, 2019).
William County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985)
San Remo Hotel, L. P. v. City and County of San Francisco, 545 U.S. 323, 337-399, 125 S.Ct. 2491 (2005).
Knick v. Township of Scott, No. 17-647, 2019 WL 2552486 (U.S. June 21, 2019).
Id.(“inverse condemnation is a cause of action against a governmental defendant to recover the value of the property which has been taken in fact by the government defendant.” United States v. Clarke, 445 U.S. 253,357).
Id.at *5. Citing Jacobs v. United States, 290 U.S. 13, 54 S.Ct. 26 (1933).
Id.at *6 citing First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 107 S.Ct. 2378.
Id.at *14 (Justice Kagan dissenting)
Id.citing Arkansas Games and Fish Comm’n v. United States, 568 U.S. 23, 31, 133 S.Ct. 511 (2012).