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Supreme Court: Landowners’ “Taking” Claims May Go Directly to Federal Court Without Seeking State Court Ruling

Litigation & Dispute Resolution Alert Rodney W. Ott, E. King Poor

Last week, the Supreme Court overruled settled precedent and held that a landowner could bring suit in federal court under the “Takings Clause” of the Fifth Amendment without first bringing such a claim in state court. The Court’s decision in Knick v. Township of Scott, Pennsylvania also unlocks what it referred to as a "Catch-22," in which losing a compensation claim in state court could also bar relief in federal court.

In Knick, the owner of a privately-owned family cemetery was required by a local ordinance to provide the general public with cemetery access during daylight hours. When the landowner failed to do, the local government fined her. She then sought to enjoin enforcement of the ordinance in state court, but did not seek compensation for inverse condemnation. Her later civil rights case in federal court was rejected by the lower courts because of the Supreme Court’s 1985 decision in Williamson County holding that a Takings Clause claim in federal court was “premature” before pursuing a claim for compensation in state court. 

In a five-to-four decision, the Supreme Court reversed and overruled Williamson County. In doing so, the Court recognized that the “unanticipated consequences” of the state-litigation requirement from Williamson County did not become clear until its decision in another case over 20 years later which held that if a landowner’s compensation claim failed in state court, then that ruling could also bar an inverse condemnation case in federal court. The Court pointed out that such an outcome made the Takings Clause of the Fifth Amendment "a poor relation" among the other guarantees of the Bill of Rights.

Drawing on earlier precedent, the Court explained that a Takings Clause claim arises and becomes "ripe" as soon as there is a taking—without the need for the landowner to first pursue compensation in state court: “[B]ecause the violation is complete at the time of the taking, pursuit of a remedy in federal court need not await any subsequent state action.  Takings claims against local governments should be handled the same as other claims under the Bill of Rights. Williamson County erred in holding otherwise.”

The Court not only explained why the majority disagreed with Williamson County, it also had to decide whether under the rule of stare decisis it would continue to adhere to this settled precedent or overrule it. It concluded that Williamson County was “not just wrong,” but that it was “exceptionally ill founded and conflicted with much of our takings jurisprudence,” and has “proved to be unworkable in practice.”  For that reason, the Court declined to follow the usual rule of adhering to established precedent and overruled Williamson County.

Writing for the four dissenters, Justice Kagan argued that the Court’s decision in Knick “rejects far more than a single case” and conflicts with precedent to going back to the 1800s that a government may take property so long as it has a reliable way to pay just compensation. What is more, Justice Kagan maintained, the Knick decision will “channel a mass of quintessentially local cases involving complex state-law issues into federal courts.”           

The Knick decision now removes a major hurdle for bringing inverse condemnation claims in federal court. But in the years to come, its further implications—legal and practical—will be sorted out by federal courts across the country.

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