We’ll be doing a longer post with our thoughts on the U.S. Supreme Court’s landmark ruling in Knick v. Township of Scott, No. 17-647 (June 21, 2019). But here’s the big picture.
It appears that at least five Justices finally seem to understand what we in the property bar have been saying for decades – that the essence of a federal “takings” claim against a local or municipal government is that “by regulation, you have deprived my property of ‘productive use’ [as Chief Justice Roberts noted on page 14 of the slip opinion], and you have not compensated me.” So it is enough that the government hasn’t paid me, and I have no obligation to “ripen” my federal claim by chasing down the local government for compensation in state court.
So nearly 100 years after Justice Holmes famously opined for the Court in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), that if a regulation goes “too far” it will be recognized as a taking, we may have the Court finally expressing clearly what that cause of action looks like. Knick is the first time as far as we can tell that the modern Court has plainly stated the precise nature of the constitutional violation.
There’s a lot to process in the majority (Roberts), concurring (Thomas), and dissenting (Kagan) opinions but for now, the bottom lines as we see them:
- Williamson County: the “state-litigation” ripeness requirement (which required an owner to not only be denied compensation by a local government, but to then sue the local government in state court, and lose) is overruled into the dustbin of history (Knick, p. 2). Time to start brushing up on the Federal Rules of Civil Procedure, everyone.
- Williamson County‘s “finality” ripeness requirement was not challenged by Ms. Knick, and remains good law. Property owners still need to obtain a final decision from the local government or agency about what uses, if any, may be made of their property under the allegedly restrictive regulation.
- Also implicitly overruled: the “preclusion trap” from San Remo, You can choose to litigate your state law takings or inverse claims in state court and if you do you will likely be barred from later raising a federal takings claim, but you no longer are going to be forced to go to state court in the first instance and raise a state law inverse condemnation claim, only to be later told you thereby litigated your federal claim by implication (Knick, p. 5-6).
- Also wiped out: Chicago College of Surgeons‘ removal imbalance. Until Knick, a property owner could not raise a federal takings claim in federal court, but a municipal or state defendant could remove a state court takings action to federal court. Under Knick, a claim seeking compensation is a federal claim, purely and simply. (Knick, p. 11).
- Property owners go ahead and file directly in federal court. But you can still bring a § 1983 claim in state court if you want. Those claims are still subject to removal to federal court by municipal or state defendants. Defendants: you have the same ability to remove state court claims to federal court like any other case.
- If you file a federal takings claim in federal court, the cause of action is § 1983, and the remedy sought should be limited to just compensation (Knick).
- You get a jury trial on your § 1983 claim (Del Monte Dunes).
- A property owner is not going to get a federal court to enjoin a regulatory taking, or declare a statute or regulation unconstitutional (Knick, p. 12-13), unless the owner is raising a takings defense to imposition of a regulation or statute (Horne). Injunctive relief is equitable, and is generally not available unless there’s no remedy at law (which there is most of the time).
- You still cannot raise a federal compensation claim against a state government (qua government) in federal court (11th Amendment).
- It remains unsettled whether a state law inverse condemnation claim “arises under” federal law and can be brought in federal court. The majority declined to consider the SG’s difficult-to-follow argument on that issue (Knick, p. 14 n.6).
- Takings claims against the federal government: nothing has changed for now. Takings claims in excess of $10k still go to the Court of Federal Claims. The issue of whether you should get a jury trial and an Article III forum is still up for grabs, we think (Brott).
We’ll have more after a further chance to digest the opinions.
Knick v. Township of Scott, No. 17-647 (U.S. June 21, 2019)