This one is worth your time to review.
In HRT Enterprises v. City of Detroit, No. 23-1847 (Dec. 22, 2025), the U.S. Court of Appeals for the Sixth Circuit affirmed the district court’s entry of summary judgment in favor of the plaintiff/owner and a jury verdict on just compensation.
The case is notable not only for the fact it’s a property owner win, but that the usual procedural hurdles an owner is forced to jump through were successfully navigated. For example, the city’s assertion that the takings claim was both not ripe, and res judicata. Yes, in the city’s view, the claim was simultaneously too early and too late.
The first sentence of the opinion tells you that the focus of the analysis is going to be the res judicata question:
After losing in state court, HRT Enterprises sued the City of Detroit in federal court under a de facto takings theory.
Slip op. at 1.
The district court rejected the city’s claim the prior state litigation precluded the subsequent federal action, concluding that facts which occurred after the state court action meant that HRT was not relitigating an old claim, but bringing a new one.
The de facto takings claim was the result of the city’s land banking of HRT’s 11-acre parcel next to the Detroit airport. For aircraft safety reasons, the airport imposed a “visibility zone” which covers 20% of the property. This “limited HRT’s ability to build on its property.” Slip op. at 2. HRT sued for inverse in state court, asserting it “is no longer able to use, lease, or sell the property.” Slip op. at 3.
In 2005, a jury rejected the claim. The court of appeals affirmed, and the Michigan Supreme Court denied review. Game over?
Not quite. HRT sued in federal court, and the “district court found that, although HRT pleaded new facts sufficient to circumvent res judicata based on the prior state court suit, it had not sought just compensation through state procedures based on the new facts.” Id. (Remember, this is before Knick.) Case dismissed without prejudice.
Another lawsuit in state court followed. The state court dismissed for res judicata, and that judgment became final after the Michigan Court of Appeals affirmed.
Flash forward a couple of years, and HRT filed another takings claim in federal court. The city (again) claimed this was res judicata, but the district court rejected the claim because this claim was based on new facts which had occurred since the first state court case, including a claim that the city publicly asserted it owned the property. Slip op. at 5.
HRT went on offense, and asked the district court to enter summary judgment on liability in its favor. The court agreed, concluding that the visibility line restrictions reduced the buildable envelope on the property such that “‘it was ‘probably not’ possible to get a permit to build a 40-foot high building on the property within this building restriction line.'” Id.
After a just compensation trial and a remittitur of the jury’s just comp number, the city sought and obtained a new trial and also asserted the takings claim was not ripe. The second jury fixed just compensation as $1.976 million. Everyone appealed.
The Sixth Circuit held the de facto takings claim was ripe because the city had reached a final decision. The court held that several events demonstrated the permissible uses of the property to a reasonable degree of certainty, despite the city’s claim it still had not finally decided:
HRT’s takings claim is ripe because the permissible uses of HRT’s property are known to a reasonable degree of certainty, meaning its claim does not rest on purely hypothetical or future events. As the district court correctly found, all of the following occurred after 2005: (1) HRT lost all its tenants; (2) vandals looted the property; (3) the City did not maintain the area; (4) others used it is a dumping ground; (5) in December 2006, the manager of the Airport confirmed the City’s plan to construct a replacement runway; (6) in March 2008, former City Mayor Kwame Kilpatrick stated that the City would complete the acquisition of land near the Airport; (7) in March 2010, the City’s Purchasing Division informed the public that it intended to acquire all of the property necessary for building a replacement runway; (8) the City voted against reopening McNichols Road, which was originally approved to be closed for five years in 1987; and (9) the City continued to purchase residential and commercial properties both within, and outside of, the Mini-Take Area since 2005. These facts are not speculative. Based on this record, the City has taken a definitive position: it will not condemn the property.
Slip op. at 7.
The court also noted the unfairness of the city’s ripeness argument “after years of protracted litigation, multiple rounds of summary judgment briefing, and two jury trials.” Slip op. at 8. We agree, although it should not take this amount of prior litigation to conclude that the “final decision” ripeness doctrine allows (indeed incentivizes) governments to make the play.
Next, having rejected the city’s argument that the takings claim was too early, the Sixth Circuit rejected the argument it was too late. The court affirmed the district court’s conclusion the second federal lawsuit was res judicata. We won’t go into the full faith and credit and claim preclusion details, and will leave it at the court held that HRT did not have a full and fair opportunity to litigate the takings issues in its second lawsuit in its first. New facts = new claim = no res judicata.
On the merits, the Sixth Circuit affirmed entry of summary judgment in favor of HRT:
The City of Detroit engaged in a series of activities that diminished HRT’s property value. The City acquired properties in the Mini-Take area, closed access roads, and City officials announced plans to acquire property in the area. The airport’s runway visibility zone encroaches on HRT’s property and limits the property’s uses. To comply with the FAA requirements without a waiver, the City must purchase HRT’s property, but it refuses to do so. On HRT’s end, its loss of tenants and business illustrates that the City’s actions had consequences.
Slip op. at 12.
Finally, the Sixth Circuit affirmed the amount of the just compensation awarded.
The court therefore did not abuse its discretion when it rejected the two highest valuations and determined that the proofs did not support the $4.25 million judgment. Thus, a remittitur was in order because it was beyond the range supportable by the proofs. Gregory, 220 F.3d at 443.
Slip op. at 17.
A couple of thoughts.
First, we like the term “de facto taking.” We’ve advocated for that term over other labels for when some exercise of government power is alleged to have the same effect on an owner’s property rights as a straight-up exercise of eminent domain power. The Sixth Circuit obliges (see, e.g., the first sentence of the opinion), and we approve.
Second, we appreciate the court’s approach to ripeness. Rather than simply accept the city’s assertion it had not made a final decision — which a lot of courts do — the court examined the facts and the law itself, and reached its own conclusion. Yes, this is what the Supreme Court requires courts to do when evaluating takings ripeness. But many lower courts don’t. Instead, they accept government assertions that it remains open to a different outcome (if only the owner would ask again, or ask the right way, or simply try again).
One judge dissented, asserting that the city’s res judicata argument was correct because HRT had not shown that new facts and evidence had arisen after its state court loss. While expressing sympathy, the judge would have held that the owner had its bite at the apple and lost, precluding it from trying again.
HRT Enterprises v. City of Detroit, No. 23-1847 (6th Cir. Dec. 22, 2025)