Williamson County Illustrated: You're Either Too Early, or You're Too Late

Thanks to Professor Patty Salkin for calling attention to a recent case from a Missouri federal court that provides a good (if that word can be used) illustration of the weird shell game that is played by the federal courts when it comes to regulatory takings claims, Reagan v. City of St. Louis, No. 4:07CV1487 (Jan. 31, 2008).

Reagan brought regulatory takings claims against the city for downzoning her land from industrial to residential, making her land unsuitable for her business.  Reagan filed suit against the city in state court, alleging that the city's actions violated the federal takings and due process clauses, and the Missouri takings clause.  Prior to trial, Reagan dismissed the federal takings claim, presumably because she was trying to keep open the possibility of federal court review of the issue at some point in the future. 

In other words, the property owner did expressly did not litigate her federal takings claims in the state action.

The Missouri trial court denied the federal due process claim, but held that the downzoning violated the Missouri takings clause, and awarded Reagan just compensation.  The Missouri Court of Appeals reversed the takings judgment, and no further appeals were entertained.

Reagan then brought the federal constitutional takings claim she thought she reserved for federal court consideration.  You would think this wouldn't be a problem, since it seems straightforward enough: federal constitutional claims can be heard in federal court, right?

Not quite.  Under the U.S. Supreme Court's doctrine of "ripeness," announced in Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985), a property owner seeking to vindicate her federal constitutional right to not have property taken without just compensation does not have the ability to demand a federal court forum.  Under the Williamson County ripeness rule, a federal takings claim is not ripe until a landowner has first pursued -- and been denied -- compensation through state procedures, including a takings claim in state court.  Which Reagan did. 

Once compensation has been denied by the state court and the property owner attempts to litigate her federal claim in federal court, however, the Williamson County rule applies the preclusion principle to conclude that the state court judgment prevents "relitigation" of the issue in federal court.  You'd be right if you concluded that this is a shell game where the property owner is either in federal court too early, or too late.  How can an issue that has never been litigated be "relitigated?"

Thus, to avoid being shut out entirely, a property owner must bring her federal claims in state court.  If the property owner does what Reagan did -- expressly reserve the federal claim -- the federal court will most likely conclude that the issue was tried in the state court anyway.

This is, frankly, a weird rule, yet a majority of the justices of the Supreme Court seem perfectly content with allowing regulatory takings claims (indeed all Fifth Amendment claims )to be handled by state courts.  In Kelo v. City of New London, for example, the Court also punted responsibility for protecting property owners from abuse of the affirmative eminent domain power to the states.  I ask: is there any other federal right, expressly protected in the Bill of Rights that the Court would treat this way?  I can't think of any.

Williamson County is a case that needs to be revisited and overruled, as several justices noted in San Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323 (2005) since it produces absurd results and denies federal court review of federal constitutional rights.  Chief Justice Rehnquist wrote:

Finally, Williamson County's state-litigation rule has created some real anomalies, justifying our revisiting the issue... I joined the opinion of the Court in Williamson County. But further reflection and experience lead me to think that the justifications for its state-litigation requirement are suspect, while its impact on takings plaintiffs is dramatic... In an appropriate case, I believe the Court should reconsider whether plaintiffs asserting a Fifth Amendment takings claim based on the final decision of a state or local government entity must first seek compensation in state courts.

Back to Reagan.  Read the district court's 10-page opinion if you want a quick lesson on the bizarre jurisprudence of Williamson County.  Professor Salkin's summary of the case, and comments are posted here.