On one hand, the U.S. Court of Appeals' opinion in Hutto v. South Carolina Retirement System, No. 13-1523 (Dec. 5, 2014) is old hat: the court concluded that a plaintiff alleging a federal takings claim could not bring that claim in federal court. But this case is different because it -- unlike those where Williamson County ripeness is invoked to (in theory) merely delay federal court jurisdiction -- resulted in a permanent bar.
The difference here is that the plaintiffs were suing the state retirement system and state officers in the their official capacities, claiming that a 2005 amendment to South Carolina's state employee retirement system which required those who retire and then return to work to make the same contributions to state-created pension plans as pre-retirement employees but without receiving further pension benefits, was a taking. They filed their complaint in federal court, and the defendants raised the Eleventh Amendment as a defense. That bars federal courts from hearing lawsuits against a state unless the state has consented.
The court first concluded that a lawsuit against the South Carolina retirement system was, in effect, a lawsuit against South Carolina:
At bottom, we conclude that the relevant indicators strongly indicate that the Retirement System and the Trust are arms of the State of South Carolina and are therefore protected under the Eleventh Amendment. This conclusion is consistent with the holdings of the overwhelming number of federal courts that have held that similar retirement systems in other States are arms of the State.
Slip op. at 25. The court also reached the same conclusion about the state officials, and also concluded that the Ex parte Young prospective injunctive relief exception to 11th Amendment immunity did not apply, because the officials did not have statutory authority to enforce the 2005 act. See slip op. at 28.
With those preliminaries out of the way, the court concluded that the Takings Clause is not an exception to 11th Amendment immunity, and that the plaintiffs could have brought their takings claims in a South Carolina court:
Because the plaintiffs can have their takings claims heard in South Carolina state courts, the Eleventh Amendment does not render the Takings Clause an empty promise. But in concluding that the Fifth Amendment Takings Clause does not, in this case, trump the Eleventh Amendment, we do not decide the question whether a State can close its doors to a takings claim or the question whether the Eleventh Amendment would ban a takings claim in federal court if the State courts were to refuse to hear such a claim.
Slip op. at 34.
As for any circuit split, the court noted "that every other court of appeals to have decided the question has held that the Takings Clause does not override the Eleventh Amendment. Id. at 36.
Hutto v. South Carolina Retirement System, No. 13-1523 (4th Cir. Dec. 5, 2014)
