We all know that if you are challenging a federal government action as either beyond the agency's authority (or is unconstitutional), and as a taking, you've got to split your claim between a U.S. district court, and the Court of Federal Claims. The district court considers challenges to the validity of the government action, while the CFC hears claims that a valid government act has taken property and thus compensation is owed.
But what about when you are challenging state actors in state court? The Connecticut Supreme Court's opinion in Wellswood Columbia, LLC v. Town of Hebron, No. SC 19693 (Nov. 7, 2017) is an example of the dangers of not bringing your compensation and damage claims together with your challenge to the government act when you are in non-federal forums.
The facts of the case are pretty straightforward: the plaintiff was considering purchasing land on which it wanted to build a retirement community. But after meeting with Town officials who expressed concerns about the proposed development, the Town's planning commission recommended closing the sole access road to the land, and the Town's board agreed.
Wellswood went to court seeking damages, and an injunction prohibiting the Town from cutting off its sole access to the property. The trial court turned down its claim for equitable relief and damages for lack of standing, after which Wellswood appealed the denial of the injunction to the Connecticut Supreme Court. But it didn't appeal the denial of damages. The Supreme Court agreed that Wellswood had standing to seek injunctive relief and after the case returned to the trial court, it issued the requested injunction and ordered the Town to open the road.
Wellswood instituted a new action seeking damages and compensation for a temporary taking, among other claims. The Town responded by arguing the damages issue was res judicata, and that Wellswood had a claim in its earlier case, but didn't appeal it. Thus, issue was resolved, and Wellswood could not raise it again. The trial court agreed.
So did the Connecticut Supreme Court. The court rejected Wellswood's argument that its temporary takings claims didn't arise until the Town opened up the road in conformity with the injunction. Wellswood also argued that it could not have known the extent of the damages until the court ordered the road opened, either, and since that issue was not litigated in the earlier case (nor could it have been), no res judicata.
No dice held the court. It doesn't matter that the extent of your damages are not yet known or whether the taking would be temporary or permanent, what matters is that there was a government act that you say resulted in a taking. And that was something that Wellswood knew about in the first case. Indeed, it brought damages claims.
The court rejected Wellswood's reliance on two Federal Circuit cases (see page 14 of the slip opinion), and concluded that the operative fact triggering a takings claim isn't a judicial determination, but the challenged government act. Whether that makes any sense under the Williamson County ripeness theory -- where a federal takings claim against a state entity is not complete until such time as a property owner challenges and loses an inverse claim in state court -- is not really addressed by the Connecticut court to our satisfaction. Nor does it square completely with the process that is required in federal takings, where you can't seek compensation unless and until you either concede the validity of the government act, or litigate and lose a challenge to its validity.
The Connecticut court spends a lot of time distinguishing these Federal Circuit cases, and we're wondering whether others think the court's reasoning holds up, or whether there's something certworthy here.
What say you all?
Wellswood Columbia, LLC v. Town of Hebron, No SC 19693 (Conn. Nov. 7, 2017)