The U.S. Court of Appeals for the Fourth Circuit's opinion in Zito v. N.C. Coastal Resources Comm'n, No. 20-1408 (Aug. 9, 2021) is just the latest in a growing list of decisions about an issue we've been following (see here, here, here, here, and here for example), including the District Court's decision in this very case.
That issue is whether a property owner can sue a state for just compensation for a taking in federal court.
You know how that works. Knick held that local governments and officials can be sued in federal court for violating the federal constitution and for civil rights violations. Check. But it didn't expressly say anything about whether there's something different about a state or a state official (in their official capacity) that prohibits the same thing. After all, the Eleventh Amendment has been interpreted, it prohibits federal court lawsuits against states (or instrumentalities of a state) for money damages. Yes, there are a number of ways around that -- mostly involving prospective injunctive relief -- but the Eleventh Amendment's plain text limitations (citizens can't sue "another state" in federal court) has over time evolved into something more general, which the courts have labeled "sovereign immunity."
In Zito, the Fourth Circuit held that Knick's throwing back open the federal court door to takings claims did not address or otherwise undermine the usual 11th Amendment rule. Slip op. at 10. Similarly, the self-executing nature of the 5th Amendment's Just Compensation requirement did not alter that calculus. Slip op. at 11 ("So Knick did nothing new with respect to the self-executing nature of the Takings Clause in federal court.") (footnote omitted). Yes, Knick made Fifth Amendment private property rights equal with other rights (under Williamson County, these rights were definitely treated as second-class right), but it didn't elevate private property rights and merely subjected them to the same 11th Amendment limitations on other constitutional rights. Slip op. at 12-13.
Of course, there's an exception to the usual "sovereign immunity" states enjoy in federal court if there isn't a "reasonable, certain, and adequate" means to obtain compensation in state court. Such remedies exist, the Fourth Circuit concluded.
Beat it, and bring you federal takings case in a North Carolina court (deja vu all over again).
Disclosure: the property owner in this one is represented by colleagues at our law firm (we had no hand in the case).
There's a growing divergence in the way the lower federal courts handle these arguments. See this case from the Ninth Circuit, for example. There's also a growing academic thread that Eleventh Amendment "sovereign immunity" isn't a blanket stay in jail free card in certain cases. See here and here, for example.
So what's next, a cert petition? Given that counsel in the case is the same fellow who brought us Knick (and who has a 2-for-2 win record at the Court), and who also earlier petitioned the Court on the 11th Amendment issue, we suspect there's a good chance something more is coming.
Zito v. N.C. Coastal Resources Comm'n, No. 20-1408 (4th Cir. Aug. 9, 2021)
