SCOTUS Decision: Property Owners Can Bring Takings Claims Straight to Federal Court

June 27, 2019 | Insights

By Steven W. Dimitt

On June 21, 2019, the Supreme Court of the United States decided Knick v. Township of Scott, Pennsylvania, holding that a property owner is not required to first bring a takings claim in state court. Rather, “[a] property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it.” The Court expressly overruled its prior holding in Williams County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), which required a property owner to first seek compensation under state law in state court before bringing a federal takings claim in federal court. In Knick, the Court held that “the state-litigation requirement imposes an unjustifiable burden on takings plaintiffs, conflicts with the rest of our takings jurisprudence, and must be overruled.”

The Facts Surrounding the Supreme Court’s Decision

In 2012, the Township of Scott passed an ordinance requiring that “[a]ll cemeteries . . . be kept open and accessible to the general public during daylight hours.” Rose Mary Knick, whose 90-acre farm had a small family graveyard, was notified that she was violating the ordinance. Ms. Knick then filed a state court lawsuit against the Township claiming that the ordinance constituted a taking of her property, but she did not bring an inverse con­demnation action under state law seeking compensation. The Town­ship responded by withdrawing the violation notice and staying enforcement of the ordinance. As a result, without an ongoing enforcement ac­tion, the state court held that Ms. Knick could not demonstrate the irreparable harm necessary for equitable relief, so it declined to rule on her re­quest.

Ms. Knick then filed an action in Federal District Court wherein she alleged that the ordinance violated the Takings Clause of the Fifth Amendment. The District Court dismissed her claim under Williamson County because she had not pursued an in­verse condemnation action in state court. The Third Circuit affirmed the lower court’s decision and the Supreme Court addressed the case.

The Basis for the Supreme Court’s Holding

The Takings Clause of the Fifth Amendment states that “private property [shall not] be taken for public use, with­out just compensation.” In Williamson County, the Court held that “a property owner whose property has been taken by a local government has not suffered a violation of his Fifth Amendment rights—and thus cannot bring a federal takings claim in federal court—until a state court has denied his claim for just compensation under state law.”

In Knick, the Court noted that the problem with this requirement is that a state court’s resolution of a claim for just compensation under state law generally has preclusive effect in any subsequent federal suit. “The adverse state court decision that, according to Williamson County, gave rise to a ripe federal takings claim simultaneously barred that claim, preventing the federal court from ever considering it.” The Court described this situation as a “Catch-22: He cannot go to federal court without going to state court first; but if he goes to state court and loses, his claim will be barred in federal court. The federal claim dies aborning.”

The Court stated that “[i]f a local government takes private property without paying for it, that government has violated the Fifth Amendment—just as the Takings Clause says—without regard to subsequent state court proceedings.” “The availability of any particular compensation remedy, such as an inverse condemnation claim under state law, cannot infringe or restrict the property owner’s federal constitutional claim—just as the existence of a state action for battery does not bar a Fourth Amendment claim of excessive force.”

[Moreover,] a later payment of compensation may remedy the constitutional violation that occurred at the time of the tak­ing, but that does not mean the violation never took place. The violation is the only reason compensation was owed in the first place. A bank robber might give the loot back, but he still robbed the bank. The availability of a subse­quent compensation remedy for a taking without compen­sation no more means there never was a constitutional violation in the first place than the availability of a dam­ages action renders negligent conduct compliant with the duty of care.

The Court stated, “[i]n sum, because a taking without compensation violates the self-executing Fifth Amendment at the time of the taking, the property owner can bring a federal suit at that time.”

The Court noted that stare decisis did not preclude it from overruling Williamson County because inter alia the decision was “poorly reasoned and conflicts with much of the Court’s takings jurisprudence.” As a result, the Court held that “[t]he state-litigation requirement of Williamson County is overruled. A property owner may bring a takings claim under §1983 upon the taking of his property without just compensation by a local government.