06.27.2019

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Updates

The U.S. Supreme Court overturned a 34-year-old precedent established by Williamson Planning Comm’n v. Hamilton Bank, holding that landowners pursuing takings claims do not need to seek redress in state courts before pursuing a federal claim. Knick v. Township of Scott, No. 17–647 (U.S. S.Ct. Jun. 21, 2019).

The Knick decision arose from a dispute about a cemetery. Rose Mary Knick had a private cemetery on her ranch in a small community north of Scranton, Pennsylvania. The local township passed an ordinance requiring that all public and private cemeteries remain open and accessible to the public during daylight hours. Ms. Knick sued in federal court, arguing that the ordinance amounted to an uncompensated taking of her property. The trial and appellate courts dismissed her claims based upon Williamson, a 1985 Supreme Court decision in which the Court held that property owners may pursue federal takings claims against local governments in federal courts only after first exhausting all remedies provided by state courts.

In a 5-4 opinion, the Supreme Court expressly overruled Williamson, stating that its “reasoning was exceptionally ill-founded and conflicted with much of our takings jurisprudence.” The Court held that property owners may pursue federal takings claims in federal court without initiating or exhausting remedies in state courts. The Court reasoned that a property owner’s right to full compensation arises at the time property is taken without compensation, irrespective of the availability of any post-taking remedies. Even if full compensation is later paid, a constitutional violation results when a taking occurs without compensation. “A bank robber might give the loot back,” the Court said, “but he still robbed the bank.”

The Knick Court’s ruling eliminated what it referred to as the “San Remo preclusion trap.” In San Remo L.P. v. City and County of San Francisco, the Supreme Court held that a “state court’s resolution of a claim for just compensation under state [and local] law generally has a preclusive effect in any subsequent federal suit.” Williamson and San Remo together resulted in the inability of property owners to reach the federal court system on federal takings claims. The Knick Court observed that “[t]he takings plaintiff thus finds himself in 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.”

Four justices signed onto a dissenting opinion in Knick, pointing out that because it cannot usually be known in advance whether implementing a regulation will effect a taking, well-meaning officials will now “often have no way to avoid violating the Constitution.” The dissent also predicted that granting access to federal courts will result in a bevy of complex state law issues being pursued in federal courts and that the “federal courts [will become] a principal player in local and state land-use disputes.”

Knick opens the door to federal takings claims against state and local government agencies being pursued in the first instance in federal courts. However, because the decision does not alter the standards for adjudicating taking claims, the extent to which the ruling benefits landowners is unknown. Nonetheless, as the dissenting justices observed, the decision is likely to result in a marked increase in the number of takings cases brought by property owners in federal courts, which may significantly affect the development of the law in this area.

© 2019 Perkins Coie LLP