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Private Property and Takings Clause of the Fifth Amendment

by | Aug 5, 2019 | Business Litigation

KNICK v. TOWNSHIP OF SCOTT, PENNSYLVANIA, ___ U.S. ___, No. 17-647 (21 June 2019)

The Takings Clause of the Fifth Amendment states that “private property [shall not] be taken for public use, without just compensation.”  The Supreme Court has long held that property owners may bring Fifth Amendment claims against the Federal Government as soon as their property has been taken. The Tucker Act, provides the procedure for such claims and gives the Court of Federal Claims jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution or any federal law or contract for damages in cases not sounding in tort. 28 U. S. C. §1491(a)(1).  United States v. Causby, 328 U. S. 256, 267 (1946).  The Court has held that “the act of taking” is the event which gives rise to the claim for compensation.” United States v. Dow, 357 U. S. 17, 22 (1958).

What if a state or local government, not the Federal Government, takes the property?  Does the property owner have an immediate cause of action in federal court for compensation under the Takings Clause of the Fifth Amendment?  In Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), the Court held that a property owner, whose property has been taken by a local government, has not suffered a violation of her Fifth Amendment rights—and thus cannot bring a federal takings claim in federal court—until a state court has denied her claim for just compensation under state law.  The Court in Williamson County assumed that if the property owner failed to secure just compensation under state law in state court, then he would be able to bring a ripe, federal takings claim in federal court. See id., at 194.

However, as it turned out that was a mistaken assumption; because the Court later held in San Remo Hotel, L. P. v. City and County of San Francisco, 545 U. S. 323 (2005), 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 Court held that the full faith and credit statute, 28 U. S. C. §1738, requires the federal court to give preclusive effect to the state court’s decision, blocking any subsequent consideration of whether the plaintiff had suffered a taking within the meaning of the Fifth Amendment. 545 U. S., at 347.  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.  Thus, a takings plaintiff 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, her claim will be barred in federal court.

Rose Mary Knick owns 90 acres of land in Scott Township, Pennsylvania, a small community just north of Scranton.  She lives in a single-family home on the property and uses the rest of the land for grazing horses and other farm animals. The property includes a small graveyard where the ancestors of Knick’s neighbors are allegedly buried.  According to the Court’s opinion, such family cemeteries are common in Pennsylvania, where “backyard burials” have long been permitted.

In December 2012, the Township passed an ordinance requiring that all cemeteries be kept open and accessible to the general public during daylight hours.  In 2013, a Township officer found several grave markers on Knick’s property and notified her that she was violating the ordinance by failing to open the cemetery to the public during the day.  Knick responded by seeking declaratory and injunctive relief in state court on the ground that the ordinance effected a taking of her property.  Knick did not seek compensation for the taking by bringing an “inverse condemnation” action under state law, which she could have done. Inverse condemnation is a cause of action against a governmental defendant to recover the value of property which has been taken in fact by the governmental defendant. United States v. Clarke, 445 U. S. 253, 257 (1980).  Inverse condemnation is different than direct condemnation, in which the government initiates proceedings to acquire title under its eminent domain authority.

In response to Knick’s lawsuit, the Township withdrew the violation notice and agreed to stay enforcement of the ordinance during the state court proceedings. The state court, however, declined to rule on Knick’s request for declaratory and injunctive relief because, without an ongoing enforcement action, she could not demonstrate the irreparable harm necessary for equitable relief.  Knick then filed an action in Federal District Court under 42 U. S. C. §1983, alleging that the ordinance violated the Takings Clause of the Fifth Amendment.  The District Court dismissed Knick’s takings claim under Williamson County because she had not exhausted her state remedies by pursuing an inverse condemnation action in state court.  Because the State had not denied her just compensation, under Williamson County she had not yet suffered an injury under the Fifth Amendment’s Takings Clause.  On appeal, the Third Circuit affirmed.  The Supreme Court granted certiorari to reconsider the holding of Williamson County that property owners must seek just compensation under state law in state court before bringing a federal, takings claim under §1983.

The Supreme Court held that the state-litigation requirement imposes an unjustifiable burden on takings plaintiffs, conflicts with the Court’s other takings jurisprudence, and must be overruled.  A property owner has an actionable, Fifth Amendment takings claim when the government takes her property without paying for it.  The property owner has suffered a violation of her Fifth Amendment rights when the government takes her property without just compensation, and therefore may bring her claim in federal court under §1983 at that time.

The Supreme Court said that “the San Remo preclusion trap should tip us off that the state-litigation requirement rests on a mistaken view of the Fifth Amendment.” (Slip op., at 2).  The Civil Rights Act of 1871 guarantees “a federal forum for claims of unconstitutional treatment at the hands of state officials,” and the settled rule is that “exhaustion of state remedies is not a prerequisite to an action under [42 U. S. C.] §1983.” Heck v. Humphrey, 512 U. S. 477, 480 (1994).  The guarantee of a federal forum rings hollow for takings plaintiffs, who are forced to litigate their claims in state court.  The state-litigation requirement relegates the Takings Clause “to the status of a poor relation” among the provisions of the Bill of Rights. Dolan v. City of Tigard, 512 U. S. 374, 392 (1994).  Plaintiffs asserting any other constitutional claim are guaranteed a federal forum under §1983, but the state-litigation requirement hands authority over federal takings claims to state courts.  Fidelity to the Takings Clause and cases construing it requires overruling Williamson County and restoring takings claims to the full-fledged constitutional status the Framers envisioned when they included the Clause among the other protections in the Bill of Rights.

Contrary to Williamson County, a property owner has a claim for a violation of the Takings Clause as soon as a government takes her property for public use without paying for it. The Clause provides: “[N]or shall private property be taken for public use, without just compensation.” It does not say: “Nor shall private property be taken for public use, without an available procedure that will result in compensation.” (Slip op. at 6).  The Fifth Amendment right to full compensation arises at the time of the taking, regardless of post-taking remedies that may be available to the property owner. Jacobs v. United States, 290 U. S. 13 (1933).

The fact that the State has provided a property owner with a procedure that may subsequently result in just compensation cannot deprive the owner of her Fifth Amendment right to compensation under the Constitution, leaving only the state law right.  That is key because it is the existence of the Fifth Amendment right that allows the owner to proceed directly to federal court under §1983.  Because of the self-executing character of the Takings Clause with respect to compensation, a property owner has a constitutional claim for just compensation at the time of the taking.

The Court considered whether stare decisis counseled in favor of adhering to Williamson County, despite its error. The Court acknowledged that the doctrine of stare decisis reflects a judgment “that in most matters it is more important that the applicable rule of law be settled than that it be settled right.” Agostini v. Felton, 521 U. S. 203, 235 (1997); Burnet v. Coronado Oil & Gas Co., 285 U. S. 393, 406 (1932) (Brandeis, J., dissenting).  The doctrine is at its weakest when the Court interprets the Constitution, as it did in Williamson County, because only the Court or a constitutional amendment can alter the Court’s holding on an issue of constitutional law. Agostini, 521 U. S., at 235.

The Court has identified several factors to consider in deciding whether to overrule a past decision, including the quality of its reasoning, the workability of the rule it established, its consistency with other related decisions, and reliance on the decision. Janus v. State, County, and Municipal Employees, 585 U.S. _-_ (2018)(slip op., at 34–35).  The Court concluded that all of these factors counsel in favor of overruling Williamson County. Williamson County was not just wrong.  Its reasoning was exceptionally ill founded and conflicted with much of the Court’s takings jurisprudence.  The decision has been criticized over the years and rests on a shaky foundation.  Moreover, because of the San Remo trap, the state-litigation requirement has proved to be unworkable in practice.  Finally, there are no reliance interests on the state-litigation requirement.

This was a five-to-four decision authored by Chief Justice Roberts and joined by Justices Thomas, Alito, Gorsuch, and Kavanaugh.  Justice Thomas wrote an additional concurring opinion.  Justice Kagan wrote a dissenting opinion joined by Justices Ginsburg, Breyer, and Sotomayor.  The dissent focused mainly on the doctrine of stare decisis, arguing that it is not enough that five justices believe a precedent is wrong; there must be special justification to overrule precedent.

John Polk is a Special Counsel at Berenzweig Leonard, LLP. John can be reached at [email protected].