Property Rights Claims Against Local Governments Gain Clearer Path to Federal Court

Lawsuits alleging that local governments have unconstitutionally taken private property now have a more direct path to federal court, after a divided U.S. Supreme Court ruling on Friday scrapped a 34-year-old legal precedent.

The 5-4 ruling, with the court’s conservative bloc in the majority, comes in Knick v. Township of Scott. Rose Knick challenged a local ordinance the Pennsylvania township enacted in 2012 requiring her to grant daytime public access to a small cemetery plot on her land.

The legality of the ordinance and how it was enforced was not at the center of the Supreme Court case. It instead focused on a legal precedent that the high court established in 1985 in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City.

Under the “takings clause” of the Constitution’s Fifth Amendment, the government cannot take private property for public use without providing “just compensation” in return.

Williamson County dictated that lawsuits over a local government taking property are not “ripe” enough to go before federal courts until the aggrieved property owner is denied just compensation in the course of state-level legal proceedings.

Friday’s majority opinion, written by Chief Justice John Roberts, strikes down the Williamson County precedent.

“The state-litigation requirement imposes an unjustifiable burden on takings plaintiffs, conflicts with the rest of our takings jurisprudence, and must be overruled,” he wrote.

“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,” Roberts added.

A notable feature of the ruling for governments is it suggests that, in situations where they face takings claims, they don’t necessarily have to provide compensation up front or otherwise run the risk that courts will block their regulations or activities while litigation unfolds.

“As long as just compensation remedies are available,” Roberts writes, “injunctive relief will be foreclosed.”

Lisa Soronen, executive director of the State and Local Legal Center, explained that in an alternative scenario courts could issue injunctions in the cases. “That would be terrible, because it basically means everything can be challenged and stopped,” she added.

State and local government groups had argued against overturning Williamson County, partly on the grounds it would funnel disputes over state and local statutes into federal courts, as opposed to state venues where judges may be more familiar with the laws in play.

"From the local government perspective that is a big deal," said Soronen, whose group filed a brief on behalf of the National Governors Association, the National League of Cities and others. "Federal judges haven't been dealing with these cases for 30 some years,” she added.

Justice Elena Kagan sounded a warning along these lines in a dissenting opinion. “Today’s decision sends a flood of complex state-law issues to federal courts,” she wrote. “It makes federal courts a principal player in local and state land-use disputes.”

“It betrays judicial federalism,” she added.

Kagan, who says the ruling “smashes a hundred-plus years of legal rulings to smithereens,” describes a takings clause violation as having two necessary elements: the government takes private property and then also denies the owner just compensation for that property.

Williamson County, she wrote, recognized this by saying a constitutional claim in federal court over an alleged takings clause violation could only arise after both of those conditions were met.

“Today’s decision means that government regulators will often have no way to avoid violating the Constitution,” Kagan said.

“When a government undertakes land-use regulation,” she added, “the responsible employees will almost inescapably become constitutional malefactors.”

Joining Roberts in the majority were justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh.

Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor signed onto the dissent.

The case was initially argued before the court last year before Kavanaugh joined it, then reargued in January with him on the bench.

Dave Breemer, an attorney with the Pacific Legal Foundation who represented Knick, said the majority’s opinion rejected “barriers that unfairly deny property owners their day in court” and sent a message that property rights are “as sacred as all other rights.”

“Property owners should now receive a prompt and fair federal hearing when the government takes their property for public use but fails to pay compensation,” he added.

The township in a statement voiced disappointment about the outcome in the case, but noted that the ruling would send the dispute back to federal district court for further proceedings.

“The case remains in its early stages, and we fully expect to prevail on the merits because the Township did not violate Ms. Knick's constitutional rights,” the statement said.

Pennsylvania and other states for decades have had laws that forbid property owners from prohibiting access to grave sites, the township contends. Knick’s land is said to contain a cemetery where some of her neighbors’ ancestors are buried, according to court filings.

The township's statement goes on to say the “ancient and humane" principles around cemetery access are what they codified in their ordinance, "and we are confident that no court, federal or state, would find it unconstitutional to hold the plaintiff to those responsibilities.”

A federal district court in Pennsylvania dismissed Knick’s claims in 2016, ruling that they were not ripe under the Williamson County precedent. The 3rd U.S. Circuit Court of Appeals affirmed the ruling, though it described the ordinance as “constitutionally suspect.”

Critics of Williamson County have said it was especially problematic because cases that proceeded in state court could later be barred from federal court due to “issue preclusion” rules and other guidelines that prevent federal courts from deciding cases litigated at the state level.

Knick’s attorneys argued a Supreme Court ruling in 2005, in the case San Remo Hotel, L.P. v. City and County of San Francisco, solidified this roadblock to federal courts for the cases.

Roberts suggested Williamson County and San Remo combined created a “Catch-22.” A plaintiff, he said, “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.”

Stewart Sterk, a professor and director of the Center for Real Estate Law and Policy at the Benjamin N. Cardozo School of Law at Yeshiva University in New York, says that the majority's opinion could have implications beyond those that are spelled out in it.

An example is an eminent domain case where a city decides to take private land for a project and offers the landowner compensation. If the landowner decides the compensation is inadequate, there would be a state process where they could seek more money.

“But if you take the majority’s opinion, I’m wondering, does the majority think that now the landowner can go to federal court on that valuation issue?” Sterk said. “The answer might be yes.”

“One could read the ruling to say: ‘you get to federal court on any ordinary valuation case,” he added. “Certainly it would upend a lot of existing law, because all of the states have their own procedures for how they deal with valuation disputes.”

“I’m not sure the federal courts would welcome that set of cases,” Sterk also noted.

It’s hard to know, he said, how much of a shift there will be in takings claim cases filed in federal court versus state venues. But he added that “takings litigation, whether it’s in state or federal court is typically unsuccessful. A very small percentage of those claims win.”

“Most of the practitioners have had the experience of going to state court and losing,” he added. “If you know you’ve been knocking your head against the wall in state court, the impetus might be: ‘might as well try federal court, can’t be worse.’”