Landmark SCOTUS Decision Allows Property Owners to Sue Local Governments in Federal Court

The U.S. Supreme Court overturned a 34-year-old legal precedent Friday that required property owners to exhaust all options in state court before filing in federal court when their land is taken for public use. The ruling is sure to increase the number and scope of takings claims against local governments.

The decision was 5-4, with Chief Justice John Roberts, Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh in the majority. The case before the Court was Knick vs. Township of Scott.

Scott, Pennsylvania enacted an unusual ordinance in 2012 that allows public officials to enter a property to determine whether or not it is a cemetery. If the property contains graves, as Rose Mary Knick’s was determined to, it must be kept open and accessible to the public.

Knick sued the township, but was told she must fight the inverse condemnation case in state court. That was based on a 1985 U.S. Supreme Court decision (Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City), which held that a plaintiff must attempt to obtain compensation in state court before pursuing a takings case at the federal level.

In his majority opinion, Chief Justice John Roberts said the Williamson decision presented “an unjustifiable burden” and resulted in a “catch-22” whereby a plaintiff “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.”

Importantly, the new majority opinion holds that a property owner has suffered a constitutional violation as soon as the government takes his property. This is in direct conflict with Williamson, which 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.”

According to legal firm Holland & Knight “for California property owners, development applicants and public officials, the most significant repercussion of Knick is that there is now, for the first time in decades, a potential forum for bringing as-applied takings claims against state and local governments that have long been inviable in California courts.”

Furthermore, the Los Angeles Times notes, California property owners have long claimed that strict regulations on developments in cities, particularly along the coast, constitute a ‘taking’ of their property. Therefore, the ruling could have some of its greatest implications in the Golden State.

“For years, federal ‘takings’ plaintiffs have effectively and inexplicably been denied access to the federal courts,” Los Angeles attorney Paul Beard II told the Times. “As of today, the federal courthouse doors are open. We should see a steady stream of new claims against laws and regulations that deprive or significantly impair an individual’s or business’ property interests.”

The Pacific Legal Foundation, which represented Knick, praised the Court’s decision.

“Thanks to Rose’s courage and the Supreme Court’s careful examination of this issue, 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.”

Critics, however, said it misinterprets the Fifth Amendment and shows the Roberts’ Court’s casual willingness to overturn longstanding legal doctrines. In her dissent, Justice Elena Kagan said the ruling "smashes a hundred-plus years of legal rulings to smithereens."

Read more analysis at Scotus Blog.


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