Posted by: Patricia Salkin | September 25, 2018

UNITED STATES SUPREME COURT HEARS IMPORTANT TAKINGS CASE

This post was authored by Edward J. Sullivan, Esq.

Most land use lawyers were unaware that the United States Supreme Court has taken up a significant takings case from Pennsylvania, a case that may revolutionize takings law for years to come.  Since the Hamilton Bank decision in 1985, the Court has generally discouraged federal courts from considering claims for just compensation for government takings of private property arising at the state and local level until after state courts have weighed in.  However, failure to succeed at the state level has usually resulted in the same result in federal courts as well, as discussed below.  Property rights advocates have long sought the means to have federal courts hear more of these takings claims directly without first seeking state court review.   And with this most recent case, they might succeed.

The case, Knick v. Township of Scott, involves a local government’s attempt to deal with the protection of archeological resources.  Noting a great number of “home burials” since colonial times and desiring public access to gravesites, the Township passed an ordinance requiring public and private cemeteries to be open to the public during daylight hours.  A Township inspector then asserted that one or more private gravesites existed on Knick’s property, although there was no evidence of the same, and that town personnel and the public could visit that alleged gravesite by traveling over Knick’s private property.  The inspector threatened penalties under the ordinance if Knick obstructed access to the asserted gravesite area.

Knick filed takings claims against the Township in state and federal courts, but this case only involves the federal action.  Under Hamilton Bank, a takings claimant could not proceed directly in a federal court.  Instead, the claimant was required to “ripen” her claim in two ways.  First, she must obtain a “final” decision from the state or local government.  This means that if there are any available remedies to reduce the scope of the claim (think of seeking a variance to zoning requirements that inordinately increase the costs of development), she must seek that relief  (and the failure to do so may be fatal to the claim).  This step was not at issue in Knick.

But the second step, which requires a claimant to seek resolution of federal takings claims in state courts, was at issue.  In this case, Knick’s federal case was dismissed because she did not complete her state court takings claim.  Unlike the typical takings claims that arises from action on a permit and requires governmental action, Knick involves a “facial” takings claim that asserts that an ordinance or regulation is unconstitutional in all of its applications.  Lower federal courts have split on whether this type of claim must first be heard by a state court and the Supreme Court has determined to resolve this conflict.

There were several theories under which this claim might proceed.  The Township required access to the alleged gravesites over Knick’s private property and a “physical taking” claim (in the nature of trespass) could be advanced by the allegedly unconstitutional obligation that Knick open her property to the world.  Also, Knick could claim a “facial” taking, that the access obligation was unconstitutional and should be invalidated immediately. Either of these challenges to Williamson County would be a significant departure from the existing practice. It is possible the Supreme Court will go further and reconsider whether it is appropriate to limit federal takings claims to those previously decided in state courts.

Property rights advocates often dislike going to state courts first.  If they lose the federal claims in state courts, the notion of collateral estoppel (that you can’t take two bites at the apple) almost always terminates the federal claim.  Even if the takings claim is raised only under their state constitutions, a loss here will likely also result in a loss of a federal takings claim, because the facts are the same and most states interpret their state constitutional provisions on takings consistent with the  federal takings clause, so the two bites of the apple rule also applies.

Local governments, and their insurance companies, may not have helped their cause by taking advantage of a practice called “removal,” in which a municipal defendant may seek to have a case involving a federal takings claim brought in state court “removed” to federal court, followed by a Motion to Dismiss by the defendant because the case was not “ripe” in that there was no state court resolution of the claim.  Some federal courts have denied the Motion to Dismiss because it reeks of game playing.  Nevertheless, the resultant effects on costs, time and uncertainty have discouraged takings claims from being litigated.

The Supreme Court has several choices to dispose of Knick – it could keep the existing ripeness rule of Williamson County rule and thus greatly limit the number of takings claims brought in federal courts.  Or it could do away with the rule completely and open federal courts to takings litigation.  Neither of these alternatives is likely.  The Court would not have taken this case if it did not desire a serious examination of ripeness.  However, neither is it likely the Court will allow a flood of federal takings claims to be brought in federal courts in the first instance.

What may happen is something in the middle.  The Court could declare that facial takings claims (such as in this case where a local government authorizes a trespass) may be heard in federal courts without ripening those claims in state courts.  Or it may decide that state courts may hear takings cases first if those courts have a constitutionally adequate procedure to examine those claims and continue to insist that those state courts hear those claims first, as Williamson County now provides.  However the court decides this case, the results will be significant.

The complete docket is available here: https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/17-647.html


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