On June 21, 2019, the United States Supreme Court swung open the door to the federal court for takings cases against state and local governments.  Specifically, in Knick v. Township of Scott, 588 U.S. ___ (2019), the Supreme Court ruled that plaintiffs may proceed directly to federal court—without having first litigated in state court—for claimed violations of the Takings Clause.

By way of background, the Township of Scott, Pennsylvania, enacted an ordinance requiring that graveyards be open to the public during daylight hours.  The township notified Rose Mary Knick, who has a small family graveyard on her ninety acre property, that she was in violation of the ordinance.  When Knick sought declaratory and injunctive relief in state court, the township withdrew the notice of violation and stayed enforcement of the ordinance.  Without an ongoing enforcement action, the state court declined to rule as Knick could not show irreparable harm, which was necessary for her requested equitable relief.  Knick proceeded then in federal court, alleging an unconstitutional taking by reason that the regulation effectively acquired took her property without just compensation.  The district court dismissed her action under Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985), which held that property owners must seek just compensation under state law in state court before bringing a federal takings claim under 42 U.S.C. § 1983.

The Constitution’s Takings Clause provides: “nor shall private property be taken for public use, without just compensation.”  In a five to four decision, the Supreme Court overruled Williamson County and held that a property owner may bring a Fifth Amendment claim under § 1983 without having first filed an inverse condemnation case in state court.  The Court concluded that a constitutional violation occurs at the very moment the property is “taken,” notwithstanding that “just compensation” may be paid later. In so holding, the Court explained that:

“A later payment of compensation may remedy the constitutional violation that occurred at the time of the taking, but that does not mean the violation never took place. The violation is the only reason compensation was owed in the first place. A bank robber might give the loot back, but he still robbed the bank. The availability of a subsequent compensation remedy for a taking without compensation no more means there never was a constitutional violation in the first place than the availability of a damages action renders negligent conduct compliant with the duty of care.”

The dissenting justices were not impressed.  Justice Elena Kagan exclaimed that the Court was “smash[ing] a hundred-plus years of legal rulings to smithereens” and had misconstrued “[t]he distinctive aspects of litigating a takings claim [which] merely reflect the distinctive aspects of the constitutional right,” which is not violated until “(1) the government takes property, and (2) it fails to pay just compensation.”

So, then, how will the decision impact state and local governments going forward?

First, expect an aggrieved landowner to engage in forum shopping.  The resulting “pros and cons list” will include a breakdown of claims, a review of state vs. federal law and consideration of the attendant advantages and disadvantages of proceeding in state or federal court (e.g., speed, expense, discovery, jury vs. condemnation commission, procedural rules, appeal of right, etc.).

Second, be aware that concern exists that the Knick decision “will subvert important principles of judicial federalism.”  Regulation of land use is “perhaps the quintessential state activity” and federal courts are not the preferred forum for the review of such decision making.  As the dissent noted: “The question in takings cases is not merely whether a given state action meets federal constitutional standards. Before those standards can come into play, a court must typically decide whether, under state law, the plaintiff has a property interest in the thing regulated.  Often those questions—how does pre-existing state law define the property right?; what interests does that law grant?; and conversely what interests does it deny?—are nuanced and complicated. And not a one of them is familiar to federal courts.”  That said, federal courts address routinely all manner of such questions and any unease as to determination of property matters is, perhaps, overblown (even if better suited in a state court more keenly acquainted with local issues and real property law).

Third, be cognizant also of predictions in the dissent that the effect of the decision “will inevitably turn even well-meaning government officials into lawbreakers.”  “Now, when a government undertakes land-use regulation (and what government doesn’t?), the responsible employees will almost inescapably become constitutional malefactors.”  This is so, because the constitutional violation is complete at the time of deprivation, notwithstanding Virginia’s statutory mechanisms for payment for bona fide inverse condemnation claims.  The possible threat of litigation against potential “constitutional malefactors” may simply be that—a remote threat—but it is not beyond expectation that a few well-placed suits will have a chilling effect on government officials’ appetite for public projects and regulation of land use activities.

Finally, the fact that a regulation or action may be deemed unconstitutional for purposes of a taking does not then result in a determination that the particular government action is prohibited.  To that end, the majority states that: “As long as just compensation remedies are available—as they have been for nearly 150 years—injunctive relief will be foreclosed.”  Such a result is consistent with Virginia’s judicial precedent and the constitutional and statutory procedures for handling inverse condemnation claims.  Indeed, the “landowner’s constitutional right is a right to recover just compensation, not a right to recover possession of the property.” Sheffield v. Dept. of H’ways & Trnsp., 240 Va. 332, 397 S.E.2d 802 (1990).  Specifically, Article I, Section 11 of the Virginia Constitution provides that “the General Assembly shall not pass … any law whereby private property shall be taken or damaged for public uses, without just compensation.”

At the end of the day, the effect of the Court’s ruling is significant in that Virginia’s federal courts are now open to claims by landowners that may have been brought previously only in the Commonwealth’s circuit courts.  But the substance of the remedy remains unchanged and is thoroughly unremarkable in that just compensation is to be afforded owners whose property is taken by the government.