In a Turnabout, SCOTUS Now Says Federal Takings Claims are Ripe When the Government Fails to Compensate Property Owners

By Sara K. Beachy and Amy T. Harriman

Overruling 34 years of precedent, the United States Supreme Court recently ruled that when the government takes private property without paying just compensation, the owner has an actionable claim under the federal Takings Clause at the time of the taking. In Knick v. Township of Scott, the Court overruled a 1985 decision, Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, which required owners to first seek compensation through state courts before filing in federal court.

The Williamson County decision was heavily criticized. First, critics argued that owners were treated differently than other constitutional plaintiffs. Generally, constitutional claims against the government are guaranteed a federal forum in addition to a state forum. For example, a plaintiff could bring a state claim for battery as well as a Fourth Amendment claim for excessive force. However, in the Fifth Amendment takings context, owners were barred from seeking federal relief until the owner had unsuccessfully sought relief in state court.

Second, critics pointed to the “preclusion trap” created by the Supreme Court’s prior ruling in San Remo Hotel, L. P. v. City and County of San Francisco. In San Remo, the Court held that a state court resolution of a takings claim for just compensation had a preclusive effect in any subsequent federal suit. Therefore, Williamson County and San Remo, taken together, created a Catch-22 for property owners: owners could not go to federal court without going to state court first, but if the owner did go to state court, the owner’s claim was then precluded from federal court.

Writing for the 5-4 majority, Chief Justice John J. Roberts noted the constitutional violation occurs at the time of the taking, even if compensation is paid later. A bank robber, the Court explains, “might give the loot back, but he still robbed the bank.”

The Knick decision paves the way for owners to start their pursuit of compensation in federal court. State law procedures vary widely among states, and some are more favorable to property owners than others. It’s not clear how many owners will take the federal path. It’s also not clear whether Knick applies to non-government condemnors, such as utilities.

For more discussion about the Knick decision, take a look at Scotusblog. For some entertaining Knick-related memes (and other thoughtful discussion), check out the Inversecondemnation Blog.