December 20, 2019

Knick v. Township of Scott: A procedural boost for takings claimants

John Echeverria

On June 21, 2019, the U.S. Supreme Court ruled in Knick v. Township of Scott, Pennsylvania, ___ U.S. ___, 139 S. Ct. 2162 (2019) (Knick) that a property owner suing a city or town under the Takings Clause of the Fifth Amendment can file her lawsuit in federal district court, jettisoning the Court’s long-standing rule that a taking claim against a local government must be filed, at least in the first instance, in state court.

The issue presented in Knick

The Knick case arose from an ordinance adopted by a community in rural eastern Pennsylvania mandating public access to ancient cemeteries located on private lands. Rose Mary Knick, owner of a 90-acre parcel with several grave markers, sued under the Takings Clause on the theory that the cemetery ordinance resulted in a physical occupation of her property. A federal district court dismissed her lawsuit, saying she was required to pursue her claim in a Pennsylvania court. The U.S. Court of Appeals for the Third Circuit affirmed, noting that while the township’s ordinance was “extraordinary and constitutionally suspect,” justiciability issues precluded the court from proceeding further. The Pacific Legal Foundation succeeded in persuading the Supreme Court to review Ms. Knick’s case.

The sole issue presented to the Court was whether it should overturn its 1985 decision in Williamson Cty. Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985) (Williamson County), which also involved a dispute between a landowner and a local government, and in which the Court established that a claim under the Takings Clause is not “ripe” in federal court unless and until the claimant has pursued a state inverse condemnation claim in state court. The Williamson County ruling was built on two propositions—that the Takings Clause does not proscribe takings but only requires payment as a condition of takings, and that compensation need not be paid in advance of a taking because all the Takings Clause requires is a reasonable process for obtaining compensation after the fact. Building from these premises, Williamson County ruled that no “violation” of the Takings Clause can occur as a result of a local land use decision unless and until the claimant pursues available state procedures for obtaining compensation and is denied relief.

The Supreme Court’s holding

In Knick, the Court, splitting five to four, overruled Williamson County. Chief Justice John Roberts, writing for the majority, articulated the new theory that a violation of the Takings Clause occurs when the government takes property without making a prior or contemporaneous payment of compensation. The upshot of the Court’s new theory is that, once the regulatory action is final, a claim based on an alleged violation of the Takings Clause can immediately be brought in federal district court (or state court, if the claimant prefers).

The Chief Justice grounded this new theory in prior Court precedent establishing that, once a regulation has been held to be a taking, the government cannot avoid liability by subsequently rescinding it and that a compensation award must include accrued interest calculated from the date of the taking. Knick, 139 S. Ct. at 2169. While he acknowledged that the Court had frequently said in other cases that a taking by itself does not violate the Takings Clause if the owner can seek after-the-fact compensation, the Chief Justice explained these cases as resting on the traditional rule that equitable relief is unavailable where there is an adequate remedy at law.

The Chief Justice also based the Court’s overruling of Williamson County on the fact that, under conventional full faith and credit doctrine, as the Court itself had recognized, once a taking claimant has pursued an inverse condemnation claim to a final judgment in state court, resort to federal court is usually barred by claim or issue preclusion. The Chief Justice thought this amounted to a catch-22 in the sense that a claimant must file in state court to “ripen” a federal taking claim, but once she ripens the claim she is foreclosed from pursing it in federal court.

The dissent

Justice Elena Kagan filed a dissent on behalf of herself and three other justices. She emphasized that the Takings Clause, unlike other provisions of the Bill of Rights, does not proscribe unconstitutional conduct, but instead affirmatively authorizes the taking of private property for public purposes—on the single condition that compensation is paid. Knick, 139 S. Ct. at 2181 (Kagan, J., with whom Ginsburg, Breyer, and Sotomayor, JJ., join, dissenting). In addition, Justice Kagan pointed out, the Court has long recognized that compensation need not be paid prior to or contemporaneously with the alleged taking to satisfy the Takings Clause. From these first principles, she contended, the rule of Williamson County follows “as night follows the day.” She accused the majority of violating the principle of stare decisis by “smashing a hundred-plus years of legal rulings to smithereens.”

As to the alleged catch-22, Justice Kagan pointed out that Congress can easily amend the full faith and credit doctrine to eliminate the preclusive effect of a state court judgment in a taking case but has so far declined to do so. Although she did not directly so argue, Justice Kagan also might have argued, as the Township and its amici did, that the Court has rejected the idea that a citizen necessarily has a right to pursue a federal constitutional issue in federal rather than state court, and that even when a citizen is compelled to litigate a federal constitutional issue in state court, standard claim and issue preclusion may bar relitigation of the issue in federal court.

The future of takings litigation after Knick

The Justices’ competing arguments will continue to hold considerable interest for academics, but they represent water over the dam, so to speak, from a practical standpoint. Henceforth, property owners suing local governments under the Takings Clause have the option to sue in either federal or state court.

The most interesting and consequential question going forward is what Knick portends for the ability of property owners to sue to enjoin alleged takings that, in the Court’s new terminology, “violate” the U.S. Constitution. The Court’s opinion contains absolute statements that takings claimants will be limited to compensatory relief, and other statements that are more nebulous. For example, the Court said, “As long as just compensation remedies are available . . . injunctive relief will be foreclosed,” but the Court also said, “Given the availability of post-taking compensation, barring the government from acting will ordinarily not be appropriate.” To add to the uncertainty, Justice Thomas filed a concurring opinion arguing that injunctive relief should sometimes be available in takings litigation; he read the opinion of the Court, which he joined, as not foreclosing the application of “ordinary remedial principles.” Knick, 139 S. Ct. at 2180 (Thomas, J., concurring).

Prior to Knick, it was clear that a property owner could not seek injunctive relief for an alleged taking of private property, because a taking did not “violate” the Takings Clause so long as the property owner could secure compensation later, as numerous Supreme Court decisions recognized. Thus, for example, in Ruckelshaus v. Monsanto Co., 467 U.S. 976 (1984), the Court rejected a request for injunctive relief because “[e]quitable relief is not available to enjoin an alleged taking of private property for a public use, duly authorized by law, when a suit for compensation can be brought against the sovereign subsequent to the taking.” Id. at 1016.

Knick, it will no doubt be contended, undermines this analysis because it establishes that a taking claim does assert a violation of the Takings Clause. To the extent that Knick undermines the reasoning of prior precedents barring requests for injunctive relief in takings cases, it can be argued that it opens the door to the injunctive remedy. If a taking claimant asserts a constitutional violation, why can’t she seek to enjoin such a violation in the same way that any other plaintiff can seek to enjoin any other federal constitutional violation?

On the other hand, even after Knick, the Takings Clause can still be read to preclude requests for injunctive relief, at least so long as the pathway is open for seeking compensatory relief. As discussed, the Takings Clause contains an implicit authorization for government to take private property for a “public use,” that is, a public purpose, on the condition that compensation be paid. Knick’s holding that a “violation” occurs when the government takes property without paying compensation may simply mean that an owner now has an immediate right to sue for compensation, a right that can now be pursued in either state or federal court. The Court’s embrace of the term “violation” does not necessarily disturb the bedrock understanding, affirmed by the Court many times, that the Takings Clause “is designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking.”

To be sure, a request for injunctive relief has long been appropriate under the Takings Clause in particular circumstances. A property owner asserting that an alleged taking is not for a “public use,” that is, not a legitimate public purpose, is entitled to seek injunctive relief; as the Supreme Court has said many times, a taking for other than a public use is unlawful and subject to an injunction whether or not the government is able and willing to pay compensation. On the other hand, if the alleged taking is for a public use, and the only remaining condition to be satisfied is payment of compensation, then a request for an injunction arguably should never be available, again assuming the claimant has the opportunity to secure compensation after the fact.

In terms of practical implications for future takings litigation, the Knick decision unquestionably gives property owners significant new tactical advantages. In particular, the option to select either a federal or state forum will allow claimants to forum shop based on which one offers the most favorable precedent or is more likely to provide a probable plaintiff-friendly judge.

At the same time, Knick will undoubtedly make takings litigation more procedurally complex, at a cost to both plaintiffs and government defendants. Prior to Knick, a property owner with competent legal representation suing a local government for a taking filed suit in state court. Period. But Knick raises new questions about whether and when takings cases should be transferred in whole in part from federal court to state court or vice versa. A threshold issue in every takings case is the nature and scope of the property interest allegedly taken. That issue is almost always governed by state rather than federal law. If a takings case is filed in federal district court, the federal court may wish to abstain in favor of state court, or invoke the certification process (where available), to obtain an authoritative resolution of the threshold property issue. The U.S. Court of Federal Claims and the U.S. Court of Appeals for the Federal Circuit commonly certify state law issues in takings cases against the United States to the highest court of the relevant state, and federal courts handling takings cases against local governments may well emulate this practice. Enlisting the aid of the state courts in resolving federal court land use cases will make the takings litigation process more protracted than it would be if plaintiffs simply filed in state court in the first instance.

Furthermore, if the owner sues under the federal Takings Clause in state court, the local government defendant may now seek to remove the case to federal court. Prior to Knick, some local government defendants sought to remove takings cases to federal court, but that tactic was problematic because, under Williamson County, only the state courts could adjudicate takings claims in the first instance. After Knick, of course, federal courts have jurisdiction over takings claims against local governments. Thus, removal should now be freely permitted when a government defendant sees some advantage in taking that step.

Ironically, despite the major victory achieved by property rights advocates in Knick, it remains to be seen if Ms. Knick will prevail in her lawsuit. A group of “cemetery scholars” filed a fascinating amicus brief documenting that Pennsylvania and many states recognize that citizens have a protected common law property right to visit the graves of their ancestors on private property, a right which Ms. Knick’s acquisition was purportedly subject to at the time of her purchase. The case has now been remanded to the federal district court in Pennsylvania to resolve whether this “background principle” of state property law may defeat this lawsuit.

John Echeverria

John Echeverria is a professor of law at Vermont Law School where he teaches Property, Water Resources, and other environmental and natural resource law courses. He has wide experience in real-world litigation as well as academic studies and, among other projects, authors a “takings litigation blog.”