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U.S. Supreme Court Overturns State-Exhaustion Requirement For Federal Takings Claims, Providing Landowners With A Direct Path To Federal Court

On Friday, June 22, 2019, in Knick v. Township of Scott, the U.S. Supreme Court overturned Williamson County Regional Planning Commission v. Hamilton Bank. In doing so, the Court paved a direct path to federal court for landowners asserting federal takings claims.

For almost 35 years, Williamson County forced landowners to bring their federal takings claims in state court before proceeding to federal court. Only after exhausting their claims in state court could landowners then proceed to federal court. To make matters worse, the Constitution’s Full Faith and Credit Clause requires federal courts to recognize state court judgments. As a result, an adverse ruling in state court often precluded landowners from asserting federal constitutional claims in federal court.

No longer. In Knick, a Pennsylvania township attempted to enforce an ordinance requiring that all graveyards be open to the public during the daytime against Ms. Mary Rose Knick. Ms. Knick, who has a small, private, family graveyard on her property, sued the township in federal court. Ms. Knick argued that the township’s attempt to enforce the ordinance amounted to an unconstitutional taking. But the U.S. District Court for the Middle District of Pennsylvania dismissed her suit, citing Williamson County and explaining that Ms. Knick failed to exhaust her state- court remedies because she did not pursue an inverse condemnation action in state court. The U.S. Court of Appeals for the Third Circuit affirmed for the same reason. But in a 5-4 decision, the U.S. Supreme Court vacated the Third Circuit’s decision, overruling Williamson County in the process.

The most direct and immediate effect of the Supreme Court’s decision is that landowners need not first litigate federal takings claims in state court. Instead, landowners with federal takings claims can proceed immediately to federal court. As a practical matter, landowners ordinarily would rather be in federal courts, which tend to scrutinize the actions of local governments more closely than state courts, which are more likely to defer to their local counterparts. Yet landowners should be cautious, as this is, without question, jurisdiction-dependent. Federal courts within the jurisdiction of the U.S. Court of Appeals for the Fourth Circuit, for example, are notoriously difficult places for landowners to succeed against local governments. Thus, Knick makes clear that landowners may bring federal takings claims straight to federal court; however, landowners should examine the precedent of their particular jurisdiction before deciding to bring their claims in federal court, instead of state court.

There is another more latent, but perhaps more important, part of the Knick decision, in which the Court explains that a federal takings claim accrues at the time that the government takes possession of the property in question. Previously, many believed that a federal takings claim did not accrue until the government refused to compensate the landowner for the taking. The majority opinion holds otherwise, indicating that the government violates the takings clause at the time that it enacts a law that deprives a landowner of its property, even if the government later compensates the landowner. In effect, the Court’s holding permits a landowner to file a federal takings claim pursuant to Section 1983 at the time that the government enacts such a law. The landowner need not wait until the government denies just compensation. It is too early to say all the ways that a landowner could use this holding to its advantage. But suffice it to say, for now, that Knick will likely give local governments pause before enacting laws that could invite immediate challenges in federal court.

Finally, Knick may signify growing protections for the property rights of landowners before the Supreme Court. The Court first heard Knick before Justice Kavanaugh took the bench, but then reheard the case after his confirmation. Many have speculated that the Court reheard Knick because the justices were split 4- 4. Whatever the truth of this speculation, the Court’s decision fell along ideological lines, and the current balance of power has property-rights advocates excited for other hot-button issues to reach the Court.


Deborah J. Israel
Louis J. Rouleau

Pascal F. Naples

Copyright © 2019 Womble Bond Dickinson (US) LLP All Rights Reserved.
Reprinted with permission.

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