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U.S. Supreme Court —Governments must pay before taking property

July 26, 2019 by Kayla Houp

In a 5-4 decision, the U.S. Supreme Court has ruled that a constitutional violation of property rights has occurred when government takes property without paying for it first, overturning long-standing case law that property owners are not constitutionally aggrieved if they can later go to state court to win just compensation.

That precedent has caused many property owners fighting for just compensation for government condemnations to be denied Fifth Amendment hearings in federal courts, but, because of a local cemetery ordinance in Pennsylvania, that precedent has now been overturned.

The decision was authored by chief justice John Roberts and joined by justices Clarence Thomas, Brett Kavanaugh, Samuel Alito, and Neil Gorsuch.

“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,” Roberts wrote. “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.”

On its face, the case is about when a property owner can make a constitutional takings claim in federal court. In Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, which was the precedent this decision overturned, the court held that property owners must seek just compensation under state law in state court before bringing a federal takings claim.

As the majority observed, however, that often means a property owner who loses in state court will almost certainly never be able to make a claim in federal court.

“The Williamson County court anticipated that if the property owner failed to secure just compensation under state law in state court, he would be able to bring a ‘ripe’ federal takings claim in federal court,” the decision stated. “But as we later held in San Remo Hotel, a state court’s resolution of a claim for just compensation under state law generally has preclusive effect in any subsequent federal suit. The takings plaintiff thus finds himself in Catch-22: He cannot go to federal court without going to state court first; but if he goes to state court and loses, his claim will be barred in federal court. The federal claim dies aborning.”

Indeed, Roberts wrote, the adverse state court decision that, according to Williamson County, gave rise to a ripe federal takings claim simultaneously barred that claim, preventing the federal court from ever considering it.

Perhaps more important, on the practical side, property owners have often claimed that being snagged in state litigation for long periods of time without immediately being able to contest a proposed remedy for a takings often means, among other things, that the government simply takes now for projects and pays much later, and often with less than just compensation, because property owners feel pressured to accept bargain-basement settlements due to the cost and length of litigation.

It also allows the government to quickly enact regulatory schemes or develop land-use projects before their public benefits can be argued, critics have claimed. 

While the justices reassured that the decisions would not halt government land-use projects or overturn regulatory frameworks that often restrict or tightly regulate development, the ability to go immediately to federal court does offer the opportunity for quicker hearings on such matters as equitable compensation claims, the public worthiness of projects, and the ability to develop land, a point made in a dissent by justice Elena Kagan, though she viewed that in a negative light, saying most of those were the jurisdiction of state law.

In her dissent, Kagan said the effect would be to “channel a mass of quintessentially local cases involving complex state-law issues into federal courts” and turn well-meaning government officials into lawbreakers. 

“(U)nder modern takings law, there is ‘no magic formula’ to determine ‘whether a given government interference with property is a taking,’” she wrote. “For that reason, a government actor usually cannot know in advance whether implementing a regulatory program will effect a taking, much less of whose property. Until today, such an official could do his work without fear of wrongdoing, in any jurisdiction that had set up a reliable means for property owners to obtain compensation. Even if some regulatory action turned out to take someone’s property, the official would not have violated the constitution. But no longer. Now, when a government undertakes land-use regulation (and what government doesn’t?), the responsible employees will almost inescapably become constitutional malefactors.”

In a concurrence with the majority, justice Clarence Thomas disagreed with what he called the “sue-me” approach advocated both by the government and the dissenters, and he said perhaps such government takings should not move forward in some cases.

“(The federal government) worries that requiring payment to accompany a taking would allow courts to enjoin or invalidate broad regulatory programs ‘merely’ because the program takes property without paying for it,” Thomas wrote, noting that government lawyers argued that it ought to be good enough that the government “implicitly promises to pay compensation for any taking” if a property owner successfully sues the government in court. 

“This ‘sue me’ approach to the Takings Clause is untenable,” he wrote. “The Fifth Amendment does not merely provide a damages remedy to a property owner willing to ‘shoulder the burden of securing compensation’ after the government takes property without paying for it. Instead, it makes just compensation a ‘prerequisite’ to the government’s authority to ‘tak(e) property for public use.’” 

A purported exercise of the eminent-domain power is therefore invalid unless the government pays just compensation before or at the time of its taking, Thomas wrote, quoting earlier cases: “If this requirement makes some regulatory programs ‘unworkable in practice,’ so be it — our role is to enforce the Takings Clause as written.”



The case

In the case, according to the court decision, Rose Mary Knick owns 90 acres of land in Scott township, Pennsylvania, a small community just north of Scranton, living in a single-family home on the land and using the rest of the property as a grazing area for horses and other farm animals. 

“The property includes a small graveyard where the ancestors of Knick’s neighbors are allegedly buried,” the decision stated. “Such family cemeteries are fairly common in Pennsylvania, where ‘backyard burials’ have long been permitted.”

In December 2012, Roberts continued in the decision, the township passed an ordinance requiring that “(a)ll cemeteries ... be kept open and accessible to the general public during daylight hours.” The ordinance also authorized township “code enforcement” officers to “enter upon any property” to determine the existence and location of a cemetery. 

“In 2013, a township officer found several grave markers on Knick’s property and notified her that she was violating the ordinance by failing to open the cemetery to the public during the day,” Roberts wrote. “Knick responded by seeking declaratory and injunctive relief in state court on the ground that the ordinance effected a taking of her property.”

But Knick did not seek compensation for the taking by bringing an “inverse condemnation” action under state law.

“In response to Knick’s suit, the township withdrew the violation notice and agreed to stay enforcement of the ordinance during the state court proceedings,” Roberts wrote. “The court, however, declined to rule on Knick’s request for declaratory and injunctive relief because, without an ongoing enforcement action, she could not demonstrate the irreparable harm necessary for equitable relief.”

Knick then went to federal court, alleging that the ordinance violated the takings clause of the Fifth Amendment, the decision stated. 

The federal district court dismissed Knick’s takings claim under Williamson County because she had not pursued an inverse condemnation action in state court, and the high court then granted certiorari to reconsider the holding of Williamson County that property owners must seek just compensation under state law in state court before bringing a federal takings claim.

Williamson County’s wrong reasoning

In the decision, the majority concluded that Williamson County’s state-litigation requirement rested on a mistaken view of the Fifth Amendment.  

“We now conclude that the state-litigation requirement imposes an unjustifiable burden on takings plaintiffs, conflicts with the rest of our takings jurisprudence, and must be overruled,” Roberts wrote. “A property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it.”

That doesn’t mean that the government must provide compensation in advance of a taking or risk having its action invalidated, the majority cautioned. 

“So long as the property owner has some way to obtain compensation after the fact, governments need not fear that courts will enjoin their activities,” the decision stated. “But it does mean that the property owner has suffered a violation of his Fifth Amendment rights when the government takes his property without just compensation, and therefore may bring his claim in federal court …  at that time.”

The state-litigation requirement relegates the Takings Clause “to the status of a poor relation” among the provisions of the Bill of Rights, Roberts continued. 

“Plaintiffs asserting any other constitutional claim are guaranteed a federal forum under (federal law), but the state-litigation requirement ‘hand(s) authority over federal takings claims to state courts,’” Roberts wrote. “Fidelity to the Takings Clause and our cases construing it requires overruling Williamson County and restoring takings claims to the full-fledged constitutional status the Framers envisioned when they included the clause among the other protections in the Bill of Rights.”

Contrary to Williamson County, the majority decided, a property owner has a claim for a violation of the Takings Clause as soon as a government takes his property for public use without paying for it.

“If a local government takes private property without paying for it, that government has violated the Fifth Amendment — just as the Takings Clause says — without regard to subsequent state court proceedings,” Roberts wrote. “And the property owner may sue the government at that time in federal court for the ‘deprivation’ of a right ‘secured by the Constitution.’” 

The court has long recognized that property owners may bring Fifth Amendment claims against the federal government as soon as their property has been taken, Roberts emphasized.

“The Fifth Amendment right to full compensation arises at the time of the taking, regardless of post-taking remedies that may be available to the property owner,” he concluded.



Just plain wrong

In the case, the justices concluded the Williamson County decision was just plain wrong.

“In sum, because a taking without compensation violates the self-executing Fifth Amendment at the time of the taking, the property owner can bring a federal suit at that time,” Roberts wrote. “Just as someone whose property has been taken by the federal government has a claim ‘founded ... upon the Constitution’ that he may bring under the Tucker Act, someone whose property has been taken by a local government has a claim under (the statutes) for a ‘deprivation of (a) right() ... secured by the Constitution’ that he may bring upon the taking in federal court.”

The “general rule,” Roberts wrote, is that plaintiffs may bring constitutional claims under the statutes without first bringing any sort of state lawsuit, even when state court actions addressing the underlying behavior are available.

But justice Elena Kagan vehemently disagreed, saying the takings clause was unique among the Bill of Rights’ guarantees. 

“It is, for example, unlike the Fourth Amendment’s protection against excessive force — which the majority mistakenly proposes as an analogy,” she wrote. “Suppose a law enforcement officer uses excessive force and the victim recovers damages for his injuries. Did a constitutional violation occur? Of course. The constitution prohibits what the officer did; the payment of damages merely remedied the constitutional wrong.”

But the takings clause was not like that, Kagan argued. 

“But the Takings Clause is different because it does not prohibit takings; to the contrary, it permits them provided the government gives just compensation,” she wrote. “So when the government ‘takes and pays,’ it is not violating the constitution at all.”

A takings clause violation has two necessary elements, Kagan wrote.

“First, the government must take the property,” she wrote. “Second, it must deny the property owner just compensation.”

As such, Kagan argued, a Fifth Amendment claim is premature until it is clear that the government has both taken property and denied just compensation. 

“If the government has not done both, no constitutional violation has happened,” she wrote. “All this is well-trod ground. Even the majority (despite its faulty analogy) does not contest it.”

And that begs an important question, Kagan observed.

“Similarly well-settled — until the majority’s opinion today — was the answer to a follow-on question: At what point has the government denied a property owner just compensation, so as to complete a Fifth Amendment violation?” she wrote. “For over a hundred years, this court held that advance or contemporaneous payment was not required, so long as the government had established reliable procedures for an owner to later obtain just compensation (including interest for any time elapsed).”



Smashing it to smithereens

The majority’s opinion thus overthrows the court’s long-settled view of the takings clause, Kagan asserted. 

“The majority declares, as against a mountain of precedent, that a government taking private property for public purposes must pay compensation at that moment or in advance,” she wrote. “If the government fails to do so, a constitutional violation has occurred, regardless of whether ‘reasonable, certain and adequate’ compensatory mechanisms exist. And regardless of how many times this court has said the opposite before. Under cover of overruling ‘only’ a single decision, today’s opinion smashes a hundred-plus years of legal rulings to smithereens.”

Everything said above aside, Williamson County should stay on the books because of stare decisis, meaning to stand by that which is already decided, Kagan contended.

“Stare decisis, of course, is ‘not an inexorable command,’” she wrote. “But it is not enough that five justices believe a precedent wrong. Reversing course demands a ‘special justification — over and above the belief that the precedent was wrongly decided.’”

What is left is simply the majority’s view that Williamson County was wrong, Kagan concluded.

“The majority repurposes all its merits arguments — all its claims that Williamson County was ‘ill founded’ — to justify its overruling,” she wrote. “But the entire idea of stare decisis is that judges do not get to reverse a decision just because they never liked it in the first instance.”

Once again, Kagan wrote, they need a reason other than the idea “that the precedent was wrongly decided.” 

“For it is hard to overstate the value, in a country like ours, of stability in the law,” she concluded.

But the majority punched back, saying the doctrine of stare decisis was at its weakest when the court interpreted the constitution, as was done in Williamson County, because only the Supreme Court or a constitutional amendment can alter the court’s holdings. 

“We have identified several factors to consider in deciding whether to overrule a past decision, including ‘the quality of [its] reasoning, the workability of the rule it established, its consistency with other related decisions, ... and reliance on the decision,’” Roberts wrote for the majority. “Williamson County was not just wrong. Its reasoning was exceptionally ill founded and conflicted with much of our takings jurisprudence.”

Its key conclusion — that a property owner does not have a ripe federal takings claim until he has unsuccessfully pursued an initial state law claim for just compensation — ignored many subsequent decisions holding that a property owner acquires a Fifth Amendment right to compensation at the time of a taking, Roberts wrote. 

“The decision has come in for repeated criticism over the years from justices of this court and many respected commentators,” he wrote. “Even the academic defenders of the state-litigation requirement base it on federalism concerns (although they do not reconcile those concerns with the settled construction of (the law) rather than the reasoning of the opinion itself.”

Because of its shaky foundations, Roberts wrote, the state-litigation requirement has been a rule in search of a justification for over 30 years.

Finally, Roberts wrote, governments need not fear that the decision will lead federal courts to invalidate their regulations as unconstitutional. 

“As long as just compensation remedies are available — as they have been for nearly 150 years — injunctive relief will be foreclosed,” he wrote. “For the same reason, the federal government need not worry that courts will set aside agency actions as unconstitutional under the Administrative Procedure Act. Federal courts will not invalidate an otherwise lawful uncompensated taking when the property owner can receive complete relief through a Fifth Amendment claim brought under the Tucker Act.”

In light of all the foregoing, the decision concluded, “the dissent cannot, with respect, fairly maintain its extreme assertions regarding our application of the principle of stare decisis.”

Richard Moore is the author of the forthcoming “Storyfinding: From the Journey to the Story” and can be reached at richardmoorebooks.com.

 

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