Knick Goes On and OnPosted: December 18, 2018 Filed under: Regulatory Takings Comments Off on Knick Goes On and On
In the pending case of Knick v Township of Scott, the U.S. Supreme Court is reexamining its longstanding Williamson County rule that a property owner suing a local government for just compensation for a “taking” of private property must proceed initially in state rather than federal court. While the Knick case appears to present a relatively arcane procedural issue, the case may well produce one of the most important takings rulings from the Supreme Court in many years.
The Knick case presently sits in an unusual posture. On October 3, 2018, oral argument was conducted before eight justices, Justice Anthony Kennedy having retired last summer. Justice Brett Kavanaugh first sat on the Court and brought it to full strength the following week, on October 9. On November 2, the Court, in lieu of producing a merits decision, issued an order directing the parties and the Solicitor General to file supplemental briefs. Subsequently, the Court scheduled the case for re-argument on January 16, 2019. The parties and the Solicitor General are now in the process of filing their supplemental briefs.
Speculation has focused on whether the eight-member Court might have deadlocked and may require Justice Kavanaugh to cast the deciding vote. Justice Kavanaugh has a thin track record in takings cases, and his inclinations in this case are hard to predict. In any event, a deep look at the issues on which the Court has sought supplemental briefing suggests that the petitioner will have considerable difficulty persuading the Court to overrule Williamson County.
The takings issue arises from the Takings Clause of the Fifth Amendment, which provides: “Nor shall private property be taken for public use, without just compensation.” The Knick case involves a claim for just compensation brought by Rose Mary Knick for an alleged taking of a public easement across her rural property by an ordinance adopted by the Township of Scott, Pennsylvania, which mandates certain forms of public access to cemeteries located on private land. Rather than pursue a traditional inverse condemnation action against the Township in the Pennsylvania courts to present her claim for compensation, Ms. Knick filed her takings claim as an action under 42 U.S.C. § 1983 in federal district court. The merits of the taking issue are very interesting and hotly contested, but they are not before the Supreme Court. Rather, the sole issue before the Court is whether the federal district court, following Williamson County, properly dismissed Ms. Knick’s section 1983 claim for just compensation on the ground that Pennsylvania has an established process for adjudicating a takings claim and awarding any compensation that may be due, but Ms. Knick failed to pursue that process.
Round One. In the first round of briefing and argument, Ms. Knick, represented by the Pacific Legal Foundation (PLF), principally contended that a “taking” of private property, standing alone, should be treated as a violation of the Takings Clause. She argued that the requirement to pay “just compensation” mentioned in the Takings Clause simply refers to a “remedy” for an unconstitutional taking. Under this theory, as soon the government takes an action that effects a taking, the owner has a viable claim she has been “deprived” of a “right” protected by the Constitution within the meaning of section 1983. Accordingly, she argues, she should have been permitted to present a federal constitutional takings claim in federal district court, whether or not she could have pursued a claim for just compensation in state court.
Knick’s opening argument fails on a number of grounds. Most fundamentally, the Court has long described the absence of just compensation as a necessary element of a claim for a Takings Clause violation. Indeed, an unbroken line of Supreme Court precedent holds that, “so long as compensation is available for those whose property in in fact taken, the government action is not unconstitutional.” Riverside Bayview Homes v. United States, 474 U.S. 121, 128 (1985). Moreover, the Court has recognized that compensation need not be provided at the moment of the taking; it is sufficient if there is a “reasonable, certain, and adequate” process for awarding compensation after the fact. Applying these precedents in Williamson County, the Court ruled that an owner cannot present a viable claim of a Takings Clause violation against a local government in federal court if the state has established a judicial process for making compensation awards and the property owner has not availed herself of that process. PLF’s attack on Williamson County based on its taking-as-constitutional-violation theory faces a steep uphill climb against a good deal of settled law.
PLF’s taking-as-constitutional-violation theory also is inconsistent with the fundamental nature and scope of the Takings Clause. As an initial matter, no one disputes that a taking for other than a “public use” violates the Takings Clause and that a federal district court (or a state court) can properly enjoin such a constitutional violation. The debate over Williamson County relates to cases in which the plaintiff accepts or at least presumes that the local government is acting for a public use, that is, a public purpose, just as Ms. Knick accepts that the Township ordinance providing public access to cemeteries serves a valid public purpose. In cases governed by Williamson County, there is no debate about public use, and the sole issues are whether there was a “taking” by the local government and if “just compensation” is due, and in what forum those issues must be litigated.
Assuming a taking is for a “public use,” a taking within the meaning of the Takings Clause represents a perfectly constitutional government act, contrary to PLF’s theory. The Takings Clause implicitly recognizes and affirms one of the essential powers of government, the power of eminent domain, the power to compel citizens to transfer ownership of property interests to the government. Thus, it is not unconstitutional for government to take private land for a public highway or a post office. Similarly, applying the same principle in the inverse condemnation context, it is not unconstitutional for government to enforce regulations that may rise to the level of a compensable taking. The Takings Clause simply establishes that the exercise of the eminent domain power for a public use is subject to the condition: that just compensation must be paid to the owner. A taking for a public use can amount to a violation of the Takings Clause only if a process for securing compensation does not exist or the available process does not yield constitutionally sufficient compensation.
Given the distinctive character of the Takings Clause, the Court in Williamson County was correct in ruling that a property owner who asserts a local government has taken her property for public use must seek just compensation in state court. A local government is a unit of the state and draws all of its legal authority from state government. A state court inverse condemnation proceeding provides an opportunity for the property owner to seek and for the state to provide any compensation that may be due for a taking by a unit of the state. If the state court awards compensation for the taking, the state satisfies the constitutional condition that compensation must be paid for a taking, preventing a federal constitutional violation from ever arising.
While a takings claimant might prefer to litigate the takings question in federal court, there is no valid constitutional objection to a requirement that a party litigate that issue in state court. The Supreme Court has repeatedly recognized that state courts are fully competent to adjudicate federal claims, including constitutional claims. State courts have the same obligation to safeguard rights protected by the Bill of Rights as federal courts. Moreover, as the Court stated in Idaho v. Coeur d’Alene Tribe, 521 U.S. 261, 275 (1997), “A doctrine based on the inherent inadequacy of state forums would run counter to basic principles of federalism.”
The distinctive character of the Takings Clause, and how that distinctive character supports the Williamson County state-compensation requirement, are demonstrated in a powerful if back-handed way by the short-lived “substantially advance” takings theory. Between the Court’s 1980 decision in Agins v. Tiburon, 475 U.S. 255, and its 2005 decision in Lingle v. Chevron USA, Inc., 544 U.S. 528, property owners could plausibly contend that Court precedent supported the theory that a government action represented a taking if it “failed to substantially advance a legitimate state interest.” Under this theory, a government action that violated this test was invalid and violated the Takings Clause; a plaintiff suing based on the substantially advance theory was entitled to sue to invalidate and enjoin the government action, whether or not the state afforded an opportunity to seek compensation. In Lingle, however, a unanimous Court repudiated the substantially advance test, and recognized that it was inconsistent with the fundamental principle that takings claims must be premised on valid, lawful government actions. As the Lingle Court stated, an inquiry into the “validity” of a regulation “is logically prior to and distinct from the question whether a regulation effects a taking, for the Takings Clause presupposes that the government has acted in pursuit of a valid public purpose.”
Tellingly, prior to repudiating the substantially advance takings test, the Supreme Court addressed whether the Williamson County state-compensation requirement applied to claims under the Takings Clause based on the substantially advance theory. The Court, in Yee v Escondido, 503 U.S. 519 (1992), ruled that the Williamson County state-compensation requirement did not apply to a substantially advance takings claim because such a claim challenges the validity of the government action and seeks to enjoin it. Following the repudiation of the substantially advance takings theory, the issue of how Williamson County should apply to this type of takings claim obviously became moot. But because the Yee decision recognizes that Williamson County cannot logically apply to a claim that a government action violates the Takings Clause because it is invalid, Yee confirms that Williamson County is based on the understanding that a claim seeking compensation for a taking does not allege a violation of the Takings Clause. The constitutional validity of takings for public use and the Williamson County doctrine are two sides of the same coin.
The distinctive character of the Takings Clause also answers the critics of Williamson County who complain that plaintiffs alleging a violation of the Equal Protection Clause and the First Amendment, for example, can sue in federal (or state) court but plaintiffs suing local governments under the Takings Clause must pursue their claims in state court. The Equal Protection Clause and the First Amendment proscribe conduct that is unconstitutional. By contrast, the Takings Clause implicitly affirms the constitutionality of the eminent domain power, and simply imposes conditions on its exercise, that the taking be for a public use and compensation be paid. Because an abridgement of the rights protected by the Equal Protection Clause or the First Amendment is unconstitutional, a citizen can appropriately enforce her rights under these provisions by suing in federal court. But because a taking for public use is constitutional, there is no basis for a suit in federal court alleging a violation of the Takings Clause, so long as the state has provided an avenue to obtain compensation in state court and the plaintiff has not pursued that avenue.
One other major problem with PLF’s taking-as-constitutional-violation theory is that if the mere act of taking private property violated the Constitution, there would be no logical reason why a property owner could not sue (in either federal or state court) to enjoin the government action, rather than sue for compensation. But another long line of Supreme Court precedent recognizes that a claim that the government has engaged in a taking for public use cannot provide the basis for enjoining the government, so long as there is an opportunity to secure payment of compensation. Expanding takings doctrine to permit property owners the option of either suing to block alleged takings for public use or to secure compensation for such takings, or both, would represent an enormous expansion of existing takings doctrine. It would be a doctrinally unsound step because takings for public use are, by definition, constitutional; there is no justification for blocking such lawful actions, and payment of compensation fully satisfies the mandate of the Takings Clause. And, as a practical matter, allowing owners to sue to enjoin takings for public use would block officials from implementing many legitimate and valuable public programs. It is one thing to read the Takings Clause to require government to pay property owners for takings for public use as a condition of carrying out certain programs; it would be entirely different, and far more disruptive of government operations, to read the Takings Clause to authorize courts to block government from acting altogether.
It is hardly surprising, given its lack of support in precedent, its inconsistency with fundamental principles of takings doctrine, and its potentially significant adverse impact on government operations that the Solicitor General joined the respondent Township in arguing against PLF’s principal theory for overruling Williamson County. It appears from the October 3 oral argument transcript that a majority of the Supreme Court found PLF’s primary argument unpersuasive. Assuming this reading of the Court is correct, the Court’s November 2 order requiring supplemental briefs seems like a last-chance offer to Ms. Knick to try to redeem a losing cause. This generous gesture will likely be for naught.
Round Two. The Court’s November 2 order invited Ms. Knick to elaborate on an alternative argument against Williamson County that her counsel relegated to a footnote in her opening brief. In that footnote Knick asserted that, even if it were correct that a taking alone does not violate the Constitution, and the Takings Clause can only be violated by a taking for a public use without compensation, Williamson County was still wrongly decided. Under this alternative theory, a taking by a local government would be unconstitutional if the local government itself failed, at the time of the alleged taking, to pay compensation or guarantee payment of compensation. This alternative theory accepts that an absence of compensation is necessary for a taking to be unconstitutional, but shifts the burden of supplying the compensation from the state courts to the local government defendants themselves. According to this theory, if a local government fails to pay compensation or to make a promise to do so at the time of the alleged taking, the owner can properly assert a claim that the taking is unconstitutional in federal district court.
Knick’s fall back argument is even more problematic than her original primary argument. First, it seeks to impose a completely unrealistic and unworkable burden on local governments. Generally speaking, the eminent domain power and the police power represent two alternative powers held by local governments. Sometimes local governments decide to take and pay for private property for public use and institute condemnation proceedings for that purpose. Sometimes they decide to exercise the police power, such as by adopting and enforcing a zoning regulation. A government decision to proceed under the police power, rather than pursuant to the eminent domain power, represents a decision (sometimes explicit but generally implicit), that the government can properly proceed under the police power without triggering financial liability under the Takings Clause.
The whole point of inverse condemnation doctrine, of course, is that in some instances government officials will turn out to be wrong in their judgment about exercising regulatory authority rather than the eminent domain power, and enforcement of a police power regulation will in fact result in a taking, triggering an obligation to pay compensation. Inverse condemnation proceedings are the traditional way for property owners to bring forward a claim that a police power regulation represents a taking and to obtain compensation. But under Knick’s novel fall back argument, local governments, after having made the decision not to exercise the eminent power and not to pay for a taking (because they believe they are not engaged in a taking), would be required to scrutinize their police power measures to consider whether they might inadvertently result in takings in order to avoid being sued under the Takings Clause in federal court.
In its supplemental filing, PLF contends that this proposed requirement would impose only a “minor burden” on local governments. But in reality this requirement would impose an enormous burden on local governments, many of which have small and strained budgets, who would be required to hire lawyers and hire new staff or consultants to examine the vast number of laws, regulations, and administrative actions that might potentially generate takings claim. Performing this kind of analysis before any inverse condemnation claim has been filed, and perhaps even before the identities of potential plaintiffs were known, would be virtually impossible, especially given the indeterminacy of current takings law. Moreover, the results of this type of analysis would generally be worthless, because the merits of potential takings claims depend on many facts that are unknown to local governments, such as the total size of an owner’s property holding or whether a government action may interfere with the owner’s reasonable investment-backed expectations.
In practice, if the Court were to embrace Knick’s fall back argument, all or most local governments, for practical reasons, would likely simply ignore the invitation to attempt to determine whether police power measures might result in takings claims in order to influence the forum in which takings and just compensation issues will be litigated. In other words, this fall back argument advocates a forum selection rule that turns on local governments exercising theoretical options that they would virtually never exercise in practice. A legal rule that has no grounding in the real world is both misguided and dangerous.
Furthermore, acceptance of Knick’s fall back argument would expose local governments to suits seeking injunctive relief under the Takings Clause to virtually the same degree as would acceptance of Knick’s primary argument. Because few if any governments would admit that police power regulations trigger takings liability in advance, property owners could assert in virtually every instance that the government has violated the Takings Clause by taking property without compensation. Like Knick’s primary argument, her back up argument would invite property owners to sue for injunctive relief rather than pursue compensation. Suits for injunctive relief generated by Knick’s fall back theory would be just as disruptive as suits for injunctive relief based on Knick’s primary theory.
Finally, Knick’s fall back theory is doctrinally unsound. A rule that would require local governments to anticipate potential future takings claims by determining, at the time of the alleged taking, to compensate property owners or at least promise to do so would certainly achieve the objective of Knick and her allies to allow takings claimants to sue in federal court. But there is simply no basis in takings doctrine or elsewhere for the novel idea that states’ individual units of local government, rather than state judiciaries, must resolve the compensation question. Over history, as the Township’s supplemental brief explains, different branches and levels of government, within both the federal and state systems, have been assigned the responsibility to handle claims for compensation for alleged takings. The State of Pennsylvania has assigned authority to adjudicate inverse condemnation claims to the state judiciary. There is no ground for contending that Pennsylvania was required to assign to local governments the responsibility to determine whether compensation is due, much less to make these determinations in advance of any actual takings dispute raised by a specific landowner.
Not surprisingly, the Solicitor General is no more supportive of Knick’s fall back argument than he is of Knick’s primary argument; he states in his supplemental filing, “The Court should not hold that the Takings Clause is violated any time the government fails to admit that its conduct has effected a taking within the meaning of the Fifth Amendment.”
The SG’s Lifeline. But the Solicitor General has presented a third alternative theory for why a property owner alleging a local government has taken private property should be permitted to sue for compensation in federal district court. (Actually, the Solicitor General has also offered a fourth alternative argument for overturning Williamson County, based on a broad reading of 28 U.S.C. § 1331, but that argument, not raised by the petitioner herself, seems so insubstantial it is not worth discussing). Under the third alternative theory, the Solicitor General affirms that a taking by a local government is not unconstitutional so long as the owner has an opportunity to pursue a claim for compensation in state court. But he contends that if the government has taken property, then just compensation is immediately due under the Takings Clause, and the owner should be permitted to assert in federal court that he has been “deprived” of his constitutional right to just compensation within the meaning of section 1983 until the compensation is paid.
This alternative fall back argument represents an obvious effort by the Solicitor General to balance the institutional interests of the Department of Justice and the rest of the federal government with a desire to be supportive of the pro-property rights agenda in the context of the Williamson County issue. By maintaining that a taking is not unconstitutional so long as the owner can pursue a claim for compensation in court, the Solicitor General seeks to ward off the potential for property owners to use the Takings Clause to seek to enjoin governmental programs. But by embracing the idea that a property owner suffers a “deprivation” of a “right” within the meaning of section 1983 so long as the compensation owned for a taking remains unpaid, the Solicitor General seeks to support the argument that an owner suing a local government for a taking can sue for compensation in federal district court.
The Solicitor General’s argument seeks to pass a thread through a needle hole that simply does not exist. Section 1983 provides a right of action for the “deprivation of any rights, privileges, or immunities secured by the Constitution and laws.” Neither the Takings Clause nor any other constitutional provision or statute requires, in the event of a taking, immediate payment of compensation. A core principle supporting the Williamson County doctrine is that an owner’s opportunity to sue for compensation after the taking has occurred is sufficient to prevent an unconstitutional taking from occurring. Since a just compensation claim simply seeks money, and loss in the value of money due to the passage of time can be compensated for with interest, a property owner suffers no practical, much less a legal deprivation while awaiting a compensation award in a state inverse condemnation proceeding.
Conclusion. As a pro-property-owner advocacy organization, PLF has an obvious tactical interest in trying to secure the ability to forum shop between the federal and state court systems. But PLF has weak legal arguments for overruling Williamson County, a 32-year-old precedent protected by the doctrine of stare decisis. As evidenced by the Court’s issuance of its November 2 order requiring supplemental briefing, PLF appears to have at least some sympathetic ears on the Court, but that should not be enough to secure victory in a weak case.