Supreme Court Opens Door to Federal Court for Local Takings Claims

July 1, 2019

In a 5-4 decision penned by Chief Justice Roberts, the U.S. Supreme Court on June 21 expanded private property rights by providing a direct route to federal court when a property owner has a claim that a state or local government has taken property without just compensation in violation of the 5th Amendment of the U.S. Constitution. The decision, Knick v. Township of Scott, Pennsylvania, resolved what was a “Catch-22” of takings law.

In Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), the court ruled that a state or local takings claim must first go through a state’s inverse condemnation proceeding before going to federal court. At that point, if the State denied compensation, the property owner’s claim was “ripe” and could be brought in federal court.

However, in San Remo Hotel, L. P. v. City and County of San Francisco, 545 U. S. 323 (2005) the court ruled that the §1738 of the U.S Code known as the “full faith and credit” statute required federal courts abide by the ruling of the State. Thus, property owners had no real avenue to federal court.

It the Knick decision, the Court ruled that an unconstitutional taking exists when the property is taken, not after compensation is denied in a state inverse condemnation proceeding. Thus, property owners can bring a claim directly to federal court. State and local governments must now be aware that they could find themselves in federal court if they pursue a direct taking or a regulation that effectively wipes out the economic value of a property.