Today’s Supreme Court argument in Knick v. Scott Township made clear that state and local governments are playing Whack-a-Mole with private property rights. Whack-a-Mole is the arcade game in which every time a mole is whacked down, a new one pops up. At issue in Knick is whether to overturn the Court’s 1985 Williamson County decision, which held that Fifth Amendment Takings Clause claimants are generally relegated to state court.
When property rights advocates subsequently pointed out that Williamson County effectively barred property owners from ever asserting their Fifth Amendment rights, state and local governments persuaded the Court to re-interpret the nature of a Takings Clause violation (in its 2005 San Remo Hotel decision) to eliminate the no-right-to-assert problem. But when Justice Gorsuch suggested at today’s oral argument that this revised interpretation of the Takings Clause undercuts Williamson County’s rationale, the attorney for Scott Township denied the validity of the revised interpretation—in effect arguing that San Remo ought to be overruled.
State and local governments should not be permitted to have it both ways. Both Williamson County and San Remo cannot have been correctly decided. As Washington Legal Foundation’s brief explains, Williamson County is the one that lacks a solid constitutional basis. Today’s oral argument underscores that when deciding Knick, the Court ought to overrule Williamson County.
Williamson County’s “Just Compensation” Rationale
The Fifth Amendment bars governments from taking private property “without just compensation.” So the taking of private property does not by itself violate the Takings Clause; rather, no violation occurs unless the government does so without providing just compensation.
At issue in Williamson County was the timing of when the denial of compensation should be deemed to occur. A property owner filed a Takings Clause claim in federal court after a county government imposed severe restrictions on the development of its land; those restrictions drastically reduced the land’s value. The Supreme Court overturned a jury verdict for the land owner, reasoning that no denial of just compensation had yet occurred. The Court reasoned that if (as was true in Williamson County) the State provides an adequate state-court procedure for seeking compensation, no denial occurs until after the property owner invokes those state-court procedures and is denied compensation. Williamson County thus prevents property owners from going to federal court without first litigating their claims in state court.
The San Remo Trap
After Williamson County, when property owners litigated their compensation claims in state court, they were limited to remedies under state law. State courts universally rejected property owners’ Fifth Amendment claims; they reasoned that no such claims could come into existence until after state courts had denied compensation under state law. If property owners sought to raise Takings Clause claims, they had to file a second lawsuit in federal court.
One such property owner was San Remo Hotel. After losing its state-law inverse-condemnation claim in California state courts, it filed a Takings Clause claim in federal district court. But the lower courts dismissed the case on res judicata grounds; they concluded that the federal claims were substantially similar to the state-law claims decided adversely to San Remo by the California courts.
In its appeal to the Supreme Court, San Remo cried foul. It noted that California (like other States) had already determined that Takings Clause claims could not be raised in an initial state-court inverse-condemnation proceeding. So if res judicata barred it from raising those claims in federal court, it would be denied all opportunity to raise a federal constitutional claim.
The Supreme Court was clearly troubled by this dilemma. Its solution was to substantially modify Williamson County’s rationale. The 2005 San Remo decision held that although a Takings Clause violation is insufficiently complete to permit filing of a federal-court claim in advance of a state-court inverse-condemnation proceeding, it is sufficiently complete to permit the same Takings Clause claim to be filed in state court as part of the inverse-condemnation proceeding. In so holding, San Remo overruled numerous contrary state court decisions sub silento. But the ruling meant that property owners would thereafter have at least one forum in which to raise their Fifth Amendment claims, and allowed the Supreme Court to justify dismissal of San Remo’s constitutional claims on res judicata claims.
San Remo Undercuts Williamson County
But once San Remo determined that a property owner may raise his Takings Clause claims in state court immediately after government officials deny his request for compensation, the rationale underlying Williamson County entirely disappears. Williamson County was premised on the theory that the Takings Clause has not been violated until “just compensation” has been denied in a state-court proceeding. That premise is no longer valid if, as San Remo held, a property owner can state a valid Fifth Amendment cause of action in state court the moment he has been turned down by executive branch officials.
At today’s oral argument, the attorney for Scott Township dealt with this conundrum by re-asserting the original Williamson County rationale. She argued that just compensation has not been denied, and thus that no Takings Clause claim can be stated, until after a state court has rejected a state-law inverse condemnation claim. The clear but unstated implication of her argument: San Remo is no longer good law, and it is entirely appropriate to deny property owners an opportunity to raise Takings Clause claims in either state or federal court.
In deciding Knick, the Court will need to come to grips with the inherent tension between Williamson County and San Remo. It should not permit state and local government officials to continue to block federal-court access to Fifth Amendment claimants by alternatively asserting that one of the two decisions (i.e., the one not currently before the Court) was improperly decided.
Also published by Forbes.com on WLF’s contributor page.