Supreme Court Overrules Precedent that Created "Catch-22" for Property Owners Attempting to Bring Takings Cases in Federal Court

Ilya Somin

In Knick v. Township of Scott, an important decision issued this morning, the Supreme Court overruled a precedent that creates a Catch-22 blocking property owners from bringing takings cases against state and local governments in federal court.
The main point at issue in Knick was whether the Court should overrule Williamson County Regional Planning Commission v. Hamilton Bank  (1985). Under Williamson County, a property owner who contends that the government has taken his property and therefore owes "just compensation" under the Fifth Amendment, could not file a case in federal court until he or she first secured a "final decision" from the relevant state regulatory agency and "exhausted" all possible remedies in state court. Even then, it was still often impossible to bring a federal claim, because various procedural rules preclude federal courts from reviewing final decisions in cases that were initially brought in state court...
The majority opinion by Chief Justice John Roberts overrules Williamson County and eliminates the Catch-22 that we highlighted in our brief, and which has long  been heavily criticized by legal scholars and others. Here is the key part of the opinion:

In Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), we held that a property owner whose property has been taken by a local government has not suffered a violation of his Fifth Amendment rights—and thus cannot bring a federal takings claim in federal court—until a state court has denied his claim for just compensation under state law….
The Williamson County Court anticipated that if the property owner failed to secure just compensation understate law in state court, he would be able to bring a "ripe" federal takings claim in federal court. See id., at 194. But as we later held in San Remo Hotel, L. P. v. City and County of San Francisco, 545 U. S. 323 (2005), 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 a 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.
The San Remo preclusion trap should tip us off that the state-litigation requirement rests on a mistaken view of the Fifth Amendment. The Civil Rights Act of 1871, after all, guarantees "a federal forum for claims of unconstitu­tional treatment at the hands of state officials," and the settled rule is that "exhaustion of state remedies 'is not a prerequisite to an action under [42 U. S. C.] §1983….'" But the guarantee of a federal forum rings hollow for takings plaintiffs, who are forced to litigate their claims in state court.
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. A property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it. That does not mean that the government must provide compensation in advance of a taking or risk having its action invalidated: 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. 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 under §1983 at that time.

Chief Justice Roberts also emphasized that Williamson County created a double standard under which Takings Clause claims are subjected to a perverse requirement that is not imposed on other constitutional claims against state and local governments:

The state-litigation requirement relegates the Takings Clause "to the status of a poor relation" among the provisions of the Bill of Rights. Dolan v. City of Tigard, 512
U. S. 374, 392 (1994). Plaintiffs asserting any other constitutional claim are guaranteed a federal forum under §1983, but the state-litigation requirement "hand[s] authority over federal takings claims to state courts." San Remo, 545 U. S., at 350 (Rehnquist, C. J., concurring in judgment). 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.

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