United States Supreme Court ruling on takings claims may result in more federal lawsuits

In a recent decision, Knick v. Township of Scott, the United States Supreme Court held (in a 5-4 decision) that property owners are no longer required to seek and obtain a decision through state inverse condemnation proceedings before being able to file takings claims in federal courts. This significant decision marks a sea change in the way takings cases have been handled for nearly forty years since the 1985 landmark decision Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City. Williamson County held that before a plaintiff could recover in federal court for a Fifth Amendment violation of the taking of private property for public use without just compensation, a plaintiff must first (1) obtain a final decision from the government officials and (2) utilize any state procedures available to obtain just compensation. This first prong meant that property owners could not simply sue a local government for an ordinance that allegedly would constitute a taking without first obtaining a final determination from such local government as to how it would be applied to the plaintiff’s property. This could include, for example, a variance denial. The logic behind this finality requirement was rooted in the complaint not being ripe until a final decision had been made. The second prong required plaintiffs to seek and be denied just compensation through adequate state remedies, such as inverse condemnation cases in state court, before filing suit in federal court. While the first prong remains in place, the Knick decision has now eliminated the second prong.

Knick considered the language of the Fifth Amendment prohibition against taking private property for public use without just compensation and analyzed whether a taking occurred at the time of the action constituting a taking (the physical invasion, for example, or the enactment of a regulation limiting property rights) or after just compensation was formally denied for such taking. Ultimately, the Knick decision held that “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” and the property owner can sue under 42 U.S.C. § 1983 (and if successful, could recover attorneys’ fees under § 1988) for a civil rights deprivation at that point. Therefore, this case may result in more federal lawsuits being filed against local governments.