Real Property Committee Article: Burying Williamson in the Knick of Time?

Real Property Committee | Burying Williamson in the Knick of Time? | Jay W. Small, Esq.

The right to own private property is no less a fundamental pillar of our society than any other constitutionally protected right. When a governmental entity takes private property, Article X, Section 6(a) to the Florida Constitution or the Fifth Amendment to the U.S. Constitution demands payment of full or just compensation. Article X, Section 6(a) provides that “[n]o private property shall be taken except for a public purpose and with full compensation therefor paid to each owner.” The Fifth Amendment states that “nor shall private property be taken for public use, without just compensation.” These clauses do not prevent a governmental taking of private property, but they condition the taking on payment of compensation to the owner.

Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194-96 (1985), established a federal procedural doctrine that seriously chips away at this pillar by forbidding owners from vindicating their Fifth Amendment rights in federal court unless they first exhaust state takings remedies. Id. This doctrine leads to bizarre results. If owners bring federal takings claims in federal court under 42 U.S.C. §1982, their complaints may be dismissed because they first failed to assert them in state court. Yet if owners first bring their federal claims in state court, their complaints may be removed to federal court and then dismissed because a state court did not finally adjudicate their state claims. This rule discriminates against property owners, as a specific class of litigants, and strips them of reasonable access to federal and state courts.

The Supreme Court can remedy this anomalous doctrine in Knick v. Township of Scott, ___, U.S. ____, 138 S.Ct. 1262, 200 L.Ed. 2d 416 (2018). The precise issue in Knick is whether to reconsider Williamson’s exhaustion doctrine. The Township of Scott lies in Lackawanna County, Pennsylvania, near the Poconos. Throughout Pennsylvania are historical, private family gravesites, some dating to the Colonial era. Over generations, land with these private cemeteries transferred through the hands of successive owners. The township adopted an ordinance requiring owners of property on which the township believed were cemeteries to allow access to the public and code inspectors who were to assure compliance with the ordinance. Rose Knick’s family farm is one such parcel. No official state records indicate that a private cemetery was ever on her farm. In federal court, she alleged, inter alia, a violation of her Fifth and Fourteenth Amendment due process and just compensation rights. Based on Williamson, the Third Circuit Court of Appeals affirmed the dismissal of her takings claim. Knick v. Twp. of Scott, 862 F3d 310, 328 (3d Cir. 2017).

The courts recognize two types of regulatory takings cases – “facial” and “as-applied” claims. “Facial” takings claims involve regulations that deprive owners of all economically beneficial use of property upon enactment. Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015 (1992); Keshbro, Inc. v. City of Miami, 801 So.2d, 864, 871 (Fla. 2001). Under Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 124 (1978), “as applied” claims require a detailed ad hoc factual analysis to examine “[t]he economic impact of [a] regulation… and… the extent to which [it]…interfere[s] with distinct investment-backed expectations” after it is applied to property.

In as-applied cases, historically two factors answer the question of whether a regulation is final enough so that a claim is “ripe” for judicial review. First, owners cannot file as-applied takings suits “unless ‘the governmental entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue.’” Palazzolo v. Rhode Island, 533 U.S. 606, 618 (2001) (quoting Williamson, 473 U.S. at 186). An owner cannot pursue federal or state as-applied regulatory taking cases until the challenged government action causes some final injury to property. San Remo Hotel, L.P. v. City & Cty. of San Francisco, 545 U.S. 323, 346-47 (2005). Requiring a meaningful attempt to get a development application provides a metric to gauge whether the severity of the regulation’s impact is so great that it causes a serious enough loss amounting to a taking.

Second, Williamson added another ripeness factor in dicta by requiring an owner to show an unsuccessful attempt to obtain just compensation in state court before filing a federal suit. 473 U.S. at 195-96. Although state courts are generally competent to protect federal rights concurrently with federal courts, Williamson’s dicta does not explain why plaintiffs alleging federal takings claims should be singled out for differential treatment from other classes of plaintiffs seeking to vindicate federally protected rights.

Williamson involved a challenge to a zoning ordinance that reduced the allowable density in a residential subdivision. It identified two rationales for deciding the ripeness question against the owner: (1) the owner did not obtain a final decision regarding the application of zoning ordinances and subdivision regulations; and (2) the owner did not use the state’s procedures to obtain just compensation. 473 U.S. at 186, 194. The first rationale is largely accepted.

Regarding the second factor, the Court primarily relied on Hodel v. Virginia Surface Mining & Reclamation Ass’n, Inc., 452 U.S. 264, 297 n.40. (1981) for support of its addition to the ripeness doctrine. The Court’s reliance on Hodel has since been criticized. Footnote 40 in Hodel restated the general rule that takings claims are unripe for consideration until after a final administrative determination; it did not identify any existing or new comity principle requiring takings claims to be reviewed differently than other federal claims also reviewed by state and federal courts. Id.

Knick dealt with a facial taking claim and thus whether facial claims were exempt from the second prong of Williamson. Petition for Writ of Certiorari, at 24, Knick v. Twp. of Scott, U.S. ____, 138 S.Ct. 1262, 200 L.Ed. 2d 416 (2018) (No. 17-647), 2017 WL 5158056, at *24. It is difficult to conceive of a plausible reason why Williamson’s additional second-tier exhaustion doctrine ever should apply to a facial taking case since this sort of taking occurs, by its very nature, upon the enactment of the land use regulation. The Court may also reanalyze Williamson exhaustion in as-applied cases.

Justices also have questioned this second factor. In San Remo Hotel, 545 U.S. at 348-52 (Rehnquist, C. J., concurring), four Justices argued for overruling Williamson. In Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, 560 U.S. 702, 742 (2010), Justice Kennedy characterized this second rationale as the “Court’s dicta in Williamson.” The rationale has been described as being at odds with the plain language of the Fifth Amendment, which makes just compensation a prerequisite for public use. Arrigoni Enter., LLC v. Town of Durham, 136 S. Ct. 1409 (2016) (Thomas, J., dissenting from denial of petition for writ of certiorari). The Court has never obligated itself to be bound to its dicta if a more complete argument demonstrates that the dicta is incorrect. Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519, 548 (2013).

Williamson’s curious dicta barricades federal courthouse doors to a discrete class of federal plaintiffs seeking protection in federal courts for federal rights. It creates a takings “No Man’s Land.” Litigating in state court virtually guarantees that later federal claims are barred by res judicata. See, e.g., San Remo, 545 U.S. at 346-47; Rockstead v. City of Crystal Lake, 486 F.3d 963, 968 (7th Cir. 2007) (holding property owner who goes through entire state proceeding and loses cannot maintain federal suit because of res judicata); Trafalgar Corp. v. Miami Cty. Bd. of Comm’rs, 519 F.3d 285, 287 (6th Cir. 2008) (holding that because “the issue of just compensation under the Takings clause . . . was directly decided in a previous state court action, it cannot be re-litigated in federal district court.”). Alternatively, a federal court may decline review of a federal takings claim based on lack of subject matter jurisdiction until after a plaintiff has exhausted state takings remedies. Reahard v. Lee Cty., 30 F.3d 1412, 1414 (11th Cir. 1994). To avoid these potential defenses, owners may sacrifice their rights protected by the U.S. Constitution rather than enter a procedural minefield that could explode both state and federal takings claims. Hardly any other federal prudential limitation presents an insular class of federal plaintiffs with a similar “Hobson’s Choice” either between selecting a judicial forum or waiving a substantive constitutional right altogether.

Williamson distorts the ripeness doctrine by directing focus on the forum where a case is filed instead of the finality of the regulation’s application. Williamson itself provides a rationale for unraveling its confusing doctrine. It conceded that ripeness does not require a claimant to exhaust state remedies because the focus is whether a decision-maker formulates a definitive regulatory position that inflicts an actual, concrete injury. 473 U.S at 192-93. Abandoning this dysfunctional notion will not give owners carte blanche to raise unripe takings claims because they must still comply with Williamson’s first ripeness requirement: that they demonstrate that the government’s actions have achieved that degree of finality such that a reviewing federal court can determine whether the regulation’s fiscal impact on the property amounts to a taking. Id.; see also Tahoe-Sierra Pres. Council v. Tahoe Reg’ l Planning Agency, 535 U.S. 302, 322 n.17 (2002) (“In determining whether government action affecting property is an unconstitutional deprivation of ownership rights under the Just Compensation Clause, a court must interpret the word ‘taken.’”).

Williamson’s dicta clouded the sharpness of the ripeness inquiry and blurred its distinct edges. In Knick, the Court’s choice is to refocus the historic ripeness inquiry back to the finality of a regulation’s impact on property. Williamson intended that its prudential restraint limit the ability of federal courts to review state land use decisions. Yet experience and history have shown that Williamson not only limited access to federal courts in as applied regulatory takings cases, but it also limited the ability to adjudicate federal property rights in state courts. Knick affords the Court the opportunity to revisit Williamson. The Court set Knick for oral argument for October 3, 2018.

Jay W. Small, Esq., Mateer Harbert, P.A., represents private- and public sector clients in the areas of eminent domain and property rights. He is the past chair of the OCBA Real Property Committee and a member of the Board of Trustees of the Legal Aid Society of the Orange County Bar Association, Inc. He has been a member of the OCBA since 1994.