What Did and Didn't Change With the Supreme Court’s Knick Decision
For over 30 years, plaintiffs alleging that state or local laws were applied in a way that caused a "taking" of their property needed to satisfy two threshold requirements:
- First, they had to wait for a "final decision" regarding the application of the challenged law to their property.
- Second, they needed to first try, and fail, to obtain just compensation for the taking under state-law procedures, before pursuing a takings claim under the U.S. Constitution.
Those two requirements were most clearly articulated in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City (1985). The final decision requirement was called "prong one" and the requirement to pursue state-law avenues for compensation was called "prong two."
In June, in Knick v. Township of Scott, a divided Supreme Court overturned "prong two," thereby giving most takings plaintiffs a choice between suing in state or federal court.
Specifically, the 5–4 majority held that if a final decision results in a taking within the meaning of the Fifth Amendment that was not accompanied by just compensation for that taking, then at that point the property owner has suffered a violation of his or her constitutional rights, and at that point he or she may proceed to federal court.
For planners and other APA members, what is most important about Knick is what it clearly did not change. It did not change substantive takings law. Therefore, the elements of liability under the takings clause remain the same as before Knick, and the doctrines governing what constitutes "just compensation" for a taking also remain the same.
The appeal did not challenge the "final decision" requirement, and the Knick decision made it clear that the requirement remains in place. That will continue to prevent certain types of premature takings claims or cause such claims to be dismissed at an early stage.
Knick's biggest change involves an opportunity for "forum-shopping." The decision will likely increase the number of challenges to the outcome of land-use decisions that are filed in federal courts. However, the Court's reasoning also gives defendants in takings suits the opportunity to remove new takings suits to federal court. (The reverse is not true; cases filed in federal court cannot be removed to state court.)
Thus, we expect to see (1) some takings suits filed in federal court; (2) some takings suits filed in state court that are removed to federal court by defendants; and (3) some takings suits filed in state court that remain in state court when defendants choose not to remove them.
Since 2007, federal courts have required plaintiffs to plead enough facts to make it appear that the claims are "plausible." Suits that fail to meet that standard are dismissed. Fewer than 10 state courts have followed the new federal approach. Thus, those takings plaintiffs who choose federal court may face a battle over "plausibility" up front, a battle that could be avoided in state court.
Federal court takings claims against state and local entities may look more like an ordinary damages suit than part of an eminent domain proceeding. There, if the case reaches trial, a jury — rather than a judge — could resolve material fact disputes. In a few states, the recovery available in a federal takings claim may be broader than the law of that state currently allows.
APA's Amicus Curiae Committee and members of APA's Planning and Law Division will continue to monitor the aftermath of Knick and update members about it in future publications, webinars, and conferences.
Top image: U.S. Supreme Court building.