One of the basic constitutional protections guaranteed to all Americans is the Fifth Amendment’s Takings Clause, which forbids government from taking private property without paying just compensation. Originally conceived to restrain the federal government’s powers, all 50 states now provide similar constitutional protections. And since ratification of the Fourteenth Amendment during the Reconstruction Congress in 1868, the Fifth Amendment has applied against the states as well.
So it has long been true that a small business landowner could pursue a claim for just compensation against public authorities at the state level; however, until recently those claims had to be brought in state court. The Supreme Court’s 2019 decision in Knick v. Township of Scott established that landowners can enforce their Fifth Amendment rights in federal court without first litigating in state court. That was a major win for the small business community and for the property rights movement.
Unfortunately, state and local governmental defendants are now finding new reasons why these cases should be heard in state court, notwithstanding the Supreme Court’s decision in Knick. The NFIB Small Business Legal Center recently filed an amicus brief in the Fifth Circuit in a case with significant implications for small business landowners. In Violet Dock v. Drew Heaphy et. al., a small business seeks just compensation in federal court after a Louisiana public authority took private facilities and reneged on paying a monetary judgment awarded by a Louisiana court.
In Violet Dock, the state authority has argued that it cannot be compelled to pay just compensation under the Fifth Amendment because Louisiana law only requires a public authority to pay a monetary judgment if the state legislature appropriated money to cover the judgment. This argument turns the federal guarantee of just compensation on its head and, if upheld, would enable state governments to ignore the Takings Clause. Fortunately, well- established case law prohibits state and local officials from passing laws that nullify federal constitutional guarantees.
NFIB’s brief argues that small business landowners have every right to enforce the Takings Clause in federal court if state authorities have refused to pay compensation owed under the Constitution. For more on NFIB Small Business Legal Center’s efforts to defend private property rights, follow us at https://www.facebook.com/NFIB.Legal/.
*Southeastern Legal Foundation and Cato Institute joined NFIB Small Business Legal Center for the amici curiae filing in Violet Dock.