Why it’s Time to Allow Property Owners to Vindicate Federal Rights in Federal Courts

Date: December 21, 2015 Last Edit: January 05, 2016

Last week the NFIB Legal Center filed a brief in the U.S. Supreme Court asking it to reconsider a 1985 decision, which closed the federal courthouse doors for landowners alleging an unconstitutional taking of their property. As we’ve discussed many times before, the Fifth Amendment to the Bill of Rights guarantees that private property shall not be taken, except for a public use—and only then if “just compensation” is paid. Of course the Bill of Rights only applied against the federal government at the time of the original ratification of our Constitution; but, with adoption of the Fourteenth Amendment after the Civil War, those rights were guaranteed at all levels of government. In other words, just compensation is required when your property is taken by government action—regardless of whether carried out by federal regulations, state law, or local ordinance. But strangely, property owners are denied the right to enforce these federally guaranteed rights in federal courts.

While you can still sue in federal court to seek just compensation for takings carried out by the United States, Williamson County Regional Planning Commission v. Hamilton Bank held that landowners must bring their claims for just compensation in state courts when suing local or state actors. The opinion held out the possibility that a landowner might be able to go to federal court after “ripening” a takings claim through state litigation; however, for the last thirty years property owners have tried and failed to get to federal court after following Williamson County’s instruction to first seek compensation in state court. And to the extent there was any question over the matter, the Supreme Court made clear in San Remo Hotel v. San Francisco that landowners are barred from vindicating their federal rights in federal court after suing in state court—notwithstanding Williamson County’s requirement.

That wouldn’t be so terrible if it wasn’t a death nail for many takings claims. The unfortunate reality is that the courts in some states are hostile toward property rights, and skeptical of the very premise that regulation can effect a taking of private property outside the most extreme of cases. The reality is that state court judges in many states are elected (or retained by popular vote)—which means that they are subject to political pressures to deny takings claims in a way that federal judges are not. And even setting aside those overt political pressures, state court judges may feel some reluctance to rule in favor of a landowner seeking just compensation against their state or local government for other reasons. For one, they live in the community and therein have a general interest in limiting public liabilities. And for that matter, such public liabilities might, in some manner, affect state court budgets. These are all potential concerns that might prompt a property owner to seek vindication of his or her federal rights in federal court, if that option was available.

But even assuming that most state court judges will do their best to impartially decide such cases, the Constitution assumes—as Justice Story noted, in the early Nineteenth Century—that state courts might have local prejudices. Thus the general rule has always been that the federal courthouse doors are open for those who have suffered a violation of their rights under the federal Constitution. So why did Williamson County slam the courthouse doors shut on property owners seeking vindication of their rights?

The truth is that there isn’t a principled reason. Williamson County said that there is no constitutional violation until just compensation has been denied, and that we don’t know if compensation has been denied until the property owner has tried to obtain compensation in state court. But, by that logic one could never go to federal court to vindicate federal rights for anything. One could just as well say: We don’t know if there has been a violation of the First Amendment’s guarantee of free speech until a state court has consummated the constitutional violation by upholding a burdensome restriction on free speech.

As we explain in much more depth in our amicus brief, there is simply no principled reason for imposing a requirement to litigate in state court on property owners. Further, there is no basis—certainly no compelling basis—for departing from the strong presumption that the federal courthouse doors should be open for vindication of federal rights. And finally, we insist that the Williamson County state litigation requirement is completely unfounded. It cannot be justified by either the text of the Fifth Amendment, or the Fourteenth Amendment.

So our hope is that the Supreme Court will ultimately reconsider Williamson County. And we think the petition in Arrigoni v. Town of Durham presents an especially useful vehicle for doing so. The case concerns a small business property owner who was denied the opportunity to raise a takings claim in federal court, notwithstanding the fact that the state courts in Connecticut had already demonstrated a lack of concern for their asserted federal rights.

In addition to our amicus brief, several other organizations are supporting Pacific Legal Foundation’s effort to overturn Williamson County in this case. Institute for Justice, Cato Institute and the Center for Constitutional Jurisprudence all filed in support of Arrigoni’s petition for certiorari, all of which speaks to the importance of the issue.

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