Important U.S. Supreme Court Decision on Regulatory Takings

The U.S. Supreme Court is finishing up its term, getting ready for its summer break, so its decisions are coming fast now. On June 21, 2019, the U.S. Supreme Court issued a surprising decision affecting regulatory takings, overruling Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City. The case, Knick v. Township of Scott, was a close 5-4 decision, with Chief Justice John Roberts writing for the majority.

Since 1985, when Williamson was decided, and then reinforced in 2005 with the Supreme Court’s decision in San Remo Hotel, L.P. v. City and County of San Francisco, 545 U.S. 323, it has been essentially impossible to have a regulatory takings claim heard, let alone won. While a takings claim can be asserted under a federal civil rights law (42 U.S.C. § 1983), which would normally give a plaintiff the ability to go to federal court to pursue its cause of action, Williamson imposed a “ripeness” requirement, making the plaintiff first ask for compensation from the state before it could pursue its federal takings claim.

Because the avenue for asking for compensation from the state is an inverse condemnation suit, and because the Court in San Remo said the findings and conclusions of the state proceedings were essentially final (res judicata) for the civil rights claim, the result was that a state agency or court made findings that killed any takings claim, without that claim ever being heard. Chief Justice Roberts discussed that problem in his decision last Friday, when the Court overruled Williamson.

With Williamson overruled, a plaintiff can go directly to federal court. The opinion from Chief Justice Roberts is also encouraging for those supporting takings rights as a general matter, because Chief Justice Roberts said: “Fidelity to the Takings Clause and our cases construing it requires overruling Williamson County and restoring takings claims to the full-fledged constitutional status the Framers envisioned when they included the Clause among the other protections in the Bill of Rights.”

Knick doesn’t change the substance of takings law; it will still be very hard to prove a regulatory taking. But the immediate takeaway, at least in Maine, is if you have a regulatory taking claim, file your claim in federal court as a civil rights claim. Maine Law Court precedent suggests it will never find that a regulatory taking has occurred, and perhaps the U.S. District Court judges in Maine will take a similarly narrow view. But in the wake of Knick there is at least some hope. So if a regulatory action significantly diminishes the value of your property, this decision removes one large impediment to pursuing your constitutional claim.

For a more comprehensive discussion of the ramifications of the Knick decision, see our Maine Appeals blog.

If you have questions about this recent decision or how it could affect your project, please contact Brian Rayback.