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U.S. Supreme Court Changes 30 Years of Takings Law

On June 21, in a 5-4 decision, the U.S. Supreme Court overruled the 34-year old precedent of Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City (1985) 473 U.S. 172 (“Williamson County”) in holding that a plaintiff seeking just compensation for an alleged taking under the Fifth Amendment of the U.S. Constitution does not need to first have the claim heard in state court before seeking relief in federal court. Under Williamson County, the rule had been that a property owner had not suffered a violation of his or her Fifth Amendment rights until a state court had denied the claim for just compensation under state law. In Knick v. Township of Scott (2019) 588 U.S. ___ (“Knick”), however, Chief Justice Roberts, writing for the majority of the Court, determined that this precedent was incorrect and that a property owner could seek just compensation for a taking in federal court as soon as the government takes his or her property without paying for it.

What Doesn’t the Knick Ruling Change?
“Takings” under the Constitution can constitute a myriad of government actions and include not only the taking of possession of private property, such as for roadway construction, but also temporary takings, and land use and environmental regulations that go “too far.” Justice Roberts opined that the Knick ruling would not halt government action through injunctions because of the availability of monetary remedies of just compensation. Thus, Knick should not be read as a vehicle for halting government regulation. Roberts also clearly pointed out that the Knick ruling did not overrule Williamson County’s requirement that a taking must be “final.” Therefore, potential takings plaintiffs still need to obtain a final ruling from local governments regarding any land use approvals, and laws and regulations will need to become final before any takings claims can be brought.

What Does the Knick Ruling Change?
Despite what remains intact, Knick’s dramatic change to takings law cannot be understated. For local governments and regulatory agencies, any ordinances, regulations, or decisions potentially affecting private property rights can immediately become violations of the federal constitution and subject those governments and regulatory agencies to financial liability for takings. For private property owners, Knick represents a powerful new tool to influence government and regulatory agencies regarding the regulation of property rights. For all practitioners, Knick also likely means that most takings claims will now be heard in federal court instead of state court.