Knick v. Township of Scott, Pennsylvania, ___ U.S. ___, 139 S.Ct. 2162, 204 L.Ed.2d 558 (2019)
On June 21, 2019, by a 5-4 vote, the United States Supreme Court in Knick v. Township of Scott, Pennsylvania overruled the 34-year-old ripeness rule articulated in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985). Under the Williamson County rule, a property owner whose property had been taken by a local government had not suffered a violation of his Fifth Amendment rights—and thus could not bring a federal takings claim in federal court—until a state court had denied his claim for just compensation under state law. The majority decision in Knick was written by Chief Justice Roberts and overruled Williamson County, thereby allowing Fifth Amendment takings claims to be filed in federal court without the claimant first having to pursue a state court action. The Court held: “[A] government violates the Takings Clause when it takes property without compensation, and that a property owner may bring a Fifth Amendment claim under §1983 at that time.”
Williamson County is Overruled.
The underlying facts in the case are that Rose Mary Knick owned 90 acres of rural property that included her single-family home and a small graveyard where the ancestors of her neighbors are allegedly buried. In 2012, the local Township passed an ordinance requiring that all cemeteries to be kept open and accessible to the general public during daylight hours. The following year, the Township notified her that Ms. Knick was violating the ordinance by failing to open the cemetery to the public during the day. She brought a declaratory and injunctive relief action in Pennsylvania state court on the ground that the ordinance effected a taking of her property; however, she did not bring an inverse condemnation action under state law for the alleged taking. Before the state court action was completed, Ms. Knick filed an action in U.S. District Court under 42 U.S.C. §1983, alleging that the ordinance violated the Takings Clause of the Fifth Amendment. However, the District Court dismissed Ms. Knick’s takings claim under the ripeness rule articulated in Williamson County. The Third Circuit Court of Appeals affirmed the District Court’s dismissal in light of that rule. The United States Supreme Court granted certiorari to reconsider the rule.
The Supreme Court then reversed by overruling the ripeness rule in Williamson County. The Chief Justice noted that the rule was “unworkable in practice” because it often resulted in property owners being barred from ever bringing takings claims to federal court. That is because of the Court’s decision 20 years later in San Remo Hotel, L. P. v. City and County of San Francisco, 545 U.S. 323 (2005), which held that a state court’s resolution of a claim for just compensation under state law generally has preclusive effect in any subsequent federal suit. The upshot of that “preclusion trap sprung by San Remo,” according to the Chief Justice, was that that “many takings plaintiffs never have the opportunity to litigate in a federal forum that §1983 by its terms seems to provide,” which is a significant consequence that was “not considered by the Court in Williamson County.” The Chief Justice added that the guarantee of a federal forum under the Civil Rights Act of 1871 “rings hollow for takings plaintiffs, who are forced to litigate their claims in state court.” Therefore, the state-litigation requirement in Williamson County “imposes an unjustifiable burden on takings plaintiffs, conflicts with the rest of our takings jurisprudence, and must be overruled.”
Jettisoning the state-litigation requirement in Williamson County, the majority then articulated the following procedural rule for takings claims in federal court:
A property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it. That does not mean that the government must provide compensation in advance of a taking or risk having its action invalidated: So long as the property owner has some way to obtain compensation after the fact, governments need not fear that courts will enjoin their activities. But it does mean that the property owner has suffered a violation of his Fifth Amendment rights when the government takes his property without just compensation, and therefore may bring his claim in federal court under [42 U.S.C.] §1983 at that time.
So what are the unstated, but possible implications of the Court’s ruling? At least three come to mind.
“A Mass Of Quintessentially Local Cases Involving Complex State-Law Issues.”
The first unstated, but possible consequence of the Knicks decision will be a dramatic increase in takings claims being filed in federal court, especially in those locales where the federal courts and federal juries are considered to be more favorable to property rights than the state courts. A significant number of those increased federal claims will likely depend upon the interpretation, determination and/or application of unresolved state property law issues. In her dissent, Justice Kagan warned about this. She argued that the majority’s overruling of Williamson County will have the damaging consequence of “subvert[ing] important principles of judicial federalism” because the decision channels “a mass of quintessentially local cases involving complex state-law issues into federal courts.” She adds that the decision channels to federal courts “a (potentially massive) set of cases that more properly belongs, at least in the first instance, in state courts.” Justice Kagan pointed out that, unlike other constitutional challenges, a claim that a land-use regulation violates the Takings Clause usually turns on state-law issues:
The question in takings cases is not merely whether a given state action meets federal constitutional standards. Before those standards can come into play, a court must typically decide whether, under state law, the plaintiff has a property interest in the thing regulated. [Citations.] Often those questions—how does pre-existing state law define the property right?; what interests does that law grant?; and conversely what interests does it deny?—are nuanced and complicated. And not a one of them is familiar to federal courts.
For example, Justice Kagan explained that, in Knick “it is first necessary to address an issue about background state law” in order to answer the “ultimate constitutional question” in that case. She admitted that neither she nor “my colleagues on the federal bench” know the answer to the underlying state law issue in Knick. But, she added, “under today’s decision, it will be the Federal District Court for the Middle District of Pennsylvania that will have to resolve this question of local cemetery law.” Justice Kagan argued that “[s]tate courts are—or at any rate, are supposed to be—the ‘ultimate expositors of state law,’” and “the corollary is that federal courts should refrain whenever possible from deciding novel or difficult state-law questions.”
Citing Railroad Commission of Texas v. Pullman Co., 312 U.S. (1941), Justice Kagan pointed out that, under the principle of judicial federalism, “this Court has promoted practices of certification and abstention to put difficult state-law issues in state judges’ hands.” But, she added, “[w]e may as well not have bothered” because the majority decision “sends a flood of complex state-law issues to federal courts. It makes federal courts a principal player in local and state land-use disputes.”
While Justice Kagan’s concern about a flood of new federal takings cases is well-founded, her concern about federal involvement in local and state land use decisions will likely be alleviated by a robust application by the federal courts of Pullman abstention. Justice Kagan accurately highlighted the prevalence of state law issues in several cases, including Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). (Indeed, she could have also pointed to the recent case of Muir v. Wisconsin, ___ U.S. ___, 137 S. Ct. 1933 (2017), where the Supreme Court held that, for purposes of determining whether a regulatory taking has occurred under the multifactored standard in Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978), that petitioners’ property should be evaluated as a single parcel because, among other reasons, “the treatment of the property under state and local law indicates petitioners’ property should be treated as one when considering the effects of the restrictions.” (Emphasis added.)) As a land use practitioner, this author has seen many takings challenges against local agency actions that are based on questionable allegations that property owners have certain state law property rights that the governmental action allegedly took away or unduly infringed upon. So, Justice Kagan is correct in asserting that takings claims often depend upon the existence or extent of an alleged property right under state law.
So, in the likely result that many more (“potentially massive”) takings claims will now be filed in the U.S. District Courts, how will federal judges handle the disputed state law property questions that will likely be at the heart of many of those claims? Justice Kagan cited certification and abstention doctrines, such as those applied in Lousiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25 (1959), as a means of putting difficult state-law issues in state judges’ hands.
The certification process may be available in cases involving significant unresolved questions of state law. For example, in Kremen v. Cohen, 325 F.3d 1035 (9th Cir. 2003), the Ninth Circuit certified the question to the California Supreme Court under Rule 29.5(a) of the California Rules of Court of whether an Internet domain name is within the scope of property subject to the tort of conversion? While the Ninth Circuit stated that “we are quite capable of resolving the issue presented,” it nevertheless certified the question because “[t]he decisions of the California appellate courts provide no controlling precedent regarding the certified question, the answer to which may be determinative of this appeal.” The court explained that the certification procedure “is reserved for state law questions that present significant issues, including those with important public policy ramifications, and that have not yet been resolved by the state courts.” The court added: “We request certification not because a difficult legal issue is presented but because of deference to the state court on significant state law matters.” (See also Doyle v. City of Medford, 565 F.3d 536, 543 (9th Cir. 2009) [“the question whether retired public employees have a vested property right to health insurance coverage after retirement under [Oregon state law] is one of exceptional importance to citizens of the State of Oregon and to local governments within the state.”]) That narrow ground for certification probably means that the procedure will be available in only a limited number of takings cases. But if the property right issue is one of “state statutory construction and the position of the state court is uncertain” then the likelihood of certification might possible be greater. (See e.g., Estate of Madsen v. Commissioner, 659 F.2d 897, 899 (9th Cir. 1981).) Nevertheless, not many state law property questions in federal takings actions are likely to meet that standard, and so most unresolved state law issues are likely not to be resolved through the certification procedure.
As Justice Kagan also seems to suggest, federal courts could invoke the Pullman abstention doctrine as a means to stay federal actions and to require the litigants pursue resolution of unresolved issues of property law in the state courts. In the Ninth Circuit, the Pullman abstention doctrine allows a federal court to postpone the exercise of federal jurisdiction when “a federal constitutional issue . . . might be mooted or presented in a different posture by a state court determination of pertinent state law.” (C-Y Development Co. v. City of Redlands, 703 F.2d 375, 377 (9th Cir. 1983).) Three criteria must be met before Pullman abstention is appropriate in the Ninth Circuit:
(1) The complaint touches a sensitive area of social policy upon which the federal courts ought not to enter unless no alternative to its adjudication is open.
(2) Such constitutional adjudication plainly can be avoided if a definitive ruling on the state issue would terminate the controversy.
(3) The possibly determinative issue of state law is doubtful. [Sinclair Oil Corp. v. County of Santa Barbara, 96 F.3d 401, 409 (9th Cir. 1996).]
Questions involving land use decisions have often been found to satisfy the criteria for Pullman abstention. (See e.g., C-Y Development, supra, 703 F.2d at 376-381; VH Prop. Corp. v. City of Rancho Palos Verdes, 622 F.Supp.2d 958 (C.D.Cal. 2009.)) That includes state law issues in cases involving federal takings claims. (See e.g., San Remo Hotel v. City and County of San Francisco, 145 F.3d 1095, 1105 (9th Cir. 1998).)
However, it is not clear after Knick whether federal courts facing increased challenges to the validity of local actions that involve state property law and local government law questions will adopt a robust application of Pullman abstention. On the one hand, the already over-burdened District Courts will be tempted to use the abstention to alleviate Justice Kagan’s concern about “a mass of quintessentially local cases involving complex state-law issues.”  On the other hand, federal courts are willing to accept takings cases that involve state law property questions, as even Justice Kagan’s dissent highlighted based on the disputed claims discussed in the briefing in the Knick case. What is likely after Knick is (1) District Courts may be more receptive to Pullman abstention arguments in cases with unresolved property rights issues under state law; and (2) federal courts will increasingly find it necessary to adjudicate state law issues of the property rights of takings claimants, especially where certification and abstention are not available.
Regulatory Invalidation vs. Compensatory Regime
The second unstated but possible consequence of Knick is an uncertainty regarding what kind of compensatory regime for land use regulations will be sufficient to avoid invalidation of a land use regulation. The majority opinion emphasized that governmental action that constitutes a taking may continue so long as compensation will be available after the taking occurs. The Chief Justice explained that the new rule set forth in Knicks
does not as a practical matter mean that government action or regulation may not proceed in the absence of contemporaneous compensation. Given the availability of post-taking compensation, barring the government from acting will ordinarily not be appropriate.
The Chief Justice repeated that governments “need not fear that our holding will lead federal courts to invalidate their regulations as unconstitutional” because “[a]s long as just compensation remedies are available … injunctive relief will be foreclosed.” Or, as Justice Thomas argued in his concurring opinion, “Injunctive relief is not available when an adequate remedy exists at law.” However, two questions arise from those statements.
First, will sovereign immunity issues impact the availability of compensation in federal courts, which could impact the likelihood of injunctive relief? In the context of takings claims against a state, one commentator opines:
A property owner is not going to get a federal court to enjoin a regulatory taking, or declare a statute or regulation unconstitutional. Unless for some reason no compensation is available. For example, what if the defendant is a state, and recovering compensation is barred in federal court by the Eleventh Amendment? If you are prohibited from your legal remedy of compensation, may you ask for an injunction under Ex parte Young? [Robert H. Thomas, “Knick Analysis, Part V: What Next?” Inverse Condemnation Blog, June 24, 2019, https://www.inversecondemnation. com/inversecondemnation/2019/06/knick-analysis-part-v-whats-next-.html.]
Second, what is a sufficiently available “post-taking compensation” or “compensation remedy” that avoids invalidation of the land use regulation by federal courts? Another way to ask that is: What is the “some way to obtain compensation after the fact” that will pass constitutional muster? The Court does not say. That uncertainty now exists after Knick, which did not exist under the state court procedures and remedies and had to be pursued under the prior Williamson County rule.
Can “Normal” Regulatory Delays Constitute Compensable Takings?
The third unstated but possible consequence of Knick is a renewed challenge to the California Supreme Court’s decision in Landgate v. California Coastal Commission (1998) 17 Cal.4th 1006, in the federal courts. In Landgate, the County of Los Angeles had approved a lot split involving property in the coastal zone. When the owner sought to build upon one of the newly split parcels, the California Coastal Commission refused to issue a permit for any construction, contending that the prior lot split was not legal. Construction was delayed for two years until the landowner obtained a court judgment that the Coastal Commission had no legal jurisdiction over the lot split. The landowner contended this delay denied it all viable use of the property for two years, which constituted a temporary taking requiring compensation. The California Supreme Court disagreed. It held that “the mistaken assertion of jurisdiction over a development is part of the development approval process, and development delays that result therefrom may be imposed on the developer rather than the general taxpayer without violating the United States Constitution.” (Id. at pp. 1021.) The court explained: “Here, there was a postponement of development pending resolution of a threshold issue of the development approval process–whether the lot was legal–and not a final decision denying development.” (Id. at pp. 1029-1030.) The court added: “[A] judicial determination of the validity of certain preconditions to development is a normal part of the development process, and the fact that a developer must resort to such a determination does not constitute a per se temporary taking.” (Id. at p. 1030.) Subsequent California courts applying Landgate have held that regulatory delays were normal and therefore not compensable, while other regulatory delays were not. (See e.g., Ali v. City of L.A. (1999) 77 Cal.App.4th 246, 250-255.)
Since takings cases in California can now bypass the state courts that are governed by Landgate and can go directly to federal court, will the “normal delay” substantive Landgate rule still be applied to such federal takings claims? One argument in favor of maintaining the Landgate rule is that it appears to be supported by language in the U.S. Supreme Court’s decision in First Lutheran Church v. Los Angeles County (1987) 482 U.S. 304 (“First English”). As the California Court of Appeal explained:
The court in First English indicated two circumstances in which such a temporary denial of all use of the property would not require compensation: … (2) the temporary deprivation was merely a normal delay in the permissible regulation of development. (482 U.S. at p. 321 [not deciding “the quite different questions that would arise in the case of normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like”].) [Ali, supra, at pp. 253-254.]
However, an argument can be leveled against the Landgate “normal delay” rule on the ground that Landgate was based on the language in Agins v. Tiburon, 447 U.S. 255, 260 (1980), that government regulation of private property effects a taking if such regulation does not substantially advance legitimate state interests (Landgate, supra, 17 Cal.4th at pp. 1010, 1018), but that language was later rejected by the U.S. Supreme Court in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 548 (2005). As the California Court of Appeal for the Fourth Appellate District recently explained:
In the wake of Lingle, state and federal courts alike have recognized that the “substantially advances” formula that the United States Supreme Court articulated in Agins and the California Supreme Court applied in Landgate no longer constitutes a valid test by which to determine whether there has been a regulatory taking under the Fifth Amendment; instead, the Penn Central [Transp. Co. v. New York City, 438 U.S. 104, 124 (1978)] factors govern. [Bottini v. City of San Diego (2018) 27 Cal.App.5th 281, 310.]
Thus, there is uncertainty as to the continued validity of “normal delay” takings cases in California under Landgate. Until the California Supreme Court revisits that issue, it is possible that there may be a substantive difference between the federal and state venues in regards to takings claims based on a regulatory delay under the Fifth Amendment to the U.S. Constitution, simply because federal courts are not bound by the Landgate decision.
Thus, while the Court’s decision to reverse the Williamson County procedural rule was fairly simple, the possible consequences are not. The Knick case could have significant implications in the way takings cases are adjudicated in California, as well as in how local agencies prepare for the potential flood of such cases in federal courts in this state.
Glen Hansen is an Attorney at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.
 After Knick, most practitioners envision an increase in federal takings litigation. (See Paul Beard, II, “‘High Court’s Knick Ruling Is a Big Win for Property Rights,’ Law260, June 28, 2019, found at https://www.alston.com/en/insights/publications/2019/06/high-courts-knick-ruling-is-a-big-win (last accessed August 8, 2019) [as a result of the Knick decision, “one can expect a steady stream of new takings claims against state and local actions,” and “we expect to see an increase in federal takings claims brought in federal courts across the country”]; Jonathan G. Cedarbaum, Michael J.P. Hazel, “Supreme Court Removes Obstacle to Property Owners Bringing Takings Claims in Federal Court,” June 24, 2019, found at https://www.wilmerhale.com/en/insights/client-alerts/20190624-supreme-court-removes-obstacle-to-property-owners-bringing-takings-claims-in-federal-court (last accessed August 8, 2019) [“Property owners affected by local governments’ actions may now take their federal takings claims directly to federal court. That will likely lead to many more just compensation challenges to local government regulations being adjudicated in federal court and it may thereby enable such challenges to be resolved more quickly.”]) But see Ilya Somin, “Knick v. Township of Scott: Ending A Catch-22 The Barred Takings Cases From Federal Court, George Mason University Legal Studies, Research Paper Series, LS 19-16 (Sept. 9, 2019), found at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3450572&dgcid=ejournal_htmlemail_u.s.: constitutional:law:rights:liberties:ejournal_abstractlink (last accessed September 25, 2019) (“Somin”)[“Critics of Knick argue that it could generate a flood of new federal court litigation. It is by no means clear that this will happen.”])
 A robust application of the certification process could also have the effect of diminishing the crush of federal takings cases that Knick opened the door to. As one commentator opined: “Enlisting the aid of the state courts in resolving state law issues raised in federal court takings cases will make the litigation process more protracted than it would be if plaintiffs simply filed in state court in the first instance.” (“Knick: Williamson County Overruled,” June 25, 2019, https://takingslitigation.com/2019/06/25/knick-williamson-county-overruled/ (last accessed August 8, 2019.)
 It’s questionable whether takings claimants will adhere to the majority’s comments about invalidation. As one real property practitioner suggested after Knick: “One sensible route for a project proponent wanting to, say, challenge a law imposing such unconstitutional takings in the permit process is to sue for that law’s invalidation in federal court.” (Beard, supra, at note 1.)
 The Court of Appeal went on to state: “We … conclude that the Penn Central test endorsed in Lingle—and not the “substantially advances” formula—applies to ad hoc regulatory takings claims that arise under the California Constitution.” (Bottini, supra, 27 Cal.App.5th at p. 310.) For an application of the Penn Central factors, see Murr, supra, 137 S.Ct. at 1945-1950; Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 271-275.