June 28, 2019

Choose Your Own Adventure: The Case of Federal or State Jurisdiction


On June 21, 2019, the US Supreme Court overruled a 1985 case concerning the taking of property for public use, because it led to unexpected, and unfairly applied, results. 

Now, landowners who believe a government regulation has "taken" their property can sue in federal court for just compensation, without first suing in state court.  However, the landowners are still required to seek variances and other land use approvals to avoid a "taking" of property. 

As a result, the day-to-day operations of city and county land use regulation probably won't change much, but lawyers representing governments and developers may have to brush up on their federal litigation rules.  

The case is procedural and does not alter the law on what constitutes a taking.  Ms. Knick, a landowner, had old gravesites on her rural land and an ordinance required her to keep it open to public access.  She didn't, so the town issued a notice of violation and she sued in state court, alleging that the ordinance "took" her private property without compensation, a violation of state and federal constitutions.  She also sought an injunction against enforcement.  The town withdrew the violation notice and agreed not to enforce the ordinance against her until the court ruled.  As a result, the state court declined to decide the case because there was no longer a dispute about pending enforcement. 

This might have ended in a stand-off, but Ms. Knick sued in federal court, which dismissed the case because the 1985 supreme court decision required Ms. Knick to litigate first in state court, which she had tried to do.  She appealed and the federal appellate court said there was probably a constitutional violation, but the 1985 decision didn't allow her to file the claim in federal court.

She appealed to the federal supreme court, which decided that the court's 1985 decision had unintended consequences that were unfair.  It also found that state court decisions could (and usually did) cut off most federal "takings" claims without any real analysis.  This result, the court now says, is unfair.  The court's 2019 decision now allows federal court litigation of federal "takings" claims without prior litigation in state court.  However, the landowner must first appeal any land use decision administratively and seek remedies such as variances or other exemptions.

This means there will be little change for local governments in Oregon when processing land use applications.  No substantive law has changed, only the procedure for which courts can hear the case when a land owner claims that a land use decision or ordinance takes property without just compensation.  Lawyers for landowners now have two choices instead of one–both state and federal court.

The difference is, however, important, because many property owners and their lawyers believe that courts in the states are more favorable to government regulatory powers than federal courts are.  Time will tell whether that opinion is borne out.

Ed Trompke is a shareholder at Jordan Ramis PC and focuses his practice on real estate development. Contact him at 503-598-7070 or ed.trompke@jordanramis.com. 

Thank you for your interest in this blog.  The information contained in this blog is for the general interest of our readers and should not be regarded as legal advice.  If you have questions, or to obtain more information on this topic, please contact an attorney in our land use and zoning practice group.




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