Thirty years ago, in the case Williamson County Regional Planning Commission v. Hamilton Bank (1985), the Supreme Court created a rule that effectively bars regulatory-takings plaintiffs from ever receiving the just compensation they are due under the Fifth Amendment. Williamson County’s noxious rule says that federal courts won’t hear Takings Clause claims until the state has not only issued a final order taking the plaintiff’s property but the plaintiff has been denied just compensation after seeking it “through the procedures the State has provided for doing so.”

This state-litigation requirement means that when the government issues a regulation that diminishes property values—for instance, by saying that the owner can’t do any excavation on rocky terrain that can’t be developed without it, as was the case in Arrigoni Enterprises v. Town of Durham—the landowner can’t file its claim in federal courts until it has lost in state court. Not only does this state-litigation rule severely delay the landowner’s remedy; in most cases, it means that the taking will go unremedied altogether.

One reason to have federal courts is to ensure that citizens whose rights have been violated by their state can have their rights vindicated by a truly impartial judge. The state-litigation requirement, however, often prevents federal courts from ever seeing such cases because a number of legal doctrines intended to promote fairness and efficiency bar the plaintiff from even seeking redress in federal court after a state court has already considered the matter. This means that the only way for many plaintiffs to get federal judicial review is to ask the U.S. Supreme Court to take their case after exhausting state courts—an uphill battle to say the least.

Arrigoni Enterprises decided not to pursue its federal Takings Clause claim in state court, and thereby presents the Supreme Court with the opportunity to overrule Williamson County’s state litigation requirement once and for all. Cato has filed a brief supporting Arrigoni’s petition. We argue that Williamson County’s rule was not tenable when written and has proven unworkable. The rule relegates Takings Clause claims to second-class status among other federal constitutional provisions, even though these claims are no more premature and state courts have no greater experience to address them than any other constitutional claims.

Four justices indicated 10 years ago in San Remo Hotel v. San Francisco (2005) that they would be willing to reconsider the wisdom of the state-litigation requirement in an appropriate case. That case has arrived, but if the Court declines to overrule the requirement outright it should at least resolve the current circuit split by ruling that the state-litigation rule is merely prudential such that federal courts can disregard it under the right circumstances and hear Takings Clause cases not litigated through state courts. 

This post, and the brief it discusses, was co-authored by Cato legal associate Jayme Weber.