For more than 30 years, a property owner who claimed that a regulatory action by the government amounted to a compensable taking under the Fifth Amendment to the U.S. Constitution has been required to litigate the issue in state court first, before being allowed to gain entry to federal court. The 1985 case of Williamson County Reg’l Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 105 S.Ct. 3108 established a peculiar form of “ripeness” that required property owners first to exhaust their administrative remedies, and then exhaust their state court remedies before they would be permitted to sue out a federal takings claim in federal court. In other words, the federal courts would not consider a regulatory takings claim to be “ripe” for hearing in federal court unless and until the property owner had first jumped through both administrative and state court exhaustion hoops.

Williamson County’s ripeness doctrine has created confusion for courts and frustration and delays for litigants since it was handed down. The U.S. Supreme Court now seems to be interested in reconsidering Williamson County, signaled by its granting review of a Pennsylvania case that squarely raises the issue of whether property owner Rose Mary Knick may go directly to federal court to litigate her unconstitutional taking claim arising from local officials seeking to enter onto her 90-acre farm to search for ancient burial sites.

Fifteen years ago, a Minnesota litigant’s unsuccessful attempt to entice the Supreme Court to reconsider Williamson County illustrates the dilemma to litigants caused by the case’s ripeness doctrine. Rochester real estate developer Franklin P. Kottschade obtained approval from the City of Rochester in 2000 to develop townhomes on about 16 acres of his 220-acre development site in south Rochester. The city approved the townhomes, but attached numerous conditions to its approval, which resulted in the project becoming economically unfeasible for Mr. Kottschade. A court decision by the Minnesota Court of Appeals described the effect of the city’s conditions on the development: “The city’s imposition of the conditions reduced the buildable area to 4.93 acres, and resulted in a site that could accommodate only 26 of the proposed 104 townhome units[1].”

In a nod to Williamson County’s administrative exhaustion requirement, Mr. Kottschade asked the city for a variance from the conditions that it had just imposed. Unsurprisingly, the city denied the variance request. In an about-face from Williamson County, however, Mr. Kottschade did not follow the state court exhaustion requirement by suing out his regulatory takings claim in state court; instead, he sued directly in federal court for a regulatory taking. Both the U.S. District Court and the U.S. Court of Appeals for the Eighth Circuit dismissed the case based on the controlling authority of Williamson County. The Eighth Circuit pointed out, however, the dilemma that litigants like Mr. Kottschade face because of Williamson County:

The plaintiff [Mr. Kottschade] points out, and justly so, that if he is required to seek a post-deprivation remedy in a state-court inverse condemnation action, he may end up being altogether denied a federal forum for what is undoubtedly a federal right. Such a federal forum, he urges, is guaranteed by 42 U.S.C. § 1983 [the federal civil rights statute] … and a plaintiff has a right to bring a § 1983 claim in a federal trial court, at his option. If plaintiff must go to the state courts, he would presumably need to show, in order to prevail … that a taking had occurred, and that just compensation had not been paid. If the state courts hold for the plaintiff, then all is well, from his point of view, and there would be no need for recourse to a federal forum. But if they hold against him, for example, on the ground that no taking has occurred, doctrines of former adjudication may be a bar to a new action under § 1983 in a federal trial court[2].

What the Eighth Circuit is pointing out is that a property owner may fall victim to two different doctrines of federal adjudication. If the property owner follows Williamson County and sues in state court first – and loses – then when the property owner attempts to seek relief in federal court, another federal doctrine may further thwart federal court consideration of the claim on the merits, under the theory that the claim has already been decided.

Rose Mary Knick may resolve this dilemma. It is being briefed now, but is unlikely to be decided until the Supreme Court’s next session, which will begin in October. Stay tuned.

[1] Kottschade v. City of Rochester, 760 N.W.2d 342, 345 (Minn. App. 2009)

[2] Kottschade v. City of Rochester, 319 F.3d 1038, 1041 (8th Cir.), cert. denied, 540 U.S. 825 (2003)