Courthouse Steps: Knick v. Township of Scott Oral Argument

Operator:  Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's Environmental Law & Property Rights Practice Group, as well as the Federalism & Separation of Powers Practice Group was recorded on Wednesday, October 3, 2018, during a live teleforum conference call held exclusively for Federalist Society members.     

 

Wesley Hodges:  Welcome to The Federalist Society's teleforum conference call. This afternoon's topic is a Courthouse Steps discussion on the oral argument of Knick v. Township of Scott heard by the Supreme Court earlier today. My name is Wesley Hodges, and I'm the Associate Director of Practice Groups at The Federalist Society.

 

      As always, please note that all expressions of opinion are those of the expert on today's call.

 

      Today we are very fortunate to have with us Ms. Christina Martin who is an attorney at the Pacific Legal Foundation and was second chair to the case on behalf of the property owner, Ms. Knick. After our speaker gives her remarks, we will move to an audience Q&A, so please keep in mind what questions you have for the case or for our speaker today. Thank you very much for speaking with us, Christina. The floor is yours.

 

Christina M. Martin:  Thank you for having me. So the Supreme Court heard oral argument this morning in this case, Knick v. Township of Scott, and as expected, we had a hot bench with a number of questions that I think bode well for our client, Rose Knick's case, and some questions that we liked less. Before we get into the specifics from oral argument though, I want to share a brief background on the case. This case asks the Court to overturn a 33-year-old precedent that has effectively closed the federal courthouse doors to property owners who have federal Fifth Amendment takings claims against state and local government in federal court.

 

      And as a refresher for those of you who don't deal with these types of claims, a takings claim arises from the Fifth Amendment's Takings Clause which provides that government cannot take property unless it pays just compensation. Unlike traditional eminent domain, a property owner brings a takings claim or an inverse condemnation claim when government has taken property without condemning it, but usually these claims arise from regulations that devalue property. As a refresher, an inverse condemnation claim arises when the local government, or state government, or federal government for that matter, regulates property or invades property but does not acknowledge that what it's doing is actually causing a taking of that property and triggering the Fifth Amendment's protections. When this happens, sometimes the government doesn't actually even know whether its actions arise to the level of a taking.

 

      In this case, Rose Knick's claim arose from an ordinance passed by Scott Township in 2012. The ordinance redefined cemeteries and granted public access rights to all cemeteries in the town. In 2013, the town sent officials onto Ms. Knick's property, which is a private farm where she lives, and they sent these officials onto her property without her permission. The town declared an area on her property where it found some loose stones to be a cemetery because it's declared that these stones were grave markers, and the town decided that if she didn't open up her property as required by the ordinance, it would fine her $300 to $600 per day, and it would fine her an additional $300 to $600 per day if she failed to maintain the area as if it really is a cemetery. So Ms. Knick doesn't believe anyone has been buried on her land, but whether anyone was ever buried on her property or not is actually irrelevant to legal question at issue in the Supreme Court.

 

      This case asks the Supreme Court to just decide whether she has a right to bring her Fifth Amendment claim in federal court. Ms. Knick actually originally did file a claim in state court, but the state court told her that it could not hear her claim until the town went further than issuing notices of violation but actually filed civil enforcement proceedings against her. Ms. Knick, at that point, felt she wouldn't get a fair shake in state court, so she went to federal court and filed her claim there. But the federal court refused to hear her claim because of a 1985 case called Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City.

 

      In that case, Williamson, the Supreme Court held that a federal takings claim against state or local government is not ripe until after the property owner pursues a takings claim in state court. The presumption there was that once you lose in state court, you could then go to federal court, but in 2005, in San Remo Hotel v. City and County of San Francisco, the Supreme Court held that once litigated in state court, the full faith and credit statute actually bars a property owner from going to federal court to litigate the related case. And preclusion rules prevent property owners from reserving their federal takings claims to be litigated after the state litigation is finished. In other words, the very action that actually ripens a federal takings claim against state or local government also destroys that claim. So, in short, Williamson County closed the federal courthouse doors to federal takings claims against state and local government.

 

      In federal court, in Ms. Knick's case, the Third Circuit actually called the town cemetery ordinance extraordinary and constitutionally suspect, but it said it could not hear her claim because of Williamson County. And in March, the Supreme Court granted review to reconsider the state litigation requirement that was created as a result of the Williamson County decision. On the merits, there were17 amicus briefs representing a larger number of amici that were filed in support of Ms. Knick, and one of those was actually the SG. There were also amicus briefs from the State of Texas, some congressmen, the Heritage Foundation, Cato, AARP, and a number of other groups. There were four briefs filed supporting the township, a couple of law professor groups, the State of California, joined by other states, and another group on behalf of various governor and municipal groups.

 

      And that brings us to today. Today the Justices had a lot of questions about whether just compensation is an element of a takings claim, and whether -- in other words, there's a requirement that you first seek just compensation in state court. And whether there's a violation of the Fifth Amendment where the property owner has not filed an inverse condemnation claim in state court. So the Fifth Amendment doesn't stop takings for a public use; it just puts a condition on that. So the Justices had a lot of questions about when there's a violation or a depravation under Section 1983 that would allow you to go to court. Justice Kagan and Chief Justice Roberts had questions about when the violation or depravation would occur, if you can have that before you seek compensation in state court. There was also some concern that our argument, or the SG's argument, which was similar, would overturn older precedents like Cherokee Nation—that's over an 150-year-old decision, which provides that government can pay you after the taking without violating the Takings Clause, but, of course, they have to pay you interest.

 

      Our argument on behalf of Ms. Knick is that she has been deprived of a right immediately when government takes property but fails to formally acknowledge that its actions rose to the level of a taking. In other words, because there's no officially recognized entitlement to compensation in takings cases, unlike traditional eminent domain, a property owner should be able to go to federal court to get a court to recognize that they are, in fact, entitled under the Fifth Amendment. Justices Alito and Gorsuch seem to understand this is as a reasonable argument.

 

      The town argued that it doesn't know whether it has taken property yet until the property owner actually files a takings claim in state court using the state's inverse condemnation law. And the town argues that there's no depravation of any right in cases like this one because the town isn't saying it won't pay Ms. Knick if the court finds a taking. Rather, it's unsure of whether there's been a taking.

 

      Justice Alito didn't seem to buy this argument. He asked whether the town knows -- whether the town would go back to its office and perhaps think about whether it's taken Ms. Knick's property and then let her know. He didn't really get an answer to that, and then he asked, "Well, if she did file in state court, would you concede there's a taking, or would you argue there is no taking?", to which, of course the town said they would argue that there has been no taking. And then he suggested that if there's no taking, then surely, she should be -- if they say there's no taking, surely, she should be allowed to go to federal court to prove that.

 

      Justice Kagan said that she thought the town made a good argument that there's no Fifth Amendment violation, but she also said that the problem with Williamson County is ultimately the preclusion doctrine closed federal courthouse doors to these constitutional claims. Justice Breyer agreed that this sort of argument could be reasonable, this argument on behalf of Ms. Knick, but he was concerned about stare decisis. He asked a few times, actually, "Why not just let sleeping dogs lie." That was his language. "Why not just let sleeping dogs lie."

 

      The town agreed with this sentiment, of course, which brought on questions from Justice Alito who asked whether there was anything like reliance interest supporting keeping Williamson County. In other words, is there some -- have they built some sort of regulatory system, or would they change their behavior, had they changed their behavior because of Williamson County? The answer to this, of course, is no. There's not any kind of reliance interest, they haven't acted differently because of Williamson County, but the answer for that was less clear, but it was fairly plain from the line of questioning from Justice Alito and then Justice Gorsuch.

 

      Justice Sotomayor expressed a lot of skepticism about the idea that property owners are actually missing out on anything other than having access to federal courts, and suggested that there's plenty of scenarios where people are not entitled to go to federal court, and suggested that even if they overturned Williamson County, that there -- that abstention doctrines would often keep federal courts from hearing these cases.

 

      And the town suggested that state courts are actually better and that this case could have been completed by now in state court, but that didn't seem to persuade Justice Roberts who suggested that it's a very large gamble for property owners to actually enforce their property rights and go to court because they have to pay a number of experts, attorneys, and they only get compensated for those things if they win, so the gamble is quite large. And specifically in this case, the gamble for Ms. Knick is quite large because it's unclear how much that easement would be worth and if it would even come close to those costs.

 

      So I think the most interesting thing from today was probably that all the Justices seemed to recognize that Williamson County has caused some problems. For instance, Breyer expressed a very clear preference for stare decisis, but he suggested that, at minimum, they should get rid of some of the problems that have arisen from Williamson County. So one of those problems is that when a property owner files their takings claim in state court, the government, the local government or the state, is allowed to remove a case to federal court. And then once it's removed, sometimes that case can then be litigated at length about whether the federal court is allowed to hear it, or other times it's been dismissed, and they've been forced to start all over again. And so at minimum, Justice Breyer recognized they should at least close the removal trap, make it clear that that sort of thing should not occur.

 

      But overall, I think it was a very interesting discussion that -- some of the Justices were harder to read, but I think it was a good day for Ms. Knick, and I think there's a fairly good shot that we might get a 5-3 decision in her favor. Justice Kagan was hard to read, but she did express concern about the preclusion effect of filing in state court and that that essentially keeps you from being able to go to federal court to enforce this federal constitutional right.

 

      So at this point, I'd like to open it up for any questions.

 

Wesley Hodges:  Thank you so much, Christina, for the remarks. We'll go ahead and move to our first caller.

 

Caller 1:  Hi there. You mentioned that Justice Sotomayor talked about abstention a bit, and I'm just curious, given the decision Lexmark and the decision in the Driehaus case where the Court has thrown quite a bit of cold water on prudential doctrines generally, and prudential ripeness specifically, was there any argument to that effect, or any discussion about that sort of reconsideration of that doctrine?

 

Christina M. Martin:  It didn't sound like they were considering reconsideration of that doctrine. What I will say is that she did seem concerned about the -- specifically this case and the possibility that overturning Williamson County would create a patchwork of cases that people would have to work through to figure out whether a court would abstain or not. Of course, we already know quite a lot about traditional abstention doctrines and there obviously would be some cases where federal courts would abstain, but they hear state-based claims all the time, state-law-based claims. And we're not concerned about that, and we're fairly confident that the questions at issue in this case are actually quite easy, and the federal court is capable of reaching the question on the law.

 

Caller 1:  Thank you.

 

Wesley Hodges:  Thank you, caller. Let's move to our next caller.

 

Gary Wheaton:  Gary Wheaton, again, New Hampshire. I missed the first part of it [inaudible 14:12], so I'm kind of confused where the Eleventh Amendment or the Tenth Amendment separations play. So you're saying there's precedent already that the federal government will hear a claim by a citizen of that state, a suit against the state, and [inaudible 14:30] court. So there's no issues as far as you're concerned?

 

Christina M. Martin:  Well, I'm sorry. I've misspoken if I said against the state specifically. Rather, I mean against entities from the state. So, for instance, in this case, it's a municipality. And we know from Monell that municipalities are treated as persons, and so the Court does -- can hear those cases. And so we didn't get into the sovereignty issue. There was some confusion about that, I think, in some of the questions, but there just wasn't time to touch upon those issues in detail as far as where the state falls out in all of this. It's not at issue in this specific case though, because again, it's against a municipality.

 

Gary Wheaton:  Okay. Got you on that. Thanks.

 

Christina M. Martin:  Yeah, the very -- I appreciate your question, though, because that's a very good distinction to make.

 

Wesley Hodges:  Thank you. Let's go ahead and move to our third caller.

 

Caller 3:  I noticed in the summary of today's presentation there was an indication that the township had threatened Ms. Knick with daily fines, and I'm wondering what, if any, impact that should have had on the analysis and the discussion in the Court.

 

Christina M. Martin:  Can you repeat the first part of your question?

 

Caller 3:  It was with reference to the indication in the summary of today's talk that there was a threat against Ms. Knick to levy daily fines, and it's not clear exactly what the basis for those fines were, but I was curious how that impacts the analysis.

 

Christina M. Martin:  They didn't ask any questions about that. It shouldn't affect the analysis because, I mean, other than adding sympathy to Ms. Knick's claim that she needs to be heard in some court and she has lost faith in state court. So the Court didn't really discuss that, and it wasn't a focus of today's oral argument.

 

Caller 3:  Because I would just think that if she was threatened with fines, that would suggest that the case is ripe.

 

Christina M. Martin:  Yeah, I mean, I agree with you, absolutely. The issue though is that the government can take her property and impose an easement on it under the Fifth Amendment. The question is about the fines, though, I mean, it's not before the Court, I suppose, in the sense that -- I mean, goodness, they could do that if they had paid her for an easement or if they would pay her for an easement, I suppose they could then require -- fine her if she closed off the property. But, yeah, that's a very interesting point.

 

Caller 3:  Thank you.

 

Wesley Hodges:  Thank you, caller. Looks like we do have another question. Let's go ahead and turn to our next caller.

 

Caller 4:  Where do you draw the line when a regulation by a local government reduces the value of my property by 10 percent, by 50 percent, by 90 percent? At what point does it -- how much of a reduction on the value of my property does it have to be to amount to a taking?

 

Christina M. Martin:  Well, that's an excellent question, and the Supreme Court doesn't actually have a firm answer on that. They've said over and over again that's an ad hoc analysis, it's going to depend. Now, when they take all of the economic use of your property, that's a taking, but anything less than that, they use a multi-factored test. It's called the Penn Central test, and they consider what the investment backed expectations are, what the loss in value is, they consider the character of the government action and to speak generally, you have to lose a heck of a lot more than 10 percent of value, something closer, probably, the majority, the vast majority, potentially, even, if you're actually going to win. I don't think that's right, but that's regulatory takings law as it is.

 

      However, this case is not one of those cases. This is actually a physical invasion case, and when you have a regulation that imposes a physical invasion on property, or any other government action, actually, that creates an easement across property, that's a per se taking. The government has argued that because they claim there's a gravesite on her property, that somehow changes the analysis, and we would be happy to litigate that on remand, but we have to get in court first to be able to do that. So this, again, this is just a much easier case than one of those cases where you're looking at how much value can they take away.

 

Caller 4:  Thank you.

 

Wesley Hodges:  Thank you, caller. Here's our next caller.

 

Caller 5:  Hi. Thank you. I might have misinterpreted what you were saying when you referred to the states might be in a better position. What are federalism arguments? And also, I'm a little confused in terms of land grants; all essentially have emanated from the sovereign, so maybe you could just address that?

 

Christina M. Martin:  What do you mean by land grants? What are you referring to?

 

Caller 5:  I'm sorry, I meant land patents.

 

Christina M. Martin:  Land patents, and like -- what do you specifically mean? I don't --

 

Caller 5:  -- Well, it's personal property, and so it seems that the government would be engaging in a taking under those circumstances. But my first part of the question regarding federalism, was that an issue that was argued?

 

Christina M. Martin:  It was to an extent in the briefs, essentially, that you should let the state courts figure out these -- figure out questions relating to state law. But, of course, we know that federal courts consider state law all the time, and sometimes they'll send a specific question back to a state court to give them the opportunity if that question has never been answered before. But we trust federal courts to answer these questions in other contexts, in Fourth Amendment contexts and First Amendment contexts, to interpret what these laws mean. And here, I think we can trust state courts to do that as well.

 

      But certainly that was mentioned in the briefs and to some extent, it was mentioned today in the Justices' questions when they were asking, well, about abstention, whether this would be appropriate to abstain, to let the state courts figure it out because it's a state law, because property rights are controlled to a degree by state law. The Constitution doesn't create property rights, it protects property rights that arise from other sources, and one of those sources is state law. So, yeah, it was referenced a few times, but I think that the bigger concern among the Justices was whether there's actually a depravation under the Constitution. And also, stare decisis came up a few times again from Justice Breyer, and so those seem to be bigger concerns.

 

Caller 5:  Okay. I appreciate that because stare decisis always depends on whose ox is being gored.

 

Christina M. Martin:  [Laughter] Sure.

 

Caller 5:  Thank you.

 

Wesley Hodges:  Thank you, caller. Now Christina, we were chatting a little bit before the call began, and you had mentioned that the Solicitor General participated in the argument today. Can you spell out for us how his argument was different than your client's?

 

Christina M. Martin:  Sure. So the Solicitor General was arguing that the decision in Williamson County was solely a decision relating to Section 1983, the Civil Rights Act, and that the Court didn't even have to overturn Williamson County to recognize jurisdiction in this case because it arises under federal question jurisdiction. And the Court didn't really seem persuaded by that argument. I think he -- I mean, I don't believe Williamson County was solely a 1983 case. We explained that in our briefs, and so the Court didn't seem persuaded by that side of the argument.

 

      The other part of it was that he was arguing that basically the depravation of a right, which allows you to bring a 1983 claim, is different than a violation. So he said that the government can lawfully take property and pay you after the fact, but between the time that it's lawfully taken your property and the time that you're actually paid, that's a depravation of a right to that money which is why they impose interest. This was the Solicitor General's main point in his argument on that side. And so he was arguing that the Williamson County should be overturned, just with a slightly nuanced argument.

 

      One thing I think that's probably most interesting about his participation is that the whole Williamson County doctrine, the state litigation doctrine, actually arose from the Solicitor General amicus brief filed in that case 33 years ago, and it was not fully briefed. It wasn't raised by the parties. And the bank, Hamilton Bank, did respond to it somewhat in their brief, but it was certainly not fully briefed by any stretch of the imagination. And now the Solicitor General's office has essentially admitted that, by participating now and encouraging reversal of Williamson County, that it was not a fully thought out argument. And most likely that's because of the San Remo decision, which showed that once you lose in state court, you cannot then go to federal court.

 

Wesley Hodges:  Thank you, Christina. I appreciate you sharing that with us. Seeing no immediate questions, Christina, I turn the mic back to you. Do you have any closing thoughts for us today?

 

Christina M. Martin:  No, but hopefully we'll be winning this case and Williamson County will just be a part of ancient history. And I think there's always a possibility of a 4-4 split, which I suppose could lead to a reargument of the case, but after today's questions, and -- I think there's a good chance that there may be a majority opinion, even with just eight.

 

Wesley Hodges:  Well, thank you so much for sharing your time with us today, Christina. On behalf of The Federalist Society, I would like to thank you for the benefit of your valuable time and expertise. We welcome all listener feedback by email at [email protected]. Thank you all for joining. This call is now adjourned.

 

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