Fifth Amendment:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
Ordinarily, property is taken under a condemnation suit upon the payment of the money award by the condemner, and no interest accrues.1 If, however, the property is taken in fact before payment is made, just compensation includes an increment which, to avoid use of the term interest,
the Court has called an amount sufficient to produce the full equivalent of that value paid contemporaneously with the taking.
2 If the owner and the government enter into a contract which stipulates the purchase price for lands to be taken, with no provision for interest, the Fifth Amendment is inapplicable and the landowner cannot recover interest even though payment of the purchase price is delayed.3 Where property of a citizen has been mistakenly seized by the government and it is converted into money which is invested, the owner is entitled in recovering compensation to an allowance for the use of his property.4
The nature and character of the tribunal to determine compensation is in the discretion of the legislature, and may be a regular court, a special legislative court, a commission, or an administrative body.5 Proceedings to condemn land for the benefit of the United States are brought in the federal district court for the district in which the land is located.6 The estimate of just compensation is not required to be made by a jury but may be made by a judge or entrusted to a commission or other body.7 Federal courts may appoint a commission in condemnation actions to resolve the compensation issue.8 If a body other than a court is designated to determine just compensation, its decision must be subject to judicial review,9 although the scope of review may be limited by the legislature.10 When the judgment of a state court with regard to the amount of compensation is questioned, the Court’s review is restricted. All that is essential is that in some appropriate way, before some properly constituted tribunal, inquiry shall be made as to the amount of compensation, and when this has been provided there is that due process of law which is required by the Federal Constitution.
11 [T]here must be something more than an ordinary honest mistake of law in the proceedings for compensation before a party can make out that the State has deprived him of his property unconstitutionally.
12 Unless, by its rulings of law, the state court prevented a complainant from obtaining substantially any compensation, its findings as to the amount of damages will not be overturned on appeal, even though as a consequence of error therein the property owner received less than he was entitled to.13
Following the Penn Central decision, the Court grappled with the issue of the appropriate remedy property owners should pursue in objecting to land use regulations.14 The remedy question arises because there are two possible constitutional objections to be made to regulations that go too far
in reducing the value of property or which do not substantially advance a legitimate governmental interest. The regulation may be invalidated as a denial of due process, or may be deemed a taking requiring compensation, at least for the period in which the regulation was in effect. The Court finally resolved the issue in First English Evangelical Lutheran Church v. County of Los Angeles, holding that when land use regulation is held to be a taking, compensation is due for the period of implementation prior to the holding.15 The Court recognized that, even though government may elect in such circumstances to discontinue regulation and thereby avoid compensation for a permanent property deprivation, no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective.
16 Outside the land-use context, however, the Court has now recognized a limited number of situations where invalidation, rather than compensation, remains the appropriate takings remedy.17
Failure to incur administrative (and judicial) delays can result in dismissal of an as-applied taking claim based on ripeness doctrine, an area of takings law that the Court has developed extensively since Penn Central. In Williamson County Regional Planning Commission v. Hamilton Bank,18 the Court announced a two-part ripeness test for takings actions brought in federal court—although the second part of this test was subsequently overturned by Knick v. Township of Scott.19 First, for an as-applied challenge, the property owner must obtain from the regulating agency a final, definitive position
regarding how it will apply its regulation to the owner’s land.20 Second, when suing a state or municipality, the owner must exhaust any possibilities for obtaining compensation from the state or its courts before coming to federal court.21 Thus, the claim in Williamson County was found unripe because the plaintiff had failed to seek a variance (first prong of test), and had not sought compensation from the state courts in question even though they recognized inverse condemnation claims (second prong).22 Similarly, in MacDonald, Sommer & Frates v. County of Yolo,23a final decision was found lacking where the landowner had been denied approval for one subdivision plan calling for intense development, but that denial had not foreclosed the possibility that a scaled-down (though still economic) version would be approved. In a somewhat different context, a taking challenge to a municipal rent control ordinance was considered premature
in the absence of evidence that a tenant hardship provision had ever been applied to reduce what would otherwise be considered a reasonable rent increase.24 Beginning with Lucas in 1992, however, the Court’s ripeness determinations have displayed an impatience with formalistic reliance on the final decision
rule, while nonetheless explicitly reaffirming it. In Palazzolo v. Rhode Island,25 for example, the Court saw no point in requiring the landowner to apply for approval of a scaled-down development of his wetland, since the regulations at issue made plain that no development at all would be permitted there. [O]nce it becomes clear that the agency lacks the discretion to permit any development, or the permissible uses of the property are known to a reasonable degree of certainty, a takings claim is likely to have ripened.
26
Facial challenges dispense with the Williamson County final decision prerequisite, though at great risk to the plaintiff in that, without pursuing administrative remedies, a claimant often lacks evidence that a statute has the requisite economic impact on his or her property.27
As noted, Williamson County also required litigants to exhaust state remedies before bringing a federal takings claim.28 This aspect of the Court’s decision had significant, and, as the Court came to conclude, unanticipated
consequences for plaintiffs.29 In San Remo Hotel, L.P. v. City and County of San Francisco, the plaintiffs had lost an inverse condemnation claim in state court after a federal court dismissed their earlier attempt to file in federal court, citing Williamson County’s exhaustion requirement.30 When the litigants attempted to return to federal court, the court dismissed their claim, holding that the legal doctrine of issue preclusion prevented the court from relitigating those claims.31 Under common-law preclusion doctrines, which are implemented by
the federal full faith and credit statute,32 federal courts are in some circumstances required to abide by state court decisions that have already resolved the issues presently before the federal court.33 In San Remo, the Supreme Court held that these preclusion doctrines barred the plaintiffs’ takings claim, declining to create any special exceptions in the context of the Takings Clause.34 Thus, as the Court later described this outcome, [t]he adverse state court decision that . . . gave rise to a ripe federal takings claim simultaneously barred that claim.
35 In a concurring opinion in San Remo, four Justices said that while they agreed that the plaintiffs were precluded from relitigating their takings claim in federal court, they believed that Williamson County may have been mistaken
in creating an exhaustion requirement.36 The concurring Justices believed it was not obvious
that this exhaustion requirement was required by constitutional or prudential principles,
37 and they further contended that Williamson County’s state-litigation rule . . . . all but guarantees that claimants will be unable to utilize the federal courts to enforce the Fifth Amendment’s just compensation guarantee.
38
The Supreme Court overruled Williamson County’s exhaustion requirement in Knick v. Township of Scott.39 Instead, the Court held that property owners have a Fifth Amendment right to full compensation
and a concomitant right to bring a federal suit at the time the government takes their property, regardless of post-taking remedies that may be available to the property owner.
40 The Court said its cases had long established that a right to compensation arises at the time of the taking,
and that Williamson County’s conclusion otherwise had rested on a misunderstanding of precedent.41 The Supreme Court concluded that Williamson County was wrongly decided and that stare decisis considerations did not preclude it from overruling the exhaustion aspects of that decision.42