Chapter 19 - § 19.2 • PROCEDURAL ISSUES

• Jurisdiction: Colorado

§ 19.2 • PROCEDURAL ISSUES

Takings litigants should consider procedural issues relating to timing, jurisdiction, collateral estoppel, and a variety of other issues that depend on whether the case involves the exercise of eminent domain or inverse condemnation.

§ 19.2.1—Timing

A plaintiff may bring a takings claim only after it is ripe and before it becomes moot.

Ripeness

A case is ripe if an injury has occurred; it is not enough if the injury is simply anticipated. "Under the ripeness doctrine, courts usually do not consider disputes involving uncertain or contingent future matters."² In takings cases, issues of ripeness generally arise in the inverse condemnation context. In these cases, ripeness requires finality on the part of the government entity.³ Specifically, "if the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue,"⁴ the case is considered ripe. Conversely, failure of a property owner to exhaust administrative remedies for inverse condemnation will warrant dismissal of the claim because the claim is unripe.⁵

An example of lack of ripeness for this reason is found in Quaker Court LLC v. Board of County Commissioners.⁶ The plaintiff brought an inverse condemnation claim when his building application was denied.⁷ Prior to bringing the claim, the plaintiff could have, but did not, submit a "rezoning request, a new development plan, or a request for a variance from existing zoning regulations" to the county.⁸ Accordingly, the court dismissed the case for lack of ripeness. Similarly, in SK Finance v. La Plata County,⁹ the plaintiff claimed a regulatory taking had occurred when it unsuccessfully sought approval to build a sewage treatment facility to serve a subdivision where plaintiff owned property, because "La Plata County had not rendered any final decision regarding the permissibility of a sewer system serving the subdivision."¹⁰

Mootness

Mootness is the flip side of ripeness; the harm involved must not have passed, or the case will be moot. The central issue in determining mootness is whether a "change in the circumstances that prevailed at the beginning of litigation has forestalled the prospect for meaningful relief."¹¹ In City & County of Denver v. Eat Out, Inc.,¹² the city demolished the property pursuant to an eminent domain action — after the lower court's ruling, but before the appellate court heard the case.¹³ Accordingly, the appellate court could not provide meaningful relief, and the resolution would "have [had] no practical legal effect."¹⁴ The case was therefore moot.¹⁵

§ 19.2.2—Proper Court, Reservation, And Collateral Estoppel Issues

A takings claim brought under the Colorado Constitution may be brought in state court, in federal court (assuming diversity jurisdiction), or removed from state to federal court (again assuming diversity jurisdiction).¹⁶ A more complicated issue is presented if there is an accompanying claim, as there often is, brought under the Fifth Amendment of the U.S. Constitution.¹⁷

In 2005, the U.S. Supreme Court decided San Remo Hotel v. City & County of San Francisco.¹⁸ This case changed the way that collateral estoppel and res judicata issues are treated when a plaintiff attempts to transfer to federal court after starting a federal constitution takings case in state court, even if the parties begin in state court due to ripeness requirements.¹⁹ As a result of San Remo, it is much more difficult to return to federal court.

In Williamson County Regional Planning Commission v. Hamilton Bank,²⁰ the lower court held that "takings claims are not ripe until a State 'fails to provide adequate compensation for the taking.'"²¹ Often forced to begin in state court, plaintiffs would attempt to reserve their federal claims for federal court, consistent with England v. Louisiana State Board of Medical Examiners.²² After San Remo, if in the process of arguing a federal takings claim alongside a state takings claim in state court, plaintiffs expressly or impliedly raise federal issues, collateral estoppel and res judicata principles may prevent them from bringing those issues back to federal court.²³ This is true even if the plaintiffs were forced to start in state court to satisfy Hamilton Bank ripeness requirements. In San Remo, the plaintiffs lost their right to return to federal court, even though an England reservation had been properly made: To hold otherwise would encourage plaintiffs who "effectively asked the state court to resolve the same federal issues they asked it to reserve [for later resolution in federal court]."²⁴

Takings litigants had assumed, after Hamilton Bank, that a takings claim against state and local governments would become ripe for a federal takings claim after a state court's resolution of the claim. However, as held in San Remo, a state court's decision on the takings question had a preclusive effect on any subsequent federal suit.²⁵ Thus, the combination of Hamilton Bank and San Remo meant that private property owners wishing to allege takings against state and local defendants could not go to federal court without going to state court first; but if the litigant went to state court and lost, the takings claim would be barred in federal court.

In 2019, the U.S. Supreme Court decided a landmark, precedent-breaking takings case, Knick v. Township of Scott.²⁶ The Knick case involved a private property owner whose land had allegedly been taken by a local ordinance. Plaintiff landowner sought relief in state court but did not seek to first bring an inverse condemnation action under state law seeking compensation.²⁷ Failure to bring a taking or inverse condemnation claim under state law had previously been fatal to federal takings claims because of Hamilton Bank.²⁸ As discussed above, Hamilton Bank held that a property owner whose property had been taken by state or local law had not yet suffered a violation of Fifth Amendment rights until a state court had denied the claim for just compensation under state law. Without first exhausting this state remedy in state court, the federal takings claim in federal court would not be constitutionally "ripe."²⁹

The Knick Court recognized the San Remo "preclusion trap" and concluded that the Hamilton Bank state litigation requirement imposed an unjustifiable burden on takings plaintiffs and must be overruled.³⁰ The proper rule, after Knick, is that a property owner has an actionable Fifth Amendment takings claim when the government takes the property without paying for it. The black letter law is that property owners suffer a violation of Fifth Amendment rights at the time the government takes the property without compensation and may bring a claim in federal court under § 1983 at that time. Property owners do not always need to start in state court when there is a taking claim against a state or local government action.

The Knick majority, in its 5-4 split decision, was particularly emphatic about how and why the Hamilton Bank rule was "mistaken."³¹ First, the Court explained the Civil Rights Act of 1871, 42 U.S.C. § 1983, guarantees a federal forum for claims of unconstitutional treatment at the hands of state/local officials where the settled rule is that exhaustion of state remedies is not a prerequisite to a § 1983 action.³² Second, the Fifth Amendment right to full compensation arises at the time of the taking, regardless of post-taking remedies that may be available to property owners, such as a state inverse condemnation claim under state law.³³ The Hamilton Bank requirement thereby infringes on the property owner's federal constitutional claim. Third, the general rule is the plaintiffs may bring constitutional claims under § 1983 without first bringing a state lawsuit, even when state court actions addressing the underlying government action are available.³⁴

In overturning the thirty-four-year precedent, the Knick majority repeatedly criticized Hamilton Bank. The Court stated the case was "wrong" in its reasoning, "exceptionally ill founded," a "rule in search of a justification," and "unworkable in practice."³⁵ More importantly, the Court was appalled that the state-litigation requirement had relegated the Takings Clause "to the status of a poor relation among the provisions of the Bill of Rights."³⁶ Knick correctly reminds us that plaintiffs asserting other constitutional claims are guaranteed a federal forum under § 1983 and that the state-litigation requirement under Hamilton Bank wrongly "hand[s] authority over federal takings to state courts."³⁷ What Knick therefore does is to restore takings claims to the "full-fledged constitutional status the Framers envisioned when they included the Clause among the other protections in the Bill of Rights."³⁸

§ 19.2.3—Inverse Condemnation Procedural Issues

Procedural issues to consider in an inverse condemnation case include whether to combine the takings claim with a tort claim, whether the government entity had the power to condemn, and whether the claim falls within the statute of limitations.

The Coupling of a Common Law Claim with an Inverse Condemnation Claim

Under many factual scenarios, the same incident can give rise to either a tort claim or an inverse condemnation claim. While the plaintiff may elect which theory to advance, the plaintiff may not advance both at the same trial. In Ossman v. Mountain States Telephone & Telegraph Co.,³⁹ the telephone company accidentally crossed the plaintiff's land in laying a cable. The landowner recited the settlement offer of $42, and sued. The pleadings and treatment by the trial court revealed a confused state of...