NOT JUST A PROCEDURAL CASE: THE SUBSTANTIVE IMPLICATIONS OF KNICK FOR STATE PROPERTY LAW AND FEDERAL TAKINGS DOCTRINE.

• Author: Dana, David A.

Introduction I. Two Readings of the Knick Opinion II. How Knick Could Distort Substantive Property Law and What Can Be Done about That A. The State Property Law Content of Federal Takings Cases B. Why Strategic Litigants Will Choose Federal Courts When They Believe Federal Courts Will Deviate from What Would Have Been the Property Law Interpretations of the State Courts i. Understanding Knicks Possible Effects Through an Examination of Denials of Certiorari Petitions C. Mitigating Knicks Intrusion into Substantive State Property Law i. Abstention and Justice Sotomayor's Question ii. Legislative and State Court Corrections iii. Certification: The Limits of Certification, and Reforms III. How Knick Could Blur Current Federal Takings Law Doctrine Conclusion INTRODUCTION

The United States Supreme Court's decision in Knick v. Township of Scott (1) ostensibly addresses only a procedural issue: Whether an aggrieved property owner must first seek compensation in state court via a state inverse condemnation action before seeking access to the federal courts or whether, instead, she can immediately bring a federal takings claim in federal court.

Viewed solely as a procedural decision, Knick itself might seem to be, basically, no big deal. After all, nothing in the Knick majority opinion purports to alter what rights in property or rights to compensation for interferences with property anyone enjoys in the United States. All the Knick decision does, on its face, is open the federal courthouse doors more quickly than is currently the case to those claiming to have had their property taken without just compensation in violation of the Fifth Amendment of the U.S. Constitution. (2) Although Knick may shift the initial decisionmaker in many federal takings cases--from a state judge to a federal judge--it does not purport to challenge the constitutional status of state property law as the underpinning of federal takings law. Nor does it purport to challenge the test and principles that are to be applied in determining whether an interference with a property right under state law requires the payment of just compensation as a matter of federal constitutional law. (3)

Nevertheless, Knick may have real consequences for substantive law, both state and federal. The purpose of this Article is to explore those implications for substantive law, suggest that they are highly problematic from a normative perspective, and consider how the possible adverse effects of Knick might be mitigated.

In our constitutional order, property law (with very limited exceptions, like federal patent rights) is the domain of state law, not federal law. Property rights in land in every state are largely created by, interpreted by, and enforced under state law. (4) Land-use regulation, in particular, is overwhelmingly a matter of local enforcement of state and local, not federal law. (5) As the physical realities, economies, histories, legal traditions, and political cultures of states differ substantially, so too does substantive state property law. (6) That diversity in state substantive property law is a strength of our legal system; it allows property law to adapt to local conditions. (7) Notably, as climate change causes rises in sea level, flooding, drought, wildfires, and mudslides, among other phenomena, affecting different parts of the country very differently, the argument for a localized substantive property law that is sensitive to and adapts to local conditions becomes even more compelling. (8)

The Knick opinion is troubling in that it may result in the effective usurpation (albeit only a partial usurpation) by the federal courts of the state courts and legislatures' role as the authors of substantive property law. For a variety of reasons, explicated below, federal judges may not consistently interpret state property law--and especially "fuzzy" background principles of law that limit rights of titleholders, such as nuisance and public trust--in the same way as state courts would. (9) It seems quite plausible that, as a result of Knick, state substantive law will be interpreted by federal courts to sometimes afford state officials and regulators less flexibility to deal with the land use challenges posed by climate change than they otherwise would have at their disposal. Knick thus can be understood as an impediment to the productive adaptation of state property law to the real-world demands of climate change adaptation. In theory, certification of state property law issues to state supreme courts can prevent federal usurpation of the state courts' role in interpreting state property law. But certification is never mandatory, and there are currently a number of impediments to it. Some of these impediments, however, could be lessened by the federal courts, state courts, and state legislatures, if they are willing. (10)

The second substantive doctrinal problem posed by Knick is that it may destabilize the test for when a compensable "temporary taking" has occurred, in such a way as to expand the scope of what constitutes a compensable "temporary taking." That expansion could chill innovative state and (especially) local land use and other regulation, and effectively overrule the Supreme Court's well-reasoned decision in Tahoe-Sierra Preservation Council v. Tahoe Regional Planning AgencyP By potentially expanding compensation requirements for temporary government actions, Knick could deprive state and local regulators of the flexibility that they require for effective adaptation to climate change. (12) Whether Knick has these effects on the substance of federal takings law depends ultimately on how courts understand and employ Knick as a precedent.

Part I of this Article provides a brief background to and summary of the Knick decision and offers a narrow and broad reading of the majority opinion. Part II explores how Knick may result in interference with state courts' role in interpreting state property law. Part II uses a review of denied certiorari petitions involving federal takings claims to highlight some of the difficult issues in state substantive property law that the lower federal courts will be called upon to decide in the post-Knick era. Part II also considers how much the usurpation of state law by the federal courts can be mitigated through prudential federal abstention, state judicial and legislative corrections of federal interpretations, and certifications to state supreme courts. Lastly, Part III considers how Knick may result in a de facto overruling of the Supreme Court's decision in Tahoe.

In sum, Knick may upend our constitutional regime that has long allocated states the power to interpret their own property law and may shift federal takings doctrine toward a more restrictive posture regarding state and local efforts to fashion solutions to a range of problems. Knick is not just a procedural decision.

1. TWO READINGS OF THE KNICK OPINION

   State courts are courts of plenary jurisdiction, and thus can hear both federal and state constitutional claims. Because states have constitutional guarantees of compensation for deprivations of property that mirror the Fifth Amendment Takings Clause, (13) property owners typically will want to bring both a federal and a state constitutional claim for just compensation for the same underlying government conduct or restriction. (14) In all states, property owners may bring an action for inverse condemnation--that is, for the interference with property rights (as protected under the state and/or federal constitution) to such an extent that the government has, in effect, condemned the property, but without paying the compensation that would have been paid in a formal eminent domain proceeding. (15)

   By contrast, federal courts are courts of limited jurisdiction. Section 1983 of the United States Code affords "any citizen of the United States or other person within the jurisdiction thereof" to sue "at law [and] in equity" seeking remedies for "deprivation[s] of any rights, privileges, or immunities secured by the Constitution----" (16) Thus, at least on the face of Section 1983, a party can bring a suit in federal court alleging a deprivation of Fifth Amendment rights based on an alleged taking of property without just compensation.

   In 1985, in Williamson County Regional Planning Commission v. Hamilton Bank, the Supreme Court articulated a ripeness rule that was consistent with precedent but not previously articulated by the Court: a federal takings claim is not ripe until a property owner first seeks compensation through a state inverse condemnation action, so long as such an action provides a "reasonable, certain and adequate provision for obtaining compensation" if compensation, in fact, is constitutionally due. (17) The Williamson County Court's holding follows from a straightforward reading of the Fifth Amendment's Takings Clause. The Clause does not prohibit or render unconstitutional government takings of property in and of themselves; it requires just compensation to be paid in due course, but there is no constitutional violation simply because the taking was not accompanied by contemporaneous compensation. (18)

   The Williamson County ripeness holding regarding state inverse condemnation action became subject to considerable criticism after the Court's 2005 decision in San Remo Hotel, L.P. v. City & County of San Francisco, which created what Chief Justice Roberts in Knick dubbed a "preclusion trap" for aggrieved property owners. (19) In San Remo, the federal court exercised Pullman abstention with respect to the plaintiffs federal takings claim, but after the plaintiff failed to prevail in state court, the federal court held that the plaintiff was precluded from re-litigating issues that had been litigated in the state court. (20) The Supreme Court based its preclusion decision on the federal full faith and credit statute:

   At base, petitioners' claim amounts to little more...