May 16, 2014

In a new victory, court blasts rules barring court access for property owners

By J. David Breemer Senior Attorney

Today, the Second Circuit Court of Appeals issued a favorable published decision in Sherman v. Town of Chester, a case in which PLF filed an amicus brief.  In the case, a New York Town gave a property owner the run-around on his development plans for a decade, changing the rules every time he presented a plan for formal decision. When the owner claimed he suffered an unconstitutional taking in state court, the Town transferred the case to federal court, and then argued the federal court could not hear it because (1) the Town had never actually said “no” (it simply refused for years to hold a hearing on Sherman’s plans) so there was no plan rejection for the Court to review, and (2) the case should be in state court– where it was before the Town had it transferred.

Today’s decision rejects the Town’s shell-game arguments, and holds that Sherman has a valid takings claim. At heart, it confirms what PLF has been saying for decades:  property owners must have their constitutional rights vindicated by federal courts without being forced to go through expensive, time-consuming and grossly unfair procedural hoops– barriers no other plaintiffs have to endure.

To understand this case and the importance of the new opinion, we must return  for a moment to Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. at 185 (1985), perhaps the most non-sensical Supreme Court property rights decision of the modern era.   Williamson County held that property owners who have had their property taken without compensation, in violation of the Fifth Amendment, cannot ask for federal court protection until they first show the government made a formal “final decision,” and then unsuccessfully spend years and great amounts of money litigating in state court for relief under state law.

Only when the property owner seeks, and fails to gain, relief through the local administrative process and state court process is he supposedly allowed to claim the protection of the Fifth Amendment in a federal court.  In practice, this scheme completely prevents property owners from having meaningful access to the federal courts, so they get relegated to the state court system. No other class of federal constitutional claimants is treated this shabbily.  Congress passed a civil rights statute (42 U.S.C. Section 1983) more than a century ago that made the federal courts the primary guardian of all federal constitutional rights — in order to protect citizens from the local biases of state courts. But many property owners are reduced to the status of state court beggars to this day thanks to Williamson County.

Indeed, government defendants have learned to wield Williamson County’s “final decision” and “state litigation” rules as a sword to defeat takings claims without ever having to answer for invading or over-regulating property.  In this case, for instance, after the Town denied Sherman  the use of his property by refusing to make a formal decision on his plan,  it tried  to claim immunity from his takings claim on the ground that its refusal to decide meant there was no ripe “final decision.”  Even more incredibly, after the Town took the case out ofstate court and to federal court, it argued that it was not ripe in federal court since Sherman did not finish the state court process — precisely because the Town had it transferred away before he could!

For many years, PLF has led a counter-attack against such bizzare and unfair barriers to federal court protection, attempting to get the underlying ripeness rules reversed or severely diluted.  In recent years, this effort has met with great success, some of which is catalogued in a new PLF law review article on the subject.

In Sherman’s case, PLF argued as amicus that the government cannot use “unfair and repetitive” administrative procedures to avoid a final and ripe decision, and a takings challenge against its property limitations. PLF also alone argued that the government loses its right to argue that a case should be in state court, rather than federal court, when it voluntarily takes a case out of state court. Today, the Second Circuit adopted both positions in a precedential opinion.  In so doing, it joined other recent PLF victories, such as last year’s decision in Sansotta v. Town of Nags Head, in limiting the effect of Williamson County. After holding Sherman’s claim ripe, the federal court did what it is supposed to do: it recognized the validity of Sherman’s takings claim on the merits.

We are watching the slow death of Williamson County. And with its demise, property owners are finally regaining the ear of the federal courts, and a real opportunity to protect their constitutional rights.

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