Victory for Property Rights at U.S. Supreme Court?

By Daniel J. Cragg

Last week, the U.S. Supreme Court handed a loss to beach front property owners in Florida, but the Court’s conservative wing’s plurality opinion from Stop the Beach Renourishment, Inc. v. Florida Dept. of Environmental Protection may portend increased involvement of the Federal courts in the protection of state law created property rights.  Although the case was a loss for the property owners involved, it represents a victory for property owners in general.

At issue in the case was whether a judicial decision could ever amount to a taking of private property without just compensation, within the meaning of the Fifth Amendment to the U.S. Constitution, which is incorporated against the States by the Fourteenth Amendment.  Justices Scalia, Alito, Thomas and the Chief Justice all answered this question in the affirmative, and, in an opinion written by Justice Scalia, held “the Takings Clause bars the State from taking private property without paying for it, no matter which branch is the instrument of the taking.”

Justice Kennedy, joined by Justice Sotomayor, did not believe that Fifth Amendment Takings analysis should apply to judicial decisions, but instead would resolve such issues under due process principles.  Justice Breyer, joined by Justice Ginsberg, demurred entirely from the question of judicial takings under both takings and due process analyses, yet he still held that the Florida Supreme Court did not take the petitioner’s property.  How he arrived at that conclusion without knowing how to analyze the issue is a bit of a mystery.  Justice Stevens took no part in the decision.

In the majority portions of the Court’s opinion written by Justice Scalia, all eight Justices held that there was no taking in the case because the Florida Supreme Court’s decision did not eliminate an established property right, meaning the Florida Supreme Court’s decision was consistent with its prior cases defining the nature and scope of the property rights at issue.  This “established rights” test was explicated by Justice Scalia’s plurality opinion, which four Justices supposedly rejected.  Like most fractured Supreme Court opinions, Stop the Beach Renourishment, Inc., is a grab bag of analytical tests and principles that litigants from every side of the argument will cite to until further clarification is received from the courts.

To those familiar with so-called “inverse condemnation” claims, where a property owner claims government action has worked an indirect taking of his property and seeks a court order requiring the government to purchase the property, the Scalia plurality opinion’s dicta on procedural issues may seem puzzling, as he indicated that the inverse condemnation remedy would not apply to so-called judicial takings of property.  Rather, the remedy would be reversal of the judgment that worked the taking, and all non-parties affected by the ruling would be able to pursue claims in federal court, “to the same extent that [they] would be able to challenge…a legislative or executive taking previously approved by a state supreme-court opinion.”

It is not clear that there is any “extent” to which an aggrieved property owner could pursue a Takings claim in Federal court, because the lower Federal courts have uniformly held that no Federal right is violated by the mere taking of private property, but rather only by the failure to pay compensation for the taking.  Furthermore, the Federal courts generally require an aggrieved property owner to pursue a claim for inverse condemnation in State court to determine whether just compensation should be paid and in what amount, before the State has been deemed to have failed to pay just compensation in violation of the Fifth Amendment.

Inverse condemnation suits result in a final State court judgment, and, under the Rooker-Feldman doctrine, which Justice Scalia acknowledged, the lower Federal courts are prohibited from reviewing – essentially acting as an appellate court – the final judgments of State courts.  In States that recognize inverse condemnation or a similar remedy, this prevents Fifth Amendment Takings cases from ever being heard in a Federal court other than the Supreme Court.

Even assuming a majority of the Supreme Court recognizes (or recognized) the concept of a judicial taking, it remains an open question as to what the remedy will be for all affected property owners.

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