Last month, a petition for writ of certiorari was filed with the U.S. Supreme Court, asking the Court to revisit a 30-year-old doctrine that makes it difficult for private landowners to bring inverse condemnation and regulatory takings claims.  Under current doctrine, to obtain compensation for government actions that take property or deprive property of value, a plaintiff must first exhaust state administrative and judicial remedies before filing a claim in federal court.  In effect, this doctrine has prevented property owners from seeking compensation from local governments that take property or impair property values.  If the Court grants the petition in Arrigoni Enterprises, LLC v. Town of Durham, private landowners could get another chance to bring their claims for compensation in the federal courts.

The Fifth Amendment to the U.S. Constitution requires the government to compensate landowners whenever it takes private property for public purposes.  The compensation requirement extends to direct appropriations of property—say, condemnation actions for right-of-way or park purposes—and also to government actions that, in their effect, deprive private landowners of property rights or value.  The latter form of takings is called “inverse condemnation,” or alternatively, a “regulatory taking.”  Inverse condemnation occurs when the government appropriates property without compensating the landowner.  A regulatory taking occurs when the government regulates the use and development of property, perhaps through zoning laws, in a manner that deprives property of all economic value—for example, restricting property solely for open space purposes—or so limits the property’s value so as to interfere with the investment-backed expectations of the owner.  A third, related category of takings occurs when the government conditions the issuance of a permit on a landowner’s giving up of property, money, or services.

Arrigoni Enterprises asks the Court reconsider the doctrine established in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City.  In Williamson County, the Supreme Court denied a landowner’s claim for compensation following a denial of a development permit by a local planning commission, finding the case unripe.  The ripeness doctrine requires a case to have reached a point in the applicable controversy, where an injury has actually occurred, such that the court can and should decide on the matter.  In Williamson County, the Supreme Court found the case unripe because the landowner had not sought compensation through the procedures provided by the state, i.e., the landowner did not sue the planning commission in state court to seek compensation.

Since Williamson County, landowners cannot seek compensation in federal court for an inverse condemnation or regulatory taking until they exhaust all state judicial remedies to obtain compensation.  This doctrine creates a significant hurdle.  In Colorado, for example, a landowner who believes that his or her property has been deprived of value by local government action would, under Williamson County, be required to pursue relief from the local government, perhaps through a rezoning or variance, and if unsuccessful there, bring an action in state district court.  If that fails, the landowner would then be required to appeal the district court’s decision to the Colorado Court of Appeals.  Then, if unsuccessful at the Court of Appeals, the landowner could bring a claim in federal district court only after being denied either compensation or certiorari by the Colorado Supreme Court.  And even then, some federal courts find that rehearings of state court decisions on such cases are barred by the doctrine of res judicata. In essence, Williamson County requires a landowner to proceed through an uncertain and potentially years-long legal battle before a claim can be filed in federal court to vindicate the right to compensation provided by the Federal Constitution.

Arrigoni Enterprises is emblematic of these cases.  In 2005, Arrigoni Enterprises, a small, family-owned company that owns a 9-acre parcel of land in Durham, Connecticut, sought to use its property for extraction and industrial purposes.  After being denied a rezoning and a subsequent denial of a special use permit to conduct the foregoing activities, Arrigoni filed an appeal of the denials in Connecticut Superior Court.  In February 2007, the Superior Court upheld the permit denials.  Arrigoni sought, but was denied, certification of the case before the Connecticut Court of Appeals.  Arrigoni went back to the town in 2007 to obtain a variance for the use of its property, and was again denied.  Subsequently, Arrigoni filed suit in federal district court on several grounds, including Arrigoni’s claim that it been denied just compensation for a taking of its property.  The district court dismissed Arrigoni’s takings claim, finding that Arrigoni had not pursued compensation in state court apart from its appeal of the 2005 permit denial.  Arrigoni then appealed the district court’s decision, and the Second Circuit Court of Appeals affirmed in October 2015.  The cert petition followed.

As the circuitous path of Arrigoni Enterprises demonstrates, the length and difficulty of establishing a ripe claim for relief acts bars many landowners who might have a claim for compensation from seeking judicial relief.  As of this writing, the Supreme Court has not decided on whether to grant the petition for certiorari.  Several public interest organizations have provided amicus curiae briefs in the case, and many conservative, pro-property rights organizations are encouraging the Court to take up the matter in the hope that the Court’s conservative majority might be willing to relax the Williamson County prudential barriers.  If the Court were to overturn Williamson County, it would provide a likely boon to private landowners while creating potentially significant liability for local governments that impose permitting conditions or highly-restrictive zoning regulations.

More information on Arrigoni Enterprises can be found here.