Today the Supreme Court heard oral argument in Devillier v. Texas, an important Takings Clause property rights case. Based on what was said, I think it very likely that the property owner will win, and that the outcome will be a significant victory for property rights generally. I previously wrote about this case here, and in an amicus brief I filed along with the Cato Institute.
The main issue at stake is whether state governments can evade liability for violating the Takings Clause of the Fifth Amendment merely because Congress has not enacted a statute specifically giving property owners the right to sue over such issues in federal court. In this case, the state of Texas flooded Mr. Devillier's ranch as a result of a highway project. When he filed a takings claim in state court, Texas removed the case to federal court under 28 U.S. Code Section 1441, which allows defendants to remove to federal court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." They then persuaded the US Court of Appeals for the Fifth Circuit to dismiss the case on the ground that it could not be brought in federal court because Congress hadn't enacted a statute allowing property owners to do so. If allowed to stand, this maneuver creates a Catch-22 under which states can evade takings liability by removing cases to federal court and then having them dismissed. Alternatively, a "rogue" state can simply choose not to allow such claims to be brought in its state courts in the first place.
As explained in our amicus brief and my first post about this case, the Supreme Court had already signaled such a Catch-22 barring takings claims from federal court is impermissible in its 2019 ruling in Knick v. Township of Scott. If today's oral argument is any indication, the justices are not going to allow Texas to bring back the Catch-22 in even more egregious form than the one it abolished in Knick.
Multiple justices suggested that they are not willing to accept the approach taken by the brief and cursory Fifth Circuit ruling. Chief Justice Roberts noted that Texas' position creates "a Catch-22… you say they have to proceed in—in state court. They can't proceed in federal court. And as soon as they do, you remove it to federal court under 1983, where you say they can't proceed?" He added that sort of reasoning was "rejected in Knick."
Liberal Justice Elena Kagan asked Texas Solicitor General Aaron Neilson whether there is "an ongoing violation of the Constitution" in a case where the state has taken private property and refused to compensate the owner. Neilson had to concede there was, to which Kagan followed up by asking: "[s]o aren't courts supposed to do something about that?" Neilson didn't have a good answer.
Even Justice Sotomayor, usually the justice least sympathetic to Takings Clause rights, seemed frustrated by Texas' tactics, telling Neilson that "This seems to me like a totally made-up case because they [the property owners] did exactly what they had to do under Texas law. It's you who are telling me—it's almost a bait and switch [because Texas removed the case to federal court and then claimed it had to be dismissed]."
Various justices raised the issue of "rogue states," which do not grant state court remedies for at least some Takings Clause violations. Under Texas' and the Fifth Circuit's reasoning, there would be no compensation available for property owners in such cases. And, as Devillier's counsel Robert McNamara noted, "the rogue state example is not a hypothetical. It's a real example because state after state has looked to federal law… as the thing that prevents the state from denying compensation. That's true in Oregon, as I mentioned, but also New Mexico, South Carolina, Nebraska, the list goes on of states that provide compensation under the Fifth Amendment because they understand the Fifth Amendment to require compensation."
As noted in our amicus brief, that the state of Louisiana—which, like Texas, is also in the Fifth Circuit—is another such "rogue" state. More generally, lots of state governments would be happy to avoid takings liability in many cases, if they could do so.
Both Texas and the federal government (represented by experienced Justice Department takings expert Edwin Kneedler) argued that even if compensation is not available, property owners could still seek relief by injunction. But, as Justice Kagan pointed out, the Takings Clause is different from many other constitutional rights because the text of the Fifth Amendment specifically mandates "just compensation." And the Supreme Court has repeatedly ruled that monetary compensation is the standard remedy for Takings Clause violations.
In many cases, compensation is the only possible remedy for the violation of the property owner's Takings Clause rights, as there is no way to address it by an injunction. For example, Justice Amy Coney Barrett noted that an injunction couldn't fix a "temporary taking" where the government has temporarily taken an owner's property, but then stopped. I would add the same is true of cases where the government has destroyed or damaged the owner's property—as in Devillier itself. Short of inventing a time travel device and going back in time, Texas cannot undo the flooding of Devillier's land. The only possible remedy for that violation of his rights is the payment of compensation.
Looking at the oral argument, I think it highly likely the Supreme Court will reverse the Fifth Circuit. At the very least, they will forbid the Catch-22 under which Texas' removed the case from state court and then got it dismissed in federal court. It is less clear whether they will go further than that and rule that takings claims can be brought directly in federal court, regardless of whether there is also a state court remedy available. But requiring property owners to go to state court first (if possible) would replicate for claims against states the regime the Court rejected in Knick, when it comes to local government. I think, but cannot be certain, that a majority of justices won't want to do that. And they shouldn't!
It's also not clear what the vote in the Supreme Court will be. Based on their comments at oral argument and votes in previous takings cases, I think all or nearly all the conservative justices will vote to reverse the Fifth Circuit (I am not fully certain about Justice Alito). Among the liberal justices, Kagan also seems likely to vote to reverse. Justice Sotomayor at least seems unwilling to accept the Catch-22 Texas is trying to exploit. But she may prefer a reversal on as narrow grounds as possible. It's not clear to me where Justice Ketanji Brown Jackson will end up. But she may be the justice most likely to vote to just affirm the Fifth Circuit.
Ultimately, the key issue in this case should be an easy one. As Justice Kagan put it, an uncompensated taking of private property is an "ongoing violation of the Constitution." And when that happens, the courts are "supposed to do something about that."
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