This Thursday (February 2), my dad and I have the privilege of presenting with Steve Davis of True North Law, LLC at the ALI CLE Eminent Domain and Land Valuation Litigation conference in Austin, Texas. Our topic: “What does it mean when the Supreme Court says that just compensation is ‘self-executing?’”
The topic is interesting and relevant to many ongoing cases, so I decided to describe it in a brief blog.
Background on the “self-executing” just compensation requirement: One of the unique aspects of the Takings Clause is that it is the only reference in the Constitution to a monetary remedy. (As a bit of trivia, the Suspension Clause is the only other provision that refers to a remedy, and that remedy is habeas corpus.) The structure and purpose of the Takings Clause explain the need for this (unique) remedy. The Takings Clause does not restrict government entities from taking private property where necessary for a public use. Instead, it mandates that as a condition of taking the property, the government entity compensates the property owner with just compensation. That compensation is necessary to ensure that the condemned property owners not bear the burden of the taking on behalf of the public at large, which by definition enjoys the benefit of the taking.
Based on the text and purpose of the Takings Clause, you would think that all property owners whose land is taken for a public use should be able to obtain just compensation. Indeed, by my count, the Supreme Court has referred to the Just Compensation Clause—i.e., the part of the Takings Clause that specifies that there be no taking “without just compensation”—as “self-executing” six times in the past 50 years. See Knick v. Twp. of Scott, 139 S. Ct. 2162, 2171 (2019); First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 315 (1987); United States v. Clarke, 445 U.S. 253, 257 (1980); Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 5 n.6 (1984); San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 654 (1981); United States v. Testan, 424 U.S. 392, 401 (1976). Normally, you would expect a “self-executing” provision to have immediate legal effect and not require implementing legislation.
It is therefore surprising that barriers often prevent property owners—including ones that have established a taking and won a judgment in court—from actually obtaining just compensation. As I explain below, even though the Supreme Court has repeatedly professed that the Fifth Amendment guarantee of just compensation is “self-executing,” lower courts have routinely qualified that right.
Here are a few notable examples:
Municipal bankruptcies: As the first example, there is currently a circuit split regarding whether claims for just compensation may be discharged in municipal bankruptcies.
In In re City of Stockton, 909 F.3d 1256 (9th Cir. 2018), the Ninth Circuit rejected a property owner’s objection to the inclusion of his ongoing state court claim for just compensation in the City of Stockton’s Chapter 9 bankruptcy. As relevant here—in what the court described as an “alternative holding,” but, as a practical matter, is technically dicta—the court found that the property owner’s claims failed because the right to just compensation is similar to the right for any other statutory or contractual claims for monetary relief, which are dischargeable in bankruptcy.
By contrast, in In re Financial Oversight and Management Board, 41 F.4th 29 (1st Cir. 2022), a case involving Puerto Rico’s bankruptcy, the First Circuit expressly came to the opposite conclusion. In rejecting the Ninth Circuit’s reasoning, the First Circuit theorized—at least in part—that the “self-executing” nature of the Just Compensation Clause means that it cannot be discharged like unsecured debt from judgments in contract or tort cases.
The merits of this decision aren’t the focus of this blog, but I firmly believe that the First Circuit got this one right. The Constitution grants Congress the right to enact bankruptcy laws, see U.S. Const. art. I, § 8, cl. 4, but that does not mean that those laws can supersede other “limitations placed by the Constitution on governmental action,” including “the relevant limitations of the Bill of Rights,” Barenblatt v. United States, 360 U.S. 109, 112 (1959). In my view, bankruptcy laws should therefore be subject to the Takings Clause’s just compensation requirement (and would be even if the requirement weren’t “self-executing”).
Enforcing judgments for just compensation: Another live example in which the “self-executing” nature of the just compensation requirement came into focus was in Ariyan v. Sewerage & Water Board of New Orleans, 29 F.4th 226 (5th Cir. 2022). As background, Louisiana has a constitutional provision that allows property owners to sue for inverse takings but requires them to obtain legislative appropriations to collect on their judgments.
In Ariyan, several landowners with judgments against Louisiana—which the state refused to pay—sued in federal court, arguing that it was a taking of their just compensation rights. The notion of the Just Compensation Clause as a “self-executing remedy”—as the Supreme Court has repeatedly described it—would lead one to believe that the state would be forced to pay, but that was not the case in practice. Instead, the Fifth Circuit ruled that, essentially, the plaintiffs were suing not to enforce the Just Compensation Clause but to enforce the state court judgment. Based on my reading of the opinion, the panel did not squarely address the property owners’ argument that a judgment for just compensation is unique from other state court judgments (for example, judgments in contact or tort cases) because just compensation is “self-executing.”
Whether the Takings Clause provides a private right of action: Finally, other recent cases have centered around whether the Fifth Amendment provides a basis to sue in federal court.
In Brott v. United States, 848 F.3d 425 (6th Cir. 2017)—a case our co-presenter Steve worked on and will discuss in detail at the conference—the Sixth Circuit ruled that “the fact that the Fifth Amendment creates a ‘right to recover just compensation,’ … does not mean that the United States has waived sovereign immunity such that the right may be enforced by suit for money damages.” (quoting First English, 482 U.S. at 315).
And, more recently, in Devillier v. Texas, 53 F.4th 904, 904 (5th Cir. Jan. 10, 2023), the Fifth Circuit—in a single sentence—ruled that the Takings Clause (as applied to states through the Fourteenth Amendment) does not provide a right of action for takings claims against a state. In reaching that decision, the Fifth Circuit frustratingly failed to address the lower court’s thoughtful explanation for reaching the opposite conclusion. It is worth noting that the posture in Devillier was unique: The lower court ruled that the state waived its sovereign immunity from suit by removing the case to federal court and waived its sovereign immunity from liability through its state constitution. If anything, that case presented a prime opportunity to weigh in on the issue we now discuss.
Based on the above examples, it is clear that lower federal courts have not agreed that the just compensation requirement is “self-executing” in the traditional sense. Perhaps in a subsequent blog I will explain in more detail the contexts in which the Supreme Court has described the just compensation requirement as “self-executing” and what I think that means moving forward.