In PA takings case, US Supreme Court rejects legal basis for 5-year City defense of Footing Drain Disconnection Program; High Court overturns both pillars of City case and Sixth Circuit judgement against homeowners

5-4 majority opinion by Chief Justice Roberts gives FDD homeowners a big win

Lumbard class action appeal heads to US Supreme Court; Reasons for cautious optimism at the Supreme Court

I reported in my earlier post about the Knick v Township of Scott case, in which the only two precedents supporting the City’s FDD arguments and the favorable opinion it obtained in the Sixth Circuit of Appeals were in deep jeopardy in the United States Supreme Court.

I’m pleased to report that the decision in Knick was handed down on June 21, 2019 and FDD homeowners in Ann Arbor had a big win. The United States Supreme Court exceeded our expectations and threw out both cases that were used by the City and its lawyers in tandem to “preclude” the Class Action Plaintiffs from a single day in federal court. The Court’s decision is a game changer for litigation on behalf of FDD homeowners in Ann Arbor.

Chief Justice Roberts Writes for 5-4 Majority

Chief Justice Roberts wrote the opinion in Knick and summed up the problems faced by the class plaintiffs in the FDD litigation since 2014 in a few paragraphs:

The Takings Clause of the Fifth Amendment states that “private property [shall not] be taken for public use, without just compensation.” In Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), we held that a property owner whose property has been taken by a local government has not suffered a violation of his Fifth Amendment rights—and thus cannot bring a federal takings claim in federal court—until a state court has denied his claim for just compensation under state law. 

Williamson is the only reason the FDD plaintiffs were forced to litigate first in state court, on the City’s home court. 4 years of difficult, expensive and ultimately pointless state court proceedings, or even one day, would not have occurred but for the Williamson case. Without that case, the FDD claimants would have filed and stayed in an independent federal court, before a life-tenured US District Judge, from day 1. The FDD Class Plaintiffs obeyed Williamson to the letter in state court. We did exactly as Justice Roberts describes above.

The Chief Justice says this was supposed to be the end of the burden of state litigation on the municipality’s home court:

The Williamson County Court anticipated that if the property owner failed to secure just compensation under state law in state court, he would be able to bring a “ripe” federal takings claim in federal court.

Instead, as Justice Roberts explains, the plaintiff in Knick–exactly like the FDD Class Plaintiffs–were intentionally deprived of a day in federal Court. That was precise objective of the City and its lawyers in the FDD litigation.

But as we later held in San Remo Hotel, L. P. v. City and County of San Francisco, 545 U. S. 323 (2005), a state court’s resolution of a claim for just compensation under state law generally has preclusive effect in any subsequent federal suit. The takings plaintiff thus finds himself in a Catch-22: He cannot go to federal court without going to state court first; but if he goes to state court and loses, his claim will be barred in federal court. The federal claim dies aborning.

As stated, that was the whole point of the City’s litigation strategy in the FDD cases. In Knick, however, the City’s strategy (while still in progress) was finally under the microscope of the only court with the power to rid the law of the Williamson/San Remo “Catch-22.” Justice Roberts did not pick nits in response:

The San Remo preclusion trap should tip us off that the state-litigation requirement rests on a mistaken view of the Fifth Amendment. The Civil Rights Act of 1871, after all, guarantees “a federal forum for claims of unconstitutional treatment at the hands of state officials,” and the settled rule is that “exhaustion of state remedies ‘is not a prerequisite to an action under [42 U. S. C.] §1983.’” Heck v. Humphrey, 512 U. S. 477, 480 (1994) (quoting Patsy v. Board of Regents of Fla., 457 U. S. 496, 501 (1982)). But the guarantee of a federal forum rings hollow for takings plaintiffs, who are forced to litigate their claims in state court.

[Emphases added.] That is exactly what happened to the FDD Class Action Plaintiffs and the class of FDD homeowners in federal court in January.

Justice Roberts went even further than we had hoped. The Court overturned Williamson and the whole case argued by the Township:

We now conclude that the state-litigation requirement imposes an unjustifiable burden on takings plaintiffs, conflicts with the rest of our takings jurisprudence, and must be overruled. A property owner has an actionable  Fifth Amendment takings claim when the government takes his property without paying for it. … [T]he property owner has suffered a violation of his Fifth Amendment rights when the government takes his property without just compensation, and therefore may bring his claim in federal court under §1983 at that time.

The Court stated that Fifth Amendment takings claims that had been made a “stepchild” of the Bill of Rights were now “restored.” I and my co-counsel, Dan O’Brien, Esq., have represented the Class Plaintiffs in the Lumbard litigation as they went through the Williamson and San Remo processes and its indignities, now banished from the legal system entirely. We will continue to represent them vigorously and zealously. Their case is brought on their own behalf and on behalf of all owners of homes where the City completed mandatory footing drain disconnections under the Footing Drain Disconnection Program.

City and Mlive Reports of the death of the FDDP Class Action were premature

In January, Mlive’s coverage of the Sixth Circuit’s decision featured the City’s supposed big win, commentary by the City Attorney, and an obituary for the FDD Class Action. Knick in a legal instant (“eo instante“) left the City’s case in ashes and “restored” the rights of of owners of FDD homes to file their federal claims before an independent federal court in the first place. We have no plans for any further proceedings in state court.

FDD Federal Class Action heads to US Supreme Court

We are in the midst of preparing a Petition for Supreme Court review in the Lumbard case–the one currently in court. This is an important step. The due date for filing is now July 29, 2019, two weeks away. The City will have 30 days to respond to the Petition, if the City wishes to respond at all.

Lumbard is among a very few federal “preclusion” cases that were decided under Williamson/San Remo while the plaintiffs were waiting for Knick to come down, including us. One of the other plaintiffs whose case is in that posture, from the Ninth Circuit, to petitioned the Court for review, arguing the case would come out in his favor if Knick were applied.

The Court quickly granted the Petition, reviewed the case, and summarily “vacated” (wiped out) the judgement of the Ninth Circuit. The case was returned to federal court for proceedings “not inconsistent” with Knick, which is now the Law of the Land. There is reason for some cautious optimism about the Court’s treatment of the FDD Class Action Plaintiffs’ Petition.

Irvin Mermelstein



Please leave a comment. Commenting is moderated.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s