Caseflicks

Supreme Court of the United States • 1985

Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City

473 U.S. 172 | 105 S. Ct. 3108 | 87 L. Ed. 2d 126 | 1985 U.S. LEXIS 87 | 53 U.S.L.W. 4969

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Takeaway

In short, this case made regulatory-takings claims subject to two ripeness requirements: the land-use authority must have made a final decision on permitted development, and the owner must first seek compensation through adequate state procedures.

Background

Hamilton Bank acquired, through foreclosure, the undeveloped portion of the Temple Hills residential subdivision in Williamson County, Tennessee. The subdivision's developer had obtained approval of a preliminary plat in 1973 under then-existing cluster-zoning rules, had constructed substantial infrastructure and a golf course, and had obtained final approval for some sections. The 1973 preliminary plat contemplated 736 units, although it left some future-development parcels unplatted.

After the county changed its zoning and subdivision rules, the Planning Commission required a revised preliminary plat. The Commission ultimately rejected Hamilton Bank's proposed plan for the undeveloped land, citing eight defects, including density calculations, steep slopes, cul-de-sac length, road grades, lot frontage, road maintenance, fire protection, and open-space concerns. The bank did not formally seek the available variances from the zoning and subdivision requirements.

The bank brought a federal action under 42 U.S.C. § 1983, alleging that the Commission had temporarily taken its property without just compensation and asserting a state-law estoppel claim. Its experts maintained that compliance with all of the Commission's objections would permit only 67 units and produce a loss; the Commission's expert testified that roughly 300 units could be developed. A jury found a taking and awarded $350,000 for the temporary deprivation. The District Court entered an injunction requiring application of the 1973 rules but granted judgment notwithstanding the verdict on the taking claim. The Sixth Circuit reinstated the jury's award, holding that a temporary regulatory denial of economically viable use could be a compensable taking.

Issues

Issue #1

Whether Hamilton Bank's regulatory-takings claim was ripe when it had not sought available variances from the zoning and subdivision requirements.

Holding

No. The Commission had not made a final, definitive decision about the uses permitted on the bank's property, so the takings claim was premature.

Reasoning

A claim that land-use regulation effects a taking is not ripe until the government entity responsible for applying the regulation has reached a final decision about how the regulation applies to the particular property. The Court relied on its prior decisions requiring a concrete application of land-use restrictions before courts can assess a claimed taking.

The Commission's denial of the proposed plat was not a final determination that the bank could not develop the property in a profitable way. Tennessee's Board of Zoning Appeals could grant variances from zoning requirements, including density and slope restrictions, and the Planning Commission could grant variances from subdivision requirements, including cul-de-sac length, road-grade, and frontage rules.

The bank had not pursued those variance procedures. It neither applied to the Board for zoning variances nor submitted the written, noticed applications required for subdivision variances. Its position that it could address variances only after preliminary-plat approval was incompatible with the Commission's rules, which made the absence of a requested variance a ground for disapproving a plat.

Finality, the Court emphasized, is distinct from exhaustion of administrative remedies. Section 1983 generally does not require a plaintiff to exhaust remedial administrative or judicial review procedures, but a variance request is not merely an appeal of an already complete injury. It is part of the process by which the initial decisionmaker determines what development the landowner may actually undertake.

Without decisions on the available variances, a court could not measure the regulation's economic impact or its interference with reasonable investment-backed expectations. The jury knew only that the bank's plan would be unprofitable if every one of the Commission's eight objections remained in force; it could not determine the effect of granting one or more variances.

Issue #2

Whether a state takings claim is ripe in federal court when the landowner has not used an adequate state procedure for obtaining just compensation.

Holding

No. Because Tennessee provided an adequate inverse-condemnation remedy, the bank could not allege a violation of the Just Compensation Clause until it sought compensation through that procedure and was denied it.

Reasoning

The Fifth Amendment does not prohibit government from taking property; it prohibits taking property without just compensation. The Constitution does not require payment before, or at the moment of, a taking, so long as the government provides a reasonable, certain, and adequate means of obtaining compensation.

Accordingly, a property owner has no completed federal Just Compensation Clause claim if an adequate state compensation procedure remains available. The constitutional injury arises only if the State fails to provide just compensation through that procedure.

Tennessee authorized inverse-condemnation actions for property owners whose property was taken without formal eminent-domain proceedings. Tennessee courts had construed that remedy to reach alleged takings caused by restrictive zoning or development regulations. The bank had not shown that this remedy was unavailable or inadequate and had not attempted to use it.

Issue #3

Whether the Court should decide whether a temporary regulatory deprivation is a compensable Fifth Amendment taking, or instead a due-process violation remediable by invalidation of the regulation.

Holding

No. The Court declined to decide the substantive takings and damages questions because the claim was premature under either theory.

Reasoning

The parties urged competing constitutional frameworks. Under one view, a regulation that goes too far is a taking that may require just compensation, including damages for a temporary taking. Under the alternative view, excessively burdensome regulation is an invalid exercise of the police power under the Due Process Clause, ordinarily remedied by invalidation rather than compensation.

The Court found it unnecessary to choose between those theories. Both require a determination of the actual effect of the land-use restrictions on the property's value and on the owner's reasonable investment-backed expectations. Because the bank had not obtained a final decision on variances, that effect could not yet be determined.

The Court therefore reversed the Sixth Circuit without deciding whether regulatory action can constitute a compensable temporary taking, whether damages are constitutionally required for such a taking, whether the bank had a protected expectation interest, or whether the jury's damages measure was proper.

Concurrences

Justice Brennan

Reasoning

Justice Brennan joined the Court's opinion because the Commission's plat denial was not final and because the bank had not pursued Tennessee's inverse-condemnation remedy. On those facts, no ripe takings claim existed.

He reaffirmed, however, his view from his San Diego Gas dissent that once a court establishes a regulatory taking, the Constitution requires compensation for the period during which the regulation deprived the owner of property rights. In his view, later invalidation or repeal of the regulation alone would not compensate the owner for losses sustained during that period.

Justice Stevens

Reasoning

Justice Stevens agreed only in the judgment and drew a sharper distinction between permanent and temporary harms caused by land-use regulation. A regulation may impose a permanent harm that government cannot impose at all, may impose only if it pays compensation, or may impose without compensation. The case was unripe as to any asserted permanent harm because the ultimate permissible scope of development remained unsettled.

He rejected the premise that every temporary loss caused while government and a landowner resolve a land-use dispute is a temporary taking. A true temporary taking involves a deliberate, time-limited appropriation of property for public use, such as a formal condemnation of a business or leasehold for a fixed period.

By contrast, delay, expense, and lost returns resulting from a good-faith regulatory dispute are ordinarily unavoidable costs of a regulated society. They do not become constitutional takings merely because the property owner later prevails on some aspect of the dispute, provided that the government used fair procedures.

The jury had found no procedural-due-process violation, and there was no evidence that the Commission deliberately appropriated the bank's property for public use. For Justice Stevens, those points independently defeated the bank's claim for damages based on the temporary harm caused by the regulatory controversy.

Dissents

Justice White

Reasoning

Justice White dissented from the Court's conclusion that the issues were unripe. He did not issue a separate opinion elaborating his reasoning, but his dissent rejected the majority's disposition that the bank's failure to pursue further variance and compensation procedures prevented judicial resolution at that time.