Supreme Court Will Review Fifth Circuit Ruling that Creates a Catch-22 for Takings Claims Against State Governments

The badly flawed lower court ruling defies the Supreme Court's landmark 2019 decision forbidding such Catch-22 traps, and threatens the property rights of large numbers of people.

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Today, the Supreme Court agreed to hear Devillier v. Texas, an important takings case. Together with the Cato Institute, I filed an amicus brief urging the Court to take and reverse this terrible decision by the US Court of Appeals for the Fifth Circuit. I hope they will now do exactly that!

I previously wrote about the issues at stake in this case here:

In its important decision in Knick v. Township of Scott (2019), the the Supreme Court reversed Williamson County Regional Planning Commission v. Hamilton Bank, a 1985 decision that made it almost impossible to bring takings cases against state and local governments in federal courts….

In a forceful opinion for the Court, Chief Justice John Roberts denounced this "Catch-22" and emphasized that "[a] property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it…."

Access to federal court is crucial to protecting constitutional rights against violation by state and local governments….

Unfortunately, a recent decision by the US Court of Appeals for the Fifth Circuit (which covers the states of Texas, Louisiana, and Mississippi) goes against the principles outlined in Knick and threatens to create a new Catch-22 keeping takings claims out of federal court.

In Devillier v. Texas,…. a Fifth Circuit panel ruled that federal courts have no jurisdiction to hear takings claims against state governments because the Fifth Amendment doesn't create such jurisdiction, and there is no federal statute establishing it either….

What the court says is simply false. The Fifth Amendment does indeed create a "direct cause of action" against state governments, no less than other provisions of the Bill of Rights do. Nothing in the text or original meaning of the Constitution suggests otherwise….

Even worse, the Fifth Circuit ruling creates precisely the kind of Catch-22 that Knick forbids. Indeed, it may be even worse! This case ended up in federal court in the first place, because—after the plaintiffs initially filed in state court—the state of 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."

Under the approach adopted here by the Fifth Circuit, takings claims against state governments cannot be brought in federal court. And if they are instead brought in state court, the defendant state can remove them to federal court and then force their dismissal!….

This is actually even worse than the Williamson County regime, under which takings claims could at least be litigated in state court (though some lower courts did permit the kinds of removal shenanigans the Fifth Circuit blessed here).

If the Supreme Court upholds the terrible lower court ruling, it would essentially give state governments a ready-made path to taking private property without having to pay compensation, as the Fifth Amendment requires. They could simply follow Texas' example of removing Fifth Amendment takings cases to federal court and then getting them dismissed under 28 U.S.C. Section 1441.

The flaws of the Fifth Circuit ruling are covered in greater detail in my earlier post about this case, and in our amicus brief urging the Supreme Court to hear the case. The Cato Institute and I will likely be filing another amicus brief on the merits, now that the justices will be hearing the case.