"Property Rights" Bills Take a Process Approach:
H.R. 992 and H.R. 1534

97-877 A

Contents for this section

House-passed H.R. 1534 and Senate-reported H.R. 1534: lowering abstention and ripeness hurdles

Description of bills
Issues raised by the bills

Description of bills

To address the foregoing issues, the H.R. 1534 bills lower the abstention and ripeness barriers in federal court. (Congress may be prohibited constitutionally from lowering them in state courts.) At the same time, they expressly disavow any intent that their key provisions alter the substantive law of takings. As noted, H.R. 1534 applies to federal-court suits against both local governments and the United States. (See Endnote 78.)

Claims against local governments: abstention. H.R. 1534 instructs that in actions under the jurisdictional provisions of 28 U.S.C. Section 1343(a) -- which applies to 'section 1983" and other civil rights statutes -- a federal district court may not abstain from exercising its jurisdiction if the use of real property is involved, no state-law claim is alleged, and no parallel state-court proceeding is pending. Where such an action cannot be decided without resolution of an unsettled question of state law, the court may certify the question to the highest appellate court of the state. Certification to a state high court can be used only when the state law question will significantly affect the federal claim, and is "patently unclear."

Claims against local governments: ripeness of property rights claims. The bill declares that section 1983 actions for 'deprivation of a property right or privilege secured by the Constitution' shall be ripe when a local agency 'final decision' occurs. (See Endnote 79.) A 'final decision' exists if -- (1) the official makes a 'definitive decision regarding the extent of permissible uses on the property that has been allegedly infringed or taken'; (2) one "meaningful application," as defined by the locality, to use the property has been submitted "but has not been approved" and one appeal or waiver has been applied for and "not been approved" (unless unavailable, incapable of providing the relief requested, or futile); and (3) if the local government's disapproval explains in writing the development that would be approved, the landowner has submitted a new proposal "taking into account" that explanation, which "has not been approved," and one variance or appeal has been applied for and "not been approved" (if available). Finally, where review of the case by elected officials is offered, the landowner must have been denied such review.

In the usual circumstance, the effect of these provisions is to allow the local land use agency at least two and up to four opportunities to rule on development applications.

To constitute a 'final decision,' the party seeking redress need not exhaust state judicial remedies.

These provisions lower the hurdles of existing takings/ripeness law in two key ways. First, H.R. 1534 imposes an absolute limit on the procedural steps a landowner must take before takings ripeness is established, in contrast with the current case-by-case approach. The bill thus places a bound on Williamson County finality ripeness. (See Endnote 80.) Second, the bill eliminates entirely the other Williamson County ripeness test: its demand that the landowner exhaust possibilities for obtaining state-forum compensation before coming to federal court. Claims against the United States: ripeness of property rights claims. The H.R. 1534 bills declare that claims founded upon a property right or privilege secured by the Constitution, that was allegedly 'infringed or taken' by the United States, shall be ripe when a 'final decision' occurs. (See Endnote 81.) "Final decision" is defined as above, except that in the case of the federal government, no provision is included for written explanations of what the land use-restricting agency will accept.

The federal-defendant provisions do not address the compensation-ripeness requirement, since it applies solely to suits against local governments.

Notice by federal agencies. H.R. 1534 requires that whenever a federal agency takes action "limiting" the use of private property, it shall notify the property owner of his or her rights under H.R. 1534. No exceptions are stated.

Issues raised by the bills

1. Federalism: congressional implications

Recent years have seen increasing congressional insistence that the federal presence in various fields be reduced, leaving matters to the states. H.R. 1534 arguably goes in the opposite direction, by requiring federal judges to rule on takings and other claims against local government that formerly could have been deflected to the state courts or postponed pending further local proceedings. This point draws particular importance from the historically local nature of most land use regulation in the United States and its sensitivity to local needs and priorities. Perhaps for that reason, H.R. 1534 is the only property rights bill in the 8- year history of congressional involvement with this issue to address primarily local, rather than federal, regulation of property use.

On the other hand, an enacted H.R. 1534 would not be alone in its seeming inconsistency with current devolution rhetoric. Simultaneous with such policy statements, Congress has fostered greater federal-court involvement in formerly state- court matters by creating new federal causes of action in several areas, such as product liability law and criminal law.

Another congressional implication flows from the argument that to the extent land developers are suffering unfair burdens at the hands of local government regulators, H.R. 1534 relieves only a symptom (takings actions dismissed on threshold issues), not the underlying problem. That problem, assertedly, is the local-government development approval process and its inability to produce expeditiously a decision that meets finality-ripeness requirements. Observers charge further that some local land regulators deliberately draw out the development approval process in the hope that the developer will lose interest. By avoiding a final decision, the regulator hopes that finality ripeness doctrine will bar the landowner from maintaining a taking action. Therefore, it has been argued, the more direct solution to the landowners' woes is to reform how local jurisdictions deal with development proposals. And that solution, it has been contended, should come from the states themselves, not the Congress. (See Endnote 82.)

2. Federalism: judicial implications

H.R. 1534 runs counter to the often-expressed view of federal judges that federal courts should minimize their presence in local land-use affairs, as a matter of intergovernmental comity. (See Endnote 83.) Bill supporters respond that because a federal constitutional right (the Takings Clause) is involved, the federal courts should be as open to deciding the case as when any other federal constitutional right is sought to be vindicated. When a local government erects a nativity scene in front of the town hall, or is alleged to engage in racial discrimination, federal courts assertedly do not defer to their state counterparts. Neither, it is said, should they with regard to property rights. (See Endnote 84.)

3. Effect on the workload of the federal courts

H.R. 1534 may well increase the workload of the federal courts, particularly from takings litigation. Congress may wish to consider this possible effect in the context of current debate over existing vacancies on the federal bench and whether the federal judiciary is overburdened.

The increase in federal-court section 1983 filings is likely to be most pronounced at the outset. Landowners' and developers' counsel, long frustrated by existing ripeness and abstention barriers, doubtless will want to test at the earliest opportunity the extent to which H.R. 1534 has improved their prospects. The early rush to the courthouse may subside a bit if landowners simply get ushered out on takings grounds rather than ripeness/abstention grounds. H.R. 1534 supporters dispute claims of increased filings, asserting that most builders are small operations that could ill afford to maintain a taking action, particularly since H.R. 1534 does not ease the rigorous substantive criteria for proving a taking.

Not as easily called into question, however, is the prediction of increased federal-court workload as a result of the land-use-based section 1983 litigation that, in the absence of H.R. 1534, would have been filed in the state courts. (See Endnote 85.) As we have seen, H.R. 1534 lowers the ripeness hurdle only in federal court; it does not apply to section 1983 actions in state court. That being so, it is likely that following enactment of H.R. 1534, far fewer property-rights-related section 1983 takings claims will continue to be filed in the courts of most states.

4. Ripeness: effect of requiring federal judges to decide takings issues without an adequate record.

As noted, H.R. 1534 explicitly disclaims any change to the judicial standards for determining which government regulations effect takings. Thus, after being helped over the ripeness hurdle by H.R. 1534, the landowner still has to make a traditional takings case. (See Endnote 86.)

Therein lies a problem. The Supreme Court's finality ripeness hurdle, which H.R. 1534 would abridge, was crafted with a clearcut purpose. It was designed, said the Court, to ensure that once met, a court would have the critical information it needs to apply certain takings factors. In particular, a court can't determine whether the 'economic impact' and 'interference with investment-backed expectations' factors of the Penn Central regulatory takings test point to the existence of a taking without knowing exactly what uses the local agency proposes to permit on the property.

As noted, the process of finding out exactly what uses the local agency will permit can be a prolonged one, and lies at the very heart of the developers' grievance. But also as noted, it is arguably a necessary process in many cases if the economic impact and interference-with-expectations factors are to be applied in an informed way. By limiting how long the landowner must pursue the approval process, H.R. 1534 will in many instances ask the federal judge to rule on the taking issue with less information than he or she would have demanded without the bill. Since the burden of proving a taking is on the landowner, a judge who feels there is an inadequate factual basis to apply the takings factors will be constrained to rule against the landowner.

So does H.R. 1534 merely substitute a judgment that there is no taking for what would have been, in the absence of H.R. 1534, a dismissal for lack of ripeness? Does the plaintiff simply lose on a different legal theory? In many cases, probably yes. Lack of the necessary record for applying the takings factors will dictate a ruling on the merits against the plaintiff, even though he or she has been pushed over the ripeness threshold by H.R. 1534. In other cases, however, H.R. 1534 proponents argue that the bill will compel federal judges who are using ripeness disingenuously -- that is, dismissing cases when there is adequate information to apply the takings factors -- to confront the takings question. Concededly, many of these court decisions ultimately may find no taking. But some will hold for the landowner, and either way, the argument runs, the taking issue in the case will have been resolved.

5. Ripeness: effect of bill on the local agency/developer relationship.

To be sure, H.R. 1534 imposes no direct federal controls on the discretion of local land use agencies. The argument is pressed, however, that if H.R. 1534 were enacted, its inflexible limit on the procedural steps the landowner must take would change fundamentally the dynamics of how developers and local planning commissions arrive at mutually acceptable development projects. Developers, it is said, would have less incentive to negotiate with local land regulators over creative, alternative development scenarios. Rather, the developer will be tempted to insist on its initial, presumably profit-maximizing proposal, knowing that the local jurisdiction is unlikely to disapprove because it can ill afford to defend the resulting taking suit which, owing to H.R. 1534, is likely to be on the merits. (See Endnote 87.)

This argument rests on the assumption that the cost/time in defending a taking action on the merits, possibly all the way through a full trial, is significantly greater than the cost/time in defending one dismissed on a threshold ripeness issue (usually by pretrial motion). Those who take this position also suggest that the increased number of takings claims likely if H.R. 1534 is enacted will make local regulators reluctant to rein in developers.

In response to criticism that H.R. 1534 would chill local zoning boards in the exercise of their police-power duties, the introduced bill was amended in the House to add additional steps the landowner must take to establish ripeness. As amended (and adopted in the Senate version), if the local agency's first disapproval includes a written explanation of the development that would be approved, the landowner must reapply "taking into account" the explanation and not be approved again, and have a variance or appeal not be approved. How much this new provision will abate any chilling effect H.R. 1534 may have is speculative. In the absence of any legislative history on how detailed and complete the written explanation must be, it is unclear whether small local governments (the large majority of local governments) would have the planning resources to prepare them. Currently, the burden of preparing development proposals falls on the developer. Nor is it clear how courts will construe the phrase "taking into account," so it is hard to predict how far the developer must go in adjusting its first proposal in the direction of the written explanation.

6. Ripeness: whether aspects of the current Supreme Court takings-ripeness test that the bill would eliminate are constitutionally required.

As mentioned, ripeness requirements in the federal courts originate in either Article III of the Constitution or the inherent 'prudential' power of the judiciary to refuse to exercise jurisdiction where inappropriate. For some purposes, it makes little difference into which category a given ripeness prerequisite falls. But where, as in H.R. 1534, Congress proposes to do away with a ripeness hurdle, the category becomes quite important. An Article III court, such as a federal district court, has subject matter jurisdiction only over 'cases' and 'controversies.' If a ripeness element is constitutionally based, this is equivalent to saying that it must be satisfied to make out a case or controversy. Congress cannot dispense with the need for plaintiffs to satisfy such an element and still leave an Article III court with jurisdiction. (See Endnote 88.)

Raising this issue is a lot easier than resolving it. The Supreme Court has been in flux as to which ripeness elements are constitutional (statutes may not eliminate) and which are prudential (statutes may eliminate). In particular, it has sent mixed signals as to the compensation ripeness doctrine announced in Williamson County. (See Endnote 89.) Some legal commentators have regarded compensation ripeness, and even finality ripeness, as constitutionally based. (See Endnote 90.) This takings-specific ripeness debate is playing out against the backdrop of a broad Supreme Court trend toward regarding ripeness as largely, though not exclusively, prudential.

7. Ripeness: tension between bill's elimination of state- compensation ripeness and the terms of section 1983.

By its terms, the nonfederal provisions of the bill purport to amend only 28 U.S.C. Section 1343, a provision that gives federal district courts jurisdiction over section 1983 claims, among others. However, by eliminating the state-compensation requirement of Williamson County, H.R. 1534 is in tension with, and arguably amends by implication, section 1983 itself.

The reasoning runs as follows. Section 1983 creates a federal cause of action for state action depriving persons of 'rights ... secured by the Constitution.' But the Supreme Court holds that 'a property owner has not suffered a violation of the [Constitution's] Just Compensation Clause until the owner has unsuccessfully attempted to obtain just compensation through the procedures provided by the State.' (See Endnote 91.) That being so, a property owner who presents a taking-based 1983 claim without having gone first to the state courts, a prerequisite eliminated by H.R. 1534, alleges no deprivation of a federal constitutional right. Lacking such a deprivation, what would be the basis of the section 1983 claim?

8. Ripeness: intent of bill's references to property rights grievances other than Fifth Amendment takings.

The ripeness provisions in the two H.R. 1534 biils refer not only to takings-based section 1983 claims and takings claims against the United States. The bills speak of section 1983 claims 'to redress the deprivation of a property right or privilege secured by the Constitution' and claims against the United States 'founded upon a property right or privilege secured by the Constitution, but [sic] was allegedly infringed or taken ....' (Emphasis added.) For both nonfederal and federal defendants, the bill defines 'final decision' to mean 'a definitive decision regarding the extent of permissible uses on the property that has been allegedly infringed or taken ....' (Emphasis added.)  

At the very least, this bill language could be read to include property-based due process claims. This view makes sense in the larger bill context, since the finality and state-compensation ripeness requirements that the bill targets have been applied by some courts to substantive due process claims, as well as takings claims, against local land- regulating agencies. Perhaps, then, this is the intent underlying the undefined term "infringed."  

Alternatively, one could argue that the term has a broader meaning -- that it even creates a new cause of action for interferences with property that fall short of takings and due process violations. Such a reading, however, seems to contradict the bill text generally, which appears to confine itself to defining when ripeness occurs. Congress may wish to clarify these matters.  

Finally, the quoted bill language could be seen to require that whatever property rights deprivations it covers, the deprivation is to be judged solely with respect to the regulated portion of the parcel, rather than its entirety. Such a view would diverge sharply from the Supreme Court takings canon, which insists that a parcel not be segmented in the takings analysis in order to isolate the restricted portion and increase the likelihood a taking will be discerned. It would, however, align the bill squarely with other property rights legislation in this and recent Congresses. Again, however, such a reading contradicts other bill text, which seems to limit the bill's scope to threshold issues. Congress may wish to clarify this issue.

9. Ripeness: implications of the bill's revision of the judicially formulated futility exemption.  

H.R. 1534 declares a "one denial" rule -- ripeness exists once the landowner applies for, but is denied, one appeal or waiver from the initial "definitive decision." The bill then excuses the landowner from obtaining this one denial where "the prospects of success are reasonably unlikely and intervention by the district court [or U.S. Court of Federal Claims] is warranted to decide the merits." The effect of this exemption is to replace the "futility exemption" articulated by numerous courts to date with a statutory standard. It would seem that this new standard -- "reasonably unlikely" -- is less demanding of the plaintiff than its judicial alter ego. Takings decisions at least give the impression that before a landowner is relieved of having to make a meaningful appeal or waiver application to establish ripeness, he or she must show that prospects for success are quite low. "Reasonably unlikely" seems a less stringent standard, one that, as a byproduct, may require federal courts to engage in assessments of the likelihood of various outcomes to local administrative processes.  

10. Abstention: various issues.  

1. While H.R. 1534 is titled the "Private Property Rights Implementation Act," one should note that its abstention provisions are not expressly limited to property. Rather, they appear to affect all actions under the covered sections in 28 U.S.C. Section 1343(a). Thus, H.R. 1534 could be invoked to prevent federal judges from abstaining in a wide range of actions arising in very diverse circumstances.  

2. H.R. 1534 instructs that a federal judge may not abstain in actions covered by 28 U.S.C. Section 1343(a) when no state claim is alleged. Existing federal statutes generally run in the contrary direction -- authorizing or requiring abstention (though usually not by that name), rather than prohibiting it. The most frequently invoked is the Anti-Injunction Act.

3. Recall the certification provisions in the abstention part of the bill. The large majority of states have now enacted laws or rules allowing the highest court of the state to answer questions as to state law that have been "certified" by federal courts. States that have not, however, include some of the most populous (e.g., California). In addition, in those states having certification procedures, not all will accept certified questions from federal district courts, as opposed to the federal courts of appeal or Supreme Court. Thus, there may be occasions under H.R. 1534 when state high courts will refuse a federal-court request to resolve a state law question.  

In those states that for whatever reason do not accept certified questions from a federal court, a question arises. What would happen if a federal judge in such a state, confronting a state-law question, were blocked from abstaining because of enacted H.R. 1534? Would the federal judge have to decide the state law question? If so, H.R. 1534 may result in federal courts resolving state law questions more often than presently.  

Brief comparison of H.R. 992 and H.R. 1534  

Though H.R. 992 and H.R. 1534 are both property rights bills modifying judicial process, the above discussion shows that they treat very different aspects of that process. Some obvious contrasts:  

Principal purpose: H.R. 992 targets a jurisdictional split that requires property-owner plaintiffs to pursue their remedies in two courts. H.R. 1534 aims to lower certain threshold hurdles often invoked by federal judges who seek not to reach the merits of property-owner actions.  

Beneficiaries: H.R. 992 benefits only property owners suing the federal government. H.R. 1534 primarily benefits property owners suing municipalities and counties.  

Scope: H.R. 992 affects only legal actions relating to adverse impacts of government actions on property interests. H.R. 1534, in its ripeness provisions, does the same. However, its abstention provisions affect any action brought under the Civil Rights Act -- most of which are not related to property.  

Definition of "property": H.R. 992 includes a broad definition of "property" that arguably expands upon the constitutional coverage. H.R. 1534 contains no definition of property, and so implicitly rests on existing definitions.  

ENDNOTES

(78) From this point on, we refer only to local, rather than local and state, governments. The portion of H.R. 1534 dealing with nonfederal defendants operates by amendment of the jurisdictional provision for the Civil Rights Act of 1871. Section 1983, the most frequently used provision in that statute, is chiefly employed in suits against local governments. Municipalities have been held subject to suit under section 1983. Monell v. Dep't of Social Services, 436 U.S. 658 (1978).

(79) The majority of takings actions against nonfederal defendants are brought under section 1983.

(80) In one minor respect, the bill may represent an expansion of the existing finality-ripeness rule. It is beyond our scope here to research whether existing takings-ripeness law requires the landowner, following denial by the initial decisionmaker and denial of any variance application, to additionally be denied on appeal to any separate review body within the local government, such as a zoning board of appeals. If takings-ripeness law does not require such a 'vertical' appeal, but H.R. 1534 is held to do so, the bill would add a new ripeness requirement for the takings plaintiff.

(81) H.R. 1534 provisions make this rule applicable regardless of whether the claim is brought in the district court under the 'little Tucker Act' (28 U.S.C. Section 1346(a)) or in the U.S. Court of Federal Claims under the regular Tucker Act (28 U.S.C. Section 1491(a)).

(82) See, e.g., Permit Streamlining Act, Cal. Gov't Code Section 65920 et seq. The PSA applies to decisions by California's state and local agencies on the completeness of applications for development permits, and on their approval or disapproval. Under the statute, failure of the agency to act on the application within the prescribed time limits must be deemed approval of the development project.

(83) See, e.g., Dodd v. Hood River County, 136 F.3d 1219, 1230 (9th Cir. 1998) ("Courts of Appeals were not created to be `the Grand Mufti of local zoning boards'), quoting from Hoehne v. County of San Benito, 870 F.2d 529, 532 (9th Cir. 1989); Spence v. Zimmerman, 873 F.2d 256, 262 (11th Cir. 1989) ('federal courts do not sit as zoning boards of review'); Littlefield v. City of Afton, 785 F.2d 596, 607 (8th Cir. 1986) ('We are concerned that federal courts not sit as zoning boards of appeals ....'); Golemis v. Kirby, 632 F. Supp. 159, 163 (D.R.I. 1985) ('So long as a state provides meaningful legal remedies for [land-use-related takings], the state must be given first crack at keeping its own house in order'); City of Oak Creek v. Milwaukee Metro. Sewerage Dist., 576 F. Supp. 482, 487 (E.D. Wis. 1983) ('Section 1983 was never intended as a vehicle for federal supervision of land use policy'). One federal court based its reluctance to decide a local land-use taking case not on lofty concerns of comity, but rather on pragmatics. Scudder v. Town of Glendale, 704 F.2d 999, 1003 (7th Cir. 1983) ('availability of federal review of every zoning decision would only serve to further congest an already overburdened federal court system').

(84) This argument of bill supporters is somewhat undermined to the extent it refers to the ripeness, as opposed to abstention, hurdles in federal court. As noted, takings- ripeness precepts are deemed to flow from the very text of the Takings Clause. If they are different than the ripeness hurdles interposed in First or Fourth Amendment- based section 1983 actions, that is because the underlying constitutional language is different.

(85) It would be useful to get a handle on the number of such land-use-based section 1983 filings in state court. All that can be put forth now, however, is one treatise writer's assertion that the annual number of all section- 1983 reported appellate decisions from state courts is 'rapidly expanding.' Steven H. Steinglass, Section 1983 Litigation in State Courts Section 2.7 (1994).

(86) A traditional takings case generally involves showing that most or all of the three factors announced by the Supreme Court in Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978) point to a taking. Those factors are: (1) the economic impact of the government action; (2) its interference with reasonable investment- backed expectations; and (3) the character of the government action. As a practical matter, courts require the landowner to show that the government action has eliminated all or substantially all use or value of the property.

(87) See, e.g., Sharon Buccino, Turmoil over "Takings": How H.R. 1534 Turns Local Land Use Disputes into Federal Cases, 28 Envtl. L. Rptr. 10083 (1998).

(88) This is not an issue in the U.S. Court of Federal Claims, the focus of the federal-defendant provisions of H.R. 1534. 'Although established under Article I, the [U.S. Court of Federal Claims] traditionally has applied the case or controversy requirement unless jurisdiction conferred by Congress demands otherwise.' Massachusetts Bay Transp. Auth. v. United States, 21 Cl. Ct. 252, 257- 258 (1990) (emphasis added). The issue, however, would emerge on appeal of the action to the U.S. Court of Appeals for the Federal Circuit, which is an Article III court.

(89) In Suitum, 117 S. Ct. At 1664, the Supreme Court declared that '[t]here are two independent prudential hurdles to a regulatory taking claim brought against a state entity in federal court.' (Emphasis added.) Follow-on text makes clear that the reference is to the finality and state-compensation prongs of Williamson County. However, in the same paragraph the Court contradictorily seemed to say that state-compensation ripeness is constitutionally based -- more exactly, that it 'stems from' the Takings Clause. In an earlier assertion of constitutional basis, the Court in Williamson County recognized that 'a property owner has not suffered a violation of the Just Compensation Clause until the owner has unsuccessfully attempted to obtain just compensation through the procedures provided by the State ....' 473 U.S. at 195 (emphasis added). If the state-compensation prong is constitutionally based, how can it be only prudential (discretionary)?

(90) See, e.g., Gregory M. Stein, Regulatory Takings and Ripeness in the Federal Courts, 48 Vand. L. Rev. 1, 16 (1995) (finality ripeness is prudential; compensation ripeness is constitutional); Gregory Overstreet, The Ripeness Doctrine of the Takings Clause: A Survey of Decisions Showing Just How Far Federal Courts Will Go to Avoid Adjudicating Land Use Cases, 10 J. Land Use & Envtl. L. 91 (1994) (both are constitutional).

(91) Williamson County, 473 U.S. at 195.