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Posted: July 31, 2014

Takings Claim Not Ripe Until Process For Obtaining Compensation Complete, Even If Taking Already Has Occurred

On July 16, 2014, the Second Circuit issued a decision in Kurtz v. Verizon New York, Inc., 13-3900-CV, affirming a decision by the EDNY that the plaintiffs had not stated a takings claim because, even though the takings already had occurred, they had not yet exhausted all of their state remedies to obtain compensation for the taking.

In Kurtz, a putative class alleged that “Verizon installed multi-unit terminal boxes on their property without just compensation,” and, because it did so using New York’s power of eminent domain, this constituted a taking. The EDNY dismissed the complaint, holding that the claim was not ripe because the plaintiffs had not yet exhausted their state law remedies to obtain compensation from Verizon. The Second Circuit affirmed, explaining:

To test the ripeness of a constitutional takings claim in federal court, we consult Williamson County. In that case, a plaintiff owner of a tract of land sued a Tennessee regional planning commission alleging that the commission’s application of various zoning laws and regulations to the plaintiff’s property amounted to an unconstitutional taking under the Fifth Amendment. Williamson County held that the claim was unripe: a plaintiff alleging a Fifth Amendment taking of a property interest must show that (1) the state regulatory entity has rendered a final decision on the matter, and (2) the plaintiff has sought just compensation by means of an available state procedure. As to finality, a claim that the application of government regulations effects a taking of a property interest is not ripe until the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue. . . .

The Fifth Amendment’s proscription of a taking without just compensation underlies Williamson County‘s exhaustion requirement: the Fifth Amendment does not require that just compensation be paid in advance of, or contemporaneously with, the taking; all that is required is that a reasonable, certain and adequate provision for obtaining compensation exist at the time of the taking. Therefore, if a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation. . . .

Plaintiffs argue that Williamson County was a case about regulatory takings, and that it does not govern claims in which, as in theirs, the taking is physical. We disagree. The finality and exhaustion requirements are both derived from elements that must be shown in any takings claim: [i] a taking [ ii] without just compensation. So Williamson County applies to all takings claims.

(Internal quotations and citations omitted).

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