The Federalization Dimension in Takings

Federal constitutional law has historically played a significant, if not overwhelming, role in influencing and developing state constitutional law. This is what some scholars have called the gravitational force of federal constitutional law, which causes state courts to mimic and follow the lead of the U.S. Supreme Court’s federal rulings and interpretations of the federal Constitution when deciding questions of state constitutional law. This phenomenon has led state courts — the nation’s judicial laboratories of democracy — to be perceived as “simple-minded [state] dependents of their smarter older [federal] sibling,” a pejorative status that is counter to the vision of federalism espoused by Justice William J. Brennan Jr.

In takings, the Supreme Court’s jurisprudence has dominated state court interpretations of analogous state constitutional takings provisions. Takings occur when the government physically seizes private property for a public use. Takings also occur when the government regulates private property in a manner that is indistinguishable from a physical seizure. Likewise, a taking may occur when the government conditions land use permits on the requirement that a private landowner pay money or provide a benefit in exchange for the permit. In either scenario, the government must pay fair market value for taking the property. Many state courts simply consider the Supreme Court’s case law interpreting the federal Takings Clause persuasive grounds for interpreting an analogous state constitutional provision. But it doesn’t have to be — nor has it always been — this way. 

Indeed, at times, state courts and their takings doctrines have influenced the Supreme Court’s federal takings jurisprudence. This is what I call “takings federalization,” a distinct feature, not a bug, of judicial federalism where the Supreme Court consults, borrows, or adopts state court doctrines and interpretations of analogous state constitutional law provisions as the primary source to interpret the federal Takings Clause or inform questions of federal constitutional law. 

In the 1807 case of Commonwealth v. Coombs, the Massachusetts Supreme Court was one of the first state courts to rule that land value is not the sole measurement in estimating damages when private property is taken by the government. Then, in 1831, the New York high court expanded this rule to consider benefits when determining the diminution of compensation or damages when private land is taken for purposes of constructing a highway. Likewise, in 1846, the Ohio Supreme Court interpreted its state takings clause to require that when property is taken, benefits that resulted in improvements may be offset when assessing just compensation. And in 1861, the Pennsylvania Supreme Court interpreted its state constitution to determine that the correct measure for just compensation in damages from takings is the difference between what the whole, unaffected property would have sold for and what the property would have sold for if it was affected by, for example, railroad construction. 

By the end of the 19th century, the U.S. Supreme Court was asked to decide in Bauman v. Ross the proper measurement for just compensation over condemned private land. In ruling that valuation was not the sole tool for measuring damages for seized parcels of land, the Court looked to prior state supreme court rulings, explaining that “for the reasons and upon the authorities” of the state courts, including the high courts of Massachusetts, New York, Pennsylvania, and Ohio, the federal Constitution did not explicitly or implicitly prohibit courts from considering benefits when estimating just compensation in takings. 

 In fact, the Court “borrowed its rule directly from the” Massachusetts Supreme Court’s decision in Coombs. Justice Horace Gray, in writing his opinion, consulted “the overwhelming number of decisions in the courts of the several states” and studied the “careful collection and classification of [those] cases” before concluding that “in the greater number of states . . . special benefits are allowed to be [offset], both against the value of the part taken, and against damages to the remainder.”

 Around the same time as the Bauman decision, state courts began addressing questions regarding the definition of a nuisance in takings claims. New Jersey courts, for example, found stenches, noise, smoke, steam, and dirt caused by railroad companies to be serious impairments to persons and their home, and thus nuisances were subject to takings claims. The New York Court of Appeals ruled that locomotive operations that cause private property to become unhealthy or unfit, and thus depreciate in value, create a nuisance. Similarly, state courts in New York reasoned that legislative authority permitting the construction of railroads does not immunize the railway companies from nuisance liability when the operation of the railroads directly affects private property. 

 Nearly a decade later, the Supreme Court in Richards v. Washington Terminal Co. borrowed directly from state court interpretations of analogous takings provisions under state constitutions to hold that, while the government was immune of liability from nuisances that were the result of incidental damages, the government would be liable for nuisances that were created directly by government action. The Richards ruling was “just a few decades removed from the passage of most of the [damages] clauses” in state constitutions. 

 The Court’s takings jurisprudence, at the time, lacked sufficient precedent to guide or inform its decision. Instead of looking within its own precedent or at the precedent of lower federal courts, the Court focused its reasoning on state court rulings interpreting their analogous state takings provisions. Justice Mahlon Pitney explained that the primary source to guide the Court’s decision rested on the “great and preponderant weight of judicial authority in those states whose constitutions” have similar takings prohibitions as the federal Takings Clause. He explained that some of the state court decisions had “become so well established that it amounts to a rule of property.” The Court had humbly bowed to the intellectual independence of the state courts. 

 Another example of takings federalization is the formation of the Fifth Amendment Takings Clause’s exactions doctrine addressing what conditions local governments can place on private land use. Prior to the Court’s groundbreaking decisions in Nollan v. California Coastal Commission and Dolan v. City of Tigard, state courts had long been creating their own versions of “exaction” tests to scrutinize government conditions on land use permits. Since the mid-19th century, the California Supreme Court crafted a looser reasonable relationship test that left significant discretion to local governments to impose fees and exact concessions from private developers for the benefit of the community and the public. The Illinois Supreme Court, on the other hand, took a stricter approach that was less welcoming to government conditions, defining a conditional fee as permissible only if the municipality shows evidence that the impact fee was directly proportional to the specific needs of the development. 

When Nollan and Dolan arrived at the Supreme Court, the Court chose not to rely on its own regulatory takings precedent to craft its new exactions doctrine. Instead, the majority in Nollan consulted with and borrowed from the various exactions doctrines that had been developed by the state courts. He explained that the Court’s decision was “consistent with the approach taken by every other [state] court that has considered the [exactions standard] question. . . .” Similarly, the Court’s Dolan ruling produced a “newly minted second phase” of the exactions framework by creating the “rough proportionality” test. That test, Justice William Rehnquist explained, was adapted by closely studying state supreme court rulings across the country. He noted that “since state courts have been dealing with this question a good deal longer than we have, we turn to representative decisions made by them.” Like Justice Pitney a century earlier, Justice Rehnquist chose modesty and humility over hubris, trusting the wisdom of the state courts over his and his colleague’s acumen.

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These rare episodes of takings federalization offer a fresh perspective on how judicial federalism functions beyond the well-worn traditional model of the Supreme Court leading and state courts following. Takings federalization, instead, should be recognized — and arguably embraced — as a legitimate interpretive practice where state courts and state constitutional law guide, rather than follow, the Supreme Court’s decisions on questions of federal constitutional law. 

Jerry Dickinson is vice dean at the University of Pittsburgh School of Law.