While U.S. Supreme Court justices may very well overturn a lower court ruling in a Texas takings dispute, a decision in favor of the state could open the floodgates for states across the country to avoid making payments in alleged takings disputes, experts say.

Justices earlier this week heard oral arguments in Devillier v. Texas, a case involving an alleged taking of property following the state putting up a barrier along a portion of Interstate 10 and multiple storms later rolling through the area. Areas along the interstate flooded allegedly as a result of the barriers, and owners claim the state has unconstitutionally taken value from their land.

Experts expect the high court to reverse a lower court decision that had found in favor of Texas, cautioning that a win for Texas in the Supreme Court could embolden various states to claim they are not liable for alleged takings.

“Texas’ argument could have a chilling effect if it’s found to be valid,” said Keith Poliakoff, co-founder of Government Law Group PLLC, noting that states would then cite the Devillier case as precedent in future cases.

“It’s unbelievable that it even made its way to the Supreme Court. To me, as someone who practices in the government field, it’s hard to imagine that Texas truly believes that it can take private property without compensation solely because Congress failed to draft a law on point in regards to their taking,” Poliakoff added.

Plaintiffs first filed in state court, and the suits were then consolidated as one federal court case. Most recently, the Fifth Circuit said private owners can’t sue state governments in federal court over takings disputes.

“The Devillier case is an important case that will define property rights and dictate whether property owners have any recourse against a state for a taking,” said Tina Nguyen, a partner at Baker Botts LLP. “The U.S. Supreme Court’s answer will define the property rights throughout the United States and stands to resolve disagreement within the circuits on this question.”

“At the heart of the case is the simple question of whether a property owner can sue a state for a taking, when the Fifth Amendment provides that no ‘private property [shall] be taken for public use without just compensation,'” Nguyen added.

The 14th Amendment applies the Fifth Amendment to states.

Justices in oral arguments, particularly Justice Elena Kagan, suggested courts are in place to protect violations of the Constitution, even if states or Congress have failed on that front, Poliakoff noted.

“To me, it is likely that the Supreme Court will overturn the decision of the appellate tribunal,” Poliakoff said. “I believe that the Supreme Court fully recognizes in other decisions that the takings clause in the Fifth Amendment is the highest law in the land and can’t be ignored … because Congress has not enacted a statute specifically on the point. I’m not sure yet what grounds they will overturn it on.”

But just exactly what road map may be drawn up in terms of how owners go about pursuing takings claims against states remains to be seen, experts say.

“Justices do believe there is a federal floor,” Kevin King, a partner at Covington & Burling LLP, said in reaction to oral arguments Tuesday. “There is debate about what that minimum would look like. [Justices believe] there is some kind of process available under federal law, in state court or some other way.”

“If a state under its own laws provides a process to vindicate Fifth Amendment claims, that’s going to be sufficient,” added King, who believes the high court will side with the plaintiffs.

Counsel for Texas couldn’t be immediately reached for comment Thursday.

“Our position is based on the Supreme Court’s rulings, so we felt good in that area. The [oral argument] questions for Texas and the [U.S. solicitor general] were much harder to deal with and coming from all angles,” said Daniel Charest, a partner at Burns Charest LLP and counsel for the plaintiffs. “We hope the court follows its own precedent and rule that the Fifth Amendment, by its own terms, provides a cause of action to takings victims.”

More than a dozen states joined Texas in support of the argument that Texas should be immune in the Devillier case from being sued in federal court, and the case has cast a nationwide spotlight on the jurisdictional question at play.

But some states, including California, also have laws on the books that set forth a process for pursuing such claims.

“In California, our constitution actually says taking or damaging property is unconstitutional,” said Rick Friess, a partner at Allen Matkins Leck Gamble Mallory & Natsis LLP, who expects the high court to overturn the Fifth Circuit decision in Devillier. “We [in California] have the advantage … that our constitution specifically addresses it. We don’t get caught in that same catch-22 that they’ve found themselves in in Devillier.”

Poliakoff said there could be a unanimous decision among justices, with the liberal justices on the court siding with the property owners. Liberal justices historically have tended to side with governments in takings disputes.

King and Friess also said liberal justices on the high court may support the property owners in this case.

“This isn’t government versus owners. This is fundamentally, ‘Do you get your day in court?’ A catch-22 like they’ve got in Texas is you don’t get your day in court,” Friess said. “I don’t think anybody on either side of the spectrum thinks that not getting your day in court is a good idea.”

The plaintiffs are represented by Robert McNamara, Christie Hebert, Andrew Ward and Suranjan Sen of the Institute for Justice, Daniel Charest and Larry Vincent of Burns Charest LLP and Charles Irvine of Irvine & Conner PLLC.

The defendant is represented by Lanora Christine Pettit of the Office of the Texas Attorney General.

The case is Richard Devillier et al. v. Texas, case number 22-913, in the Supreme Court of the United States.

–Additional reporting by David Holtzman. Editing by Janice Carter Brown.

Article Link: A Texas Win In Takings Dispute ‘Could Have A Chilling Effect’
Author: Andrew McIntyre