Property Owner Loses, But Property Rights Win in Supreme Court Ruling

Property Owner Loses, But Property Rights Win in Supreme Court Ruling
January 1, 1998



In a watershed decision, the Supreme Court has provided significant new access to federal courts for landowners. In its December 15 ruling on City of Chicago v. International College of Surgeons, the high court held that federal courts cannot refuse to hear a Fifth Amendment property rights claim just because the claim arose from a state administrative action.

Justice Ruth Bader Ginsburg, in a dissent joined by Justice John Paul Stevens, characterized the court’s ruling as a “watershed decision” that would allow litigants direct appeal to federal courts “from the actions of all manner of local (county and municipal) agencies, boards, and commissions.”

Responding to the decision, Nancie Marzulla, president of Defenders of Property Rights, stated, “We certainly hope Justice Ginsburg is right. Property owners have long sought fair treatment by the federal courts. All of the other rights in the Bill of Rights find easy access to federal courts. Why should property rights be singled out for such poor treatment?”

While the Court’s decision helps property owners in general, it did not help the property owner involved in this case, the International College of Surgeons.

“Ironically,” Marzulla noted, “one property owner’s loss in court has helped thousands of other property owners around the country.”

The college had originally planned to demolish two buildings on its property in Chicago. The city, however, deemed the buildings “historic landmarks” and refused to allow the demolition. The college sued, contending that the city’s actions violated its rights under the Illinois and U.S. constitutions.

In a move that usually represents the interests of landowners, the city had the case removed directly to federal court before addressing the various state issues involved. More often, state and local agencies try to drag out a property rights case for years within the state court system, wearing down the property owner’s resources and resolve on procedural battles. But the city of Chicago felt it could win by moving directly to Federal District Court, and it did.

Responding to its defeat at the federal court level, the college played the role typically played by state and local governments, appealing the District Court’s ruling not on the merits of the case but on the issue of the District Court’s jurisdiction. The college argued that the District Court should not have ruled on the case because the state issues had not been resolved. The Seventh Circuit Court agreed and reversed the District Court’s decision.

The Supreme Court settled the jurisdictional dispute on December 15, when it held that the District Court was correct in hearing the case. Justice Sandra Day O’Connor, writing for the majority, held that “the relationship between [the federal] claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional ‘case.’” In essence, the Supreme Court stated that federal courts may hear cases in which constitutional violations are alleged regardless of the status of state claims related to the case.

The Supreme Court’s ruling coincides with Congressional action on the same issue. A bill introduced by Representative Elton Gallegly (R-California) passed the House in October and awaits the Senate’s consideration in 1998. The Private Property Rights Implementation Act, like the Supreme Court’s decision in City of Chicago v. International College of Surgeons, allows property owners more direct access to federal courts when seeking relief from constitutional violations.

Recent studies show that federal district and circuit courts are overwhelmingly inclined to dismiss land use cases on jurisdictional grounds before reviewing the merits of the case.

“This ruling demonstrates,” concluded Defenders president Marzulla, “that the Supreme Court, no less than Congress, recognizes the injustice of locking property owners out of federal court when they are making constitutional claims. Federal courts are designed to hear such claims. They should have no excuse for avoiding them.”