On June 28, 2021, the U.S. Supreme Court decided Pakdel v. San Francisco, holding that the plaintiffs were not required to exhaust state remedies through an inverse condemnation proceeding to bring a § 1983 claim for regulatory taking.
A married couple in San Francisco bought a multiunit residential building. It was originally organized as a tenancy-in-common, but the plaintiffs signed an agreement with the other owners to allow for condominium-style arrangements. San Francisco had recently made it easier to convert a tenancy-in-common, so long as the owner offered a lifetime lease. The plaintiffs asked for an exception, but the city refused.
The plaintiffs brought a § 1983 claim against the city, claiming that the lifetime-lease requirement was an unconstitutional taking. The District Court dismissed the case because the plaintiffs did not first bring a state court inverse condemnation proceeding. The Ninth Circuit affirmed, holding that the city had not reached a final decision.
The Supreme Court reversed — the finality requirement does not require exhaustion of state administrative remedies. Indeed, an exhaustion requirement is contrary to the Supreme Court’s prior opinion in Knick v. Township of Scott, 588 U.S. ___ (2019). Instead, there simply must be no question of how the regulations apply to the land in question. The Court emphasized the well-settled rule that exhaustion of state remedies is not a prerequisite to an action under § 1983. And while a case may not be ripe when the government’s final position is unclear, here it was clear that the city would not grant the exception. The plaintiffs, therefore, had a ripe takings claim.
The unanimous opinion of the Court was per curiam.