Frank Kottschade: Setting the precedent for property rights

U.S. Supreme Court ruling cites Housing First Minnesota member Frank Kottschade

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The U.S. Supreme Court issued a landmark industry victory in its decision to remove an obstacle to address government takings of property. In Knick v. Township of Scott, the court overruled a 1985 precedent (Williamson County) that required a property owner who claimed a regulatory taking to first approach the state court before being allowed to gain access to federal court.

At issue, was the catch-22 where a property owner was forced to go through state courts first, but if the court ruled against the owner, the claim is barred from appeal to the federal courts.

Housing First Minnesota member Frank Kottschade has long been a pioneer in precedent-setting property rights court cases and has been involved in this particular effort for decades. Kottschade was in Washington, DC at the Supreme Court to hear arguments. Fifteen years earlier, Kottschade sought to entice the U.S. Supreme Court to reconsider the 1985 Williamson County case with a challenge of his own.

In that case, Kottschade had obtained approval from the City of Rochester in 2000 to develop townhomes on about 16 acres of a 220-acre development site in south Rochester. The city approved the townhomes but, as is all too common, attached myriad, onerous conditions to the approval, which amounted to a taking and ultimately killed the project.

The Minnesota Court of Appeals said, “The city’s imposition of the conditions reduced the buildable area to 4.93 acres, and resulted in a site that could accommodate only 26 of the proposed 104 townhome units.” That made the finances impossible and Kottschade was forced to abandon the project. He challenged the conditions on grounds that they were unconstitutional exactions.

Kottschade had knowledge of the Williamson County case and the requirement to seek redress in the state court before being able to bring a property taking case to the federal courts. He asked the City of Rochester for a variance from the conditions it had just imposed. The city denied the request, as expected, and Kottschade sued in federal court for a regulatory taking as a challenge to the Williamson precedent.

Both the U.S. District Court and the U.S. Court of Appeals for the Eighth Circuit dismissed the suit based on the Williamson case. But the Eighth Circuit pointed out that litigants such as Kottschade face a real dilemma.

The Rose Mary Knick case the Supreme Court just decided remedies Kottschade’s problem and he was asked to submit an Amicus Brief in the case based on his earlier experience with Rochester and a subsequent Amicus Brief he filed in a similar case involving the San Remo Hotel.

In their brief, they state the following:

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“The primary purpose of this brief is to make sure that the Court understands that the conflicts and confusion created by Williamson County are not simply the stuff of law review articles and rarefied judicial debates on jurisdictional ripeness. This issue has real world consequences. It affects families, business, and livelihoods including many people who are not large developers.”

In the supporting amicus briefs, Kottshcade and colleagues point out that governments do not take property from a majority, but rather from a political powerless minority.

“It is all too easy for legislators to impose exactions on a few property owners, rather than explain tax increases to all of the voters.” The fundamental purpose of the Fifth Amendment is “to bar Government from forcing some people alone to bear the public burdens, which in all fairness, should be borne by the people as a whole.” Armstrong v. United States.

As a result of the case, litigants can decide whether bringing a property taking claim is best done at the state court or whether they want to move directly to federal court, an action that was previously unavailable. As Chief Justice Roberts wrote, “Fidelity to the Takings Clause” requires “overruling Williamson County and restoring takings claims to the full-fledged constitutional status the Framers envisioned when they included the Clause among the other protections in the Bill of Rights.”