In a case watched closely by National Association of Home Builders’ (NAHB) Advocacy Group, property owners who want to have their takings claims heard in federal court scored a major victory in an Aug. 28 ruling by the U.S. 2nd Circuit Court of Appeals.

In the case of Santini v. Connecticut Hazardous Management Service, the court advanced a doctrine that allows property owners to “reserve” the right to have their takings claim heard in federal court following a state court decision.

Over the last decade, property owners who claim that local governments have enacted land use regulations violating their Fifth Amendment property rights have been told by federal courts that they must first exhaust all administrative remedies through the local bureaucracy and then pursue the claim in state court. However, after having endured that lengthy and expensive process, landowner’s years later can arrive in federal court only to see their case dismissed because the facts have already been heard by a state court.

In the Santini case, a Connecticut developer was unable to complete the second phase of his subdivision when a local agency announced that this property was being considered for the site of a hazardous waste disposal facility.

A map of his property, 74 acres of which had been completed, appeared on the front page of the local newspaper accompanied by the international symbol for radioactivity.

In 1994, the developer filed a claim for inverse condemnation in the Connecticut state courts. The case was appealed all the way to the U.S. Supreme Court, where he did not prevail.

A takings claim was subsequently filed in the U.S. District Court in Connecticut, but the federal court would not consider his case because it had been heard in state court. Santini appealed to the 2nd Circuit and in March, NAHB and the Home Builders’ Association of Connecticut filed a friend-of-the-court brief supporting that appeal.

In last summer’s decision, the court ruled against Santini’s argument that the local government had taken his property.

However, it was significant that the court had agreed to hear the merits of the case and had not dismissed it merely because a state court had already ruled on it.

The court also recognized NAHB’s argument that there is a fundamental problem with the way in which federal courts are commonly interpreting constitutional law relating to property rights.

By establishing a “Santini Reservation,” the court agreed with NAHB that property owners should be allowed to file a reservation so that a federal court will hear their claims following a decision by a state court. Advocates at NAHB are hopeful this precedent-setting case will persuade federal courts to hear Fifth Amendment takings cases.

For more information on the ruling, e-mail Mary Lynn Pickel at mlpickel@nahb.com, or call her at (800) 368-5242, ext. 8485.