Ninth Circuit Affirms District Court Abstention Pending State-Court Eminent Domain Action

The Ninth Circuit ruled last week that a federal district court was right to abstain from proceeding on the plaintiffs' regulatory takings claim when a state court was considering an eminent domain action on the property.

The court in Gearing v. City of Half Moon Bay rejected the plaintiffs' claim that federal court Pullman abstention amounted to a state-forum exhaustion requirement, rejected by the Supreme Court.

In English: The Supreme Court ruled in Knick v. Township of Scott and Pakdel v. City and County of San Francisco that a plaintiff need not exhaust state-forum proceedings before lodging a Takings Clause challenge in federal court. This means that a plaintiff can bring a case in federal court to challenge a taking, even as any state-forum proceeding is still pending.

At the same time, on a different front, federal courts can abstain from ruling on a constitutional question when there's a pending state-court challenge, if the case touches on a sensitive area of social policy, the state proceeding could narrow or eliminate the federal constitutional question, and state law is uncertain. That's Pullman abstention.

In this case, the plaintiffs filed a claim in federal court arguing that the City's rejection of the plaintiffs' development plan amounted to a regulatory taking. The City then filed an eminent domain action in state court. The City also filed a motion to abstain in the federal case. The district court granted the motion.

On appeal, the plaintiffs argued that abstention would force them to litigate their federal takings claim in state court, which would functionally require them to exhaust state-forum proceedings in violation of Knick and Pakdel.

The Ninth Circuit disagreed. The court said that those cases addressed exhaustion, not abstention. The court said that even if they preclude abstention in some other case, they don't preclude abstention in this case. That's because the state court could adjudicate the eminent domain action without reaching the plaintiffs' regulatory takings claim--because eminent domain and regulatory takings suits lead to different compensation for different injuries. Finally, the court ruled that the requirements of Pullman abstention were satisfied in this case.