Pakdel v. City and County of San Francisco

In San Francisco, Peyman Pakdel and his wife Sima Chegini owned a residential building as tenants-in-common. The city’s affordable housing program allowed conversion to condominiums only if they granted certain tenants lifetime leases. Pakdel agreed under protest, then sued under 42 U.S.C. §1983, alleging a regulatory taking without just compensation in violation of the Fifth Amendment. The Ninth Circuit dismissed the claim as unripe, reasoning that plaintiffs must first seek compensation through state inverse condemnation proceedings. The Supreme Court reversed in a per curiam opinion on June 28, 2021. It held that the takings claim was ripe because the city had imposed a final, concrete condition on the property owners; requiring them to litigate compensation in state court before bringing a federal claim was unnecessary. The Court remanded for further proceedings without deciding whether a taking actually occurred.

The U.S. Supreme Court reversed the Ninth Circuit in a unanimous per curiam decision, holding that the Pakdels' takings claim was ripe and could proceed in federal court without first seeking compensation in state court. The case was remanded for further proceedings on the merits.

Whether a regulatory takings claim is ripe for federal adjudication when the government has taken a final position imposing a condition, or whether the property owner must first exhaust state court remedies by seeking compensation through inverse condemnation before filing a federal lawsuit.

The decision reinforces that property owners can bring federal constitutional takings claims as soon as a local government takes a final regulatory action, without a separate state-court compensation suit. It removed a procedural hurdle that had blocked some property rights challenges and clarified ripeness doctrine under Knick v. Township of Scott. Local governments facing land-use exactions may see more direct federal litigation.