Court Opinion

ID: 4710071
Source: CourtListenerOpinion
Date Created: 2021-08-09 19:00:59.946349+00
Date Added: 2024-06-11T08:07:01.112106
License: Public Domain

PUBLISHED

                           UNITED STATES COURT OF APPEALS
                               FOR THE FOURTH CIRCUIT

                                          No. 20-1408

MICHAEL ZITO; CATHERINE ZITO,

                        Plaintiffs – Appellants,

                v.

NORTH CAROLINA COASTAL RESOURCES COMMISSION,

                        Defendant – Appellee.

-------------------------------------

NORTH CAROLINA COASTAL FEDERATION,

                        Amicus Supporting Appellee.

Appeal from the United States District Court for the Eastern District of North Carolina, at
Elizabeth City. James C. Dever III, District Judge. (2:19-cv-00011-D)

Argued: May 4, 2021                                              Decided: August 9, 2021

Before GREGORY, Chief Judge, MOTZ, and THACKER, Circuit Judges.

Affirmed by published opinion. Chief Judge Gregory wrote the opinion, in which Judge Motz
and Judge Thacker joined.

ARGUED: J. David Breemer, PACIFIC LEGAL FOUNDATION, Sacramento,
California, for Appellants. Ryan Y. Park, NORTH CAROLINA DEPARTMENT OF
JUSTICE, Raleigh, North Carolina, for Appellees. ON BRIEF: Glenn E. Roper, North
Highlands, Colorado, Erin E. Wilcox, PACIFIC LEGAL FOUNDATION, Sacramento,
California, for Appellants. Joshua H. Stein, Attorney General, Sarah G. Boyce, Deputy
Solicitor General, Mary Lucasse, Special Deputy Attorney General, Marc Bernstein,
Special Deputy Attorney General, NORTH CAROLINA DEPARTMENT OF
JUSTICE, Raleigh, North Carolina, for Appellee. Ramona H. McGee, Sierra B. Weaver,
Elizabeth R. Rasheed, SOUTHERN ENVIRONMENTAL LAW CENTER, Chapel Hill,
North Carolina, for Amicus North Curiae.

                                         2
GREGORY, Chief Judge:

       This case asks whether a Fifth Amendment takings claim against the North Carolina

Coastal Resources Commission (the “Commission”) is barred by State sovereign

immunity. When the Commission denied Plaintiffs Michael and Catherine Zito (the

“Zitos”) permission to rebuild their vacation home due to environmental regulations, the

Zitos brought suit in federal court, claiming that the State deprived them of the value of

their property and committed a taking under the Fifth Amendment. The district court

granted the State’s motion to dismiss for lack of subject matter jurisdiction due to the

State’s immunity from suit in federal court. We affirm the district court’s dismissal.

                                             I.

       In 2008, the Zitos purchased a beachfront house and lot (the “Property”) in South

Nags Head, North Carolina. The Property is located on one of the State’s barrier islands,

a system of narrow islands that run along the State’s coast. Between 2008 and 2016, the

Zitos used the house as a vacation home and rental property. But on October 10, 2016, the

house caught fire and burned to the ground. Following the fire, the Zitos sought to rebuild

the house on the same lot.

       Given its location, the Zitos’ Property is governed by North Carolina’s Coastal Area

Management Act (“CAMA”). Enacted in 1974, CAMA created the Commission to

implement rules regulating land-use planning, development permits, and beach

management and restoration along North Carolina’s coasts. N.C. Gen. Stat. §§ 113A-

103(2), -107, -110, -120, -134.11. One of CAMA’s goals is “[t]o [e]nsure that the

                                             3
development or preservation of the . . . coastal area proceeds in a manner consistent with

the capability of the land and water for development, use, or preservation based on

ecological considerations.” Id. § 113A-102(b)(2).

      To do so, CAMA requires coastal property development to be set back a certain

distance from the vegetation line—the first line of natural vegetation which marks the

boundary between the beach and more stable land.            15A N.C. Admin. Code 07H

.0305(a)(5), .0306(a)(1). These set-back requirements protect property owners from

coastal storms and encroaching waters while also preventing disturbance to the beaches

and dunes that act as buffers for the property and environment further inland. See id. at

.0306(a); Br. of N.C. Coastal Fed’n, as Amicus Curiae in Support of Appellee at 11–12.

Under CAMA, buildings with less than 5,000 square feet must be set back a distance at

least 60 feet or 30 times the local rate of erosion, whichever is farther. 15A N.C. Admin.

Code 7H.0306(a)(5)(A). But buildings of less than 2,000 square feet built before June 1,

1979 fall under a grandfather provision, requiring the property to be set back only 60 feet

from the line of vegetation. 15A N.C. Admin. Code 7H.0309(b).

       Though the Zitos’ Property qualifies for the grandfather provision, it fails to satisfy

the 60 feet set-back limit. Based on an October 2017 survey, the Property is currently set

back only 12 feet from the vegetation line. In 2018, the coastline by the Property eroded

at an average rate of six feet per year. The next year, the average rate of erosion climbed

to seven feet per year. According to amicus curiae, coastal erosion and rising sea levels

                                              4
could cause the Property to be underwater by 2024. Br. of N.C. Coastal Fed’n, as Amicus

Curiae in Support of Appellee at 7. 1

       To enforce its set-back regulations, CAMA requires a permit for property

development that will affect “any area of environmental concern,” such as the barrier

islands where the Property is located. N.C. Gen. Stat. § 113A-118(a). To acquire a minor

permit—for the construction of a small residential building, such as a house 2—individuals

must apply to the local city or county; if the initial application is denied, applicants may

seek administrative review or a variance from the Commission. Id. §§ 113A-118(b), -

120.1, -121(b), -121.1; 15A N.C. Admin. Code 07J.0201.

       The Zitos applied for a permit from the Town of Nags Head. The Town’s local

permit officer denied the application because the Property did not meet CAMA’s set-back

requirements. The Zitos then filed a petition for a variance with the Commission. After

considering the petition at a public hearing, the Commission issued its Final Agency

Decision denying the variance on December 27, 2018. When notifying the Zitos of the

denial, the Commission also informed them of their right to appeal the decision in state

superior court.

       1
        The effects of annual erosion are offset, to some extent, by the State’s beach
renourishment projects. North Carolina has carried out beach renourishment projects in
2010 and 2019. The 2019 renourishment project appears to have still been in progress in
June 2020, but the record does not indicate whether the 2019 project is now complete or
whether it has affected the setback lines. See J.A. 55.
       2
         Though the Zitos wished only to replace the house that had previously been built
on the lot, the Commission’s regulations consider the “[r]eplacement of structures damaged
or destroyed by natural elements, fire or normal deterioration” to be “development [that]
requires CAMA permits.” 15A N.C. Admin. Code 7J .0210.
                                             5
       The Zitos filed suit in federal court, arguing that CAMA’s restrictions amounted to

an unconstitutional taking. The Commission filed a motion to dismiss for lack of subject

matter jurisdiction, claiming that the suit was barred by State sovereign immunity. The

district court agreed with the Commission. First, it found that the Commission qualifies as

an arm of the State subject to the protections of sovereign immunity. Zito v. N.C. Coastal

Res. Comm’n, 449 F. Supp. 3d 567, 577–79 (E.D.N.C. 2020). It then relied upon this

Court’s decision in Hutto, where we held that “the Eleventh Amendment bars Fifth

Amendment taking claims against States in federal court where the State’s courts remain

open to adjudicate such claims.” Id. at 576 (quoting Hutto v. S.C. Ret. Sys., 773 F.3d 536,

552 (4th Cir. 2014)). Determining that North Carolina’s Constitution permits individuals

to bring takings claims in state court, the district court concluded that Plaintiffs’ claims

against the State were barred by sovereign immunity in federal court. Id. at 580–83. The

Zitos appealed.

                                            II.

                                            A.

       State sovereign immunity presents a question of law that we review de novo. See

Hutto, 773 F.3d at 542. Because sovereign immunity is waivable, this Court treats it “akin

to an affirmative defense,” meaning that the defendant bears the burden of demonstrating

that sovereign immunity applies. Id. at 543.

                                               6
      The Zitos do not dispute that the Commission is an arm of the State, such that

sovereign immunity may apply. But they argue that the Fifth Amendment’s Takings

Clause overcomes State sovereign immunity.

      The Eleventh Amendment states that “[t]he Judicial power of the United States shall

not be construed to extend to any suit in law or equity, commenced or prosecuted against

one of the United States by Citizens of another State, or by Citizens or Subjects of any

Foreign State.” U.S. Const. amend. XI. While courts—including this one—frequently

refer to States’ immunity from suit as “Eleventh Amendment immunity,” see, e.g., Hutto,

773 F.3d at 542, the phrase is “something of a misnomer, for the sovereign immunity of

the States neither derives from, nor is limited by, the terms of the Eleventh Amendment.”

Alden v. Maine, 527 U.S. 706, 713 (1999). Rather, “States’ immunity from suit is a

fundamental aspect of the sovereignty which the States enjoyed before the ratification of

the Constitution, and which they retain today . . . except as altered by the plan of the

[Constitutional] Convention or certain constitutional amendments.” Id.

      The Fifth Amendment provides that “private property [shall not] be taken for public

use, without just compensation.” U.S. Const. amend. V. The Zitos contend that because

the Fifth Amendment’s Takings Clause is self-executing—guaranteeing a remedy of just

compensation—it reflects a Constitutional structure that exempts takings claims from the

limitations of sovereign immunity. 3 While the Takings Clause originally applied only to

      3
         Plaintiffs briefly draw a comparison to the Bankruptcy Clause, which the Supreme
Court held to create a constitutional exception to sovereign immunity. See Cent. Va. Cmty.
Coll. v. Katz, 546 U.S. 356, 373–78 (2006). But the Supreme Court has since declared that
(Continued)
                                            7
the federal government, Plaintiffs argue that its incorporation to the States in the Fourteenth

Amendment abrogated the sovereign immunity of States as well.

       However, this Court adopted a different reading of the Takings Clause and

sovereign immunity in Hutto, 773 F.3d at 540. In Hutto, South Carolina public employees

challenged a state law amending pension benefits and contributions for public employees

who returned to work after retirement. Id. They argued that changes to the law amounted

to a taking because the changes ended benefits and required the employees to make

additional contributions. Addressing sovereign immunity, the plaintiffs in Hutto made the

same claim the Zitos make here—that “sovereign immunity never bars a constitutional

takings claim” due to the Takings Clause’s guarantee of just compensation. Id. at 551.

       This Court disagreed. We observed that the Supreme Court has recognized the

surrender of State sovereign immunity in six contexts:

       (1) when a State consents to suit; (2) when a case is brought by the United
       States or another State; (3) when Congress abrogates sovereign immunity
       pursuant to Section 5 of the Fourteenth Amendment or pursuant to the
       Bankruptcy Clause; (4) when a suit is brought against an entity that is not an
       arm of the State; (5) when a private party sues a state official in his official
       capacity to prevent an ongoing violation of federal law; and (6) when an
       individual sues a state official in his individual capacity for ultra vires
       conduct.

Id. (citing S.C. State Ports Auth. v. Fed. Mar. Comm’n, 243 F.3d 165, 176–77 (4th Cir.

2001)). We declined to create an additional, blanket exception for the Takings Clause.

this exception is “limited to the Bankruptcy Clause” due to the “singular nature” of
bankruptcy jurisdiction. Allen v. Cooper, 140 S. Ct. 994, 1002 (2020). The Supreme Court
“view[s] bankruptcy as on a different plane, governed by principles all its own.” Id. at
1003. Its treatment of the Bankruptcy Clause and sovereign immunity is therefore “a good-
for-one-clause-only holding.” Id.
                                              8
Although “there is arguably some tension” between the Fifth Amendment guarantee of just

compensation and the bar of sovereign immunity, “that tension is not irreconcilable.” Id.

       To resolve that tension, this Court compared the Takings Clause to the Due Process

Clause’s right to a remedy for taxes collected in violation of federal law. Id. at 551–52.

“In a long line of cases,” the Supreme Court “has established that due process requires a

‘clear and certain’ remedy for taxes collected in violation of federal law.” Reich v. Collins,

513 U.S. 106, 108–09 (1994) (citing McKesson Corp. v. Div. of Alcoholic Beverages and

Tobacco, Fla. Dep’t of Bus. Regulation, 496 U.S. 18 (1990) and “the long line of cases

upon which McKesson depends”). “[D]espite the constitutional requirement that there be

a remedy, the Supreme Court expressly noted in Reich . . . that the sovereign immunity that

States enjoy in federal court, under the Eleventh Amendment, does generally bar tax refund

claims from being brought in that forum.”          Hutto, 773 F.3d at 110 (cleaned up).

Nevertheless, Reich held that state courts must allow suits to recover taxes unlawfully

collected, the “sovereign immunity [that] States traditionally enjoy in their own courts

notwithstanding.” Reich, 513 U.S. at 110. “Reasoning analogously,” this Court concluded

that “the Eleventh Amendment bars Fifth Amendment taking claims against States in

federal court when the State’s courts remain open to adjudicate such claims.” Hutto, 773

F.3d at 551. 4

       4
         This Court “[did] not decide the question whether a State can close its doors to a
takings claim or the question whether the Eleventh Amendment would ban a takings claim
in federal court if the State courts were to refuse to hear such a claim.” Hutto, 773 F.3d at
551.
                                              9
                                              B.

       The Zitos argue that the Supreme Court’s ruling in Knick v. Township of Scott, 139

S. Ct. 2162 (2019) undermined Hutto’s reasoning. Because Knick held that plaintiffs can

bring a takings claim in federal court, regardless of state remedies available, the Zitos

believe Knick abrogated Hutto’s rule applying sovereign immunity in federal court if state

courts are open to such claims.

       Knick addressed the substantive requirements of a takings claim: It decided when

the plaintiff has “suffered a violation of his Fifth Amendment rights” and is “able to bring

a ‘ripe’ federal takings claim in federal court.” Knick, 139 S. Ct. at 2168. Before Knick,

the Supreme Court held in Williamson County that “if a State provides an adequate

procedure for seeking just compensation, the property owner cannot claim a violation of

the Just Compensation Clause until it has used the procedure and been denied just

compensation.” Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson

City, 473 U.S. 172, 195 (1985). In other words, the Williamson County Court believed a

person to be denied just compensation at the moment a person’s claim for compensation

was denied in state court. But Williamson County inadvertently laid a “trap” for potential

litigants. Because the full faith and credit statute, 28 U.S.C. § 1738, requires federal courts

to give preclusive effect to a state court decision, Williamson County’s substantive

definition of a takings claim effectively prevented federal courts from reviewing federal

takings claims. Knick, 139 S. Ct. at 2169. Reversing Williamson County, the Supreme

Court held in Knick that a property owner is denied just compensation and has an actionable

                                              10
claim in federal court “as soon as a government takes his property for public use without

paying for it.” Id. at 2170.

       Knick did not address sovereign immunity, as it involved a suit against a town. See

Jinks v. Richland Cnty., 538 U.S. 456, 466 (2003) (“[M]unicipalities, unlike States, do not

enjoy a constitutionally protected immunity from suit.”). Thus, every circuit to address

Knick’s effect on sovereign immunity has concluded that Knick did not abrogate State

sovereign immunity in federal court. See Williams v. Utah Dep’t of Corr., 928 F.3d 1209,

1214 (10th Cir. 2019) (“But Knick did not involve Eleventh Amendment immunity, which

is the basis of our holding in this case.”); Bay Point Props., Inc. v. Miss. Transp. Comm’n,

937 F.3d 454, 456–57 (5th Cir. 2019) (“Nor does anything in Knick even suggest, let alone

require, reconsideration of longstanding sovereign immunity principles protecting states

from suit in federal court.”), cert. denied, 140 S. Ct. 2566 (2020); Ladd v. Marchbanks,

971 F.3d 574, 579 (6th Cir. 2020) (“[T]he Court’s opinion in Knick says nothing about

sovereign immunity.”), cert. denied, 141 S. Ct. 1390 (2021).

       To sidestep this fact, the Zitos suggest that Knick indirectly altered the sovereign

immunity framework by recognizing the self-executing nature of the Takings Clause in

federal court. But the Supreme Court recognized the self-executing nature of the Takings

Clause in federal court well before Knick. See Jacobs v. United States, 290 U.S. 13, 16

(1933) (“[S]uits [] based on the right to recover just compensation for property taken by

the United States . . . . rested upon the Fifth Amendment. Statutory recognition was not

necessary.”). Knick itself makes this point when quoting Jacobs to explain that the form

of a state remedy does not qualify the substantive takings claim because the claim “rest[s]

                                            11
upon the Fifth Amendment.” Knick, 139 S. Ct. at 2170 (quoting Jacobs, 290 U.S. at 16).

So Knick did nothing new with respect to the self-executing nature of the Takings Clause

in federal court. 5

       Additionally, Knick’s discussion of the Takings Clause does not imply any link

between the self-execution of the Takings Clause and the elimination of sovereign

immunity. To the contrary, the Supreme Court’s analysis compares the Takings Clause to

other constitutional rights that may be subject to sovereign immunity. The Court wrote,

       Although Jacobs concerned a taking by the Federal Government, the same
       reasoning applies to takings by the States. The availability of any particular
       compensation remedy, such as an inverse condemnation claim under state
       law, cannot infringe or restrict the property owner’s federal constitutional
       claim—just as the existence of a state action for battery does not bar a Fourth
       Amendment claim of excessive force.

Knick, 139 S. Ct. at 2171. By drawing a comparison to Fourth Amendment claims of

excessive force, the Supreme Court indicated that its analysis did not deal with sovereign

immunity, which otherwise limits Fourth Amendment suits seeking damages against

States. Ultimately, the Knick Court expressed its belief that Williamson County made the

Takings Clause an inferior right “among the provisions of the Bill of Rights”; by reversing

Williamson County, the Court meant to “restor[e] takings claims” to equal and “full-fledged

status . . . among the other protections in the Bill of Rights.” Id. at 2169–70; see also id.

       5
         This Court likewise recognized the self-executing nature of the Takings Clause in
Hutto. See 773 F.3d at 551–52 (“Just as the Constitution guarantees the payment of just
compensation for a taking, so too does the Due Process Clause provide the right to a remedy
for taxes collected in violation of federal law.”); id. at 553 (quoting other circuits stating
that the “self-executing” nature of a takings claim does not override sovereign immunity
in federal court).
                                             12
at 2177 (“Takings claims against local governments should be handled the same as other

claims under the Bill of Rights.”). By treating the Takings Clause the same as other

constitutional rights, the Supreme Court suggests that it remains subject to the same

limitations on those other rights—including sovereign immunity. See Will v. Mich. Dep't

of State Police, 491 U.S. 58, 66 (1989).

       Accordingly, Knick did not undermine Hutto, where this Court held sovereign

immunity to bar a takings claim against a State in federal court if state courts remain open

to adjudicating the claim.

                                            III.

       We next consider whether North Carolina courts remain open to adjudicating the

Zitos’ takings claim. The parties agree that state courts satisfy this requirement if they

provide a “reasonable, certain, and adequate” means for challenging an action as a taking

and obtaining compensation if the challenge is successful. See Oral Argument at 29:03–

29:19; Mountain Valley Pipeline, LLC v. 6.56 Acres of Land, 915 F.3d 197, 213 (4th Cir.

2019) (quoting Cherokee Nation v. S. Kan. Ry. Co., 135 U.S. 641, 659 (1890)).

       Though North Carolina’s Constitution generally provides a cause of action for

plaintiffs to bring takings claims, see Corum v. Univ. of N.C., 413 S.E.2d 276, 289 (N.C.

1992), the Zitos contend that takings claims against the Commission are governed by North

Carolina General Statutes § 113A-123(b)–(c), which provides an “exclusive” procedure

where invalidation of the state action is the sole remedy. Because invalidation does not

                                            13
compensate the plaintiff for any temporary taking, the Zitos insist that North Carolina

courts do not provide an adequate avenue for just compensation.

       Section 113A-123(b) states that any person with a recorded interest in land affected

by a final order of the Commission may “petition the superior court to determine whether

the petitioner is the owner of the land in question” and “determine whether . . . the order

constitutes the equivalent of taking without compensation.” N.C. Gen. Stat. § 113A-

123(b). “Either party shall be entitled to a jury trial on all issues of fact, and the court shall

enter a judgment . . . as to whether the Commission order shall apply to the land of the

petitioner.” Id. “The method provided in this subsection for the determination of the issue

of whether such order constitutes a taking without compensation shall be exclusive and

such issue shall not be determined in any other proceeding.” Id. If the court has determined

the action to be a taking, and the State still intends to regulate the property, then the State

must initiate eminent-domain proceedings “under the provisions of Chapter 146 of the

General Statutes,” id. § 113A-123(c), which would result in compensation. See N.C. Gen.

Stat. §§ 136-103, -104, -109, -112.

       The Zitos, however, emphasize the outcome if the state court rules the

Commission’s action to be a taking and the State does not pursue eminent-domain

proceedings (i.e., if the State agrees to cease the regulatory restriction). To the Zitos,

§ 113A-123(b) would invalidate the restriction but offer no compensation for the

temporary taking. In this situation, the Commission asserts that the plaintiff may bring a

                                               14
subsequent suit under the North Carolina Constitution to obtain compensation for the

temporary taking. 6

       We agree with the Commission. Section 113A-123(b) states that its procedure

“shall be exclusive” only “for the determination of the issue of whether such order

constitutes a taking without compensation.” N.C. Gen. Stat. § 113A-123(b) (emphasis

added). It does not state that this shall be the exclusive procedure for determining all

available remedies. Because the North Carolina Constitution provides an independent

cause of action for plaintiffs to seek damages for a takings claim, Corum, 413 S.E.2d at

289, it permits the Zitos to pursue damages after establishing through § 113A-123(b) that

the regulation amounted to a taking.

       Even if we assume that N.C. Gen. Stat. § 113A-123(b) provides the exclusive

remedy for a takings claim brought against the Commission, North Carolina’s

constitutional guarantees would override that limitation to the extent it prevented the

redress for a temporary taking. See Carolina Beach Fishing Pier, Inc. v. Town of Carolina

Beach, 163 S.E.2d 363, 371 (N.C. 1968) (“It is familiar learning that a citizen may sue the

State . . . for taking his private property for a public purpose under the Constitution where

no statute affords an adequate remedy.”); Corum, 413 S.E.2d at 289 (“[I]n the absence of

an adequate state remedy, one whose state constitutional rights have been abridged has a

direct claim against the State under our Constitution.”); Taylor v. Wake Cnty., 811 S.E.2d

       At oral argument, the State represented that a plaintiff could file a claim for
       6

compensation for the temporary taking the same day that the state court found the
Commission’s action to be a taking. See Oral Argument at 39:12–40:08.
                                             15
648, 652 (N.C. Ct. App. 2018) (“A Corum claim allows a plaintiff to recover compensation

for a violation of a state constitutional right for which there is either no common law or

statutory remedy, or when the common law or statutory remedy that would be available is

inaccessible to the plaintiff.”). 7

       For instance, in Midgett, a landowner sued the State Highway Commission for a

taking because its construction of a nearby highway caused his property to become flooded.

Midgett v. N.C. State Highway Comm’n, 132 S.E.2d 599, 602 (N.C. 1963), rev’d on other

grounds by Lea Co. v. N.C. Bd. of Transp., 304 S.E.2d 164 (N.C. 1983). Though North

Carolina provided an “ordinarily exclusive” statutory remedy for the taking, the applicable

condemnation statute contained a statute of limitations that “would make a recovery by the

plaintiff in the instant case impossible.” Id. at 608. Nevertheless, the North Carolina

Supreme Court held that the plaintiff’s taking claim could be maintained under the State

Constitution. Id. The Court explained that the State Constitution’s promise of just

compensation for a taking is not “susceptible of impairment by legislation,” and where “no

statute affords an adequate remedy under a particular fact situation, the common law will

furnish the appropriate action for adequate redress of such grievance.” Id.; see also Craig

       7
         Though this right of action arises from a state constitutional right, North Carolina
uses the same standard for determining whether a taking has occurred under both the U.S.
and North Carolina Constitutions. See Finch v. City of Durham, 384 S.E.2d 8, 19 (N.C.
1989) (holding that a rezoning did not constitute a taking under the North Carolina
Constitution and that the rezoning therefore did not constitute a taking under the U.S.
Constitution “for the same reasons”); Guilford Cnty. Dep’t of Emergency Servs. v.
Seaboard Chem. Corp., 441 S.E.2d 177, 183 (N.C. Ct. App. 1994) (“We find that these
tests are consistent and therefore analyze Seaboard’s state and federal constitutional
[takings] claims together.”).
                                             16
ex rel. Craig v. New Hanover Cnty. Bd. of Educ., 678 S.E.2d 351, 356–57 (N.C. 2009)

(reaffirming Midgett and North Carolina’s “long-standing emphasis on ensuring redress

for every constitutional injury”).

       In reply, the Zitos contend that even if they can bring a takings claim for damages

after § 113A-123(b) proceedings, the statutory proceedings effectively create an

exhaustion requirement forbidden by the Supreme Court in Knick. But again, the Zitos

misstate the holding of Knick. Knick prohibited the use of state procedures as an exhaustion

requirement for a takings claim in federal court. See Knick, 139 S. Ct. at 2167. But Knick

did not prohibit States from establishing procedural requirements in their own courts.

Indeed, Knick reaffirmed Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1018 n.21 (1984),

where the Supreme Court upheld a federal statute that “required the plaintiff to attempt to

vindicate its [takings] claim [] through arbitration before proceeding [with their takings

claim] under the Tucker Act.” Knick, 139 S. Ct. at 2173. This requirement was permissible

because Congress “is free to require plaintiffs to exhaust administrative remedies before

bringing constitutional claims” in federal court. Id.; see also Ladd, 971 F.3d at 579 (“In

reaffirming [Ruckelshaus], the Court notes that Congress can, as a condition of its waiver

of sovereign immunity in the Tucker Act, require takings plaintiffs to exhaust

administrative remedies before proceeding to federal court.”). If Congress can condition

its waiver of federal sovereign immunity in federal court by requiring plaintiffs to satisfy

certain exhaustion requirements, it follows that States may condition their waiver of State

sovereign immunity the same way in their courts as well. See Felder v. Casey, 487 U.S.

                                            17
131, 138 (1988) (“No one disputes the general and unassailable proposition . . . that States

may establish the rules of procedure governing litigation in their own courts.”).

       Of course, there are limits on the procedural constraints that the States may impose.

The Supreme Court has warned that state procedures violate the Supremacy Clause if the

procedures effectively deprive plaintiffs of their federal rights. See id. (“[W]here state

courts entertain a federally created cause of action, the ‘federal right cannot be defeated by

the forms of local practice.’”). For example, a State may not adopt procedures that

discriminate between state and federal claims. See Haywood v. Drown, 556 U.S. 729, 738

(2009); Felder, 487 U.S. at 141. But the Zitos’ arguments revolve around Knick, and they

otherwise offer no argument for why North Carolina’s procedures might impede their

federal rights in violation of the Supremacy Clause. As explained above, North Carolina’s

procedures are consistent with Knick; North Carolina’s procedures guarantee the ability to

challenge the Commission’s action as a taking in state court; and if North Carolina’s

statutes do not provide an adequate constitutional remedy, the North Carolina Constitution

guarantees the Zitos the ability to seek that remedy in state court.

       Thus, North Carolina’s courts remain open for takings claims. Under Hutto, this

means that sovereign immunity bars the Zitos’ claims against the State in federal court.

773 F.3d at 552.

                                             IV.

       We recognize there must be sorrow in the Zitos’ loss of their home, and even more

so in light of the steadily rising swells of our oceans’ waters. But State sovereign immunity

                                             18
bars their takings claims against the Commission in federal court when North Carolina’s

courts remain open to adjudicating those claims. For the foregoing reasons, we affirm the

district court’s judgment.

                                                                            AFFIRMED

                                           19