A recent decision of the U.S. Court of Appeals for the Fourth Circuit concerned a nightmare scenario for any property owner. The plaintiffs sought to rebuild their beachfront house after it was destroyed. But the property was so close to the beach that local and state agencies would not allow the plaintiffs to rebuild, citing North Carolina’s coastal area management laws. Because the denial rendered the property essentially valueless, the plaintiffs sued the state, seeking compensation on the basis that the state had taken their property without just compensation.
But states, as a general rule, are immune from lawsuits. And though some exceptions exist, they are hard to navigate. Here, the Fourth Circuit allowed the possibility that the plaintiffs could challenge the state’s decision. But federal court was not the appropriate forum.
