Four years later, after the developer had incurred substantial costs installing infrastructure and had received final approval for the construction of the first 212 units, the county changed its zoning ordinance and adopted more stringent density limits.

[3] The Sixth Circuit Court of Appeals reversed and reinstated the jury's award, holding that just compensation was mandated by the Fifth Amendment when land-use regulations deprive an owner of all economically viable use of property, for the period during which they are in effect.

[4][5] The Supreme Court granted certiorari to determine whether monetary compensation is required when an owner is temporarily deprived of the beneficial use of land by operation of government regulations, but it did not resolve that issue.

Justice Stevens wrote a concurring opinion, arguing that the judgment below should be reversed because there was no violation of due process and no formal condemnation of the property.

The latter problem became known as the "Williamson Trap" among attorneys for aggrieved property owners,[16] although it was defended as a straightforward application of principles of preclusion by government advocates.

[17] However, in an earlier landmark takings case, Euclid v. Ambler (1926), the Court held it unnecessary to seek a local permit before challenging a land-use regulation as unconstitutional.

This seemed to bear out the views of commentators who saw Williamson County's second prong as extinguishing federal takings claims, rather than ripening them.