PLF starts new year at Supreme Court, urges closure of permit extortion loophole

At 72, many retirees might mark their calendars for family gatherings or travel. George Sheetz turned 72 in December with one single day circled: January 9, 2024, when his seven-year property rights battle would ascend to the U.S. Supreme Court, aiming to slam shut a legal loophole that has long allowed governments to get away with theft-by-permit.

His ordeal began in 2016 while still running his successful engineering firm. George got a good deal on a vacant lot in rural El Dorado County, California. With a little work, it was ideal for a small manufactured home where he and his wife could retire and raise their grandson.

“The parcel was a mess. It had been logged, and had ruts and slash piles everywhere. But the more I worked on it, the more I fell in love with it,” he says.

Fervor turned to shock when George applied for a county building permit and was told its approval hinged on payment of a staggering $23,000 “traffic impact” fee.

“I was sick to my stomach,” he recalls. “A manufactured home is already built, already been inspected by the federal government, is brought in on a truck, and set down. The county has nothing else to do.”

The county claimed its hands were tied by its Traffic Impact Mitigation Fee Program. Adopted in 2004, the permitting scheme forces new development to pay the full cost of county plans to address historic and future roadway needs by building new roads and road improvements through exorbitant permit fees—regardless of whether anyone actually uses the new or improved roads.

Reflecting on the blood, sweat, time, and money he’d put into his land, George reluctantly paid the fee, got the permit, and his home. But he refused to let the government off the hook. The county never justified its fee, so he formally protested, demanding either an explanation or a refund.

County bureaucrats merely ignored his protest and mocked his concerns.

“They said, ‘This is just the way it is. Accept it. You don’t have to build. No one’s making you build,’” says George. “I said, ‘Well, then I’m going to sue you.’ They just chuckled and said, ‘Good luck. You’ll never win.’”

Determined as ever, George filed a takings claim in state courts, arguing the outrageous fee had nothing to do with his project and violated the unconstitutional-conditions doctrine established by three Supreme Court decisions—PLF wins in Nollan v. California Coastal Commission (1987) and Koontz v. St. Johns River Water Management District (2013), as well as Dolan v. City of Tigard (1994).

The rulings powerfully rebuked government extortion through the permit process by limiting conditions and fees to what’s sufficiently proportional and related to a proposed project.

Six years later, however, it looked as if the bureaucrats were right. State courts denied George’s claim using a legal loophole that exempts even the most egregious permit conditions or fees from Supreme Court doctrine if imposed by lawmakers rather than officials manning the permit desk.

Although the permit conditions at the heart of Nollan, Dolan, and Koontz all originated in the legislature, the Court did not specifically address whether legislatively imposed conditions were subject to the doctrine—a resounding silence that emboldened some courts—including California’s— to create an exclusion from the unconstitutional-conditions doctrine.

George’s case landed in this unfortunate loophole because his permit fee was baked into county land use laws a dozen years earlier. When the California Supreme Court refused to review his case, George asked the U.S. Supreme Court to close this loophole once and for all so no Americans must choose between their rights and a government permit to use their own land.

“When you’re dealing with these government agencies, they pretty much have you over a barrel,” he says. “I wanted to go after the county and do everything I could to win.”

George will watch in person as his attorney, Paul Beard II, argues Sheetz v. El Dorado County before the Supreme Court. Paul is a former PLF attorney who successfully argued Koontz. Now a partner at FisherBroyles, LLP, Paul brought George’s case through lower courts and successfully petitioned the Supreme Court to hear the case.

“The Supreme Court has long recognized that the government can charge fees to mitigate actual public impacts caused by private projects,” explains Paul. “But the government cannot force property owners to surrender a constitutional right in order to extort more than is appropriate. Nor can it weasel out of the Court’s rulings just because a legislature created the permit process.”

Given PLF’s expertise and track record of winning landmark cases in this area of the law, Paul asked PLF to serve as co-counsel at the Supreme Court—a request we accepted with honor and vigor.

“Justice Thomas invited this challenge as far back as 1994 when he wrote, ‘a city council can take property just as well as a planning commission can,’” notes PLF senior attorney Brian Hodges. “And for decades since, PLF has relentlessly pursued opportunities to bring such a challenge before the Court. We’re proud to stand with George and Paul in urging the Justices to ensure fair government fees no matter who charges them.”

George admits the journey from the county planning office to the nation’s highest court has been long, and he understands why some people give up. Yet, he calls the experience a thrill ride and is hopeful for victory—and vindication.

“Through your whole life, you get beat down so many times, it would be nice to win one,” he says. “I want to go back into that county building, look those bureaucrats right in the eye and say, ‘Well, how do you like me now?’”