Pacetta, LLC v. The Town of Ponce Inlet

Asking the Supreme Court to revive property rights protections

Cases > Property Rights > Pacetta, LLC v. The Town of Ponce Inlet
Lost: The U.S. Supreme Court declined to review the case.
Case Court: Florida Third District Court of Appeal

Urged by the town of Ponce Inlet, Florida, Lyder and Simone Johnson bought a number of land parcels and planned a new development through their business, Pacetta, LLC. Town leaders wanted the development so badly, they began revamping the town’s comprehensive land use plan, to allow the project. But after an election, the town’s political winds shifted and new leadership prohibited the development. The Johnsons sued and won a $30 million jury award for the town’s unconstitutional property takings, only to have an appeals court strip the verdict—and the Johnsons’s compensation. A petition filed by PLF asking the U.S. Supreme Court to review and reverse the appeals court decision was denied October 1, 2018.

In 2004, Simone and Lyder Johnson bought six acres of vacant land in Ponce Inlet, Florida, through their business Pacetta, LLC. The Johnsons intended to build a home for themselves and a small residential development.   

Town leaders loved the idea so much that in 2005, they invited the Johnsons to expand their idea to a larger sixteen-acre waterfront development. They all agreed that the larger development would only be feasible if the Johnsons bought the rest of the land. The Johnsons did so, relying on the town’s promises to approve the development and make any appropriate changes to the town’s comprehensive land-use plan.  

Pacetta prepared a detailed plan to develop the waterfront project to be known as the Villages of Ponce Park. The project gave the Town everything it wanted: a public sunset pier and community fountain, a 1,300-foot public river walk, 500-foot nature walk, preservation of trees and archaeological land, and expansive public parking and public access—all at Pacetta’s expense.  

Over the next two years, town leaders followed through on a number of assurances—they passed ordinances that would pave the way for necessary land-use changes, and issued permits for the early stages of the development, including a 900-foot seawall. 

Then local politics shifted. After the Johnsons had spent millions on planning and making initial improvements, and after the Town preliminarily approved Comprehensive Plan amendments, three opponents to the Johnsons’ plan were elected to the town council. In 2007, the council passed the first of many moratoriums on the project. In 2008 and 2009, it passed ordinances singling out the Johnsons’ land and nixed the Comprehensive Plan amendments, destroying any economically feasible use of most of the vacant property.  

The Johnsons sued and won $30 million on a federal takings theory. The trial court found that the Town intentionally devalued Pacetta’s vacant land so that it could later purchase the land at a steep discount.  According to the court, the Town hoped to put Pacetta in severe financial trouble so that the Johnsons would be unable to enforce their property rights. But an appellate court reversed, holding that Pacetta would have to prove even more than that to prevail in a takings claim. 

On behalf of the Johnsons, PLF filed a petition asking the U.S. Supreme Court to review and reverse the appeals court decision, affirming that the Johnsons deserve compensation for their property taking. The Supreme Court denied the petition on October 1, 2018.

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What’s at stake?

  • Government should not be allowed to avoid the Constitution’s requirement that it pay just compensation when it takes property, by intentionally devaluing land prior to taking it.
  • Property owners should not be forced to apply for futile permit applications when government makes clear what types of uses will be allowed on the land.

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