June 26, 2013

Does Koontz also blow holes in Williamson County?

By J. David Breemer Senior Attorney

Yesterday, Pacific Legal Foundation scored a huge victory for property rights when the United States Supreme Court issued an opinion favoring the property owner in Koontz v. St. Johns River Water Management Agency. The obvious boon for property owners was that the Court agreed with PLF’s arguments that all conditions imposed on building permits- including monetary exactions- should be subject to the robust constitutional standards of review adopted in Nollan v. California Coastal Commisison and Dolan v. City of Tigard. The Court thus agreed that conditions which are unrelated and disproportionate to the impact of the proposed development must be struck down. Additionally, the Court agreed that land use regulators must comply with Nollan/Dolan limits on their conditioning powers when they deny permits because an applicant does not agree to a condition , as well as when they approve a permit subject to compliance with a condition. Property rights advocates at PLF and elsewhere have been struggling for years to get courts to recognize that mitigation and impact fees should be subject to heightened judicial scrutiny to ensure that the government is not using its permitting discretion to force building permit applicants and other property owners to become the public’s ATM machine.  Koontz is a great vindication of this effort.

But, as I read the decision, I began to wonder if perhaps Koontz had provided one more benefit to property owners. Specifically, it occurred to me that perhaps Koontz had dealt a blow to another long time scourge of property owners: the Williamson County ripeness doctrine.  The Supreme Court’s 1985 decision in  Hamilton Bank of Johnson County v. Williamson County Regional  Planning Commission stands, in part, for the proposition that property owners cannot go to federal court when they assert that they are entitled to just compensation under the Fifth Amendment because the government has infringed on their constitutional freedom from uncompensated takings of property.   Rather, Williamson County, and the later decision in San Remo Hotel v. City and County of San Francisco, seem to say that property owners seeking the constitutional remedy of just compensation for a taking can only go to state courts for protection- unlike other classes of constitutional plaintiffs, who are free to seek federal court protection of their rights.  The reasoning behind this doctrine is bizarre and has, over time, given rise to a multitude of illogical procedural barriers that often destroy property owners’ constitutional claims before they are ever heard in court. For an article illustrating this point, see here.

With this background in mind, what struck me about Koontz is that the entire Court seemed to agree that a property owner who challenges a permit denial under Nollan/Dolan due to an offending condition can seek to invalidate the condition under the unconstitutional conditions doctrine, as well as potentially seek damages under a state or federal statute, but is not entitled to just compensation under the Fifth Amendment. See Slip. Op., at 11 and the dissenting opinion, at 2. If this is so, then such plaintiffs are free of Williamson County. After all, that decision hinges entirely on the Just Compensation Clause of the Fifth Amendment. If the Just Compensation Clause is inapplicable to permit denial/unconstitutional conditions plaintiffs, and invalidation is a proper remedy, as Koontz appears to say, then Williamson County does not apply by its own terms.  And that in turn means that Nollan/Dolan permit denial plaintiffs can sue immediately in federal court on the ground the government has denied a permit because the applicant refused to accede to a condition.

Moreover, it is not clear to me that there is a logical basis for applying a different remedial, and thus ripeness, framework for traditional Nollan/Dolan plaintiffs; i.e., those challenging permit approvals including objectionable conditions.  If a plaintiff subject to a permit denial due to an unaccepted condition can seek invalidation/removal of the condition as a remedy, then why can’t a plaintiff who challenges a conditioned approval do the same? Indeed, in Nollan itself, the property owner sought and obtained a “mandate” remedy that resulted in invalidation of a challenged condition.  Once again, if invalidation is available and sought out as a Nollan/Dolan remedy, and the Just Compensation Clause is not, then Williamson County ripeness barriers have no bearing on the prosecution of the claim.  All of which leads to the conclusion that, after KoontzWilliamson County may be on very shaky ground in the Nollan and Dolan context, and federal courts may therefore soon be deciding these claims, as many believe they should have been doing all along.

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St. Johns River Water Management District v. Koontz

Coy A. Koontz sought to develop commercial land, most of which lies within a riparian habitat protection zone in Orange County, Florida. He applied for a dredge and fill permit with the St. Johns Water Management District, which  agreed to grant the permit only on the condition that he place a conservation easement over his land, and perform mitigation off-site by replacing culverts and plugging certain drainage canals on distant District-owned properties. When Koontz refused to perform the off-site mitigation, St. Johns denied the permit. PLF successfully represented Koontz before the U.S. Supreme Court, which held that a land-use agency cannot condition a permit on the payment of a mitigation fee to be used to pay for facilities that have no connection to the impacts of the permitted development.

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