An interview with the attorneys behind the SCOTUS case Sheetz v. County of El Dorado

On Tuesday, January 9, 2024, the Supreme Court heard oral arguments in Sheetz v. County of El Dorado, a case challenging the government’s ability to place unreasonable conditions, including large “impact fees,” on property owners seeking building permits.

Pacific Legal Foundation partnered with Paul Beard of FisherBroyles, LLP and argued that the impact fee imposed on our client George Sheetz violated the unconstitutional-conditions doctrine established by three Supreme Court decisions—PLF wins in Nollan v. California Coastal Commission and Koontz v. St. Johns River Water Management District, as well as Dolan v. City of Tigard.

After the arguments, Pacific Legal Foundation sat down with Paul Beard, the former PLF attorney who argued the case, and PLF attorney Brian Hodges, who worked on the legal team in this joint effort. This wasn’t Paul and Brian’s first time partnering: They also worked together on Koontz, which Paul also argued before the Supreme Court. Koontz was PLF’s 7th Supreme Court victory.

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PLF:

Were there particular questions from the Justices that surprised you?

Brian Hodges:

Nothing surprised us, actually. We were prepared to cover the whole field of potential questions.

What surprised us was how focused the Court was just on the question presented, which was whether legislative exactions are subject to Nollan and Dolan. The government briefs really didn’t address that issue. That’s the issue that the Court granted cert on, but they didn’t really address it. They tried to change the topic. And the fact that the Justices didn’t really take the bait was a bit surprising.

Paul Beard:

I don’t think generally that there were a lot of questions that surprised me. We can get super hyper-technical and talk about some of the questions regarding “where’s the taking?” I guess I certainly didn’t expect Justice Alito’s hypothesis that maybe the taking is some kind of a “no build” easement or the negative easement. Interesting theory, but that’s probably the one that I hadn’t really expected.

Brian Hodges:

What surprised me was the lack of questioning on the government’s arguments—the focus on the question presented.

Paul Beard:

That’s a good point. We had talked about whether they were going to try to limit it to the question that we presented to them. We debated whether we thought they would go beyond, into some of the issues that the County and the U.S. government had raised, and I think Brian’s right.

To my surprise, a majority of them seemed interested only in answering the question presented and not tackling some of the County issues.

PLF:

There appeared to be a common sentiment among some of the Justices that money is not real property and does not count as a government taking. Is this a common opinion held by the Court?

Paul Beard:

Well, their issue is how can money be property protected by the Takings Clause, and that has been something I don’t think they’ve actually resolved squarely.

If anything, what you take away from the opinions is, yeah, if the government takes away an undifferentiated sum of money, like $100 in cash, it’s not a taking. They always want it linked to something identifiable, whether that’s a bank account, and in our case, whether that’s a link to real property land. So it doesn’t sound like common sense, but that is at the technical level.

We haven’t really gotten a decision from the Supreme Court on that. Brian, correct me, but I think this is right, that when the government just takes an undifferentiated sum of money, that’s not a taking. It might be other things. It could be a due process violation, equal protection violation, but the government has never said that just money is property protected by the Takings Clause.

Brian Hodges:

There’s an unhealthy relationship with money with the government and with the courts because money is the air that government breathes. They need it. They need it to operate. So the Court over the years has just kept carving out these exceptions for money, but there’s really no doctrinal basis because the Constitution applies to all property, and money is property. And money was within the minds of the Founders when they were drafting the Takings Clause. So, there’s no real reason for them to exclude it, but they’ve created these rules that make it harder to bring a takings claim when the only thing that’s being taken is money. And it appeared on the face of Koontz that they said that when you demand money that’s linked to a specific parcel of property, it falls within this category of monetary takings cases.

Today they were saying, yeah, it’s a fee. We call it an impact fee, but it’s more like a tax. They were just fudging around with definitions. I’m not sure if it’s because they didn’t want to engage with the government’s arguments or whether there’s something that they’re uncomfortable with their decision in Koontz, that they’re not quite ready to underscore it and put an exclamation point on it. But that’s something that we’ll find out.

PLF:

You said that the County in their briefing really tried to change the subject from whether legislative exactions are exempt or not. Were you surprised that the attorney outright agreed that legislative exactions are not exempt?

Paul Beard:

That came out in their briefing, so we weren’t too surprised that they had to go down that road. The County attorney qualified a lot of it, but at the end of the day, she just couldn’t get around the fact that they had conceded the essential point of our question presented, and that there was an agreement on that issue.

Brian Hodges:

What surprised me the most was Justice Sotomayor’s questioning of the County attorney, when she was trying to say, well, we agree with them in principle, but what the court below did was something different. And she was trying to wriggle off that hook that she had set. And when Justice Sotomayor said—I can’t remember the turn of phrase she used, but something like “you’re doing violence to the words or you’re fighting with the words of the opinion.” [Note: The Justice’s exact quote was, “You’re fighting the words.”]

So that surprised me because really all of the weight of the various government briefs were behind this attempt to say that the California courts really weren’t exempting legislative exactions. They were just carving out an exception for this one special case. And the Court wasn’t buying it.

PLF:

The client George Sheetz and his daughter were in the courtroom today. Were you able to talk to him before or after arguments and get his reaction?

Brian Hodges:

He seemed thrilled to be there. He knew he was in the right. And he was so shut down when he wanted to challenge the fee and was told “If you don’t like it, don’t build a home.” That I think he feels vindicated to see his case being argued in the highest court.

PLF:

Paul, this is not your first time arguing at the Supreme Court. What was it like going back, and what was the preparation like?

Paul Beard:

We’ve been preparing for what, October, November, December, over three months. But the intense preparation started last Tuesday when we all flew in from out of town and really hunkered down and met regularly, spent days and even evenings together, formulating answers to expected questions.

A lot of the stuff that came out of my mouth were questions that we as a team had decided, “Okay, this is the way we want to try to say it.” I may have butchered some of it, but in essence, most of it was the product of this week-long preparation at PLF and here at the hotel, trying to identify the most difficult questions and formulating the best-possible responses to them.

The moot courts were very helpful, in part because I feel like they matched really well with what the questions were today. All focused on taxes, user fees, and the practicality of applying Nollan and Dolan to legislative exactions. The moot judges zeroed in on what it turns out the Justices today were mostly interested in.

In terms of the lead-up, the last couple of days, it’s been a little bit gnarly, for me at least. I think Brian suffered some of the same anxiety. But I woke up in the middle of the night last night, couldn’t get back to bed just thinking about the case, thinking about answers to the questions. So at least for me, it’s not a pleasant experience, the day or two in the run-up, but obviously it’s a great feeling once you’re up there and you’re answering the questions and you feel like you know something about what they’re saying.

Brian Hodges:

And you were definitely in flow state. So prepared that you were able to answer things without difficulty.

Paul Beard:

I felt that I was better prepared this time than I was 11 years ago in Koontz. And I think that’s in part because of the infrastructure and logistics of how PLF does oral argument now, as opposed to 11 years ago. We had a lot of support.

Brian Hodges:

Yeah. And we also had the benefit of having a little bit of a head start here because we were the team that did Koontz. We had all that experience under our belt and the things that we could have done better, we both are very aware of and did them better.

This is my fourth time being on a team at SCOTUS, and it never ceases to overwhelm me walking in those halls, walking up the stairs. Especially the moment that really gets me is when you’re in the lawyers’ lounge. You’ve got hundreds of years of continued tradition. Every great case has begun that the advocates were in that same room. They were pacing the same worn marble floor. There’s just such a sense of tradition and duty and consistency of the law, that you are part of the law when you’re going there to advocate on behalf of your clients, and it’s really overwhelming.

Paul Beard:

I definitely feel that way myself as well. Going into the courtroom is awe-inspiring. No matter how many times you go in there, I feel like it’s a new awe-inspiring experience, with the columns and the grandeur of the room.

Brian Hodges:

When you’re in the U.S. Supreme Court and the columns sweep to the sky, and then you’ve got the paintings on the ceiling and the reliefs built in. There’s very little in the world that can match it.

PLF:

You’ve worked on this case for seven years, Paul. What did today feel like, and what would winning this case mean?

Paul Beard:

When I first took on the case way back when in 2017, I had the premonition that this would be a case possible for the Supreme Court because of the persistent conflict in the courts about whether legislative exactions are exempt from Nollan and Dolan. So I had a really good feeling about the case even early on. It was really satisfying to get the cert granted. So that was the best moment, I think, of the entire process, was getting that cert granted.

In terms of what it might mean for the case, I mean, obviously we’re going to have to wait and see what the Court writes, but at a minimum, if it answers our question presented and nothing else, I think that’ll be an important win in those jurisdictions, which I don’t know how many there are now, but certainly California.

In those jurisdictions with legislative exactions now, there won’t be an excuse not to review them closely, which is an important win for all property owners when they’re in the permitting process and some law requires the dedication of property, the government won’t be able to rely anymore on this idea that, well, the legislature is the one that enacted it, so it’s exempt from review.

Judicial review is really what this case is about—making sure that we hold the government’s feet to the fire. It can keep them honest. And I think anytime you have heightened judicial review of a government action, I think it’s super-beneficial to property owners in particular.

Brian Hodges:

If we get a win in this case … There’s a common thread in a lot of PLF’s cases, and it’s like, “Just give us a day in court and we can show you what was done to us was wrong.”

It’s really sick that we’re seven years into this case, and no court has lifted the hood to see how this fee demand works. It’s so clearly shifting burdens from one group of people onto another. It’s just so clear that that’s what they did, and no court was willing to look at that. They were just throwing up excuses to not try Mr. Sheetz’s case, and if he has his day in court, fairness will prevail.

Paul Beard:

Amen.

Photo at top, from left to right: Damien Schiff, Paul Beard, George Sheetz, Brian Hodges, Larry Salzman.