Tomorrow, the U.S. Supreme Court will hear oral arguments in PLF’s property rights case, Koontz. In a series of posts last week, we scrutinized the arguments being made and argued that the Supreme Court precedents set out in Nollan and Dolan should apply to Koontz. On Friday, we took an in-depth look at Nollan. This post focuses on Dolan.
Florence Dolan wanted to grow her plumbing and electric supply business by expanding the existing store (pictured) in Tigard, Oregon and paving a parking lot for patrons. Her proposal was consistent with the city’s zoning scheme, so she applied for a permit from the city. The city planning commission determined that Ms. Dolan’s proposal could increase traffic and the risk of flooding. The commission approved the permit application on the condition that she give 10 percent of her property to the city for the construction of a pedestrian/bicycle path along the creek (pictured) that ran behind the store, and that she improve the city’s storm drainage system. Ms. Dolan objected to the conditions, arguing that it wasn’t enough for the commission merely to say that her store could have some effect on traffic and drainage. If the commission was going to impose conditions on her permit, she argued, it had to show that the conditions were related to the magnitude of the effects of her project.
In a divided 5-4 decision, the Supreme Court agreed. The court interpreted Nollan as an application of the well-settled doctrine of “unconstitutional conditions.” This doctrine holds that the government cannot use its powers to confer discretionary benefits to circumvent constitutional limits. The Constitution protects our rights to free speech, to vote, to receive just compensation when property is taken for a public use, etc. The government cannot sidestep these limits by demanding that they be waived in exchange for welfare payments, building permits, or any other discretionary benefit. Whereas Nollan held that the government’s demands had to be related to the type of effects of the project, Dolan extended the rule by requiring some relationship between the magnitude of the demands and the effects of the project.
The test announced in Dolan requires a “roughly proportional” relationship between permit conditions and the effects of the action to be permitted. Under that test, the court will evaluate whether the government actually attempted to weigh the scope of the conditions against the effects of the project and whether it did so reasonably. The condition in Dolan failed because the commission offered only conclusory statements that the dedication could offset some potential effects, without any individualized determination of rough proportionality.
In the Koontz case, a government agency demanded that a property owner dedicate 75% of his total property to conservation and spend up to $150,000 improving land owned by the agency miles away from his proposed development. The government has never demonstrated that these demands were proportional to any effect of the project. If Dolan applies, as PLF argues, these conditions would fail constitutional scrutiny.
For more information on Dolan, you can listen to the oral argument, and there are pictures of how the site looked before an after the project. Ms. Dolan was eventually able to build her store (pictured).