Koontz oral argument: the importance of Nollan

In only four days the U.S. Supreme Court will hear oral arguments in PLF’s property rights case, Koontz.  In recent posts, we’ve argued that Supreme Court precedents set out in Nollan and Dolan should apply to Koontz.  Today and Monday we’ll take a closer look at the importance of those two cases. This post focuses on Nollan v. California Coastal Commission, 483 U.S. 825 (1987)–a property rights case that PLF argued at the Supreme Court over 25 years ago.

In Nollan, James and Marilyn Nollan wanted to replace a small, dilapidated bungalow (pictured on the right) on their Southern California beachfront lot with a three-bedroom house.  The Nollans originally leased that property with an option to buy, but the option to purchase was conditioned on the promise to demolish and replace the bungalow.  The Nollans applied for a permit to do so.  The California Coastal Commission agreed to issue the requisite coastal development permit on the condition that the Nollans dedicate part of their land as a public beach.  The Nollans objected, arguing that the Commission’s condition could not be imposed without evidence that their proposed project would have a direct adverse impact on public access to the beach.  The Commission claimed that the new house would interfere with visual access to the beach and consequently, create a “psychological barrier” to “access.”  The Commission argued that the burdens on “access” could be alleviated by making the Nollans provide lateral access to the beach. 

A majority of the U.S. Supreme Court rejected the Commission’s argument and agreed with the Nollans.  Justice Scalia held that, in order for government to compel a transfer of property as a condition on approval of a development application, the government must establish an “essential nexus” exists between a permit condition and a proposed project.  The court found that nexus was absent in the Nollans’ case.  The opinion explained that unless a permit condition is required to mitigate for some impact of the project development proposal, a government’s demand that a property owner give up an unrelated benefit is an “out-and-out plan of extortion.”  The opinion explained that governments can use the power of eminent domain to advance some “public purpose” under the Fifth Amendment, but it must pay just compensation for the land taken–it cannot evade the Takings Clause by making  demands in the permitting process.  The majority opinion concluded by saying if California “wants an easement across the Nollans’ property, it must pay for it.”

Nollan was a great victory for the Pacific Legal Foundation and supporters of property rights nationwide.  It established the “essential nexus test” used in unconstitutional conditions analyses.  In the Koontz case, a government agency imposed extortionate permit conditions on a property owner who wanted to develop a few acres of his land: he would have to dedicate 75% of his total property to conservation and he would have to spend up to $150,000 improving government lands that were miles away from his proposed development and his property.  We hope the essential nexus test will apply in this case and strengthen property rights in the process.

For more information on the Nollan case, you can listen to former PLF attorney Robert Best’s 1986 Supreme Court oral argument.

An aerial shot of the Nollan’s new house is pictured below.  Check back on Monday for a blog profile of Dolan.