PLF files opening brief in major U.S. Supreme Court property rights case

November 21, 2012 | By BRIAN HODGES

Today, PLF filed the merits brief in the U.S. Supreme Court property rights case, Koontz v. St. John’s River Water Management District (a copy of the merits brief is available here).

As you may recall, Koontz concerns an issue that is eventually faced by every property owner:  can the government force you to pay for your rights?  Coy Koontz, Sr. owned commercial acreage at the intersection of two major Florida highways.  When he applied to develop a small portion of his land, a local land use agency said it would approve the permits, but only if Mr. Koontz paid to restore degraded wetlands owned by the government and located miles away from his land.  When Mr. Koontz objected, the agency denied his permits.  Almost two decades of litigation followed.  The trial and appellate courts ruled in favor of Mr. Koontz, holding that the agency had taken his land.  The Florida supreme court disagreed.  Now the case is before the U.S. Supreme Court.

As set out in PLF’s brief, this case follows up on an important precedent set by PLF in the 1987 case, Nollan v. California Coastal Commission.  There, a California state agency required that the family to dedicate a third of their beachfront property to the public in order to receive permit approvals to tear down a dilapidated bungalow and build a new house.  The Court struck down the condition, holding that the condition bore no relationship, or “nexus,” to the permit application.  It was “not a valid regulation of land use,” the Court wrote, “but an out-and-out plan of extortion.”  Several years later, in Dolan v. City of Tigard—a case in which PLF participated as a friend of the court—the Supreme Court refined the rule set out in Nollan to require that a development condition be both related and “roughly proportional” to the impact of the proposed development.

Together, Nollan and Dolan assured that the government did not abuse its superior position in the permit process by requiring landowners to give up excessive benefits as the “price” of obtaining permit approvals.

Over the years, however, lower courts have narrowed the nexus and proportionality tests to the point of absurdity.  Under some of the more radical decisions, the nexus and proportionality test have been so altered, that rules intended to protect against government abuse of the permit process, now provide a roadmap for extortion.  Take, for example the state court’s decision in Koontz.  The Florida supreme court held that Nollan and Dolan will never apply where (1) permit approval is withheld based on a landowner’s objection to an excessive exaction, and (2) the exaction demands dedication of money to the public.

Operating under the lower court’s decision in Koontz, a permitting agency could avoid constitutional liability by couching its demands as a condition requiring a dedication of money, labor, or other personal property, and imposing the demand as conditions that have to be satisfied before a permit will issue.  In that way, the agency would be able to force landowners into “agreeing” to otherwise unconstitutional conditions in order to secure the permit approvals necessary to make use of their property.

Such a formulation of takings law is repugnant to the most basic concept of fairness, and finds no support in the U.S. Supreme Court’s case law.  The Koontz case will determine whether the constitutional safeguard established in Nollan and Dolan will have any practical effect for property owners across the nation.