By Justin Allsop, Law Clerk, Rose Law Group
Back in January 2013, the Supreme Court of the United States (SCOTUS) issued an opinion that reverberated throughout the walls of city planning departments and other permit issuing agencies everywhere – that opinion was the Koontz v. St. Johns River Water Management District. The case was decided based on interpretations of takings jurisprudence. In general, the courts have recognized three types of “takings” that compel a government to provide a property owner just compensation by way of their 5th Amendment right to such payment. The three ways a government can be held liable for this constitutional violation are (1) through actual physical possession of land, (2) a regulatory taking (where a government regulation limits the value of the land or ability to utilize the economic benefits of the property) and (3) unconstitutional conditions. Koontz came about as a result of the third type of taking but this time around it was slightly different take on the doctrine of unconstitutional conditions.
The doctrine of unconstitutional conditions stems from two previous SCOTUS opinions, the Nollan v. California Coastal Commission and the Dolan v. City of Tigard cases. These cases have provided the Nollan-Dolan test which states that a government subjects a landowner to a taking when it subjects that landowner to permit conditions that do not have a substantial nexus and rough proportionality to the proposed development of the landowner.
In Koontz, the Water Management District sought to limit Koontz’s development to a small 1-acre portion of his 14.9-acre parcel. His original plans had proposed a small commercial development on 3.7 acres. The District put a condition for approval on his permit that he pay for environmental mitigation on District owned land miles away from his property. Koontz refused and sued. He won and the trial court and appellate court level in Florida’s state courts but then lost in the state’s Supreme Court. His petition for cert was granted and the opinion of SCOTUS came down 5-4 in his favor.
Justice Alito, writing for the majority, provided that although the Nollan-Dolan cases were about permit conditions that resulted after a permit was granted, the mere denial of a permit based on a property owner’s refusal to comply with a government’s unreasonable conditions was a constitutional violation subjecting that government to takings claims. Holding that Nollan-Dolan applied in this case, Alito reaffirmed that any conditions placed on a permit application must meet the substantial nexus and rough proportionality requirements else run afoul of a landowner’s constitutional rights.
So what does that mean today? It means that there may be potential delays in permitting processes as government agencies scratch their heads as to where the line is drawn when they try to force a developer to deal with a conditioned permit. It also means that developers have a very sizable bargaining chip to levy against any agency overreach, as there is now a viable claim for just compensation. Hopefully, moving forward it will mean a more streamlined and fair process for the multitude of projects that have been hampered with burdensome conditions for approval, but it might also mean that we will see less investment in community aesthetics as governments seem fearful of asking for too much.
