The Takings Line is Bent

Posted on June 26, 2017 by Brian Rosenthal

In an expansive review of regulatory takings, the Supreme Court reiterates governments must pay when overly impinging individual property rights by regulatory means, resulting in compensable takings.  The Court announces a flexible approach to analyze the private party’s parcel deemed taken by regulatory action (past or present).  Particularly, but not exclusively, when more than one parcel is involved as was the case before the Court, a new test emerges to define the taken parcel. The test includes consideration of the landowner’s expectations.  

The dissenters believe the Court for the first time strays away from its precedential findings on the whole parcel in issue as defined under state law, and predict the new multi-factor parcel review test will “tip the scales in favor of the government” for uncompensated takings by allowing the government to frame the taking as reasonable as it relates to the defined parcel and burden.

The majority is equally passionate, noting its test mitigates against the government’s unchecked usurpation and sometimes over-eager use of private property rights in the guise of the greater good.  The Court suggests “[p]roperty rights are necessary to preserve freedom” and supports its test as best suited for that protection.

The case involved a state’s restricting the development of lots on a protected river to those of a certain size, and resulted from unique circumstances where the property owners had come into possession of adjacent lots, each individually failing the development requirement.  Analyzing the facts under a multi-step review, the Court found the lots retained their economic value as a whole and supported a “no compensable taking” finding by looking at the following factors:

  1. No complete loss of economic value [might be non-compensable even if a complete loss where state property and nuisance laws would be deemed legitimately and commonly understood as a fair counterbalance to the regulatory taking (perhaps like wetlands restrictions)];

  2. Land treatment under governing state and local real estate law (how and where bounded);

  3. Physical characteristics (including topography and both its human and ecological features, such as if it were a coastal property or, as  here, a scenic river);

  4. Value (including any opportunities the burden may create, such as preserving a vista or greenspace or relationship of the lots); and

  5. Reasonable expectations of the landowners.

This case has been closely watched by both land use practitioners and regulating governments and municipalities.  Its implications reach squarely to environmental laws and regulations such as water regulations and use and development restrictions.

Finding Common Ground

Posted on August 1, 2013 by Irma S. Russell

Last month’s decision by the U.S. Supreme Court in Koontz v. St. Johns River Water Management District has been the subject of intense dialogue among ACOEL members and environmental lawyers around the country. The Court’s holding that the Water District violated the Fifth Amendment just compensation clause extended the Nollan and Dolan standard to the context of denial of a permit application and raised the need for land use agreements that achieve acceptable results for all involved – a tall order.

A recently published book provides a resource for lawyers and students working in the land use arena. Land In Conflict: Managing and Resolving Land Use Disputes (Lincoln Institute, 2013) by Sean Nolon, Ona Ferguson, and Patrick Field, focuses on land use disputes over the full range of zoning, planning, and development and provides a primer for professionals on all sides of land use issues, including local planners, proponents of projects, developers and their financiers. Parties involved in land use permitting can draw on the book to consider how their conduct and orientation facilitate (or, perhaps, impair) the ability of the parties to find common ground. This book provides insights regarding the public’s right to access to information about land use projects. Both proponents and opponents to projects will gain ideas from this book on interacting effectively, whether this is in the filing process of proposing or opposing a project before a local board or department with land use authority. The orientation of this work is to focus on reconciling the interests of all legitimate stakeholders in the hope of producing, as the authors note, more durable outcomes than typically achieved in the adjudicatory approach. This mutual-gains approach has wider application than land use. It is guided by principles that move decision making away from the impasse of rights rhetoric toward decisions that seek the best alternatives for all stakeholders.

Taking the Fifth on the Fifth’s Taking Clause

Posted on June 26, 2013 by Robert M Olian

…nor shall private property be taken for public use, without just compensation.

Everyone understands the Fifth Amendment’s takings clause to mean, at a minimum, the government cannot force the transfer of private property to the government even for a manifestly governmental purpose (e.g. a highway right of way, or a new airport runway), without compensating the property owner.

Tuesday’s Supreme Court decision in Koontz v. St. John’s River Water Management District is the latest in a series of Supreme Court rulings to extend the protections of the Takings Clause beyond the obvious governmental requisitioning of private property. That’s “latest,” not “last”.

Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994), combine to set forth the Court’s requirements for an “essential nexus” and “rough proportionality” between conditions on land use development and the government’s underlying objectives in the permit scheme to which the property owner is subjected. Absent either nexus or proportionality, a taking has occurred, and the Takings Clause requires that the property owner get “just compensation.” So far, so good.

The facts in Koontz are to some extent irrelevant; indeed the Court’s opinion expressly disowned any determination of the merits of his particular claim for compensation. Depending on whose brief you read, Koontz wanted to develop some wetlands property but the Water Management District refused to approve his project as proposed and put forth some mitigation options that were either “extortionate demands” or “helpful suggestions”, one of which consisted of Koontz spending money to improve public lands remote from his own property. Koontz took umbrage and sued under Florida state law.  The trial court found for Koontz on the basis of Nollan-Dolan, and the intermediate state appellate court affirmed.

The Florida Supreme Court reversed for two reasons: first, it held the Nollan-Dolan standard does not apply to denial of a permit; and second, it held the standard does not apply to a requirement for the payment of money, as opposed to the impairment of a specific piece of property.

Every Justice agreed that the Florida Supreme Court got the first part wrong; that is, they all agreed the Takings Clause applies to permit denials as well as permit approvals. The majority and dissent parted ways with respect to the second question, however, with the majority again holding that Florida got it wrong and that excluding monetary exactions would allow permitting agencies to improperly circumvent the Nollan-Dolan requirements.

Now, one can agree or disagree with the majority, but the decision hardly shocks the conscience. What the decision holds is far less important than what remains to be decided in future cases:

1.    How concrete and specific must a demanded concession be to give rise to liability under Nollan and Dolan?
2.    What happens if a permitting authority merely says, “Denied, come back with something better,” and makes no other demand?
3.    Where will the line be drawn to prevent countless local land use decisions from becoming federal cases?

On these points, the majority took the Fifth.