GOVERNMENT MUST GIVE IN ORDER TO TAKE

The Fifth Amendment to the U.S. Constitution states, in part, "nor shall private property be taken for public use without just compensation."

In June, the U.S. Supreme COurt issued a decision that has received little media attention but has importance for land use and environmental regulation.*

An owner of some Florida land sought a permit from a local water management district to develop a portion of the owner's land. State law requires permit applicants seeking to build on wetlands to offset any resulting environmental damage. The developer proposed to mitigate the effects of his project by giving the district a conservation easement over the rest of his land. The district rejected the developer's offer and said it would grant a permit only if he substantially reduced the size of his project and granted a conservation easement over the much larger balance of his land or if he paid for improvements to wetlands owned by the district elsewhere.

The landowner rejected the district's demands, and the district denied the permit. The landowner sued in state court for damages on the ground that the district's action was a taking of property without just compensation. The Florida Supreme Court denied the claim.

The U.S. SUpreme Court reversed the Florida decision. The Court applied the "unconstitutional conditions doctrine", as expressed in its prior Nollan** and Dolan*** decisions. Those cases establish that government may not condition the grant of a land use permit on the landowner's giving up a portion of the owner's property unless there is a nexus and rough proportionality between the condition demanded and the effects of the proposed land use.

At issue in the current case was whether the unconstitutional conditions doctrine applied when the requested permit was denied. The Court held that it does apply. The Court stated that the Nollan and Dolan decisions "provide important protection against the misuse of the power of land-use regulation."

Writing for the majority, Justice Alito said: "We have said in a variety of contexts that 'the government may not deny a benefit to a person because he exercises a constitutional right.'". He added that the unconstitutional conditions doctrine "protects the Fifth Amendment right to just compensation for property the government takes when owners apply for land-use permits." The Court further stated that under the doctrine, "the government may choose whether and how a permit applicant is required to mitigate the impacts of a proposed developments, but it may not leverage its legitimate interest in mitigation to pursue governmental ends that lack an essential nexus and rough proportionality to those impacts. The Court also held that the doctrine applied regardless whether a permit is granted with conditions or is denied because the applicant rejects the conditions.

While this case involved wetlands mitigation, the key factual issues of "nexus" and "rough proportionality" could become relevant in other development permitting scenarios, such as government demand for contributions of money, road improvements, water and waste water facilities, and the like.

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* Koontz v. St. Johns River Water Management Dist., 570 U,S,___(2013)

** Nollan v. California Coastal Comm'n, 483 U.S. 825 (1087)

*** Dolan v. City of Tigard, 512 U.S. 374 (1994)