Stealing Your Property or Paying You for Obeying the Law Stealing Your Property or Paying You for Obeying the Law? Takings Exactions after Koontz v. St. Johns River Water Management District Gregory M. Stein Associate Dean and Professor of Law, University of Tennessee David L. Callies Professor of Law, University of Hawaii Brian Rider Adjunct Professor of Law, University of Texas

Outline Background on Takings Law Exactions after Nollan and Dolan Issues that Remained Open Koontz: Facts and Outcome (FL and US) Analysis of Opinion Open Questions, Repercussions, Possible Responses

Background Law 5th Amendment Takings Clause: “… nor shall private property be taken for public use, without just compensation.” Regulatory Takings – Four Types: Permanent Physical Occupations (Loretto) Deprivations of Substantially All Economically Viable Use (Lucas) Most Other Regulatory Takings (Penn Central) Exactions

Exactions, Nollan, and Dolan Exaction: Government approval is conditioned on a landowner concession Nollan (1987): “Essential Nexus” – exaction must meet this means-end connection Dolan (1994): “Rough Proportionality” – exaction may not be excessive in magnitude

Unresolved Issues (pre-2013) What if owner rejects government’s proposed exaction? What if government seeks to exact money rather than a real property right? Does it matter whether exaction is administrative or legislative in nature? What if government simply rejects owner’s proposal?

Koontz v. St. Johns River Water Management District Facts The physical configuration of the Koontz property The case in the Florida state courts

Koontz: Aerial View of Area

Koontz: Immediate Area

Koontz: Close-Up of Parcel

Koontz v. St. Johns River Water Management District The US Supreme Court grants certiorari Court agrees to decide two issues: Do Nollan and Dolan apply if the owner rejects the government’s proposed exaction? Do Nollan and Dolan apply if the government seeks to exact money rather than an interest in real property?

U.S. Supreme Court Supreme Court rules in favor of landowner on both issues Majority of 5: Alito, Roberts, Scalia, Kennedy, Thomas Dissent of 4: Kagan, Ginsburg, Breyer, Sotomayor

Majority Opinion: First Issue “Nollan and Dolan [principles] do not change depending on whether the government approves a permit on the condition that the applicant turn over property or denies a permit because the applicant refuses to do so.” “A contrary rule would . . . enable the government to evade . . . Nollan and Dolan simply by phrasing its demands for property as conditions precedent to permit approval.”

Majority Opinion: Second Issue Do not want land use officials to evade Nollan/Dolan by substituting a monetary fee for an exaction of real property The property interest necessary in cases such as these is not a required dedication of land itself but rather the effect of any exaction on the owner’s subject parcel

Dissent: First Issue Agrees that a conditional denial is no different from a conditional approval But as the Court says, “Where the permit is denied and the condition is never imposed, nothing has been taken.” Court instead calls this an unconstitutional condition If this is not a taking, what is the remedy? And here, government demanded nothing

Dissent: Second Issue Government exactions of money cannot constitute compensable takings The requirement to pay money in Koontz does not differ from other requirements that impose general liabilities, such as taxes Nollan and Dolan simply are not relevant

Reasons for Owners to Celebrate Governments now must assess “nexus” and “proportionality” earlier in the process Mitigation fees, in-lieu fees, and impact fees may constitute exactions Exactions are not the same as taxes

Reasons for Regulators to Worry Koontz is not a takings case The Court does not trust government officials Exactions are difficult to distinguish from taxes

Possible Repercussions More outright denials of permit requests Greater focus on distinction between administrative and legislative exactions Increased use of contract and conditional zoning, development agreements Closer tailoring of government charges Scrutiny of affordable housing exactions

Conclusion Nollan and Dolan are alive and very well Court has not yet reached some of the other questions those cases left open Governments will have to tailor exactions more closely, and may deny more requests More cases likely to arise