US Supreme Court Protects Landowners from
“Extortionate” Demands by the Government in
Land-Use Permitting Decisions, Including Permit
Denials
In a 5-4 decision authored by Justice Alito, and joined by Chief Justice Roberts and
Justices Scalia, Thomas and Kennedy, the US Supreme Court in Koontz v. St. Johns River
Water Management District broadened the protections afforded to landowners against
unconstitutional conditions imposed by the government in land-use permitting decisions.
In prior decisions in Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987) and Dolan v.
City of Tigard, 512 U.S. 374 (1994), the Court prevented the government from conditioning
a land-use permit on the owner’s relinquishment of a portion of his property unless there
is a “nexus” and “rough proportionality” between the government’s demand and the
effects of the proposed land use. In Koontz, the Court held that the Nollan/Dolan standard
applies to circumstances where the government denies a land-use permit because the
permit applicant does not acquiesce to its demands and where the government’s demand
involves a monetary exaction. All of these cases involve application of the unconstitutional
conditions doctrine which protects the Fifth Amendment right to just compensation.
Koontz involved a landowner’s proposal to develop a 3.7-acre property near Orlando,
Florida. Because the proposed development had the potential to impact water resources
of the state, the landowner was required to obtain a Management and Storage of Surface
Water (MSSW) permit from the St. Johns River Water Management District (“District”), one
of ve water management districts authorized under Florida law to regulate “construction
that connects to, draws water from, drains water into, or is placed in or across the waters
in the state.” In evaluating the permit application, Florida law requires that any resulting
environmental damage be offset by creating, enhancing or preserving wetlands elsewhere.
Although the landowner offered to deed to the District a conservation easement on
a separate 11-acre parcel of his property, the District would not approve the MSSW
permit unless the landowner agreed to reduce the size of his development to 1 acre or,
alternatively, make improvements to District-owned land several miles away. Believing the
District’s demands for mitigation were excessive in light of the environmental effects of
the proposed construction, the landowner led suit in state court seeking, among other
things, “monetary damages” under state law based on “an unreasonable exercise of the
state’s police power constituting a taking without just compensation.”
The trial court applied the Nollan/Dolan standard and found that the mitigation sought
by the District did not meet the “nexus” and “rough proportionality” tests because the
property at issue had already been “seriously degraded.” Accordingly, the trial court found
the permit denial unlawful. The Florida Supreme Court reversed, distinguishing Nollan and
July 10, 2013
For more information, please contact
one of the following members of
Katten’s Real Estate Practice:
Cynthia L. Burch
310.788. 4539 / cynthia.burch@kattenlaw.com
Bryan K. Brown
310.788. 4496 / bryan.brown@kattenlaw.com
Allan J. Abshez
310.788.4444 / allan.abshez@kattenlaw.com
www.kattenlaw.com
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