SCOTUS Confirms Property Rights Are Civil Rights Deserving the Highest Constitutional Protections in Koontz v. St. Johns River Water Mgmt Dist

The Supreme Court issued its decision today in Koontz v. St. Johns River Water Mgmt District, No. 11-1447 (cert. granted Oct. 5, 2012), holding that the “essential nexus” and “rough proportionality” standards established by Nollan and Dolan apply not only to exactions for land as a condition for land use permits but also to the government’s demand for money in exchange for permitting. The majority opinion written by Justice Alito clarifies that property rights are constitutionally protected rights and that “property” includes not only land but also money.

[Disclosure: OCA filed an amicus brief in this case in support of the landowner, Koontz.  See our previous post here.]

As Reuters pointed out here, the opinion is “the culmination of a more than 18-year battle by Koontz and his late father over the development of their nearly 15-acre (six-hectare) parcel of land.”

The battle began when Koontz requested a permit to develop 3.7 acres of the property, much of which was designated as protected wetlands.  To mitigate any environmental effects of this development, Koontz offered to dedicate the remaining 11 acres to conservation.  Water Management District officials found this to be inadequate and required Koontz to pay for improvements to District-owned property miles away in addition to dedicating the 11-acre conservation easement.

Koontz refused and the permit was never issued.  A Florida trial court awarded him $327,500 as damages for being unable to use his property. The Florida Supreme Court threw the award out, ruling that because Koontz never paid the money and the District never issued a permit, “nothing was ever taken.”

As we learned today, the U.S. Supreme Court largely disagrees with the Florida Supreme Court’s judgement  and has remanded the case for further proceedings.

Our decisions in Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987), and Dolan v. City of Tigard, 512 U. S. 374 (1994), provide important protection against the misuse of the power of land-use regulation. In those cases, we held that a unit of government may not condition the approval of 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 this case, the St. Johns River Water Management District (District) believes that it circumvented Nollan and Dolan because of the way in which it structured its handling of a permit application submitted by Coy Koontz, Sr., whose estate is represented in this Court by Coy Koontz, Jr. The District did not approve his application on the condition that he surrender an interest in his land. Instead, the District, after suggesting that he could obtain approval by signing over such an interest, denied his application because he refused to yield. The Florida Supreme Court blessed this maneuver and thus effectively interred those important decisions. Because we conclude that Nollan and Dolan cannot be evaded in this way, the Florida Supreme Court’s decision must be reversed. (Slip op. at 1.)

Further, Justice Alito writes, “The principles that undergird our decisions in Nollan and Dolan 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.” (Slip op., pp 8-9.)

Justice Kagan, writing for the four dissenting justices, indicates that she agrees with Alito and the majority regarding the standard established by Nollan and Dolan requiring government agencies to show the “essential nexus” and “rough proportionality” between their permitting decisions and a landowner’s proposed uses. However, she disagrees with the majority on the question of  whether a demand for money should be subject to the standards of Nollan and Dolan suggesting that by submitting government demands for money to such scrutiny will result in negative practical consequences.  Most certainly now we can expect the sky to fall as governments must consider the money or fees required as permit conditions to be proportionate and related to the intended use of a property.

Hats off to the Pacific Legal Foundation, the firm representing Koontz before the Court, which reviewed three property rights cases this term.  With the conclusion of the term, the current count is Property Owners – 3, Government – 0.

More commentary on the Koontz decision is available at inversecondemnation, Gideon’s Trumpet and by Prof. Somin at the Volokh Conspiracy.

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