The Supreme Court Gets It Right On Takings - And Wrong - A View From 'Inside The Curtilage': The Property Owner's Perspective

Koontz v. St. Johns River Water Management District, No. 11-1447 (U.S. Supreme Court, June 25, 2013)

In Koontz v. St. Johns River Water Management District, the Supreme Court cleared up two important, nagging issues with wide applicability and importance to property owners across the country. First, the 5-member majority, led by Justice Alito, held that a government cannot avoid Fifth Amendment takings liability by denying a permit unless the applicant agrees to a potentially unconstitutional condition. The Court saw this as a procedural ploy to circumvent the effect of Nollan-Dolan. According to Justice Alito, denial of a permit because an applicant will not accept an unconstitutional condition does not insulate the condition from constitutional review any more than when the condition is imposed over the applicant's objection and the permit is granted. In California, state law already generally allows applicants to accept a permit and still challenge illegal conditions under Nollan-Dolan, but many states saw the granting of the permit as barring a later challenge. The majority's second ruling was the one that caused sparks to fly with the dissent. Justice Alito held that monetary exactions are subject to the same scrutiny under the Nollan-Dolan "nexus" and "rough proportionality" tests as land dedication requirements. This has generally been the rule for many years in states like California and Texas.

Interestingly, the 4-member dissent by Justice Kagan agreed with the majority that permit denials are subject to Nollan-Dolan if based on excessive demands for exactions of any kind. Nevertheless, the divisions on the court are apparently so severe that the majority and the minority could not agree on how to state the law, even though the minority spent the first two pages of their opinion explaining and recasting their "agreement" with the majority.

The majority and dissent agreed that there is no taking when the government simply proposes excessive conditions of approval that are rejected by the landowner. Although their reasoning is somewhat different, they were united in their view that the imposition of unconstitutional demands where a permit is denied is not a taking in violation of the Fifth Amendment because "nothing has been taken." But here the majority and the minority appear to part company.

Thus, the majority chooses to view this case as one to be decided under the well established doctrine of unconstitutional conditions. In other words, even though there is no physical "taking," i. e., title to property has not passed to the government, the government's action in this and similar cases still places an unconstitutional burden on the property...