'In Koontz, The Supreme Court Creates Uncertainty For Permitting Agencies And Opportunities For Developers'

Among the monumental and headline-grabbing decisions handed down in the frenzied final days of the 2012-2013 Supreme Court term, one opinion has the potential to dramatically alter the relationship between local governments and property owners. In Koontz v. St. John's River Water Management District, the Supreme Court waded back into the doctrinal marsh that is Takings Clause jurisprudence and issued an opinion that local governments, permitting agencies and property owners of all sizes and levels of sophistication will be grappling with for years to come.

Koontz has the potential to expand the scope of and uncertainty associated with natural resources development permit-related litigation by exposing "in lieu" of fees and other monetary exactions to challenge under existing Supreme Court precedent that applied to other property conditions imposed on permits. Additionally, because the Court found actionable a permitting authority's statement made in the course of ongoing negotiations, Koontz may significantly affect how permit conditions are developed and negotiated. Before exploring such repercussions, which may ultimately come to affect permitting relationships of all sorts, though, it is critical to found an understanding of Koontz in the particular permitting dispute before the Court.

Coy Koontz Sr. owned a 14.9 acre property situated within a designated wetlands area in central Florida. In 1994, Koontz applied for a set of permits necessary under state law to authorize the construction of a 3.7 acre commercial development on the northern section of his property including wetlands. In his applications and as required by state law, Koontz offered to offset the environmental damage associated with his proposed development by deeding a conservation easement to the state which would prohibit any future development of the remaining 11-acre portion of his property. The District rejected Koontz's conservation easement as insufficient to mitigate the damage that would be caused by his development and instead offered Koontz two options: reduce the size of his development to 1 acre and implement a conservation easement over the remaining 13.9 acres, or retain his 3.7 acre development plan and finance an off-site wetlands enhancement project on District-owned land. Additionally, the District indicated that it was willing to negotiate further and review any further alternatives Koontz identified.

With his permit applications still pending, Koontz...