Supreme Court Decision Alert - June 25, 2013

Keywords: Koontz v. St. Johns River Water Management District, land-use permit, wetlands, regulatory taking, Nollan-Dolan standard,

Today the Supreme Court issued one decision, described below, of interest to the business community.

Takings—Whether Government May Deny Permits Based on Property Owner's Refusal to Pay for Unrelated Improvements Takings—Whether Government May Deny Permits Based on Property Owner's Refusal to Pay for Unrelated Improvements

Koontz v. St. Johns River Water Management District, No. 11-1447 (previously discussed in the October 8, 2012, Docket Report)

Today, in a 5-4 decision in Koontz v. St. Johns River Water Management District, No. 11-1447, the Supreme Court clarified its holdings in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), which prohibit the government from conditioning the approval of a land-use permit on an 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.

Justice Alito authored the majority opinion and was joined by Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas. Justice Kagan dissented and was joined by Justices Ginsburg, Breyer, and Sotomayor.

Petitioner Koontz wanted to develop a piece of property that is subject to oversight by the St. Johns Water Management District, a Florida agency that oversees wetlands. The District informed Koontz that it would approve his development only if he mitigated its effects on the local watershed by either (1) reducing the size of his proposed project and deeding a conservation easement to the District on the remainder of the property or (2) improving District-owned wetlands several miles away from his property. Believing that the District's demands for mitigation were excessive in light of the environmental effects that his building proposal would have caused, Koontz sued the District in Florida state court, arguing that the exaction was an impermissible "regulatory taking." The state trial court and intermediate appellate court both ruled for Koontz, holding that the exaction lacked the "essential nexus" and "rough proportionality" required by Nollan and Dolan. But the Florida Supreme Court reversed, holding that Nollan and Dolan do not apply when what is at issue is the payment of money or when the government denies a permit (as opposed to approving a permit on...