The Expansion of the ‘Unconstitutional Conditions’ Doctrine In Land Use Regulation

The United States Supreme Court extended important protections to landowners faced with ‘unconstitutional conditions’ imposed on them by the government in the context of land-use regulations. Koontz v. St. Johns River Water Management District, — U.S. —, 133 S.Ct. 2586 (2013).

Mr. Koontz owns 14.9 acres of land in Florida, most of which contains wetlands. He proposed to develop a 3.7 acre portion of it and deed a conservation easement to the St. Johns River Water Management District (District) on the remaining acres (about 11 acres) to mitigate the environmental effect of the development. The District, however, considered the 11 acre easement to be inadequate and told Mr. Koontz that it would approve the development only if he agreed to one of two concessions. He could reduce the size of his development to 1 acre and grant an easement over the remaining 13.9 acres. Or, in the alternative, he could proceed as originally proposed (build on the 3.7 acres while deeding an easement over the remaining acres) only if he also agreed to make improvements on District-owned land several miles away. Mr. Koontz believed that these alternatives were excessive in light of the environmental effects of his proposal and refused. The District denied his permit. Thereafter, Mr. Koontz filed suit under a Florida state law allowing landowners monetary damages for an agency’s unreasonable exercise of the state’s police power which constitute a taking without just compensation.
In evaluating these facts, the Supreme Court invoked and relied on the ‘unconstitutional conditions’ doctrine, as articulated in two prior decisions of the court – the Nollan and Dolan cases. Nollan v. California Coastal Commission, 483 U.S. 825, 107 S.Ct. 3141 (1987); Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309 (1994). In those cases, the Supreme Court 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. Otherwise, the government may coerce people into giving up enumerated constitutional rights. Nollan and Dolan involve a special application of the doctrine that protects the Fifth Amendment right to just compensation for property the government takes when owners apply for land-use permits.

The District could have used its power of eminent domain to seize or take a conservation easement over Mr. Koontz’s property. In so doing, however, such an action would constitute a ‘per se’ taking of property requiring just compensation. The conditioning of a land-use permit on giving up private property to the government in order to receive a land-use permit creates the same result (the property has been seized), but the government is relieved of having to pay just compensation. The Nollan and Dolan cases prevent that type of behavior, unless there is a “nexus” and “rough proportionality” between the property that the government demands and the social costs of the applicant’s proposal.

The importance of Koontz is that the Supreme Court applied these principles to situations in which the government approves a permit on the condition that the applicant turn over property as well as when it denies a permit because the applicant refuses to turn over property. Additionally, the Supreme Court specifically held that the doctrine applies in situations in which the government demands money as opposed to just a conservation easement.

Thus, the Supreme Court specifically held that the government’s demand for property from a land-use permit applicant must satisfy the requirements of Nollan and Dolan even when the government denies the permit and even when its demand is for money. However, the Supreme Court did not determine the underlying merits, that is, whether the demands by the District in this case satisfied the requirements of Nollan and Dolan. Instead, it remanded the case back to the Florida Supreme Court for further proceedings.

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