Development Permit Terms May Support Suit

WASHINGTON (CN) - A Florida water district must face takings claims related to conditions it placed on a proposed development, the Supreme Court ruled Tuesday.

Coy Koontz Sr. had sued the St. Johns River Water Management District for money damages for thwarting his attempts to develop a commercial property.

Koontz has owned the property in question since 1972. It lies south of State Road 50, immediately east of the eastern extension of the East-West Expressway in Orange County.

A portion of the original acreage adjacent to Highway 50 was condemned in 1987, leaving Mr. Koontz with 14.2 acres. Florida Power maintains a 100-foot wide transmission line easement running parallel to and about 300 feet south of Highway 50.

All but approximately 1.4 acres of the tract lies within a Riparian Habitat Protection Zone of the Econlockhatchee River Hydrological Basin and is subject to jurisdiction of the St. Johns River Water Management District.

Koontz wanted to develop 3.7 acres adjacent to Highway 50, made up of 3.4 acres of wetlands and 0.3 acres of uplands, but he would need a management and storage of surface waters permit to dredge the wetlands.

The agency had refused to approve the application, however, unless Koontz made improvements to 50 acres of government-owned wetlands located miles away from the project.

Koontz agreed to deed his excess property into conservation status but he refused the condition of offsite mitigation, which would require him to either replace culverts 4 1/2 miles southeast of his property, or plug certain drainage canals on other property some 7 miles away. He also refused the alternative condition requiring him to reduce his development to 1 acre.

Finding that the permit denial represented a temporary taking of Koontz's property, a Florida judge deemed it invalid and awarded Koontz just compensation.

Though an appellate panel affirmed, the Florida Supreme Court reversed after distinguishing the case from Supreme Court precedent: the 1987 decision Nollan v. California Coastal Commission and the 1994 case Dolan v. City of Tigard.

Whereas in Nollan and Dolan involved applications that were denied for failing to accede to a district's demands, here the district had denied Koontz's application because he re­fused to make concessions, according to the ruling.

But the sharply divided U.S. Supreme Court found this distinction unremarkable Tuesday.

"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," Justice Samuel Alito wrote, joined by Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy and Clarence Thomas. "We have often concluded that denials of governmental benefits were impermissible under the unconstitutional conditions doctrine. In so holding, we have recognized that regard­less of whether the government ultimately succeeds in pressuring someone into forfeiting a constitutional right, the unconstitutional conditions doctrine forbids burdening the Constitution's enumerated rights by coercively with­holding benefits from those who exercise them."

Nollan and Dolan try to strike a balance that gives the government something in exchange for land uses that would otherwise impose costs on the public.

Though "extortionate demands ... frustrate the Fifth Amendment right to just compensation," it is also "a hallmark of responsible land-use policy" to make landowners "internalize the negative externalities of their conduct," according to the ruling.

"We have long sustained such regulations against constitutional attack," Alito added.

"Nollan and Dolan accommodate both realities by allow­ing the government to condition approval of a permit on the dedication of property to the public so long as there is a 'nexus' and 'rough proportionality' between the property that the government demands and the social costs of the applicant's proposal," the decision continues.

Noting that Koontz brought his claim under Florida law, the court said such statutes allow "property owners to sue for 'damages' whenever a state agency's action is 'an unreasonable exercise of the state's police power constituting a taking without just compensation."

"We hold 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," Alito added. "The court expresses no view on the merits of petitioner's claim that respondent's actions here failed to comply with the principles set forth in this opinion and those two cases."

Though the four dissenting justices found that Koontz's case did trigger the Nollan-Dolan standard, they said the majority improperly extended the precedent "to cases in which the government conditions a permit not on the transfer of real property, but instead on the payment or expenditure of money."

"That runs roughshod over Eastern Enterprises v. Apfel, which held that the government may impose ordinary financial obligations without triggering the takings clause's pro­tections," Justice Elena Kagan wrote. "The boundaries of the majority's new rule are uncertain. But it threatens to subject a vast array of land-use regulations, applied daily in states and localities throughout the country, to heightened constitutional scrutiny. I would not embark on so unwise an adventure, and would affirm the Florida Supreme Court's decision."

Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor joined the dissent.

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