Supreme Court to Decide How Hard Landowners May Be Squeezed

Supreme Court to Decide How Hard Landowners May Be Squeezed
January 23, 2013

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)

Nearly 20 years ago, Coy Koontz Sr., now deceased, sought a permit for four acres of his property in Orange County, Florida to be available for development, so he could sell the property and fund his retirement.

The St. Johns River Water Management District responded by demanding Koontz put the rest of his 11 acres of land in a conservation easement to block development, and pay up to $150,000 for improvements to district-owned property several miles away.

Koontz agreed to turn over the remaining land but refused to spend money for improvements to other district-owned land that had no connection to his land or relation to his proposal. His permit was rejected.

Takings Clause Issue

The resulting Koontz v. St. Johns River Water Management District lawsuit has wended its way to the U.S. Supreme Court, which heard oral arguments January 15. At issue is the proper scope of the Takings Clause of the Fifth Amendment, which requires the government to pay “just compensation” when it takes private property for public use.

Management District officials all but admitted extortion in a pretrial stipulation that “the exact project [he] proposed would have been permitted” if Koontz had paid for improvements to the agency’s other land.

Nonetheless, the responses of several justices indicate they might rule for the District.

Attorney Paul Beard of the Pacific Legal Foundation, the national public-interest law firm representing Coy Koontz Jr. in his challenge, told the justices the Water Management District imposed an “unconstitutional condition” for the permit approval, to which Justice Sonia Sotomayor responded, “Counsel, I’ve had a problem with your argument, okay?”

Justice Antonin Scalia also appeared to have a problem with the argument, as he declared no harm had been done.

“What has been taken?” Scalia asked Beard. “The permit’s been denied. I can’t see where there’s a taking here. Nothing’s been taken.”

Until that comment, Scalia was seen as a vote in Koontz’s favor.

No Limit to Conditions?

Attorney Paul Wolfson, representing the Water Management District, took tough questioning from Chief Justice John Roberts, who asked, “Is there anything in the Federal Constitution that limits the conditions that you can demand?”

Wolfson stood his ground in defending the District’s power to essentially demand whatever it likes for a permit.

In a public statement outside the Supreme Court after oral arguments, Beard said, “In this litigation, the Koontz family and Pacific Legal Foundation are taking a stand against government extortion of property owners.

“We are asking the Supreme Court to send a message and make it clear to government regulators at all levels, in all parts of the country: Government cannot abuse its land use permitting powers by shaking people down. It can’t arm-twist a homeowner or other landowner who is seeking a land use permit. Government can’t arm-twist that person into giving up land or money or rights, when the government’s demand has no connection to the person’s property or the land use proposal that is being considered,” Beard added.

Two Precedents

In a blog post, Beard noted Koontz relied on two precedents—Nollan v. California Coastal Commission and Dolan v. City of Tigard—in which the Supreme Court invalidated exactions requiring the dedication of real property that were attached to permit approvals.

“[T]he Nollan and Dolan applicants were challenging the unlawful conditioning of their right to use their properties, and they sought prospective relief—i.e., the invalidation of the exactions, precisely so that no property would be taken,” he wrote.

“It is true that, in Nollan and Dolan, the agencies’ threat was couched in different language. There, the agencies effectively said, ‘We approve your permit, so long as you comply with our permit exaction.’  Here, the District said, ‘We deny your permits, unless you comply with our permit exaction.’ But there is no constitutional difference in the two threats: Both refused to issue permits unless and until the applicant acquiesced. It is that kind of conditioning on one’s right to use property that Nollan and Dolan were created to address.”

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)