Dalton and Tomich white logo
Dalton and Tomich white logo

A Tough Day for Takings claims in the Supreme Court

As reported in SCOTUS blog today, https://www.scotusblog.com/2013/01/argument-recap-an-ever-shrinking-takings-claim/, the chance for a new day in Takings law appears to have dimmed based on the questions posed at oral argument in Koontz v. St. Johns River Water Management District.

In the highly anticipated case, the issue of whether a Taking under the Fifth Amendment occurred turned on whether the local governments demand for an exaction of a $150,000 “donation” for an unrelated project, resulted in a Taking where development permits were not issued without the fee being paid. Lyle Denniston, a reporter who has been covering the Supreme Court for fifty-four years, wrote the following regarding the questions at oral argument. It appears, from the questions raised, that the Taking Claim will not be successful in this case.

Something really big, and potentially decisive, happened to a major new property rights case between the time the Supreme Court took it on, and Tuesday’s argument by lawyers before the Court. The very idea that an unconstitutional “taking” had occurred to an owner of a small plot of ground in Florida seemed near to vanishing, propelled toward oblivion by a spreading fear on the bench that maybe the entire regulatory apparatus of government might be at risk. Credit lawyers for a state agency and the federal government for deepening this anxiety.

From the time at the start of the Term that the Court agreed to hear the case of Koontz v. St. Johns River Water Management District (11-1447), the vigilant property rights movement had reason to be confident. If ever there was a David-and-Goliath case, it was this one: an eleven-year bout between the owner of a handful of acres near Orlando and a statewide agency with power to bargain to get its way in protecting the state’s wetlands. And the property owner seemed to have two major Supreme Court precedents on his side.

By the time the one-hour argument ended shortly after noon Tuesday, however, those precedents did not seem to be working as the property owner’s shield, and a “sky is falling” argument by government lawyers had been taken quite seriously on the bench. The combination was obviously threatening to the claim of the landowner, Coy A. Koontz, Jr., who had kept up the legal fight after his father had died.

The owner’s claim that there had been a “taking” had been strenuously assailed by Justice Antonin Scalia, whose vote the landowner almost certainly had to have. That was probably the most menacing development for Koontz. But the worry that seemed to spread across the bench, that a victory for Koontz might well pull the government’s public works projects into constant constitutional court battles, spelled trouble, too.

Justice Scalia is the author of one of the two precedents that Koontz has relied upon as the core of his case, Nollan v. California Coastal Commission, in 1987, and Scalia was part of a five-Justice majority in the 1994 case of Dolan v. City of Tigard. Those rulings established a series of tests that governments would have to follow when they attached conditions to land-use permits they issued to property owners seeking to redevelop their land.

But, as Justice Scalia repeatedly pointed out, those two rulings apply only when the government’s conditions have actually taken something away from the landowner, forcing some kind of forfeiture in return for a development permit. When the Water District in Florida denied a permit to Koontz to redevelop some three-plus acres, because he would not agree to a demand that he finance some wetlands protection elsewhere in Florida, “no property was taken,” Scalia said. Koontz had claimed that there was a “taking” but Scalia bluntly asked: “Taking what?” It was a phrase Scalia would use over and over again, with slight variations.

After Scalia had made that thrust early in the argument, Justice Sonia Sotomayor asked bluntly: “Why are we even in this case? Why are we here?” She noted that Koontz’s lawyers had not challenged the Water District’s authority to take steps to protect wetlands across the state, under a policy that “was clear and unassailable.” Koontz had been given a chance to make an offer to do something to protect wetlands, but it was not enough, and the agency had to act to further its policy, she suggested.

Together with Justice Ruth Bader Ginsburg’s arguments of how reasonable the Water District had been to try to work something out with Koontz, Justice Elena Kagan’s wondering “Where is the taking?”, and Justice Stephen G. Breyer repeatedly suggesting that Koontz’s lawyers were proceeding on the wrong legal theory, the Scalia and Sotomayor challenges loomed even larger.

No matter how vigorously Koontz’s lawyer, Sacramento attorney Paul J. Beard II, tried to push his reliance upon the Nollan and Dolan precedents, the members of the Court either were resistant or skeptical. Beard’s only hope appeared to be the suggestion of Justice Anthony M. Kennedy that, perhaps, Koontz might yet be able — in a future proceeding — to make a due process claim, which he had not yet made.

As Beard yielded the lectern to the Water District’s lawyer, Washington attorney Paul R. Q. Wolfson, it appeared that the opposition to the Koontz claim was fully developed, leaving attorney Wolfson with the task only of weathering some fairly aggressive questioning from Chief Justice John G. Roberts, Jr. ”Is there anything in the federal Constitution,” Roberts asked, “that limits the conditions that you can demand [as the price of granting a development permit]?” And, the Chief Justice wondered, “Can you ask for the moon?”

At first Wolfson said he did not think there were limits on regulatory conditions, but then relented a bit, and said Koontz might have some other constitutional claims, just not one of a “taking.”

The Chief Justice kept pressing a hypothetical about a demand that a single property owner put up the money for a municipal football stadium, seemingly trying only to sketch the outer limits of the conditions that a permit-issuing agency could impose on a developer.

Justice Samuel A. Alito, Jr., wondered aloud what would be left of the Nollan and Dolan precedents if the Court agreed with Wolfson and the Water District, but Wolfson replied that those precedents were not really at issue.

Wolfson, in the Water District’s legal brief, had argued that the “takings” analysis should be applied at all when a permitting agency imposed conditions that would require a developer to spend some money for a public project, but he had some difficulty as he pressed that point “before the Court. “[T]he problem with extending the takings concept to a monetary obligation . . . is that it has no logical stopping point,” the lawyer said. Scalia retorted that the stopping point would be when an agency simply came and took one’s money, but Wolfson said that the owner of the money did not need the protection of the Nollan and Dolan precedents, because there were state laws that would protect property from such seizures.

Wolfson, though, got Scalia back on his side by saying that it was hard to see how an agency makes an unconstitutional demand on a property owner “when nothing is even taken.,” Scalia commented: “That is a problem.”

While Wolfson along the way had sought to stress the Water District’s obligations to take steps to protect wetlands, and to relate that to its negotiations with Koontz, it was left for the federal government’s lawyer — Deputy Solicitor General Edwin S. Kneedler — to put really heavy stress on what he called “the radical change” that would confront government regulators if in carrying out their programs they had to bear the burden of justifying the actions they took to make those programs work.

Under the rationale of the Nollan and Dolan precedents, Kneedler said, the burden would shift to the government to defend its regulatory measures, reversing the usual requirement that it was up to a challenger to make a case against those measures. It would be “very different,” the government counsel said, if the government had to make the case in court whenever it imposed a regulatory requirement that would require a private person or entity to spend some money. “It can’t be that requiring the expenditure of money is a ‘taking,’” he contended.

Kneedler, like Wolfson, however, was willing to concede that, once the “takings” issue was put aside, property owners might well have other constitutional claims they could press if the government put onerous demands on them in return for development permits. If the government demanded, as a condition, that a specific property owner put up millions for a city football stadium, Kneedler said, that would present “a very substantial equal-protection challenge.”

When Beard returned to the lectern for rebuttal, the effect of the Kneedler argument, in particular, was evident. Justice Sotomayor said “I see an enormous floodgate here,” in which a regulatory agency that makes any demand on a property owner it is regulating would have to fend off a constitutional “takings” claim.

Attorney Advertising Disclaimer

Please note that this website may be considered attorney advertising in some states. Prior results described on this site do not guarantee similar outcomes in future cases or transactions.