The Supreme Court ruled today, in Koontz v. St. Johns River Water Management District, that a property owner who is denied a land use permit on the ground that he refused to pay money to compensate for the harm to be caused by his proposed property use states a claim for a regulatory taking, unless the regulator can establish a “nexus” and “rough proportionality” between the exaction and the alleged harm requiring mitigation.
The facts in Koontz are muddled and, as the dissent points out, it is not obvious that Koontz should prevail on remand, even under the majority’s holding. On balance, though, the case seems like an obvious extension of the Court’s prior decisions in Nollan v. California Coastal Commission and Dolan v. City of Tigard, which established the nexus and rough proportionality test. So long as the regulatory takings doctrine exists, and the Court conditions land use regulation on establishment of a nexus between the proposed use and the remedy, and a rough proportionality between the harm caused by the use and the cost of the regulatory exaction, I agree with the Court that it is a distinction without a difference whether that exaction entails giving up a formal property right or just paying money as compensation for the harm caused.
Interestingly, Justice Alito, writing for the majority, accused Justice Kagan, dissenting, of wanting to overrule Nollan and Dolan (60s rock band, perhaps?). While Justice Kagan denied it, I think that Justice Alito was onto something; he just did not go far enough. The better argument for the dissent really is for the overruling of the Court’s entire regulatory takings jurisprudence, beginning with Pennsylvania Coal v. Mahon, in 1922. After all, while that decision cited some prior cases, it pretty much made up the concept of a regulatory taking out of whole cloth.
The irony is that it is the conservative wing of the Court, which likes to focus on the plain language of the Constitution, which most supports property rights and has provided bedrock support for regulatory takings claims. On the other hand, the liberal wing, which sees the Constitution as a living document, would focus on how the regulatory needs of government have evolved more than how the definition of a taking needs to evolve to protect property rights.
Put another way, does anyone really doubt that when the founders thought about takings, they were focused solely on formal legal takings of formal property rights, such as fees or easements? Where is the phrase “regulatory taking” found in the Constitution?
There is not really room here for full consideration of the practical consequences of this decision, but while the majority pooh-poohed the dissent’s concerns, this case could have real impact. Are linkage payments in my City of Boston and other metropolitan areas constitutional? How about requirements that developers contribute to significant sewer system upgrades, going far beyond what would be required to mitigate the impact of the specific development for which a permit is sought?
My crystal ball tells me that much Koontz-related litigation is in our future.