United States Supreme Court Reaffirms Landowner’s Rights in Recent Land-Use Decision

Earlier this year the United States Supreme Court issued a decision reaffirming the limitation on a government or agency to exact fees or property in exchange for development rights. The Court’s narrow 5-4 decision in Koontz v. St Johns River Water Management District has the potential to broaden the interests of landowners while simultaneously limiting the ability of governments to condition proposed land developments.

The Koontz family worked for more than 18 years to develop their property, consisting of about 15 acres of land, the majority of which was declared as protected Florida wetlands. The St Johns River Water Management District first required that a majority of the Koontz property be preserved under a conservation easement and then gave options for development of the remainder of the property: 1) Koontz could further reduce his proposed development and preserve even more of his property under a conservation easement; or 2) Koontz could pursue his development, as planned, but only if he paid contractors to improve conservation land already owned by the District.

Koontz decided the District’s exactions were too high a burden and filed suit, under Florida law, to recover damages on the loss of developable land. The trial court found in favor of the Koontz family and awarded the family $327,500 but the Florida Supreme Court reversed that decision.

Justice Alito, in writing for the majority of the Court, reversed the decision of the Florida Supreme Court. Building on the precedents established in the landmark cases of Nolan v. California Coastal Commission and Dolan v. City of Tigard, the Court found that these precedents apply regardless of whether a land use permit is issued or denied. The District argued that denial of a permit did not trigger a claim for loss of a particular property interest. The Court unanimously agreed that the denial of a land use permit on the basis of a property owner’s refusal to comply with excessive mitigation measures is subject to the same controls established by the Nolan and Dolan line of cases. To hold otherwise, in the opinion of the Court, is to allow governments the option of avoiding the limitations established by precedents.

The more controversial aspect of the Court’s decision comes with the majority stating that payment of fees for mitigation of impacts is also subject to the limitations established by the precedent cases. Justice Kagan, in writing for the 4 dissenting justices, cautioned that application of the Nolan and Dolan cases to fee payments has the potential to seriously undermine many land use regulations currently applied to developments throughout the United States.

In the end, the Court remanded the Koontz case back to the state courts for further proceedings on the merits of the particular claims. However, the Court, in issuing its decision, reaffirmed the principal that governments must show a connection between the mitigation demanded and the realized development impacts.