Supreme Court to Settle Takings Clause Dispute Regarding Wetlands Preservation January 21, 2013

Last week the U.S. Supreme Court heard oral arguments in Koontz v. St. Johns River Water Management District. The Supreme Court’s decision, expected to be issued in June, will settle a nearly 20 year dispute between the Koontz family and the State of Florida over the development of a 14.2 acre parcel containing wetlands that are in a protected zone of a river basin. In 1994, the owner applied for two permits authorizing the commercial development of 3.7. acres. As part of the permitting process, the District required that the owner undertake mitigation efforts to offset the impact of development within the wetlands. To minimize the impact of the proposed development the owner proposed to perpetually preserve the balance of the 14.2 acres in its natural state through the dedication of a conservation easement to the District. The District rejected this proposal and suggested several alternatives to the owner, including reducing the size of the project, combining the conservation easement dedication with other offsite improvements within the river basin, or project design modifications. The owner declined to consider these alternatives and the District denied the development permit. Under Florida law, the owner could have petitioned for judicial review under the Florida Administrative Procedure Act, but elected instead to file suit against the District for inverse condemnation seeking compensation for on an exactions theory for the taking of private property without just compensation under the Florida Constitution. An exactions theory taking was recognized in two previous U.S. Supreme Court rulings– Nollan v. California Coastal Commission and Dolan v. Tigard). These decisions require the government to demonstrate a nexus between a legitimate state interest and the permit conditions, and that the dedication or exaction is roughly proportional to the impact of the development. If the court find the essential nexus is not present or the required dedication is not roughly proportional to the impact of the development on public services the owner However, in Yet in Nollan and Dolan the landowners were actually required to dedicate property to the regulatory authority in exchange for the right to develop, and those owners filed suit after the property was dedicated and the permit issued. In this case, the Court will consider whether 1) the government can be held liable for a taking when it refuses to issue a land use permit on the sole basis that the permit applicant did not accede to a permit condition that, if applied, would violate the essential nexus and rough proportionality tests set out in Nollan and Dolan and 2) whether the nexus and proportionality tests set out in Nollan and Dolan apply to a land use exaction that takes the form of a government demand that a permit applicant dedicate money, services, labor, or any other type of personal property to a public use. In short, can you have a taking under the exactions theory before something is taken?.

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