Property Rights Advocates Cheer Supreme Court Ruling

Washington — A legal dispute that started with Florida wetlands ended yesterday in a Supreme Court victory for conservatives and private property advocates nationwide.

In a 5-4 decision that could impede government regulators at all levels, the court effectively made it harder for public agencies to demand property or money in exchange for issuing a land-use permit. At a certain point, the conservative majority reasoned, these demands amount to an unconstitutional taking of property without compensation.

“Land-use permit applicants are especially vulnerable to (this) type of coercion,” Justice Samuel Alito wrote for the majority, “because the government often has broad discretion to deny a permit that is worth far more than property it would like to take.”

Most immediately, the decision cheers Coy Koontz Jr., a Raleigh, N.C., resident whose late father, Coy Koontz Sr., bought the Florida property in question.

Koontz purchased the Orange County land in 1972 with hopes of building a small commercial project. The St. Johns River Water Management District, which covers 18 counties in northeast Florida, subsequently designated much of the property as a “riparian habitat protection zone.” In exchange for securing a permit, Koontz reluctantly agreed to give the district a conservation easement on about 11.5 acres.

Citing the loss of valuable wetlands, water district officials told Koontz that he also would have to offer additional mitigation, such as paying to restore about 50 acres of district land elsewhere. He refused, and the district rejected his permit application. So Koontz sued.

“Extortionate demands of this sort frustrate the Fifth Amendment right to just compensation,” Alito declared.

The Fifth Amendment states that “nor shall private property be taken for public use, without just compensation.” If a public agency simply takes property, as with condemnation, it must pay. This becomes more complicated when, instead of seizing property, the public agency tries to impose conditions on its use.

In previous cases, the court said that rigorous standards must be applied when the government conditions a land-use permit on the conveyance of property or something like an easement. Specifically, these previous cases have specified there must be a “nexus” and “rough proportionality” between the government’s demands and the effects of the proposed land use.

The ruling yesterday extends this strict standard to cover cases where the government denies a permit because private property wasn’t conveyed. The ruling also extends this to cover cases where the government demands money instead of property.

Attorneys with the Sacramento-based Pacific Legal Foundation, who represented the Koontz family pro bono, cheered the ruling and suggested it could help keep environmental rules and regulations in check.

“Regulators can’t hold permit applicants hostage with unjustified demands for land or other concessions, including, as in this case, unjustified demands for money,” foundation attorney Paul J. Beard II said. “The court has recognized that money is a form of property, and the Constitution prohibits grabbing money from property owners the same way it prohibits grabbing land without compensation.”

The National Association of Home Builders and conservative allies lined up with the Koontz family. They wanted the court to rule that a government agency that refuses a land-use permit because the property owner declines to pay certain fees has essentially taken the property. This would compel agencies to more strictly justify their permit requirements.

Nineteen states had urged the court not to impede the widespread use of fees by characterizing them as a taking, with the states noting in a legal brief that “impact fees on developments are used by a large percentage of localities across the nation.”

“The boundaries of the majority’s new rule are uncertain,” Justice Elena Kagan wrote in dissent, “but it threatens to subject a vast array of land-use regulations, applied daily in states and localities throughout the country, to heightened constitutional scrutiny.”

The court’s 5-4 split fell along standard conservative vs. liberal lines. Chief Justice John Roberts Jr. and Justices Clarence Thomas, Antonin Scalia and Anthony Kennedy joined Alito in the majority. Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor joined Kagan in the dissent.

The Koontz case was one of several private property disputes settled by the Supreme Court this term. Earlier, the court unanimously agreed that property owners might deserve payment when public agencies temporarily flood their land.