The US Supreme Court on Tuesday ruled in favor of a Florida landowner who complained that his attempt to develop a vacant parcel of his land was met with a “shakedown” by regulatory officials who sought to force him to pay for expensive improvements on unrelated government property.
Lawyers for the property owner, who said the officials refused to issue a development permit unless he agreed to pay for the improvements, argued that such extortionate demands by public officials amounted to an unconstitutional taking of private property for public use.
Voting 5 to 4, the high court agreed.
Writing for the majority, Justice Samuel Alito said the demands of the Florida regulatory officials were excessive because they required the landowner to pay for a so-called “mitigation” project that had no connection to any adverse impact on the public allegedly resulting from the proposed development of his land.
Under existing legal precedents, Justice Alito wrote, government regulators were required to demonstrate that any private property being used by the public for mitigation in a development project must be connected to and proportionate to the anticipated public impacts of the project.
Tuesday’s decision is significant because it expands that constitutional protection to include government demands that a permit applicant spend money as part of mitigation related to a development permit.
“Today’s ruling says the Fifth Amendment protects landowners from government extortion, whether the extortion is for money or any other form of property,” said Paul Beard, a lawyer with the Pacific Legal Foundation.
Mr. Beard, who argued the case at the high court, said the ruling is a victory for property owners across the country and will protect all land owners in the midst of a government permitting process.
He said the ruling bars government regulators from making extortionate demands of those seeking development permits.
“The ruling underscores that homeowners and other property owners who seek permits to make reasonable use of their property cannot be forced to surrender their rights,” Beard said. “Regulators can’t hold permit applicants hostage with unjustified demands for land or other concessions – including, as in this case, unjustified demands for money.”
The decision establishes that the government must be able to demonstrate a connection between the mitigation required as a condition of a development permit and the harms to be mitigated from the proposed project. The requirement will apply regardless of whether the demanded mitigation is in the form of a transfer of real property or the expenditure of money.
In a dissent, Justice Elena Kagan said that the boundaries of the high court’s new rule were uncertain. “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,” she said.
“I would not embark on so unwise an adventure,” she said.
The opinion stems from a lawsuit filed 18 years ago over a decision by the St. Johns River Water Management District to deny a development permit for a project on vacant land east of Orlando, Florida.
The owner, Coy Koontz, Sr., had purchased the 14-acre tract in 1972. Most of the land was subsequently designated as protected wetlands.
In 1994, Mr. Koontz applied for two permits to develop 3.7 acres of his land near the intersection of two major highways.
As mitigation to lost wetlands, he offered to place the remaining 11 acres of his land in a conservation easement.
Officials with the Water Management District told him they would deny his development permit unless he also agreed to pay for improvements on government-owned land miles from his proposed project. The improvements included building a road and fixing drainage issues.
Koontz agreed to preserve 11 acres of his land for conservation, but he refused the second requirement that he pay for improvements on public land. His permit was denied. Without the approval Koontz could not use his property.
He filed a lawsuit in state court. The issue: whether the required off-site mitigation was an exercise of government power that amounted to a “taking” of private land for a public purpose without just compensation.
The judge ruled for Koontz and ordered the Water Management District to pay him $376,154 in compensation for lost rents due to the initial denial of the permits.
A state appeals court upheld the decision.
The water district took its case to the Florida Supreme Court. The state supreme court reversed the lower courts, and ruled that the regulatory action did not amount to a “taking.”
The court said such a taking occurs when a property owner is forced to surrender a public easement as a condition of obtaining permit approval. The court said that’s not what happened in the Koontz case.
On Tuesday, the US Supreme Court reversed the Florida high court and sent the case back for reconsideration.
Mr. Koontz died in 2000 and never knew how his legal battle ultimately ended. It was his son, Coy Koontz, Jr., who took the case to the US Supreme Court.
“I am ecstatic,” he told reporters after the decision. “It certainly vindicates my father for deciding to take this fight on.”
He said he was hopeful that the decision would give property owners “a bigger stick to go into court with in the future to fight these kind of cases.”
The case was Koontz v. St. Johns River Water Management District (11-1447).