The National Law Journal has an interesting report on the rising costs of the federal “Rails-to-Trails” program. What seemed like a neat way to create hiking and biking trails has spawned substantial amounts of litigation by landowners who assert the federal government cannot convert abandoned railroad easements to other uses without paying compensation. According to the story, the Congressional Budget Office predicted the program would not cost anything. Yet as NLJ reports, the federal government has shelled out $49 million to compensate aggrieved landowners in the past year alone, and some predict total liabilities will top $500 million. [...]
NYU law professor Rick Hills isn’t nearly as pleased with the Supreme Court’s important property rights decision in Koontz as I am. He objects to the result primarily on federalism grounds. In Rick’s view, federal courts should not enforce significant Takings Clause constraints on state land use policies because they can’t effectively with the diversity and complexity of local land use decisions:
The idea that the Court will enlist federal courts to duplicate the work of state courts in policing conditions on literally hundreds of thousands of land-use permits, as suggested by Justice Alito, seems laughable, because the feds lack the manpower and electoral legitimacy to pull off such an act of imperialism….
[W]hy do I say that serious enforcement of Nollan-Dolan against a broad range of conditions on land-use development would lead to a quagmire? The Court declared that a demand on a developer to improve some off-site culverts is covered by the Nollan/Dolan line of cases, thereby embarking on what looks to be a futile effort to police the literally hundreds of thousands of conditional permissions for land development from roughly 35,000 general purpose local governments. Justice Alito tried to cheer us up by asserting that “teasing out the difference between taxes and takings is more difficult in theory than in practice” (Slip Op. at 19). But the very form of this encouragement suggests that SCOTUS either does not know what it is getting into or is being disingenuous about the burden that it is assuming: The problem is not merely distinguishing taxes from takings but also distinguishing all other routine conditions on land-use permits (e.g., obligations to build affordable housing, finance public plazas, bank wetlands, hire local folks for construction jobs, improve subway stops, etc.) that are the routine currency of conditional map amendments, conditional use
Here are some early reflections on Koontz v. St. John’s River Water Management District, the important Takings Clause case the Supreme Court decided today. As discussed more fully here, the case involved a situation where Coy Koontz, a Florida property owner, was refused a permit to develop his land by a government agency, unless he agreed to, among other things, perform off-site repair and maintenance work on other properties he did not own, which were miles away from his land.
In Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994), the Supreme Court ruled that, under the Takings Clause, there must be an “essential nexus” and “rough proportionality” between the purpose behind a government-imposed physical invasion of property and the objectives of any permit scheme where development permits are conditioned on allowing the physical invasion. If there is no such connection, then a taking has occurred, and the Takings Clause requires that the property owner get “just compensation.” Otherwise, the government could essentially wipe out property owners’ rights to control their property simply by refusing them the right to develop their land in any way unless they do whatever the state demands.
Koontz addresses two major issues that previous Supreme Court cases had not covered: Whether the requirements of Nollan and Dolan apply when the government denies a permit, as opposed to issuing it with attached conditions, and whether those requirements apply to cases where the burden imposed by the government is an obligation to finance off-site “mitigation” as opposed to requiring the property owner to allow a physical invasion of his land. The Supreme Court majority answered “yes” to both questions. I think they got both of them right.
I. Issued Permits vs. Permit Denials
The distinction between issued and denied permits is [...]
In a major Supreme Court victory for property rights, the Supreme Court ruled against the government in Koontz v. St. John’s River Water Management District, an important Takings Clause case that I described here here. Justice Alito wrote the majority opinion for a 5-4 Court split along ideological lines. This was an unexpected outcome because the oral argument went well for the government. Justice Scalia, who seemed supportive of the government’s position at argument, apparently changed his mind. As I speculated in this recent post, the fact that Alito ended up with the opinion was a positive sign for the property owner.
I will have more to say about this case once I have had a chance to study the opinion.
UPDATE: I should note that the case was remanded to the Florida Supreme Court for further proceedings. So technically the property owner did not win a complete victory; we don’t yet know what kind of compensation he will get. However, he did prevail on the big issue before the Supreme Court.
UPDATE #2: I have change “regulatory takings” to “takings” in the title of this post, because the Supreme Court majority ruled that the case was not technically a regulatory takings claim, but a per se taking. [...]