By Professor Mark Fenster
What will be the impact of the U.S. Supreme Court's decision in Koontz v. St. Johns River Water Management District on the regulatory conditions called exactions common to land use regulation? Professor Mark Fenster analyzes the Court's decision, including the holding that Nollan and Dolan now apply to money exactions and the more complicated and less resolved issues arising when an exaction negotiation fails.
In Koontz v. St. Johns River Water Management District [enhanced version available to lexis.com subscribers], a 5-4 majority of the U.S. Supreme Court reversed a state court decision which had limited the application of Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994). Nollan and Dolan concern regulatory conditions, also called exactions, that commonly occur in land use regulation. In Koontz, a property owner challenged a regulatory agency's denial of his permit application following negotiations over exactions that failed. The Florida Supreme Court had concluded that Nollan and Dolan did not extend to conditions that the agency had not officially approved and applied to the owner's property, nor did they extend to conditions that imposed fees on property owners. The Supreme Court reversed both conclusions, holding that Nollan and Dolan's intermediate scrutiny can apply in both contexts. The fees issue will prove fairly straightforward for lower courts to follow, but the issue that concerns regulatory conditions that had not yet been imposed will likely cause significant confusion in the future.The case concerned a property owner (Koontz) who hoped to develop part of a parcel situated along a state road. Although it had wetlands and was located within a designated riparian habitat protection zone, the parcel was also situated in an area near commercial and residential property. To develop his property, Koontz needed to dredge and fill the wetlands, which required him to seek a permit from the regional St. Johns Water Management District ("District"). The District had the authority under state law to deny Koontz's application. The parties attempted to negotiate a mitigation plan and discussed various mitigation measures that would serve as conditions on the approval to build, but they could not agree to any particular conditions. Believing the District's demands in the negotiation to be excessive, Koontz filed suit in state court.Koontz wound its way through the Florida courts over the course of more than a decade. After a split intermediate appellate court decision in 2009 upholding a trial court decision to award the property owner compensation under Nollan and Dolan, the Florida Supreme Court reversed the District Court of Appeal unanimously—although in two separate, quite different decisions. The four-justice majority concluded that Nollan and Dolan applied only to exactions that require a dedication of a landowner's interest in real property as a condition of permit approval, and where the regulatory agency officially issues the conditional permit. Because the District did not in fact impose an exaction and only considered imposing an off-site mitigation fee rather than a physical taking of land, the majority held, Koontz was owed no compensation. The two-justice concurrence did not reach the federal constitutional claim, concluding instead that Koontz had failed to exhaust all administrative remedies required by the applicable Florida statute before he raised his constitutional claims. The court thus disagreed over whether Koontz's claims failed under the Takings Clause (the majority's view) or were unripe and thus not yet justiciable under state law (according to the concurrence).
Mark Fenster is Cone, Wagner, Nugent, Hazouri & Roth Tort Professor at the Levin College of Law, University of Florida. He earned his J.D. at Yale Law School and a PhD from the Institute of Communications Research at the University of Illinois at Urbana-Champaign. His research is on regulatory takings and administrative law, and he has published widely on exactions law and practice. Professor Fenster co-authored an amicus brief submitted on behalf of the Florida Leagues of Cities and Counties in the Florida Supreme Court, siding with the petitioners St. Johns Water Management District in Koontz.
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