Supreme Court Accepts Takings Challenge to Land-Use Exaction

A landowner’s petition claiming California courts misapplied precedent on land-use exactions when they upheld a fee for road improvements a county charged him to get a permit to build a house on his property was granted certiorari by the US Supreme Court Friday.

El Dorado County, Calif., required George Sheetz to pay $23,420 to finance road improvements. He claimed that the exaction was calculated without consideration of the impact his project would have on the nearby roads and challenged it under the takings clause of the US Constitution.

Sheetz argued that in Nollan v. California Coastal Commission and Dolan v. City of Tigard the Supreme Court made clear that the government can’t ask a person to give up a constitutional right in exchange for a discretionary benefit where the benefit sought has little or no relationship to the property.

Under the Nollan/Dolan test, approval of a land-use permit can be conditioned on payment of an exaction only if there’s a nexus and rough proportionality between the property and the social costs of the landowner’s proposal, Sheetz said.

But the California Court of Appeal ruled that the Nollan/Dolan test doesn’t apply to development fees that are generally applicable to a broad class of property owners through legislative action, as distinguished from a monetary condition imposed on an individual permit application on an ad hoc basis.

Sheetz argued in his petition for certiorari that federal and state courts are split over whether the Nollan/Dolan test applies to legislatively enacted fees and asked the Supreme Court to decide “whether a permit exaction is exempt from the unconstitutional conditions doctrine as applied in Nollan and Dolan simply because it is authorized by legislation.”

El Dorado County said that the court of appeal’s decision didn’t hinge on the distinction between legislative and administrative exactions. The state courts held that the fee program Sheetz challenged was fully compliant with the reasonable relationship test for legislative exactions under California’s Mitigation Fee Act.

The Pacific Legal Foundation and the Cato Institute were among the amici that filed briefs supporting Sheetz.

FisherBroyles LLP represented Sheetz. Abbott & Kindermann, Inc. represented the county.

The case is Sheetz v. El Dorado Cty., U.S., No. 22-1074, petition for certiorari granted 9/29/23.