Recent U.S. Supreme Court Case Benefits Landowners

July 1, 2013

To the benefit of landowners, the U.S. Supreme Court overturned the Florida Supreme Court in a recent decision, Koontz v. St. Johns River Water Management District. The U.S. Supreme Court held that the government’s demand for property from a permit applicant must have a “nexus” and “rough proportionality” between the demand and the effects of the proposed land use. The Court made clear that these requirements apply to the government even if the government denies a land-use permit application and even if the government demands money from the landowner applicant.

In Koontz, the landowner, Coy Koontz, applied for two separate land-use permits. The government told Koontz that it would only approve the permits if he agreed to either (1) significantly reduce his development and grant a large easement on his property, or (2) pay to make improvements to government-owned land. Koontz sued the government, arguing that these demands were excessive in comparison to the proposed construction on his land.

The Circuit Court agreed with Koontz, finding that the government’s demands failed to meet the nexus and rough proportionality requirements imposed by Nollan and Dolan, two earlier U.S. Supreme Court cases. However, the Florida Supreme Court sided with the government. The Florida State Supreme Court thought that the requirements in Nollan/Dolan did not apply, because in this case, the government denied Koontz’s application based on his refusal to agree to its demands; the Court thought that Koontz’s case significantly differed from Nollan/Dolan, where the government would only approve an application on the condition that the landowner agree to the government’s demands.

The U.S. Supreme Court disagreed with the Florida Supreme Court and sided with Koontz. The Court stated that the nexus and rough proportionality requirement from Nollan/Dolan applied; the distinctions made by the Florida State Supreme Court do not matter. Thus, if the government denies an application because the applicant refuses to concede to the government’s demands, the demands–including financial demands–still must have a nexus and rough proportionality to the effects of the proposed land use.

In sum, the Koontz decision benefits landowners. The Court helped clarify that the government cannot deny a landowner’s permit application when the landowner refuses government-imposed demands, if those demands lack a nexus or rough proportionality to the effects of the proposed land use. By clarifying the government’s obligation, landowners now have more assurance when applying for and negotiating with the government about land-use permits.

Special thanks to Axley Summer Law Clerk Jarod L. Ferch for his assistance with this article.

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