DOLAN v. CITY OF TIGARD

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Argument of David B. Smith

Chief Justice Rehnquist: We'll hear argument first this morning in Number 93-518, Florence Dolan v. the City of Tigard.

Mr. Smith.

Mr. Smith: Mr. Chief Justice and may it please the Court:

The question before this Court is whether Government may demand the dedication of real property as a condition of development approval, without showing that there is a reasonably proportional relationship between the dedication and the actual adverse impacts of the development.

In the case that we have today, the City of Tigard demanded that Mrs. Dolan dedicate 10 percent of her real property, and the City did that without showing any proportional relationship whatsoever.

We submit that the failure of the City in requiring that dedication to show the proportional relationship violates the Fifth and Fourteenth Amendments, because it takes private property from her for public use, without payment of just compensation.

Justice Souter: Mr. Smith, are you going to comment on the question of whether the City would have been within its rights to deny the building permit entirely?

Mr. Smith: Yes, Your Honor.

And we would agree that the City would have been within its authority to deny the permit outright.

However, that... that of course might raise a different takings question that's outside the realm of dedications and municipal exactions, and not only that, that... no, Your Honor, we are not.

Justice Souter: We... we take the case on the assumption that the City could have denied it?

Mr. Smith: Yes, Your Honor, that is correct.

And one of the problems that we have is if... if all that is required in a threshold inquiry for dedication to meet constitutional muster is that the... the Government could have denied the permit outright, and never reach the question of whether there is the essential nexus or the requisite proportionality, then there is really no textual meaning that I believe is given to this Court's opinion in Nollan, and there is no fulfillment of the... the mandate in Armstrong v. United States, that individuals should not be singled out to bear public burdens that, in all fairness and justice, should be borne by the public as a whole.

The... the City really demanded Mrs. Dolan's land because it wanted it for free, to fulfill its longstanding plans for park... for a park and for a pedestrian and bicycle pathway.

And it did that without any regard to the actual impacts of her new store.

The City's so-called findings in this case were made up after the fact, and were mere speculation and conjecture.

And the City--

Chief Justice Rehnquist: Well, so far as the finding about the flood plain is concerned, there was a finding that if you pave over with asphalt things that have been previously green or growing in some way, you're going to have a more rapid runoff.

Now, that... that doesn't seem very speculative to me.

Mr. Smith: --Mr. Chief Justice, there is indeed common sense to tell us that if one increases the amount of a per... impervious surface on a piece of property, that there will indeed be more runoff.

We would certainly agree with that.

However, the problem is... and I think this was well pointed out by Justice Peterson of the Oregon Supreme Court in his dissenting opinion below... that there was never a quantification of exactly how much water would run off.

And as Justice Peterson characterized it in his dissent, how much, a thimble full?

In the absence of any quantification of the amount of water that would actually run off of a site, and comparing that to the overall amount of water that could run off from other structures throughout the City that increased impervious surface, there is really no way for the... the City to come up with a fair apportionment of the... of the cost that should be imposed on Mrs. Dolan.

Chief Justice Rehnquist: So, you say the City has to... has to quantify something like that, do some sort of empirical studies that would show the portion for which this increase in her usage... or her increased pavement is responsible?

Mr. Smith: Yes, Mr. Chief Justice.

In fact, I believe that the City itself recognized that that was the way to go.

That, in the record that's before this Court, at Docket Number F, at pages 810 and... and 811, it shows that the City, in the detailed study it did of storm water runoff, that its consultant commended to the City and urged the City to do a calculation on the total amount of impervious surface that would occur within the City at buildout, and as the people proposed development, they should calculate the specific development's contributions to that impervious surface and to use that relative fraction to apportion cost.

Justice Scalia: Is there any reason to believe that creating impervious surface closer to the flood plain causes more of a problem than creating impervious surface further away from the flood plain?

Mr. Smith: No, Justice Scalia, there is not.

Justice Scalia: And yet, people who did that further away would not have to dedicate any of their land to the public use?

Mr. Smith: That is correct, Your Honor.

That, in fact, there are a number of properties that are not located on Fanno Creek itself in the City of Tigard that in fact may generate more storm water runoff than Mrs. Dolan's proposed new store.

But, in fact--

Chief Justice Rehnquist: But isn't there... excuse me... isn't there some sort of attenuation?

I mean, if you're three miles from Fanno Creek and pave over 2,000 square feet, surely it's a lesser immediate effect on the creek than if you are right along the creek and pave over 2,000 square feet?

Mr. Smith: --Yes, Your Honor, we would agree with that.

Justice Kennedy: Assume that the additional runoff would require that some vegetation remain alongside of the creek.

Is it your position that the demands of the City are nevertheless excessive?

Mr. Smith: Yes, Your Honor, it is.

And the reason is, is that the City has already established regulatory restrictions on what can go on inside that 100-year flood plain.

And the Dolans are already prohibited from engaging in developmental uses of that 100-year flood plain.

And considering the geography in question, it is highly unlikely that... that anything could go on either.

It's a very, very steep bank.

So, the fact of the matter remains is there is no development that's going to go on within the 100-year flood plain.

It couldn't go on within the 100-year flood plain.

Justice Kennedy: When we hear about the greenway, is that simply part of the bike path, of is that also part of the flood plain?

Mr. Smith: Your Honor, that is part of the... the flood plain.

What the City required was the dedication of all land within the 100-year flood plain for a greenway to fulfill its plan to link up a network of parks, both upstream and downstream.

In addition, they required the dedication of a 15-foot wide strip immediately adjacent and east of the boundary of the flood plain for construction of a pedestrian and bicycle pathway.

Which, incidentally, would increase impervious surface in and of itself.

And also, for the site of a... the construction of a future storm drain that the City contemplated establishing in the future.

Justice Kennedy: Well, would it be your position that if vegetation must be there, assuming there is some additional runoff and there is a relation between that, that you're entitled to keep vegetation that's other than what would be in the greenway?

I mean, is this an excessive demand, so far as the City is concerned?

Mr. Smith: Your Honor--

Justice Kennedy: If all they ask is grass.

Mr. Smith: --I don't believe that the regulatory impositions that were imposed on Mrs. Dolan for maintaining open space and vegetated area on her property were unreasonable.

And we in fact did not challenge those below and do not do so before this Court today.

Justice Souter: Well, what... what... what could she do then that she cannot do now?

Mr. Smith: Your Honor, what has occurred now is that she may not construct her larger store and demolish her old store until such--

Justice Souter: No, no.

My question was imprecise.

I'm sorry.

On the... on the... the greenway area, the flood plain, which is subject to the easement, she couldn't develop it before... what is it that she wanted to do that she cannot do now?

Mr. Smith: --Your Honor, there are a number of non-developmental uses to which she could have put the land in the greenway, which might have added value and amenity to... to her larger store.

She could have, for example, put in landscaping within the greenway that would have made her site more attractive, without violating the restrictions that the City had already placed upon her regarding development of that land.

Justice Scalia: Doesn't the... fill me in... doesn't the public have access to the greenway?

I thought the purpose of the greenway was for a park.

That's not so?

Mr. Smith: Your Honor, the public does not have access to the lan... to Mrs. Dolan's land at this time, with the exception of the access for her business.

Justice Scalia: No, I mean after... after she complied with the condition for the... for the permit, would the public have had access to the greenway?

Mr. Smith: Yes, Your Honor.

Unknown Speaker: Well, that's... that's one thing she couldn't... she could do now and couldn't do afterwards, which is keep other people out.

Mr. Smith: That is absolutely correct.

Justice Scalia: Which is pretty important.

Mr. Smith: Yes, Your Honor, it is.

Justice O'Connor: Did the City require an easement or the fee to this area?

Mr. Smith: Your Honor, the... the City in its actual findings required the dedication of a fee.

The City has represented in its brief that what it was really going to ask for was merely an easement.

That is not contained in their explicit findings.

And as we noted in our reply brief, that even if they were to only require an easement, there would still be an undue burden upon her.

Because as was noted by Justice Scalia, she would still have the burden of having the public... the uninvited public, pass to and fro.

Justice O'Connor: Right.

But you say the record as it comes to us shows the requirement of dedication of the fee title to this property?

Mr. Smith: Yes, Your Honor, that's correct.

The City's findings require dedication.

Justice O'Connor: All right.

Did the City also require Mrs. Dolan to construct the bike path at her expense?

Mr. Smith: Your Honor, the City's findings at the petition for cert at appendix G... at page G-28, specifically require the construction.

However, the City has noted and has in fact submitted additional materials to this Court that would show, when Mrs. Dolan made her first application... and this appeal is brought from a second application... that the City had in fact decided not to require her to construct the pathway.

However, when the findings came out with regard to the second application, the findings had it back in there again.

So, as the record is before this Court today, there was a requirement to construct the bike path.

Justice Scalia: Well, do you rest your case on the difference between whether an easement had been given or whether she had to convey the... didn't... Nollan involved an easement, as I recall, rather than an outright conveyance, didn't it?

Mr. Smith: That is correct, Your Honor.

Nollan was merely the conveyance of an easement.

And we do not rest our case on the distinction between dedication of fee and easement.

Justice Scalia: And an easement is... is a right in property, isn't it?

It's a conveyance of property?

Mr. Smith: Yes, Your Honor, it is, well recognized in law.

Justice Stevens: Would the case be the same if it had been a license rather than an easement?

Mr. Smith: Your Honor, I believe that if the... the requirement had been that that license mandated the continuous passage of the public, it would have been just as burdensome an imposition upon Mrs. Dolan as was the beach easement was on Mr. and Mrs.--

Justice Stevens: In other words, your answer is yes?

Mr. Smith: --Yes, Your Honor.

[Laughter]

Justice Scalia: I in fact thought that a license to... to use land is the definition of an easement.

I'm not... can you create a license to use land that is not an easement?

Can you?

Mr. Smith: I believe that Justice Stevens says the answer to that question is yes, and I would defer to his judgment.

[Laughter]

Justice Stevens: At least it was in my first year property course, which was some years ago.

[Laughter]

Mr. Smith: If I could turn again... once again to the issue of proportionality, I think that one of the important points to be noted in this case is that if there had been a... a clear understanding on the part of the... of the Oregon Supreme Court and the City of Tigard that there was a requirement for proportionality embedded within this Court's 1987 decision in Nollan v. California Coastal Commission, that the outcome of the case might have been significantly different.

This Court, within Nollan, used words like "specific connection", "precise fit" was used in the dissent, "essential nexus".

And the Oregon Supreme Court construed those to mean that there really only needed to be some sort of rational relationship between the dedications and the adverse impacts.

And, therefore, hypothetical impacts... and I would stress that... that the impacts that were found by the City in this case were really very, very speculative... that that was sufficient to satisfy the City of Tigard, and in fact satisfy the majority of the Oregon Supreme Court.

I don't believe that... that proportionality, as it has been characterized by the City in its brief, is indeed a revolutionary concept.

In fact, the emerging weight of authority across the United States in the various States recognizes that a proportionality test is in fact the one that should be used in looking at the relationship between dedications.

Chief Justice Rehnquist: Assuming that there is some degree of proportionality, do you insist on, you know, actual empirical demonstration of adverse effects?

Mr. Smith: No, Your Honor, we do not.

I believe that would be unreasonable.

And the emerging weight of authority among the States is adopting a similar position there.

As you know, and as is well laid out in the Washington Legal Foundation's amicus brief to this Court, they discussed the old Illinois test, which was specifically and uniquely attributable.

And in fact, the weight of authority has moved away from that and is requiring some sort of rough proportionality based on actual impacts, with some sort of temporally present, contemporaneous relationship that's substantially and demonstrably clear.

And I believe that that test, far being from revolutionary, is the one that is coming out.

It's in the so-called New Jersey test that was established in Longwood in 1968.

It's in the Wisconsin test that was established in--

Justice O'Connor: How would you articulate such a test in... in simple terms?

What would you say the test is that you think this Court has or should impose?

Mr. Smith: --Justice O'Connor, it's difficult to articulate the test in simple terms, mostly because the... the courts across the country... the State courts... have not chosen to use simple terms.

Justice O'Connor: But if you can't do it, how do you expect us to?

[Laughter]

Mr. Smith: I would submit that to find proportionality, that there are about three things that need to be done.

First of all, there needs to be some sort of actual, specific quantification of impacts and of public needs, much as was described in the City of Tigard's record and how their consultant thought that they ought to approach storm water runoff.

After that quantification is done, I believe that there... there has to be some sort of proportional relationship that establishes the contribution of an individual development project to the overall need.

And, finally, where a dedication of real property is required, I think that needs to be quantified and compared against that... that fraction or that relationship.

Chief Justice Rehnquist: Well, specifically in this case, what should the City of Tigard have done that it didn't do in order to justify the demands it made on your client for her property?

Mr. Smith: Mr. Chief Justice, in the... the first instance, what the City should have done is they should have quantified the actual storm water runoffs that had... were going to occur from the 17,600-square-foot building.

That they never did.

There is quantification of the overall increase in impervious surface, the overall demand citywide when it goes to buildout, but no specific assessment of what this project would do.

Justice Stevens: May I... may I raise the question that troubles me about just really the whole case.

The requirement of quantification, it seems to me, it would be awfully difficult to meet in cases in which a municipality might perceive a danger that it really couldn't evaluate, but feels it doesn't want to take the risk.

Say out in California you worry about earthquakes.

You don't know when it's going to happen or how serious it'll be, but you know it's a possibility.

How do you quantify against a reasonable risk that you just aren't quite sure what'll happen, but you just don't want to take any chances?

Mr. Smith: Justice Stevens, in that instance, I believe that what would occur would not be a dedication of real property as some sort of permit condition, but in fact would be a regulatory restriction upon development as regularly happens within 100-year flood plains, geologic hazard areas.

And based on this Court's Lucas decision--

Justice Stevens: Well, but you've acknowledged they could deny the permit outright if they were concerned in sort of... they just think there's a danger there, but they're not sure they're able to quantify it.

I think you've acknowledged they could deny the permit outright?

Mr. Smith: --Yes, Your Honor, we have.

Unknown Speaker: But you say they can't say, well, if you want to go ahead and build, because we're unsure about what's happened, we're going to insist that you make these perhaps exaggerated precautions?

You're saying they can't do that?

Mr. Smith: Your Honor, if the exaggerated precautions involve the dedication of an interest in real property, I believe that it is incumbent on the Government, in order to fulfill this Court's requirements laid down in 1960 in Armstrong, that it do more than merely speculate or hypothesize.

I think they need to look at the... the real impacts and come up with a quantification.

Otherwise, the alternative is to prohibit it outright.

Then we have a... a Lucas v. the South Carolina Coastal Council question that arises, as to whether it is in fact a common law nuisance.

Justice Scalia: Mr. Smith, I... I assume you don't concede that a proportionality requirement is necessarily in addition to a rational basis requirement?

I mean, I... I assume that... that you... you would acknowledge the possibility that something does not have a rational basis if it is wildly disproportionate?

Mr. Smith: Your Honor, we would... we believe that... that the rational basis... or rational relationship test, if we should call it that, as it was applied by the Oregon Supreme Court and was applied by the City of Tigard, is in fact no test at all.

And that in fact proportionality is essentially the antithesis of that test.

I believe rational... rational basis is much more akin to the sort of rational basis review that goes on in due process and equal protection context, and in fact is willing to rely upon even the most remote and hypothetical of State interests.

Justice Ginsburg: In 1971, the Supreme Court decided that you couldn't make arbitrary distinctions between men and women because that violated the rational basis test.

Mr. Smith: Yes, Your Honor.

Justice Ginsburg: You said it was no test at all; it seemed to be a pretty significant test in the case of Reed v. Reed.

Mr. Smith: I would agree, Your Honor.

And I would believe that within the... the context of the review of legislation, that the rational basis review, as it has been applied by this Court, in fact is... works quite well within the equal protection and due process context.

However, I believe as this Court observed in Nollan, that when one is involved with the dedication of interests in property, that something more than the rational basis review necessarily needs to be applied.

Justice Ginsburg: How do you formulate that?

I think it was what Justice O'Connor was asking you earlier.

How do you formulate the something more?

Mr. Smith: Justice Ginsburg, I believe that, as this Court set forth in Nollan, that it said that what was required was a substantial advancement of legitimate State interests; that that substantial advancement test is in fact given context and given substance by virtue of a requirement for proportionality.

Justice Ginsburg: That's kind of a submiddle tier, because the stock formula, equal protection/due process, is substantial relationship to an important Government interest.

This is one notch down, a legitimate Government interest.

It's not quite as heavyweight as an important Government interest, is it?

Mr. Smith: Yes, Your Honor, that's correct.

Justice O'Connor: Mr. Smith, is there any difference, do you think, in the justification the City can offer for the flood control problem and the justification for the bike path, insofar as Mrs. Dolan's property is concerned?

Mr. Smith: Yes, Your Honor.

With regard to flood control, the City did, and it is in the record before this Court, an extensive study that documented what would be the storm water runoff when all of the vacant land in the City had been built up and had the maximum amount of impervious surface.

With regard to transportation... but that's all they did.

Okay.

With regard to transportation, the City relied upon its parent county traffic impact ordinance.

And that traffic impact ordinance quantifies not only the overall needs of the community, but quantified the specific impacts that would be generated out of this... this larger site, with the increased number of parking spaces and trips per day.

Chief Justice Rehnquist: Is Tigard in Multnomah County?

Mr. Smith: No, Mr. Chief Justice.

Tigard is in Washington County, which is right next to Multnomah County.

Justice Souter: Mr. Smith, I don't want to be picky; I think I'm going to sound that way, though.

I don't... I still do not grasp your... your... your substantial relationship as a basis for your proportionality test.

Are you saying, in effect, that you basically make a fraction... let's say on the runoff problem... that you make a fraction of the amount of runoff that's going to be created by this change in use of the property, with that created by the change of use in the property as your numerator and all the other unnatural runoff that is going to hit this creek as your denominator, to start with?

And then, you, in effect, say that fraction governs the... the portion of the cost of improving the creek that can be borne by this landowner?

Mr. Smith: Yes, Your Honor.

And in fact, with regard to the traffic impact fee that was assessed on Mrs. Dolan, 14,000-and-some-odd dollars, that's exactly what the City did.

Justice Souter: How do you go... how do you... how do you determine what your denominator is?

Do you go back to the point where... before the land was settled, and you figure all of the runoff that is now taking place that wouldn't have taken place if this were just grassland or woodland or whatever it would have been?

Or do you... do you start with some baseline, the year 1990, and you measure incremental runoff from that point on?

How... how, in practice, does it work?

Mr. Smith: In the City of Tigard, Your Honor, the... the snapshot was taken in 1983, when the City's comprehensive plan was adopted.

And that snapshot evaluated the amount of impervious surface that was within the Fanno Creek watershed at that time.

And it then looked at the allowable zoning that was provided for within the Fanno Creek basin, and looked at how much impervious surface could increase after that, until the basin got to buildout.

Justice Souter: So, it would be the amount of legitimate increase that could be projected from '83, as the denominator, and the portion of that attributable to this change in use as the numerator?

Mr. Smith: Yes, Your Honor, that is correct.

Mr. Chief Justice, with the permission of the Court, I--

Justice Scalia: I assume the time you take the snapshot ought to depend on the time when the restriction for which this is the exaction was imposed... that is, the time the zoning requirement, which this exaction is... is meant to justify a waiver from, was imposed... that is when you'd take the snapshot, I assume?

Mr. Smith: --Yes, Justice Scalia.

And that was 1983 in this case.

Chief Justice Rehnquist: Very well, Mr. Smith.

Mr. Smith: Thank you, sir.

Argument of Timothy V. Ramis

Chief Justice Rehnquist: Mr. Ramis, we'll hear from you.

Mr. Ramis: Mr. Chief Justice, and may it please the Court:

In this case, the City of Tigard avoided denying the application and, instead, granted conditional... the conditional approval based upon mitigation for a project which the record shows would add hundreds of additional automobile trips to already congested streets in the City, and which would place a building of several thousand square feet directly in the path of... of expected flooding.

Justice Scalia: This property owner had to pay some money for the increased congestion; wasn't there an assessment, the $14,000, that was mentioned?

Mr. Ramis: Yes, there was a payment made--

Justice Scalia: And this is in addition to that?

Mr. Ramis: --Made for... it is, Your Honor.

The traffic impact fee, however, is not a complete offset for the impacts of this project.

That issue appears for the first time in the briefs at this level of review, and so the... the ordinance was not in the record.

We have lodged it with the Court.

There are three points on the face of that ordinance that demonstrate that it is not a complete setoff.

First, the adoption of the ordinance, ordinance 379, section 2, says specifically it is not intended as a complete setoff.

It's intended only as a partial solution to be used along with other mechanisms in a multifaceted way to pay for transportation improvements.

In addition, the supporting documentation, adopted at the same time, has a calculation which shows only 21 percent of the costs expected for improving streets and roads, based upon impact, is covered.

Justice Scalia: What would happen if somebody two lots back from this property, two lots further away from the flood plain, who increased business to the same extent by... by an expansion of the building, and who paid $14,000 similarly, but didn't have any flood plain land to contribute to a bike... to a bike path?

What... what would happen to that person?

Mr. Ramis: That property owner would also be expected to make a contribution or to demonstrate, in the language of our comprehensive plan, that there are adequate public facilities and services available.

Every property owner in the City, not just those along the flood plain... not just those along the bike path, must satisfy the standards of 7.1.2.

Justice Scalia: And this property, there is something peculiar about this property, by being next to the flood plain, adequate services are not available, so that you have to contribute a bike... a bike path?

Mr. Ramis: It's not--

Justice Scalia: But if you're further away, what... what would be done to a property further away?

Mr. Ramis: --Another property might reconstruct the sidewalk.

Another property might contribute to the synchronization of street lights in order to provide more capacity on the streets.

The problem the City was facing in this case was not bringing people to the property on bikes.

The problem was that this expansion... major expansion, over... close to double the size, would add hundreds of additional car trips to... to streets that were already so congested that fire vehicles--

Justice Scalia: And the solution to that was a bike path?

Mr. Ramis: --The solution was to offset those car trips by an alternative system of transportation.

Justice Scalia: People are going to go to the hardware store on their bike?

Mr. Ramis: No, Your Honor.

That's not the basis of our decision.

Justice Scalia: That isn't even contended by the City, is it?

So, there is no relationship between the increased traffic volume and the bike path?

Mr. Ramis: Your Honor, the relationship is that this project is a retail project that puts additional cars on the road.

The bike path is mitigation device that takes trips off the road.

They don't have to be the same people.

Justice Scalia: I see, people who would otherwise be driving their cars for recreation will instead ride bicycles for recreation; is that the--

Mr. Ramis: No, Your Honor.

Justice Scalia: --Is that the notion?

Mr. Ramis: No, Your Honor.

The... the concept is that the City is trying to encourage people to go to other places to do their shopping by means of bicycle rather than car.

If they can achieve that, then we will free up spaces on the streets for those people who are coming in the car to this business.

This is not a radical notion or a particularly innovative notion.

It is an idea that Congress has legislated.

Dollars that--

Justice Scalia: There are a lot of bike paths around Washington, and I've never seen people carrying shopping bags on their bikes.

Mr. Ramis: --The record--

Justice Scalia: Perhaps city planners, I guess they--

Justice Souter: --Mr. Ramis--

--Are you judging the... the obligation of the littoral property owners and the nonlittoral owners by contradictory standards?

Because you're saying that... excuse me... in answer to an earlier question, that the... the owner of property two blocks away from the creek would be judged by... by asking whether the... the public facilities that would be burdened by the... by the building were already adequate; whereas you have made, as I understand it, a definitive determination with respect to the littoral property owners that they're not adequate.

You're saying we've got to have a bike path because there's too much traffic.

We've got to improve the... or set aside more land for creek overflow because there's going to be a quicker runoff.

It seems to me that you've made kind of a conclusive determination with respect to... to the Petitioner here, but you haven't made any determination on... on your theory with respect to the nonlittoral owners.

Mr. Ramis: --There are two features of the City's code which I'd like to describe, which I believe address... address your question.

First, every property owner in the City is required to address the standard of providing adequate facilities and services, and that standard is described at 827 in the appendix.

And to paraphrase it--

Justice Souter: Well, but is... correct me if I'm wrong, as I understand it, the Petitioner here would not have been allowed by the City to come in and say there's... there's plenty of room for the creek to flow and there's... there's plenty of capacity in the streets and sidewalks.

You've already determined that the answer to... in each case, is that there is not sufficient capacity--

Mr. Ramis: --That's not the case, Your Honor.

Justice Souter: --Okay.

Mr. Ramis: And that's the second point I wante to make about the operation of the code.

This code has several openings for property owners to come in and ask for adjustments.

And the key one is the variance procedure, which says specifically you may have a variance if you can demonstrate there's no adverse effect on drainage or on transportation.

Justice Souter: Okay.

But does... does the property owner two blocks away have to ask for a variance?

Mr. Ramis: Well, Your Honor, if they cannot prove that there are adequate public facilities and services, they would be conditioned to provide them, and then they would have to ask for a variance.

Justice Souter: Okay.

But in this case, as I understand it, the proof, so called, has already been made.

And the way for the littoral property owner, the Petitioner here, to alleviate the burden is to ask for a variance.

Those... those, at least, are procedurally different mechanisms, aren't they?

Yes... go ahead.

Mr. Ramis: Your Honor, the... the upstream property owner, the uphill property owner, would also have... have to ask for a variance in the event that the staff sought to impose, for example, a bus pullout to address traffic problems.

They would have--

Chief Justice Rehnquist: But supposing that the upstream property owner or the uphill property owner, the one out of the flood plain or littoral, he wants... he wants to enlarge his business the same way that Mrs. Dolan did, would the City demand of him something in the way of an easement... something corresponding to the flood plain easement which they asked of Mrs. Dolan?

Mr. Ramis: --Yes, Your Honor.

Chief Justice Rehnquist: What something is it?

Mr. Ramis: That is a water storage facility.

At page four of our brief, at footnote four, it describes that you'd have to do a study of the drainage.

And as a result of that study of the drainage, you would be required to build a storage facility for the runoff.

So, the way the system works is that those who are next to the creek handle the problem by dedication, and then the City comes in and spends the money to build the storage capacity.

The balance is those that are upstream do not suffer a physical invasion, but in that case, they have to build on their own land the storage facility with their own money... that's the balance.

Justice Kennedy: Suppose... suppose Mrs. Dolan said that she was willing to build a storage facility?

Mr. Ramis: Then she would not have to dedicate the land for the greenway.

Justice Kennedy: Was she given that... was... did she have that option?

Mr. Ramis: She did have that option and did not choose to seek it.

If you would look in the record, Your Honor, at page E-4 of our appendix, you have the... a copy of the statement of justification for variance filed by the attorney... the then-attorney for the Dolans, not my friend, Mr. Smith, another attorney.

And there you can see that they made no serious effort at all to try to say either that they were going to provide storage facilities or that there wasn't an impact from this project.

They simply didn't take advantage of the system.

They could have.

They could have come in with a design that showed a... a large catch basin under their parking lot.

Justice Kennedy: Of course, in all events, it seems to me that it's unnecessary for the drainage that the property owner lose the right to exclude the public from access to it.

I see no relation between those two.

Mr. Ramis: Your Honor, that's not the purpose of the regulation, as can be seen by the fact that if you don't create a drainage impact you would not have to dedicate.

Justice Scalia: Mr. Ramis, could I... could I come back to your footnote four... footnote six on page four?

I don't see that that says what you've described.

What that says is that natural drainage ways must be maintained unless submitted studies show that alternative drainage solutions can solve onsite drainage problems.

That... it seems to me that regulation is meant to cover the situation where someone is... is constructing an improvement in such a way that it blocks runoff which would normally occur, not that it... that it makes land more impervious.

Of course... I mean, all communities require you to put... put some sort of a catch basin or something when you're... you've interrupted the natural drainage flow.

But if somebody makes an improvement that does not interrupt the natural drainage flow, I don't see any... any... any requirement that either one of these regulations imposes on them.

Mr. Ramis: Your Honor, there are two steps in this process.

The first is triggered by the requirement that is a precondition to development.

You do a site development study that would analyze the impact to the drainage.

Justice Scalia: Fine.

Mr. Ramis: Step two is at page B-63 of our appendix.

And that is subsection (d) of section 18.160--

Justice Scalia: B as in buzz?

Mr. Ramis: --D as in dog.

Justice Scalia: D as in dog.

Mr. Ramis: At B-63.

And here, if you're study shows that--

Justice O'Connor: Excuse me, I can't find what you're talking about.

Is that something in the red brief?

Mr. Ramis: --Yes, in the red brief, Your Honor.

In the back, there's an appendix.

Justice O'Connor: Yes.

Mr. Ramis: And at page B as in boy--

Justice O'Connor: B as in boy?

Mr. Ramis: --Boy, 63.

Chief Justice Rehnquist: B-63.

Justice O'Connor: Thank you.

Mr. Ramis: Yes.

There is a code provision, D, effect on downstream drainage.

And what this provision says is if you are going to create additional runoff that will overload the existing drainage facility, then among your options is to provide for storage of additional runoff.

xx--

Justice Scalia: Sure, I think what that means is if the pipe that's going into the municipal conduit that goes down to this stream would be overloaded, so that there's not... not enough capacity in that pipe to carry it off, you have to store it and then let it out at another time.

But that has nothing to do with... so long as you can get it into the municipal conduit, you're allowed to do it.

I don't read this as having anything to do with the capacity of the flood plain.

Mr. Ramis: --The reason that... that it wouldn't work for an applicant to come in and say, I can get a pipe to the municipal system, is that you wouldn't be able to comply with... with policy 7.1.2, which says you must provide adequate public facilities.

If there's not capacity that's sufficient in that public drainage system when you get to the pipe to it, then you've overloaded it.

And if you've overloaded it, you've caused a harm and you are required to provide additional capacity.

Justice O'Connor: But if you haven't overloaded it, then there's no such problem or requirement, right?

Mr. Ramis: That's exactly right.

Justice O'Connor: And that's a possibility?

Mr. Ramis: Yes.

Justice O'Connor: But it isn't a possibility for Mrs. Dolan?

Mr. Ramis: It is, Your Honor, because under the... the policy at page four, Mrs. Dolan was required to come in with a drainage analysis.

She didn't do that.

If she had provided a drainage analysis that said we're going to build a large catch basin under our parking lot and it will meter the water out slowly at the same rate that it would have gone out if there was no building, then there would have been no exaction.

She would have gotten--

Justice O'Connor: Well, let me ask you this.

What about the bike path?

Did she have an option there?

Mr. Ramis: --Yes.

The findings discuss the fact... actually discuss one of the other options.

One of the options would have been to handle the traffic impact by reconstructing the sidewalk in front.

There's a discussion saying that if she reconstructed the sidewalk and the street that that would be a possible offset.

Justice O'Connor: Then no bike path?

Mr. Ramis: Yes.

But--

Justice O'Connor: Now, how about other property owners that are not adjacent to the creek, are they required to build a bike path?

Mr. Ramis: --No.

They're required to make other contributions to the transportation system.

Justice O'Connor: But never a bike path?

Mr. Ramis: Not unless the bike path goes by their property.

They might contribute by building a sidewalk.

And of course we see the bike path and the sidewalk system as one integrated system.

And so--

Justice Kennedy: Is it your representation to us that Mrs. Dolan had all of the options of an uphill property owner?

Mr. Ramis: --Yes.

She--

Unknown Speaker: The... go ahead.

Mr. Ramis: --There are three different variance procedures, all of which she could have taken advantage of.

Chief Justice Rehnquist: The Supreme Court of Oregon didn't rely on those in the majority opinion, did it?

Mr. Ramis: On the variance procedures, Your Honor?

Chief Justice Rehnquist: Yes.

Mr. Ramis: I don't believe the opinion mentions them.

Your--

Justice Scalia: Did you mention them in your argument to the Oregon Supreme Court?

Mr. Ramis: --The... the argument there was focused on the test.

And... and so that issue did not arise.

Your Honor, the three procedures that are available are, first, at the time of application, you can come into the process and say there's been a change or a mistake in the process, or there are special attributes to my property.

And that would justify a change in the... in the regulations as they're applied.

The second provision allows that the City engineer can adjust the regulations based upon a showing that there are sound engineering principles allowing it.

That would be the case, for example, of the catch basin as an alternative to storage capacity in the creek.

And then, finally, there's the formal variance process.

So... and the variance process would allow variance if you were able to show that there's no adverse effect.

So, all three of these processes are available to adjust the conditions.

Justice Scalia: Is it... is it your representation to this Court, Mr. Ramis, that... that... that Mrs. Dolan could have avoided both the bike path dedication and the flood plain dedication... she could have avoided both by simply agreeing to do what some uphill owners would do?

Mr. Ramis: Yes, Your Honor.

She could have come in with alternative solutions to the traffic impact she was creating and to the runoff impact.

Unfortunately, the design that they have doesn't do that.

Justice Scalia: Alternative... an alternative to the bike path?

Mr. Ramis: Yes.

Justice Scalia: Something that would solve the traffic problem better than the bike path would?

Mr. Ramis: Or as adequately.

In other words--

Justice Scalia: Well, that's zero as far as I can tell.

So, what would she come in to?

Mr. Ramis: --Well, Your Honor, the record would show that bike paths are effective as mitigation.

Because they draw people off of the highways.

Justice O'Connor: But you said she could have an alternative by providing a sidewalk.

Now, that wouldn't provide bike space at all.

That's for people to walk on--

Mr. Ramis: Well, the bike path is actually a bike and pedestrian path.

It's designed for nonautomobile transportation, both for pedestrians and for people on bicycles.

Justice Kennedy: --If... if she had an alternative that was equally mitigating to the bike path, would your City have the right to insist on the bike path because it preferred it?

Mr. Ramis: I believe the question would be... I believe the answer is no, Your Honor.

If she was able to show that she adequately handled the traffic impact, then we could not impose the bike requirement if she had some other mechanism.

Justice Ginsburg: Who makes... who is the decisionmaker?

You... you said that she could propose.

She doesn't like the bike path.

She doesn't like your plan.

She can come up with an alternative.

And suppose you say we, for a variety of reasons, like the bike path better.

Who decides and what review is there of that decision?

Mr. Ramis: Right.

The decision is made by, in the first instance, the planning commission, and then, on appeal, to the city council.

Under the law in Oregon, this is an adjudicatory process, with all the safeguards of an impartial decisionmaker, a decision on the record, a decision under written criteria.

That decision is then subject to review by the land use board of appeals.

And a property owner such as this one can introduce evidence at that trial level about constitutional violations and procedural violations.

So, there was a second--

Justice Scalia: Where does this appear in the record that... that she can come forward with alternative solutions which must be accepted by the City?

Does that appear--

Mr. Ramis: --That's--

Justice Scalia: --Can you give us some citations to the... to the regulations or whatever?

Mr. Ramis: --Yes, Your Honor.

Yes, Your Honor.

The adjustment criteria are, first, the variance criteria at 18.134.050, which appears in this record in... in my brief at page B-49.

Second, the City engineer's ability to change the criteria based on alternative engineering solutions--

Justice Scalia: Not ability... obligation... if... if she comes forward with it.

Mr. Ramis: --Yes.

Justice Scalia: Okay.

Mr. Ramis: If she comes forward, she has a right to obtain a change in the application criteria.

Justice Scalia: Okay.

Mr. Ramis: That is at B-51 of the appendix, section 18.164.020(b).

And, finally, the consideration of change or mistake or positive attributes of the property which could justify change is at B-7 of the appendix.

All of these processes are available.

Unknown Speaker: Okay.

Mr. Ramis: And all of them, of course, would be decided in an adjudicatory procedure, subject to review on... on a substantial evidence standard, except in the case of allegations of constitutional violations.

Chief Justice Rehnquist: Thank you, Mr. Ramis.

Mr. Ramis: Thank you, Mr. Chief Justice.

Argument of Edwin S. Kneedler

Chief Justice Rehnquist: Mr. Kneedler, we'll hear from you.

Mr. Kneedler: Thank you, Mr. Chief Justice, and may it please the Court:

I would like to address, first, just one factual point about the... or I guess policy point about the flood plain.

The... the legitimacy of... of the flood plain approach taken by the City here has been addressed thus far only in terms of the adverse impacts that would be caused by increasing the impervious surface on the... on the parking lot and expanding the building.

And Petitioner suggests that the condition imposed on Mrs. Dolan should be proportional to that adverse impact.

That is one measure, and it's true the City's flood plain... excuse me... drainage plan does identify that measure as one method of allocating the cost.

But there is another important consideration, and that's the benefit to Mrs. Dolan.

She is right along the flood plain.

And the City's drainage plan estimates that, absent some improvements in the drainage channel, because of development all along the flood plain, the flood level will rise two to five feet, with a 40 percent increase in the amount of water during the 100-year flood plain... flood... typical flood.

And so the improvement of the channel confers considerable benefits on the property owners immediately adjacent to the creek.

And in... in designing what sorts of conditions should be imposed--

Chief Justice Rehnquist: What... what benefits--

Mr. Kneedler: --It will prevent the... will prevent the... the plan is to widen the channel and to reinforce the slopes, so that the channel will have a greater carrying capacity in large floods.

With a greater carrying capacity, the water will be carried past her property.

Otherwise, it would... it would rise and go onto her property.

Chief Justice Rehnquist: --Is there something in the record that indicates that, had the channel not been widened in some relatively expectable flood, her property would have been hurt?

Mr. Kneedler: Yes.

This is addressed on page six of the Respondent's brief.

The channel has not yet been built, but this is the projection of... of what would be necessary.

Justice Scalia: Does it benefit only riparian property owners who want to expand their facilities?

Mr. Kneedler: No, but it--

Justice Scalia: It's sort of a haphazard way of... of assessing a benefit, right, when you want to expand your facilities, since we're... we're helping you on the flood plain, we're going to... we're going to make you dedicate... only if you want to expand your facilities.

Mr. Kneedler: --Well, one... one of the important aspects of flood plain reg... flood plain regulation came in about 20 years ago.

And... and realistically, flood plain regulation often has to take something of a given what's already there, but... but to attach conditions on expanding what is already there.

Justice Scalia: But the nexus that's... that our opinions require is... is not a nexus to whether you're benefitted or not.

It's a nexus to the... the permit to which this... this exaction is attached.

Mr. Kneedler: Right, and--

Justice Scalia: And I don't see any nexus to the permit.

Mr. Kneedler: --Right, I--

Justice Scalia: And the fact that you're benefitted is very interesting, but, it seems to me, irrelevant to the nexus requirement.

Mr. Kneedler: --Right, I... and that's the next point I wanted to get to.

I just wanted to make the point that it is appropriate for a municipality, in deciding what conditions to attach, to take into account the unique characteristics of the land.

Chief Justice Rehnquist: Well, Mr. Kneedler, a moment ago in your response to my question about whether there was a showing in the record that Mrs. Dolan's property would be hurt in the foreseeable future, you referred me to page six--

Mr. Kneedler: I'm sorry, I misspoke.

It's page eight.

I'm sorry.

Page eight of the red brief.

Chief Justice Rehnquist: --Well, page seven has a finding in the drainage plan that there would be flooding in several areas along Fanno Creek, including areas near Petitioner's property.

Now, does page eight have something better than that?

Mr. Kneedler: Immediately... immediately adjacent... adjacent to the indentation on page eight, it says upstream of Hall Boulevard, which is the stretch where her property is located.

The flood stage reductions that would result from widening the channel will reduce the flood range from two to five feet over the next years.

I would like to address the... the test, though.

As... as we understand this Court's decision in Nollan, the test is really one of whether the permit condition serves the same purpose as an outright denial.

It's taken as a given in this case by virtue of Petitioner's concession that the permit could have been denied outright.

So, what... what this Court said in Nollan is that it agreed with the State's contention there that if the permit condition serves the same purpose as an outright denial would have done, that... that the condition can be imposed.

That's all the Court required.

Justice Scalia: Is that all, just... just... you really think that's... that Nollan said, for... suppose the City is worried about urban congestion and pollution and someone who has a factory wants to... wants to expand it infinitesimally, just a very little bit.

Can the State require, as a condition of that permit, a million-dollar contribution to the City, which would go to... to pollution reduction?

Mr. Kneedler: No.

As--

Justice Scalia: It serves the same purpose.

Mr. Kneedler: --As we suggested in our brief, if the... if... and, in fact, Respondent seems to agree with this at page 19 of our reply brief, with our formulation, which is if... if the landowner can show that the conditions being imposed is wholly out of relation to the... to the adverse impact--

Justice Scalia: There is a proportionality element?

Mr. Kneedler: --But... but... we think not in its own right.

But it goes to a measure... it goes to determining whether this is ultimately a land use regulation, as opposed to serving some other purpose.

In Nollan, the Court articulated the question as whether the condition serves the same purpose.

And the Court there concluded the condition did not.

Because it did not serve the same purpose, the Court said it converted what was a legitimate land use regulation into something else.

And we think that the same principle might well apply by virtue of gross disproportionality or no relation, it would convert land use regulation to something that's not.

It's really a question of subterfuge or something in the nature of pretext... is what the City is trying to do something other than land use regulation?

But where that's not present, conditions serving the same purpose as a permit denial are... are not something that are inherently suspect, but in fact are to be encouraged.

They... they discourage... otherwise, a city could be encouraged to deny permits all the time, and have a right land use regulation scheme.

But permit conditions that serve the same purpose as the ultimate denial might afford flexibility to both sides.

The City has ways in which to promote its environmental, its flood control, its traffic problems, and the landowner can dedicate an easement and get on with the work on his or her own property.

Justice Souter: So, there's no proportionality requirement, but... but proportionality is a subject of evidence to indicate whether in fact the required relationship... i.e., serving the same purpose... is present or not?

Mr. Kneedler: That... that's correct.

It's an outer limit or... or a touchstone for determining whether the same purpose should be served.

And this is... this is not a... a principle unique to this Court's takings jurisprudence, it applies--

Justice O'Connor: That seems to kind of ignore the word "substantial" in the test articulated in Nollan.

Mr. Kneedler: --But in... in our view, the word "substantial"... substantially advancing a governmental purpose... to the extent it means something other than a reasonable relationship, we think goes to the question of whether the overall regulatory scheme furthers a governmental interest.

And if the permit denial would... would further... would substantially--

Justice O'Connor: Well, I hadn't read it that way, but I guess that's a way one could read it.

Mr. Kneedler: --Well, Nollan does... does... if we take as a given that the permit denial would substantially further the governmental interest, and if the permit condition serves the same purpose, it's lesser included, and therefore would substantially further the same purpose.

We think that that... that that would... that that would ordinarily follow as... as a matter of course.

And--

Justice Souter: The burden, I assume, would be... on your theory, would be on the landowner to show the disproportionality?

Mr. Kneedler: --Correct.

Correct.

And this question of... of relevance or germaneness is a principle this Court has applied in a... in a number of situations where... where conditions are attached to expenditure of governmental funds or other governmental programs.

Justice Kennedy: And are these tests relevant to an ultimate determination of whether what the City is doing is simply a pretext for furthering its own goals that do not proportionally relate to the property?

Mr. Kneedler: Right... we don't think it's necessary to inquire into the actual subjective motivation.

But it's in the nature of a pretext inquiry.

As the Court said, again, in... in Nollan, if it serves a different purpose, it converts the land use regulation to something else.

And that's where we think proportionality does enter into it.

Justice Scalia: Can... could I come back to who the burden is on?

You mean that a municipality, all it has to do is say, you know, there may be a thimble full of water, we're not going to do any studies, and therefore, we want 10 percent of your land for flood control, and... and the burden is shifted to Mrs. Dolan to do a study, to show that that is disproportionate?

Mr. Kneedler: No--

Justice Scalia: Why should the burden be on her?

Mr. Kneedler: --The City... the City can't just assert that with... without foundation, I think.

But that's not at all what happened here.

It's typical for Congress, for agencies, for cities--

Justice Scalia: Well, what do you mean without foundation?

Mr. Kneedler: --Well--

Justice Scalia: Why isn't the burden on the City to demonstrate some rough proportionality?

Mr. Kneedler: --What the City did was to adopt a code of general applicability, which... which states, for example, that... that increasing impervious surfaces will increase runoff and increase flooding, as one example.

And then the burden shifts to the landowner to say that this condition will not... will not further the same purpose.

Justice Scalia: That just shows you're in the same general ball park, flood control.

But why doesn't the City have... have the burden of showing that it's roughly proportional?

That's an awful burden to put on the... on the small individual property owner, to conduct a massive study to demonstrate that the City's wrong.

All the City has to say is, well, flood control is flood control.

One way to do it is to... is to not expand your property.

Another way to do it is to give us 10 percent of your property for--

Mr. Kneedler: The question is not principally one of quantification, but logical relatedness of the condition to the... to the impact being addressed.

Rebuttal of David B. Smith

Chief Justice Rehnquist: --Thank you, Mr. Kneedler.

Mr. Smith, you have four minutes remaining.

Mr. Smith: Thank you, Mr. Chief Justice.

Chief Justice Rehnquist: Will you cover some of the contentions about the variances and so forth?

Mr. Smith: Yes, Mr. Chief Justice.

On the... on the matter of a variance, I don't believe that it is appropriate for the City to establish a requirement for the dedication of real property and thrust upon the private property owner the unreasonable demand that in order to escape from having to surrender a fee title or an easement to the Government, it is necessary for them to go through a variance procedure in order to get out from under what would otherwise be an unconstitutional taking of private property.

Justice Kennedy: Well, what about the availability of conditions... of... of alternatives that she could have invoked and that the City would have had to accept as a matter of right?

Mr. Smith: Your Honor, I don't believe that there were such alternatives.

And I don't believe that the record supports that contention.

And I have noted in appendix G of the petition for certiorari, at page G-12 and G-14, two recitations that I think belie my distinguished colleague's representation that they do.

This... and I quote here from pages G-11 and G-12, where the City, in its findings, said, it appears to be impractical to perform the proposed reconstruction of Main Street on a piecemeal fashion, on a lot-by-lot basis.

Therefore, we do not propose that any reconstruction of Main Street be required as a condition of approval of this development proposal.

Similarly, at page G-14, the City says, requiring surface water quality facilities on small sites, which certainly one and two-thirds acres is, could result in numerous facilities that could become a maintenance burden on the City.

Furthermore, the applicant does not propose any such facilities, and there are no natural depressions or other areas of this site that are particularly suitable for water... water quality features.

I think that... that answers both questions as to whether the City honestly believed that Mrs. Dolan could have avoided the dedications by engaging in either improvements to Main Street or the establishment of an onsite water quality impoundment facility.

Chief Justice Rehnquist: Do you agree with your colleague that the Oregon Supreme Court didn't consider the availability of variances, and they were not argued to the Oregon Supreme Court?

Mr. Smith: That is correct, Mr. Chief Justice.

I would... would make one more point about proportionality.

And that is, very essentially, that unless there is some requirement for proportionality between actual impacts and dedications, that even the most strenuous of dedications could have been required.

The City could have found that Mrs. Dolan's new store would have increased traffic by one additional vehicle trip per day.

In the absence of proportionality, the City could have required her to dedicate 75, 95 percent of her land for a widening of Main Street.

No proportionality.

We have our rational relationship.

The City gets it.

And there's no fairness.

There's no justice.

And what this Court said in Armstrong has no meaning at all.

Justice Scalia: Do the other State plans that you referred to in your main presentation... New Jersey and elsewhere... do they provide for some proportionality?

Mr. Smith: Yes, Your Honor, they do.

And, in fact, there is at least one State that I am told... the State of... I believe it's Virginia... that even requires the old Illinois test and requires even a heightened degree of proportionality that puts an extreme burden on Government.

And it's noteworthy that... that both the New Jersey and Wisconsin tests were adopted in the 1960's, well before this Court established its ruling in Nollan, and they have worked quite well.

Thank you, Mr. Chief Justice.

Chief Justice Rehnquist: Thank you, Mr. Smith.

The case is submitted.

Print this transcript Transcript: 

Argument of Chief Justice Rehnquist

Mr. Rehnquist: I have the opinion of the Court to announce in two cases.

The first is Dolan against the City of Tigard.

In here, petitioner, Florence Dolan, owns a plumbing store and electric supply store in Tigard, Oregon which is the suburb of Portland.

She applied to the city for a permit to redevelop the site by merely doubling the size of her current store in paving what was a dirt parking lot.

The City Planning Commission conditioned approval of her application on her dedication of some of her land to the city first, for a public green-way along a nearby creek to minimize flooding hazards that would be enhanced by the increases and run off associated with her development, and second, for a pedestrian and bicycle pathway intended to relieve traffic congestion in the City's central business district.

And the Oregon State Courts upheld this action of the City Planning Commission.

In an opinion filed with the Clerk today, we reverse the Oregon Supreme Court's ruling.

While we find that a connection exists between the conditions imposed by the City Planning Commission and the impacts of the proposed development, we do not think that the extent of the exaction demanded and by the permit conditions was sufficiently closely related to the projected impact of the proposed development.

No precise mathematical calculation is required but the City must make some sort of individualized determination that the required dedication is related both in nature and extent of a proposed development's impact in order to avoid violation of the Fifth Amendment's prohibition against the taking of private property without compensation.

Here, the City has never said why a public as opposed to a private green-way is required in the interest of flood control and it has not shown in any charical way how the bicycle paths relates to the petitioner's increase of her business area.

In an opinion filed today we reverse the judgment of the Supreme Court of Oregon.

Argument of Justice Stevens

Mr. Stevens: I have filed a dissenting opinion that Justice Blackmun and Justice Ginsburg have joined and Justice Souter has also filed a dissent.

The importance of the case consist brief oral statement.

As the Chief Justice has explained, the case arises out of a request for a permit to enlarge the Tigard unit in petitioner's chain of hardware stores.

There is no dispute that the post development will have an adverse impact on the City's legitimate and substantial interest in controlling drainage in Fanor Creek and minimizing traffic congestion in Tigard's business district.

That impact is sufficient to justify an outright denial of the application for approval of the expansion.

The City has nevertheless agreed to grant Dolan's application if she would comply with two conditions.

Each of which admittedly will mitigate the adverse effect of her proposed development.

The disputing question is whether the City has violated the Due Process Clause of the Fourteenth Amendment to the Federal Constitution by refusing to allow Dolan's planned construction to proceed unless those conditions are met.

In answering that question, the Court's opinion has candidly acknowledged that it is announcing a new rule of law.

The Court is correct in concluding that the City may not attach arbitrary conditions to a building permit or to a variance even when it can rightfully deny the application out right.

It could not, for example, insist on a contribution to the mayor's campaign in exchange for a permit.

On the other had, it is equally clear that real estate developers have often and properly have been required to dedicate interest in property to the public to help provide needed roads, parks, or schools, or to otherwise alleviate some of the problems caused by the proposed use of their land.

Over the years, a substantial body of state law has developed without any assistance from this Court.

Today, however, this Court has decided that federal judges should henceforth play an important role in an area which we have traditionally allowed State Courts the greatest deference.

I should just mention a few of the reasons I think the decision is misguided.

First, by imposing on the local government the burden of demonstrating a rough proportionality between the harm caused by the new development and the off setting benefit obtained from a required dedication.

The Court has reversed the presumption of constitutionality that hereto for attach the state actions that have challenged on federal constitutional ground.

Moreover, in its analysis, unlike the State Courts that have dealt with similar cases, this Court completely ignores the benefit that the property owner obtains from the entire transaction and narrowly focuses on a single strand the so-called power to exclude of the bundle of rights involved in the development of commercial property.

In a case of this kind, the property owner is not defending his house and home against the king's intrusions but simply attempting to maximize his profits from a commercial venture.

The conditions attached to the development are a species of commercial regulation that should be entitled to the strongest presumption of constitutional validity.

Perhaps even more important in the Court's imposition of a novel burden of proof on cities implementing valid comprehensive land use plans is the fact that the Court has implicitly, not expressly, given new life to the Doctrine of substantive due process as a basis for reviewing state regulation of commercial property.

The constitutional text that provides the basis for its holding today is found in the Due Process Clause of the Fourteenth Amendment.

While the Court suggests that it is merely applying a well-settled unconstitutional conditions doctrine in a new setting.

In fact, its reasoning is reminiscent of the Court's much-maligned decision in Lochner against New York.

In our changing world, one thing is certain.

Uncertainty that characterize predictions about the impact of new urban developments and the risks of floods, earthquakes, traffic congestion, or environmental harms.

When there is doubt concerning the magnitude of those impacts, the public interest in averting them should outweigh the private interest of the commercial entrepreneur.

If the government can demonstrate that the conditions it has imposed in a land use permit a rational, impartial, and conducive to fulfilling the aims of a valid land use plan a strong presumption of validity should attach to those conditions.

The burden of demonstrating that those conditions have unreasonably impaired, the economic value of the proposed improvement should rest squarely on the shoulders of the party challenging the constitutionality of the state action.

That allocation of burdens has served as well in the past.

In my opinion, the Court has stumbled badly today by reversing it.