KOONTZ v. ST. JOHN'S RIVER WATER MANAGEMENT
In 1994, Coy A. Koontz requested a permit from St. John’s River Water Management to develop more of his land than the original permit allowed. St. John’s had jurisdiction over Koontz’s land. St. John’s agreed to issue the permit on the condition that Koontz deed the rest of his property into a conservation area and do some mitigation work on the surrounding areas. Koontz agreed to the deed but not to the mitigation work. St. John’s denied the permit application.
Koontz sued St. John’s River Water Management, and the trial court found in favor of Koontz. A Florida trial court held that St. John’s actions effected a taking of Koontz land and that imposing requirements for the issuance of a permit is only constitutional if the required action serves the same governmental purpose as the ban on development. Florida's Fifth District Court of Appeal affirmed. The Supreme Court of Florida reversed.
Is the government liable for a taking when it refuses to issue a permit until the landowner has agreed to dedicate personal resources to a public use?
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
COY A. KOONTZ, Jr., PETITIONER v. ST. JOHNS RIVER WATER MANAGEMENT DISTRICT
on writ of certiorari to the supreme court of florida
[June 25, 2013]
Justice Alito delivered the opinion of the Court.
Our decisions in Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987) , and Dolan v. City of Tigard, 512 U. S. 374 (1994) , provide important protection against the misuse of the power of land-use regulation. In those cases, we held that a unit of government may not condition the approval of a land-use permit on the owner’s relinquishment of a portion of his property unless there is a “nexus” and “rough proportionality” between the government’s demand and the effects of the proposed land use. In this case, the St. Johns River Water Management District (District) believes that it circumvented Nollan and Dolan because of the way in which it structured its handling of a permit application submitted by Coy Koontz, Sr., whose estate is represented in this Court by Coy Koontz, Jr. 1 The District did not approve his application on the condition that he surrender an interest in his land. Instead, the District, after suggesting that he could obtain approval by signing over such an interest, denied his application because he refused to yield. The Florida Supreme Court blessed this maneuver and thus effectively interred those important decisions. Because we conclude that Nollan and Dolan cannot be evaded in this way, the Florida Supreme Court’s decision must be reversed.I A
In 1972, petitioner purchased an undeveloped 14.9-acre tract of land on the south side of Florida State Road 50, a divided four-lane highway east of Orlando. The property is located less than 1,000 feet from that road’s intersection with Florida State Road 408, a tolled expressway that is one of Orlando’s major thoroughfares.
A drainage ditch runs along the property’s western edge, and high-voltage power lines bisect it into northern and southern sections. The combined effect of the ditch, a 100foot wide area kept clear for the power lines, the highways, and other construction on nearby parcels is to isolate the northern section of petitioner’s property from any other undeveloped land. Although largely classified as wetlands by the State, the northern section drains well; the most significant standing water forms in ruts in an unpaved road used to access the power lines. The natural topography of the property’s southern section is somewhat more diverse, with a small creek, forested uplands, and wetlands that sometimes have water as much as a foot deep. A wildlife survey found evidence of animals that often frequent developed areas: raccoons, rabbits, several species of bird, and a turtle. The record also indicates that the land may be a suitable habitat for opossums.
The same year that petitioner purchased his property, Florida enacted the Water Resources Act, which divided the State into five water management districts and authorized each district to regulate “construction that connects to, draws water from, drains water into, or is placed in or across the waters in the state.” 1972 Fla. Laws ch. 72–299, pt. IV, §1(5), pp. 1115, 1116 (codified as amended at Fla. Stat. §373.403(5) (2010)). Under the Act, a landowner wishing to undertake such construction must obtain from the relevant district a Management and Storage of Surface Water (MSSW) permit, which may impose “such reasonable conditions” on the permit as are “necessary to assure” that construction will “not be harmful to the water resources of the district.” 1972 Fla. Laws §4(1), at 1118 (codified as amended at Fla. Stat. §373.413(1)).
In 1984, in an effort to protect the State’s rapidly diminishing wetlands, the Florida Legislature passed the Warren S. Henderson Wetlands Protection Act, which made it illegal for anyone to “dredge or fill in, on, or over surface waters” without a Wetlands Resource Management (WRM) permit. 1984 Fla. Laws ch. 84–79, pt. VIII, §403.905(1), pp. 204–205. Under the Henderson Act, permit applicants are required to provide “reasonable assurance” that proposed construction on wetlands is “not contrary to the public interest,” as defined by an enumerated list of criteria. See Fla. Stat. §373.414(1). Consistent with the Henderson Act, the St. Johns River Water Management District, the district with jurisdiction over petitioner’s land, requires that permit applicants wishing to build on wetlands offset the resulting environmental damage by creating, enhancing, or preserving wetlands elsewhere.
Petitioner decided to develop the 3.7-acre northern section of his property, and in 1994 he applied to the District for MSSW and WRM permits. Under his proposal, petitioner would have raised the elevation of the northernmost section of his land to make it suitable for a building, graded the land from the southern edge of the building site down to the elevation of the high-voltage electrical lines, and installed a dry-bed pond for retaining and gradually releasing stormwater runoff from the building and its parking lot. To mitigate the environmental effects of his proposal, petitioner offered to foreclose any possible future development of the approximately 11acre southern section of his land by deeding to the District a conservation easement on that portion of his property.
The District considered the 11acre conservation easement to be inadequate, and it informed petitioner that it would approve construction only if he agreed to one of two concessions. First, the District proposed that petitioner reduce the size of his development to 1 acre and deed to the District a conservation easement on the remaining 13.9 acres. To reduce the development area, the District suggested that petitioner could eliminate the dry-bed pond from his proposal and instead install a more costly subsurface stormwater management system beneath the building site. The District also suggested that petitioner install retaining walls rather than gradually sloping the land from the building site down to the elevation of the rest of his property to the south.
In the alternative, the District told petitioner that he could proceed with the development as proposed, building on 3.7 acres and deeding a conservation easement to the government on the remainder of the property, if he also agreed to hire contractors to make improvements to District-owned land several miles away. Specifically, petitioner could pay to replace culverts on one parcel or fill in ditches on another. Either of those projects would have enhanced approximately 50 acres of District-owned wetlands. When the District asks permit applicants to fund offsite mitigation work, its policy is never to require any particular offsite project, and it did not do so here. Instead, the District said that it “would also favorably consider” alternatives to its suggested offsite mitigation projects if petitioner proposed something “equivalent.” App. 75.
Believing the District’s demands for mitigation to be excessive in light of the environmental effects that his building proposal would have caused, petitioner filed suit in state court. Among other claims, he argued that he was entitled to relief under Fla. Stat. §373.617(2), which allows owners to recover “monetary damages” if a state agency’s action is “an unreasonable exercise of the state’s police power constituting a taking without just compensation.”B
The Florida Circuit Court granted the District’s motion to dismiss on the ground that petitioner had not adequately exhausted his state-administrative remedies, but the Florida District Court of Appeal for the Fifth Circuit reversed. On remand, the State Circuit Court held a 2-day bench trial. After considering testimony from several experts who examined petitioner’s property, the trial court found that the property’s northern section had already been “seriously degraded” by extensive construction on the surrounding parcels. App. to Pet. for Cert. D–3. In light of this finding and petitioner’s offer to dedicate nearly three-quarters of his land to the District, the trial court concluded that any further mitigation in the form of payment for offsite improvements to District property lacked both a nexus and rough proportionality to the environmental impact of the proposed construction. Id., at D–11. It accordingly held the District’s actions unlawful under our decisions in Nollan and Dolan.
The Florida District Court affirmed, 5 So. 3d 8 (2009), but the State Supreme Court reversed, 77 So. 3d 1220 (2011). A majority of that court distinguished Nollan and Dolan on two grounds. First, the majority thought it significant that in this case, unlike Nollan or Dolan, the District did not approve petitioner’s application on the condition that he accede to the District’s demands; instead, the District denied his application because he refused to make concessions. 77 So. 3d, at 1230. Second, the majority drew a distinction between a demand for an interest in real property (what happened in Nollan and Dolan) and a demand for money. 77 So. 3d, at 1229– 1230. The majority acknowledged a division of authority over whether a demand for money can give rise to a claim under Nollan and Dolan, and sided with those courts that have said it cannot. 77 So. 3d, at 1229–1230. Compare, e.g., McClung v. Sumner, 548 F. 3d 1219, 1228 (CA9 2008), with Ehrlich v. Culver City, 12 Cal. 4th 854, 876, 911 P. 2d 429, 444 (1996); Flower Mound v. Stafford Estates Ltd. Partnership, 135 S. W. 3d 620, 640–641 (Tex. 2004). Two justices concurred in the result, arguing that petitioner had failed to exhaust his administrative remedies as required by state law before bringing an inverse condemnation suit that challenges the propriety of an agency action. 77 So. 3d, at 1231–1232; see Key Haven Associated Enterprises, Inc. v. Board of Trustees of Internal Improvement Trust Fund, 427 So. 2d 153, 159 (Fla. 1982).
Recognizing that the majority opinion rested on a question of federal constitutional law on which the lower courts are divided, we granted the petition for a writ of certiorari, 568 U. S. ___ (2012), and now reverse.II A
We have said in a variety of contexts that “the government may not deny a benefit to a person because he exercises a constitutional right.” Regan v. Taxation With Representation of Wash., 461 U. S. 540, 545 (1983) . See also, e.g., Rumsfeld v. Forum for Academic and Institutional Rights, Inc., 547 U. S. 47 –60 (2006); Rutan v. Republican Party of Ill., 497 U. S. 62, 78 (1990) . In Perry v. Sindermann, 408 U. S. 593 (1972) , for example, we held that a public college would violate a professor’s freedom of speech if it declined to renew his contract because he was an outspoken critic of the college’s administration. And in Memorial Hospital v. Maricopa County, 415 U. S. 250 (1974) , we concluded that a county impermissibly burdened the right to travel by extending healthcare benefits only to those indigent sick who had been residents of the county for at least one year. Those cases reflect an overarching principle, known as the unconstitutional conditions doctrine, that vindicates the Constitution’s enumerated rights by preventing the government from coercing people into giving them up.
Nollan and Dolan “involve a special application” of this doctrine that protects the Fifth Amendment right to just compensation for property the government takes when owners apply for land-use permits. Lingle v. Chevron U. S. A. Inc., 544 U. S. 528, 547 (2005) ; Dolan, 512 U. S., at 385 (invoking “the well-settled doctrine of ‘unconstitutional conditions’ ”). Our decisions in those cases reflect two realities of the permitting process. The first is that land-use permit applicants are especially vulnerable to the type of coercion that the unconstitutional conditions doctrine prohibits because the government often has broad discretion to deny a permit that is worth far more than property it would like to take. By conditioning a building permit on the owner’s deeding over a public right-ofway, for example, the government can pressure an owner into voluntarily giving up property for which the Fifth Amendment would otherwise require just compensation. See id., at 384; Nollan, 483 U. S., at 831. So long as the building permit is more valuable than any just compensation the owner could hope to receive for the right-of-way, the owner is likely to accede to the government’s demand, no matter how unreasonable. Extortionate demands of this sort frustrate the Fifth Amendment right to just compensation, and the unconstitutional conditions doctrine prohibits them.
A second reality of the permitting process is that many proposed land uses threaten to impose costs on the public that dedications of property can offset. Where a building proposal would substantially increase traffic congestion, for example, officials might condition permit approval on the owner’s agreement to deed over the land needed to widen a public road. Respondent argues that a similar rationale justifies the exaction at issue here: petitioner’s proposed construction project, it submits, would destroy wetlands on his property, and in order to compensate for this loss, respondent demands that he enhance wetlands elsewhere. Insisting that landowners internalize the negative externalities of their conduct is a hallmark of responsible land-use policy, and we have long sustained such regulations against constitutional attack. See Village of Euclid v. Ambler Realty Co., 272 U. S. 365 (1926) .
Nollan and Dolan accommodate both realities by allowing the government to condition approval of a permit on the dedication of property to the public so long as there is a “nexus” and “rough proportionality” between the property that the government demands and the social costs of the applicant’s proposal. Dolan, supra, at 391; Nollan, 483 U. S., at 837. Our precedents thus enable permitting authorities to insist that applicants bear the full costs of their proposals while still forbidding the government from engaging in “out-and-out . . . extortion” that would thwart the Fifth Amendment right to just compensation. Ibid. (internal quotation marks omitted). Under Nollan and Dolan the government may choose whether and how a permit applicant is required to mitigate the impacts of a proposed development, but it may not leverage its legitimate interest in mitigation to pursue governmental ends that lack an essential nexus and rough proportionality to those impacts.B
The principles that undergird our decisions in Nollan and Dolan do not change depending on whether the government approves a permit on the condition that the applicant turn over property or denies a permit because the applicant refuses to do so. We have often concluded that denials of governmental benefits were impermissible under the unconstitutional conditions doctrine. See, e.g., Perry, 408 U. S., at 597 (explaining that the government “may not deny a benefit to a person on a basis that infringes his constitutionally protected interests” (emphasis added)); Memorial Hospital, 415 U. S. 250 (finding unconstitutional condition where government denied healthcare benefits). In so holding, we have recognized that regardless of whether the government ultimately succeeds in pressuring someone into forfeiting a constitutional right, the unconstitutional conditions doctrine forbids burdening the Constitution’s enumerated rights by coercively withholding benefits from those who exercise them.
A contrary rule would be especially untenable in this case because it would enable the government to evade the limitations of Nollan and Dolan simply by phrasing its demands for property as conditions precedent to permit approval. Under the Florida Supreme Court’s approach, a government order stating that a permit is “approved if” the owner turns over property would be subject to Nollan and Dolan, but an identical order that uses the words “denied until” would not. Our unconstitutional conditions cases have long refused to attach significance to the distinction between conditions precedent and conditions subsequent. See Frost & Frost Trucking Co. v. Railroad Comm’n of Cal., 271 U. S. 583 –593 (1926) (invalidating regulation that required the petitioner to give up a constitutional right “as a condition precedent to the enjoyment of a privilege”); Southern Pacific Co. v. Denton, 146 U. S. 202, 207 (1892) (invalidating statute “requiring the corporation, as a condition precedent to obtaining a permit to do business within the State, to surrender a right and privilege secured to it by the Constitution”). See also Flower Mound, 135 S. W. 3d, at 639 (“The government cannot sidestep constitutional protections merely by rephrasing its decision from ‘only if’ to ‘not unless’ ”). To do so here would effectively render Nollan and Dolan a dead letter.
The Florida Supreme Court puzzled over how the government’s demand for property can violate the Takings Clause even though “ ‘no property of any kind was ever taken,’ ” 77 So. 3d, at 1225 (quoting 5 So. 3d, at 20 (Griffin, J., dissenting)); see also 77 So. 3d, at 1229–1230, but the unconstitutional conditions doctrine provides a ready answer. Extortionate demands for property in the land-use permitting context run afoul of the Takings Clause not because they take property but because they impermissibly burden the right not to have property taken without just compensation. As in other unconstitutional conditions cases in which someone refuses to cede a constitutional right in the face of coercive pressure, the impermissible denial of a governmental benefit is a constitutionally cognizable injury.
Nor does it make a difference, as respondent suggests, that the government might have been able to deny petitioner’s application outright without giving him the option of securing a permit by agreeing to spend money to improve public lands. See Penn Central Transp. Co. v. New York City, 438 U. S. 104 (1978) . Virtually all of our unconstitutional conditions cases involve a gratuitous governmental benefit of some kind. See, e.g., Regan, 461 U. S. 540 (tax benefits); Memorial Hospital, 415 U. S. 250 (healthcare); Perry, 408 U. S. 593 (public employment); United States v. Butler, 297 U. S. 1, 71 (1936) (crop payments); Frost, supra (business license). Yet we have repeatedly rejected the argument that if the government need not confer a benefit at all, it can withhold the benefit because someone refuses to give up constitutional rights. E.g., United States v. American Library Assn., Inc., 539 U. S. 194, 210 (2003) (“[T]he government may not deny a benefit to a person on a basis that infringes his constitutionally protected . . . freedom of speech even if he has no entitlement to that benefit” (emphasis added and internal quotation marks omitted)); Wieman v. Updegraff, 344 U. S. 183, 191 (1952) (explaining in unconstitutional conditions case that to focus on “the facile generalization that there is no constitutionally protected right to public employment is to obscure the issue”). Even if respondent would have been entirely within its rights in denying the permit for some other reason, that greater authority does not imply a lesser power to condition permit approval on petitioner’s forfeiture of his constitutional rights. See Nollan, 483 U. S., at 836–837 (explaining that “[t]he evident constitutional propriety” of prohibiting a land use “disappears . . . if the condition substituted for the prohibition utterly fails to further the end advanced as the justification for the prohibition”).
That is not to say, however, that there is no relevant difference between a consummated taking and the denial of a permit based on an unconstitutionally extortionate demand. Where the permit is denied and the condition is never imposed, nothing has been taken. While the unconstitutional conditions doctrine recognizes that this burdens a constitutional right, the Fifth Amendment mandates a particular remedy—just compensation—only for takings. In cases where there is an excessive demand but no taking, whether money damages are available is not a question of federal constitutional law but of the cause of action—whether state or federal—on which the landowner relies. Because petitioner brought his claim pursuant to a state law cause of action, the Court has no occasion to discuss what remedies might be available for a Nollan/Dolan unconstitutional conditions violation either here or in other cases.C
At oral argument, respondent conceded that the denial of a permit could give rise to a valid claim under Nollan and Dolan, Tr. of Oral Arg. 33–34, but it urged that we should not review the particular denial at issue here because petitioner sued in the wrong court, for the wrong remedy, and at the wrong time. Most of respondent’s objections to the posture of this case raise questions of Florida procedure that are not ours to decide. See Mullaney v. Wilbur, 421 U. S. 684, 691 (1975) ; Murdock v. Memphis, 20 Wall. 590, 626 (1875). But to the extent that respondent suggests that the posture of this case creates some federal obstacle to adjudicating petitioner’s unconstitutional conditions claim, we remand for the Florida courts to consider that argument in the first instance.
Respondent argues that we should affirm because, rather than suing for damages in the Florida trial court as authorized by Fla. Stat. §373.617, petitioner should have first sought judicial review of the denial of his permit in the Florida appellate court under the State’s Administrative Procedure Act, see §§120.68(1), (2) (2010). The Flor-ida Supreme Court has said that the appellate court is the “proper forum to resolve” a “claim that an agency has applied a . . . statute or rule in such a way that the aggrieved party’s constitutional rights have been violated,” Key Haven Associated Enterprises, 427 So. 2d, at 158, and respondent has argued throughout this litigation that petitioner brought his unconstitutional conditions claim in the wrong forum. Two members of the Florida Supreme Court credited respondent’s argument, 77 So. 3d, at 1231–1232, but four others refused to address it. We decline respondent’s invitation to second-guess a State Supreme Court’s treatment of its own procedural law.
Respondent also contends that we should affirm because petitioner sued for damages but is at most entitled to an injunction ordering that his permit issue without any conditions. But we need not decide whether federal law authorizes plaintiffs to recover damages for unconstitutional conditions claims predicated on the Takings Clause because petitioner brought his claim under state law. Florida law allows property owners to sue for “damages” whenever a state agency’s action is “an unreasonable exercise of the state’s police power constituting a taking without just compensation.” Fla. Stat. Ann. §373.617. Whether that provision covers an unconstitutional conditions claim like the one at issue here is a question of state law that the Florida Supreme Court did not address and on which we will not opine.
For similar reasons, we decline to reach respondent’s argument that its demands for property were too indefinite to give rise to liability under Nollan and Dolan. The Florida Supreme Court did not reach the question whether respondent issued a demand of sufficient concreteness to trigger the special protections of Nollan and Dolan. It relied instead on the Florida District Court of Appeals’ characterization of respondent’s behavior as a demand for Nollan/Dolan purposes. See 77 So. 3d, at 1224 (quoting 5 So. 3d, at 10). Whether that characterization is correct is beyond the scope of the questions the Court agreed to take up for review. If preserved, the issue remains open on remand for the Florida Supreme Court to address. This Court therefore has no occasion to consider how concrete and specific a demand must be to give rise to liability under Nollan and Dolan.
Finally, respondent argues that we need not decide whether its demand for offsite improvements satisfied Nollan and Dolan because it gave petitioner another avenue for obtaining permit approval. Specifically, respondent said that it would have approved a revised permit application that reduced the footprint of petitioner’s proposed construction site from 3.7 acres to 1 acre and placed a conservation easement on the remaining 13.9 acres of petitioner’s land. Respondent argues that regardless of whether its demands for offsite mitigation satisfied Nollan and Dolan, we must separately consider each of petitioner’s options, one of which did not require any of the offsite work the trial court found objectionable.
Respondent’s argument is flawed because the option to which it points—developing only 1 acre of the site and granting a conservation easement on the rest—involves the same issue as the option to build on 3.7 acres and perform offsite mitigation. We agree with respondent that, so long as a permitting authority offers the landowner at least one alternative that would satisfy Nollan and Dolan, the landowner has not been subjected to an unconstitutional condition. But respondent’s suggestion that we should treat its offer to let petitioner build on 1 acre as an alternative to offsite mitigation misapprehends the governmental benefit that petitioner was denied. Petitioner sought to develop 3.7 acres, but respondent in effect told petitioner that it would not allow him to build on 2.7 of those acres unless he agreed to spend money improving public lands. Petitioner claims that he was wrongfully denied a permit to build on those 2.7 acres. For that reason, respondent’s offer to approve a less ambitious building project does not obviate the need to determine whether the demand for offsite mitigation satisfied Nollan and Dolan.III
We turn to the Florida Supreme Court’s alternative holding that petitioner’s claim fails because respondent asked him to spend money rather than give up an easement on his land. A predicate for any unconstitutional conditions claim is that the government could not have constitutionally ordered the person asserting the claim to do what it attempted to pressure that person into doing. See Rumsfeld, 547 U. S., at 59–60. For that reason, we began our analysis in both Nollan and Dolan by observing that if the government had directly seized the easements it sought to obtain through the permitting process, it would have committed a per se taking. See Dolan, 512 U. S., at 384; Nollan, 483 U. S., at 831. The Florida Supreme Court held that petitioner’s claim fails at this first step because the subject of the exaction at issue here was money rather than a more tangible interest in real property. 77 So. 3d, at 1230. Respondent and the dissent take the same position, citing the concurring and dissenting opinions in Eastern Enterprises v. Apfel, 524 U. S. 498 (1998) , for the proposition that an obligation to spend money can never provide the basis for a takings claim. See post, at 5–8 (opinion of Kagan, J.).
We note as an initial matter that if we accepted this argument it would be very easy for land-use permitting officials to evade the limitations of Nollan and Dolan. Because the government need only provide a permit applicant with one alternative that satisfies the nexus and rough proportionality standards, a permitting authority wishing to exact an easement could simply give the owner a choice of either surrendering an easement or making a payment equal to the easement’s value. Such so-called “in lieu of” fees are utterly commonplace, Rosenberg, The Changing Culture of American Land Use Regulation: Paying for Growth with Impact Fees, 59 S. M. U. L. Rev. 177, 202–203 (2006), and they are functionally equivalent to other types of land use exactions. For that reason and those that follow, we reject respondent’s argument and hold that so-called “monetary exactions” must satisfy the nexus and rough proportionality requirements of Nollan and Dolan.A
In Eastern Enterprises, supra, the United States retroactively imposed on a former mining company an obligation to pay for the medical benefits of retired miners and their families. A four-Justice plurality concluded that the statute’s imposition of retroactive financial liability was so arbitrary that it violated the Takings Clause. Id., at 529–537. Although Justice Kennedy concurred in the result on due process grounds, he joined four other Justices in dissent in arguing that the Takings Clause does not apply to government-imposed financial obligations that “d[o] not operate upon or alter an identified property interest.” Id., at 540 (opinion concurring in judgment and dissenting in part); see id., at 554–556 (Breyer, J., dissenting) (“The ‘private property’ upon which the [Takings] Clause traditionally has focused is a specific interest in physical or intellectual property”). Relying on the concurrence and dissent in Eastern Enterprises, respondent argues that a requirement that petitioner spend money improving public lands could not give rise to a taking.
Respondent’s argument rests on a mistaken premise. Unlike the financial obligation in Eastern Enterprises, the demand for money at issue here did “operate upon . . . an identified property interest” by directing the owner of a particular piece of property to make a monetary payment. Id., at 540 (opinion of Kennedy, J.). In this case, unlike Eastern Enterprises, the monetary obligation burdened petitioner’s ownership of a specific parcel of land. In that sense, this case bears resemblance to our cases holding that the government must pay just compensation when it takes a lien—a right to receive money that is secured by a particular piece of property. See Armstrong v. United States, 364 U. S. 40 –49 (1960); Louisville Joint Stock Land Bank v. Radford, 295 U. S. 555 –602 (1935); United States v. Security Industrial Bank, 459 U. S. 70 –78 (1982); see also Palm Beach Cty. v. Cove Club Investors Ltd., 734 So. 2d 379, 383–384 (1999) (the right to receive income from land is an interest in real property under Florida law). The fulcrum this case turns on is the direct link between the government’s demand and a specific parcel of real property. 2 Because of that direct link, this case implicates the central concern of Nollan and Dolan: the risk that the government may use its substantial power and discretion in land-use permitting to pursue governmental ends that lack an essential nexus and rough proportionality to the effects of the proposed new use of the specific property at issue, thereby diminishing without justification the value of the property.
In this case, moreover, petitioner does not ask us to hold that the government can commit a regulatory taking by directing someone to spend money. As a result, we need not apply Penn Central’s “essentially ad hoc, factual inquir[y],” 438 U. S., at 124, at all, much less extend that “already difficult and uncertain rule” to the “vast category of cases” in which someone believes that a regulation is too costly. Eastern Enterprises, 524 U. S., at 542 (opinion of Kennedy, J.). Instead, petitioner’s claim rests on the more limited proposition that when the government commands the relinquishment of funds linked to a specific, identifiable property interest such as a bank account or parcel of real property, a “per se [takings] approach” is the proper mode of analysis under the Court’s precedent. Brown v. Legal Foundation of Wash., 538 U. S. 216, 235 (2003) .
Finally, it bears emphasis that petitioner’s claim does not implicate “normative considerations about the wisdom of government decisions.” Eastern Enterprises, 524 U. S., at 545 (opinion of Kennedy, J.). We are not here concerned with whether it would be “arbitrary or unfair” for respondent to order a landowner to make improvements to public lands that are nearby. Id., at 554 (Breyer, J., dissenting). Whatever the wisdom of such a policy, it would transfer an interest in property from the landowner to the government. For that reason, any such demand would amount to a per se taking similar to the taking of an easement or a lien. Cf. Dolan, 512 U. S., at 384; Nollan, 483 U. S., at 831.B
Respondent and the dissent argue that if monetary exactions are made subject to scrutiny under Nollan and Dolan, then there will be no principled way of distinguishing impermissible land-use exactions from property taxes. See post, at 9–10. We think they exaggerate both the extent to which that problem is unique to the land-use permitting context and the practical difficulty of distinguishing between the power to tax and the power to take by eminent domain.
It is beyond dispute that “[t]axes and user fees . . . are not ‘takings.’ ” Brown, supra, at 243, n. 2 (Scalia, J., dissenting). We said as much in County of Mobile v. Kimball, 102 U. S. 691, 703 (1881) , and our cases have been clear on that point ever since. United States v. Sperry Corp., 493 U. S. 52 , n. 9 (1989); see A. Magnano Co. v. Hamilton, 292 U. S. 40, 44 (1934) ; Dane v. Jackson, 256 U. S. 589, 599 (1921) ; Henderson Bridge Co. v. Henderson City, 173 U. S. 592 –615 (1899). This case therefore does not affect the ability of governments to impose property taxes, user fees, and similar laws and regulations that may impose financial burdens on property owners.
At the same time, we have repeatedly found takings where the government, by confiscating financial obligations, achieved a result that could have been obtained by imposing a tax. Most recently, in Brown, supra, at 232, we were unanimous in concluding that a State Supreme Court’s seizure of the interest on client funds held in escrow was a taking despite the unquestionable constitutional propriety of a tax that would have raised exactly the same revenue. Our holding in Brown followed from Phillips v. Washington Legal Foundation, 524 U. S. 156 (1998) , and Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U. S. 155 (1980) , two earlier cases in which we treated confiscations of money as takings despite their functional similarity to a tax. Perhaps most closely analogous to the present case, we have repeatedly held that the government takes property when it seizes liens, and in so ruling we have never considered whether the government could have achieved an economically equivalent result through taxation. Armstrong, 364 U. S. 40 ; Louisville Joint Stock Land Bank, 295 U. S. 555 .
Two facts emerge from those cases. The first is that the need to distinguish taxes from takings is not a creature of our holding today that monetary exactions are subject to scrutiny under Nollan and Dolan. Rather, the problem is inherent in this Court’s long-settled view that property the government could constitutionally demand through its taxing power can also be taken by eminent domain.
Second, our cases show that teasing out the difference between taxes and takings is more difficult in theory than in practice. Brown is illustrative. Similar to respondent in this case, the respondents in Brown argued that extending the protections of the Takings Clause to a bank account would open a Pandora’s Box of constitutional challenges to taxes. Brief for Respondents Washington Legal Foundation et al. 32 and Brief for Respondent Justices of the Washington Supreme Court 22, in Brown v. Legal Foundation of Wash., O. T. 2002, No. 01–1325. But also like respondent here, the Brown respondents never claimed that they were exercising their power to levy taxes when they took the petitioners’ property. Any such argument would have been implausible under state law; in Washington, taxes are levied by the legislature, not the courts. See 538 U. S., at 242, n. 2 (Scalia, J., dissenting).
The same dynamic is at work in this case because Florida law greatly circumscribes respondent’s power to tax. See Fla. Stat. Ann. §373.503 (authorizing respondent to impose ad valorem tax on properties within its jurisdiction); §373.109 (authorizing respondent to charge permit application fees but providing that such fees “shall not exceed the cost . . . for processing, monitoring, and inspecting for compliance with the permit”). If respondent had argued that its demand for money was a tax, it would have effectively conceded that its denial of petitioner’s permit was improper under Florida law. Far from making that concession, respondent has maintained throughout this litigation that it considered petitioner’s money to be a substitute for his deeding to the public a conservation easement on a larger parcel of undeveloped land. 3
This case does not require us to say more. We need not decide at precisely what point a land-use permitting charge denominated by the government as a “tax” becomes “so arbitrary . . . that it was not the exertion of taxation but a confiscation of property.” Brushaber v. Union Pacific R. Co., 240 U. S. 1 –25 (1916). For present purposes, it suffices to say that despite having long recognized that “the power of taxation should not be confused with the power of eminent domain,” Houck v. Little River Drainage Dist., 239 U. S. 254, 264 (1915) , we have had little trouble distinguishing between the two.C
Finally, we disagree with the dissent’s forecast that our decision will work a revolution in land use law by depriving local governments of the ability to charge reasonable permitting fees. Post, at 8. Numerous courts—including courts in many of our Nation’s most populous States—have confronted constitutional challenges to monetary exactions over the last two decades and applied the standard from Nollan and Dolan or something like it. See, e.g., Northern Ill. Home Builders Assn. v. County of Du Page, 165 Ill. 2d. 25, 31–32, 649 N. E. 2d 384, 388–389 (1995); Home Builders Assn. v. Beavercreek, 89 Ohio St. 3d 121, 128, 729 N. E. 2d 349, 356 (2000); Flower Mound, 135 S. W. 3d, at 640–641. Yet the “significant practical harm” the dissent predicts has not come to pass. Post, at 8. That is hardly surprising, for the dissent is correct that state law normally provides an independent check on excessive land use permitting fees. Post, at 11.
The dissent criticizes the notion that the Federal Constitution places any meaningful limits on “whether one town is overcharging for sewage, or another is setting the price to sell liquor too high.” Post, at 9. But only two pages later, it identifies three constraints on land use permitting fees that it says the Federal Constitution imposes and suggests that the additional protections of Nollan and Dolan are not needed. Post, at 11. In any event, the dissent’s argument that land use permit applicants need no further protection when the government demands money is really an argument for overruling Nollan and Dolan. After all, the Due Process Clause protected the Nollans from an unfair allocation of public burdens, and they too could have argued that the government’s demand for property amounted to a taking under the Penn Central framework. See Nollan, 483 U. S., at 838. We have repeatedly rejected the dissent’s contention that other constitutional doctrines leave no room for the nexus and rough proportionality requirements of Nollan and Dolan. Mindful of the special vulnerability of land use permit applicants to extortionate demands for money, we do so again today.* * *
We hold that the government’s demand for property from a land-use permit applicant must satisfy the requirements of Nollan and Dolan even when the government denies the permit and even when its demand is for money. The Court expresses no view on the merits of petitioner’s claim that respondent’s actions here failed to comply with the principles set forth in this opinion and those two cases. The Florida Supreme Court’s judgment is reversed, and this case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
1 For ease of reference, this opinion refers to both men as “petitioner.”
2 Thus, because the proposed offsite mitigation obligation in this case was tied to a particular parcel of land, this case does not implicate the question whether monetary exactions must be tied to a particular parcel of land in order to constitute a taking. That is so even whenthe demand is considered “outside the permitting process.” Post, at 8 (Kagan, J., dissenting). The unconstitutional conditions analysis requires us to set aside petitioner’s permit application, not his ownership of a particular parcel of real property.
3 Citing cases in which state courts have treated similar governmental demands for money differently, the dissent predicts that courts will “struggle to draw a coherent boundary” between taxes and excessive demands for money that violate Nollan and Dolan. Post, at 9–10. But the cases the dissent cites illustrate how the frequent need to decide whether a particular demand for money qualifies as a tax under state law, and the resulting state statutes and judicial precedents on point, greatly reduce the practical difficulty of resolving the same issue in federal constitutional cases like this one.
SUPREME COURT OF THE UNITED STATES
COY A. KOONTZ, Jr., PETITIONER v. ST. JOHNS RIVER WATER MANAGEMENT DISTRICT
on writ of certiorari to the supreme court of florida
[June 25, 2013]
Justice Kagan, with whom Justice Ginsburg, Justice Breyer, and Justice Sotomayor join, dissenting.
In the paradigmatic case triggering review under Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987) , and Dolan v. City of Tigard, 512 U. S. 374 (1994) , the government approves a building permit on the condition that the landowner relinquish an interest in real property, like an easement. The significant legal questions that the Court resolves today are whether Nollan and Dolan also apply when that case is varied in two ways. First, what if the government does not approve the permit, but instead demands that the condition be fulfilled before it will do so? Second, what if the condition entails not transferring real property, but simply paying money? This case also raises other, more fact-specific issues I will address: whether the government here imposed any condition at all, and whether petitioner Coy Koontz suffered any compensable injury.
I think the Court gets the first question it addresses right. The Nollan-Dolan standard applies not only when the government approves a development permit conditioned on the owner’s conveyance of a property interest (i.e., imposes a condition subsequent), but also when the government denies a permit until the owner meets the condition (i.e., imposes a condition precedent). That means an owner may challenge the denial of a permit on the ground that the government’s condition lacks the “nexus” and “rough proportionality” to the development’s social costs that Nollan and Dolan require. Still, the condition-subsequent and condition-precedent situations differ in an important way. When the government grants a permit subject to the relinquishment of real property, and that condition does not satisfy Nollan and Dolan, then the government has taken the property and must pay just compensation under the Fifth Amendment. But when the government denies a permit because an owner has refused to accede to that same demand, nothing has actually been taken. The owner is entitled to have the improper condition removed; and he may be entitled to a monetary remedy created by state law for imposing such a condition; but he cannot be entitled to constitutional compensation for a taking of property. So far, we all agree.
Our core disagreement concerns the second question the Court addresses. The majority extends Nollan and Dolan to cases in which the government conditions a permit not on the transfer of real property, but instead on the payment or expenditure of money. That runs roughshod over Eastern Enterprises v. Apfel, 524 U. S. 498 (1998) , which held that the government may impose ordinary financial obligations without triggering the Takings Clause’s protections. The boundaries of the majority’s new rule are uncertain. But it threatens to subject a vast array of land-use regulations, applied daily in States and localities throughout the country, to heightened constitutional scrutiny. I would not embark on so unwise an adventure, and would affirm the Florida Supreme Court’s decision.
I also would affirm for two independent reasons establishing that Koontz cannot get the money damages he seeks. First, respondent St. Johns River Water Management District (District) never demanded anything (including money) in exchange for a permit; the Nollan-Dolan standard therefore does not come into play (even assuming that test applies to demands for money). Second, no taking occurred in this case because Koontz never acceded to a demand (even had there been one), and so no property changed hands; as just noted, Koontz therefore cannot claim just compensation under the Fifth Amendment. The majority does not take issue with my first conclusion, and affirmatively agrees with my second. But the majority thinks Koontz might still be entitled to money damages, and remands to the Florida Supreme Court on that question. I do not see how, and expect that court will so rule.I
Claims that government regulations violate the Takings Clause by unduly restricting the use of property are generally “governed by the standards set forth in Penn Central Transp. Co. v. New York City, 438 U. S. 104 (1978) .” Lingle v. Chevron U. S. A. Inc., 544 U. S. 528, 538 (2005) . Under Penn Central, courts examine a regulation’s “character” and “economic impact,” asking whether the action goes beyond “adjusting the benefits and burdens of economic life to promote the common good” and whether it “interfere[s] with distinct investment-backed expectations.” Penn Central, 438 U. S., at 124. That multi-factor test balances the government’s manifest need to pass laws and regulations “adversely affect[ing]. . . economic values,” ibid., with our longstanding recognition that some regulation “goes too far,” Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 415 (1922) .
Our decisions in Nollan and Dolan are different: They provide an independent layer of protection in “the special context of land-use exactions.” Lingle, 544 U. S., at 538. In that situation, the “government demands that a landowner dedicate an easement” or surrender a piece of real property “as a condition of obtaining a development permit.” Id., at 546. If the government appropriated such a property interest outside the permitting process, its action would constitute a taking, necessitating just compensation. Id., at 547. Nollan and Dolan prevent the government from exploiting the landowner’s permit application to evade the constitutional obligation to pay for the property. They do so, as the majority explains, by subjecting the government’s demand to heightened scrutiny: The government may condition a land-use permit on the relinquishment of real property only if it shows a “nexus” and “rough proportionality” between the demand made and “the impact of the proposed development.” Dolan, 512 U. S., at 386, 391; see ante, at 8. Nollan and Dolan thus serve not to address excessive regulatory burdens on land use (the function of Penn Central), but instead to stop the government from imposing an “unconstitutional condition”—a requirement that a person give up his constitutional right to receive just compensation “in exchange for a discretionary benefit” having “little or no relationship” to the property taken. Lingle, 544 U. S., at 547.
Accordingly, the Nollan-Dolan test applies only when the property the government demands during the permitting process is the kind it otherwise would have to pay for—or, put differently, when the appropriation of that property, outside the permitting process, would constitute a taking. That is why Nollan began by stating that “[h]ad California simply required the Nollans to make an easement across their beachfront available to the public . . . , rather than conditioning their permit to rebuild their house on their agreeing to do so, we have no doubt there would have been a taking” requiring just compensation. 483 U. S., at 831. And it is why Dolan started by maintaining that “had the city simply required petitioner to dedicate a strip of land . . . for public use, rather than conditioning the grant of her permit to [d]evelop her property on such a dedication, a taking would have occurred.” 512 U. S., at 384. Even the majority acknowledges this basic point about Nollan and Dolan: It too notes that those cases rest on the premise that “if the government had directly seized the easements it sought to obtain through the permitting process, it would have committed a per se taking.” Ante, at 14–15. Only if that is true could the government’s demand for the property force a landowner to relinquish his constitutional right to just compensation.
Here, Koontz claims that the District demanded that he spend money to improve public wetlands, not that he hand over a real property interest. I assume for now that the District made that demand (although I think it did not, see infra, at 12–16.) The key question then is: Independent of the permitting process, does requiring a person to pay money to the government, or spend money on its behalf, constitute a taking requiring just compensation? Only if the answer is yes does the Nollan-Dolan test apply.
But we have already answered that question no. Eastern Enterprises v. Apfel, 524 U. S. 498 , as the Court describes, involved a federal statute requiring a former mining company to pay a large sum of money for the health benefits of retired employees. Five Members of the Court determined that the law did not effect a taking, distinguishing between the appropriation of a specific property interest and the imposition of an order to pay money. Justice Kennedy acknowledged in his controlling opinion that the statute “impose[d] a staggering financial burden” (which influenced his conclusion that it violated due process). Id., at 540 (opinion concurring in judgment and dissenting in part). Still, Justice Kennedy explained, the law did not effect a taking because it did not “operate upon or alter” a “specific and identified propert[y] or property right[ ].” Id., at 540–541. Instead, “[t]he law simply imposes an obligation to perform an act, the payment of benefits. The statute is indifferent as to how the regulated entity elects to comply or the property it uses to do so.” Id., at 540. Justice Breyer, writing for four more Justices, agreed. He stated that the Takings Clause applies only when the government appropriates a “specific interest in physical or intellectual property” or “a specific, separately identifiable fund of money”; by contrast, the Clause has no bearing when the government imposes “an ordinary liability to pay money.” Id., at 554–555 (dissenting opinion).
Thus, a requirement that a person pay money to repair public wetlands is not a taking. Such an order does not affect a “specific and identified propert[y] or property right[ ]”; it simply “imposes an obligation to perform an act” (the improvement of wetlands) that costs money. Id., at 540–541 (opinion of Kennedy, J.). To be sure, when a person spends money on the government’s behalf, or pays money directly to the government, it “will reduce [his] net worth”—but that “can be said of any law which has an adverse economic effect” on someone. Id., at 543. Because the government is merely imposing a “general liability” to pay money, id., at 555 (Breyer, J., dissenting)—and therefore is “indifferent as to how the regulated entity elects to comply or the property it uses to do so,” id., at 540 (opinion of Kennedy, J.)—the order to repair wetlands, viewed independent of the permitting process, does not constitute a taking. And that means the order does not trigger the Nollan-Dolan test, because it does not force Koontz to relinquish a constitutional right.
The majority tries to distinguish Apfel by asserting that the District’s demand here was “closely analogous” (and “bears resemblance”) to the seizure of a lien on property or an income stream from a parcel of land. Ante, at 16, 19. The majority thus seeks support from decisions like Armstrong v. United States, 364 U. S. 40 (1960) , where this Court held that the government effected a taking when it extinguished a lien on several ships, and Palm Beach Cty. v. Cove Club Investors Ltd., 734 So. 2d 379 (1999), where the Florida Supreme Court held that the government committed a taking when it terminated a covenant entit-ling the beneficiary to an income stream from a piece of land.
But the majority’s citations succeed only in showing what this case is not. When the government dissolves a lien, or appropriates a determinate income stream from a piece of property—or, for that matter, seizes a particular “bank account or [the] accrued interest” on it—the government indeed takes a “specific” and “identified property interest.” Apfel, 524 U. S., at 540–541 (opinion of Kennedy, J.). But nothing like that occurred here. The District did not demand any particular lien, or bank account, or income stream from property. It just ordered Koontz to spend or pay money (again, assuming it ordered anything at all). Koontz’s liability would have been the same whether his property produced income or not—e.g., even if all he wanted to build was a family home. And similarly, Koontz could meet that obligation from what-ever source he chose—a checking account, shares of stock, a wealthy uncle; the District was “indifferent as to how [he] elect[ed] to [pay] or the property [he] use[d] to do so.” Id., at 540. No more than in Apfel, then, was the (supposed) demand here for a “specific and identified” piece of property, which the government could not take without paying for it. Id., at 541.
The majority thus falls back on the sole way the District’s alleged demand related to a property interest: The demand arose out of the permitting process for Koontz’s land. See ante, at 16–17. But under the analytic framework that Nollan and Dolan established, that connection alone is insufficient to trigger heightened scrutiny. As I have described, the heightened standard of Nollan and Dolan is not a freestanding protection for land-use permit applicants; rather, it is “a special application of the doctrine of unconstitutional conditions, which provides that the government may not require a person to give up a constitutional right—here the right to receive just compensation when property is taken”—in exchange for a land-use permit. Lingle, 544 U. S., at 547 (internal quotation marks omitted); see supra, at 3–5. As such, Nollan and Dolan apply only if the demand at issue would have violated the Constitution independent of that proposed exchange. Or put otherwise, those cases apply only if the demand would have constituted a taking when executed outside the permitting process. And here, under Apfel, it would not. 1
The majority’s approach, on top of its analytic flaws, threatens significant practical harm. By applying Nollan and Dolan to permit conditions requiring monetary payments—with no express limitation except as to taxes—the majority extends the Takings Clause, with its notoriously “difficult” and “perplexing” standards, into the very heart of local land-use regulation and service delivery. 524 U. S., at 541. Cities and towns across the nation impose many kinds of permitting fees every day. Some enable a government to mitigate a new development’s impact on the community, like increased traffic or pollution—or destruction of wetlands. See, e.g., Olympia v. Drebick, 156 Wash. 2d 289, 305, 126 P. 3d 802, 809 (2006). Others cover the direct costs of providing services like sewage or water to the development. See, e.g., Krupp v. Breckenridge Sanitation Dist., 19 P. 3d 687, 691 (Colo. 2001). Still others are meant to limit the number of landowners who engage in a certain activity, as fees for liquor licenses do. See, e.g., Phillips v. Mobile, 208 U. S. 472, 479 (1908) ; BHA Investments, Inc. v. Idaho, 138 Idaho 348, 63 P. 3d 474 (2003). All now must meet Nollan and Dolan’s nexus and proportionality tests. The Federal Constitution thus will decide whether one town is overcharging for sewage, or another is setting the price to sell liquor too high. And the flexibility of state and local governments to take the most routine actions to enhance their communities will diminish accordingly.
That problem becomes still worse because the majority’s distinction between monetary “exactions” and taxes is so hard to apply. Ante, at 18. The majority acknowledges, as it must, that taxes are not takings. See ibid. (This case “does not affect the ability of governments to impose property taxes, user fees, and similar laws and regulations that may impose financial burdens on property owners”). But once the majority decides that a simple demand to pay money—the sort of thing often viewed as a tax—can count as an impermissible “exaction,” how is anyone to tell the two apart? The question, as Justice Breyer’s opinion in Apfel noted, “bristles with conceptual difficulties.” 524 U. S., at 556. And practical ones, too: How to separate orders to pay money from . . . well, orders to pay money, so that a locality knows what it can (and cannot) do. State courts sometimes must confront the same question, as they enforce restrictions on localities’ taxing power. And their decisions—contrary to the majority’s blithe assertion, see ante, at 20–21—struggle to draw a coherent boundary. Because “[t]here is no set rule” by which to determine “in which category a particular” action belongs, Eastern Diversified Properties, Inc. v. Montgomery Cty., 319 Md. 45, 53, 570 A. 2d 850, 854 (1990), courts often reach opposite conclusions about classifying nearly identical fees. Compare, e.g., Coulter v. Rawlins, 662 P. 2d 888, 901–904 (Wyo. 1983) (holding that a fee to enhance parks, imposed as a permit condition, was a regulatory exaction), with Home Builders Assn. v. West Des Moines, 644 N. W. 2d 339, 350 (Iowa 2002) (rejecting Coulter and holding that a nearly identical fee was a tax). 2 Nor does the majority’s opinion provide any help with that issue: Perhaps its most striking feature is its refusal to say even a word about how to make the distinction that will now determine whether a given fee is subject to heightened scrutiny.
Perhaps the Court means in the future to curb the intrusion into local affairs that its holding will accomplish; the Court claims, after all, that its opinion is intended to have only limited impact on localities’ land-use authority. See ante, at 8, 21. The majority might, for example, approve the rule, adopted in several States, that Nollan and Dolan apply only to permitting fees that are imposed ad hoc, and not to fees that are generally applicable. See, e.g., Ehrlich v. Culver City, 12 Cal. 4th 854, 911 P. 2d 429 (1996). Dolan itself suggested that limitation by underscoring that there “the city made an adjudicative decision to condition petitioner’s application for a building permit on an individual parcel,” instead of imposing an “essen-tially legislative determination[ ] classifying entire areas of the city.” 512 U. S., at 385. Maybe today’s majority accepts that distinction; or then again, maybe not. At the least, the majority’s refusal “to say more” about the scope of its new rule now casts a cloud on every decision by every local government to require a person seeking a permit to pay or spend money. Ante, at 20.
At bottom, the majority’s analysis seems to grow out of a yen for a prophylactic rule: Unless Nollan and Dolan apply to monetary demands, the majority worries, “land-use permitting officials” could easily “evade the limitations” on exaction of real property interests that those decisions impose. Ante, at 15. But that is a prophylaxis in search of a problem. No one has presented evidence that in the many States declining to apply heightened scrutiny to permitting fees, local officials routinely short-circuit Nollan and Dolan to extort the surrender of real property interests having no relation to a development’s costs. See, e.g., Krupp v. Breckenridge Sanitation Dist., 19 P. 3d, at 697; Home Builders Assn. of Central Arizona v. Scottsdale, 187 Ariz. 479, 486, 930 P. 2d 993, 1000 (1997); McCarthy v. Leawood, 257 Kan. 566, 579, 894 P. 2d 836, 845 (1995). And if officials were to impose a fee as a contrivance to take an easement (or other real property right), then a court could indeed apply Nollan and Dolan. See, e.g., Norwood v. Baker, 172 U. S. 269 (1898) (preventing circumvention of the Takings Clause by prohibiting the government from imposing a special assessment for the full value of a property in advance of condemning it). That situation does not call for a rule extending, as the majority’s does, to all monetary exactions. Finally, a court can use the Penn Central framework, the Due Process Clause, and (in many places) state law to protect against monetary demands, whether or not imposed to evade Nollan and Dolan, that simply “go[ ] too far.” Mahon, 260 U. S., at 415; see supra, at 3. 3
In sum, Nollan and Dolan restrain governments from using the permitting process to do what the Takings Clause would otherwise prevent—i.e., take a specific property interest without just compensation. Those cases have no application when governments impose a general financial obligation as part of the permitting process, because under Apfel such an action does not otherwise trigger the Takings Clause’s protections. By extending Nollan and Dolan’s heightened scrutiny to a simple payment demand, the majority threatens the heartland of local land-use regulation and service delivery, at a bare minimum depriving state and local governments of “necessary predictability.” Apfel, 524 U. S., at 542 (opinion of Kennedy, J.). That decision is unwarranted—and deeply unwise. I would keep Nollan and Dolan in their intended sphere and affirm the Florida Supreme Court.II
I also would affirm the judgment below for two independent reasons, even assuming that a demand for money can trigger Nollan and Dolan. First, the District never demanded that Koontz give up anything (including money) as a condition for granting him a permit. 4 And second, because (as everyone agrees) no actual taking occurred, Koontz cannot claim just compensation even had the District made a demand. The majority nonetheless remands this case on the theory that Koontz might still be entitled to money damages. I cannot see how, and so would spare the Florida courts.A
Nollan and Dolan apply only when the government makes a “demand[ ]” that a landowner turn over property in exchange for a permit. Lingle, 544 U. S., at 546. I understand the majority to agree with that proposition: After all, the entire unconstitutional conditions doctrine, as the majority notes, rests on the fear that the government may use its control over benefits (like permits) to “coerc[e]” a person into giving up a constitutional right. Ante, at 7; see ante, at 13. A Nollan-Dolan claim therefore depends on a showing of government coercion, not relevant in an ordinary challenge to a permit denial. See Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U. S. 687, 703 (1999) (Nollan and Dolan were “not designed to address, and [are] not readily applicable to,” a claim based on the mere “denial of [a] development” permit). Before applying Nollan and Dolan, a court must find that the permit denial occurred because the government made a demand of the landowner, which he rebuffed.
And unless Nollan and Dolan are to wreck land-use permitting throughout the country—to the detriment of both communities and property owners—that demand must be unequivocal. If a local government risked a lawsuit every time it made a suggestion to an applicant about how to meet permitting criteria, it would cease to do so; indeed, the government might desist altogether from communicating with applicants. That hazard is to some extent baked into Nollan and Dolan; observers have wondered whether those decisions have inclined some local governments to deny permit applications outright, rather than negotiate agreements that could work to both sides’ advantage. See W. Fischel, Regulatory Takings 346 (1995). But that danger would rise exponentially if something less than a clear condition—if each idea or proposal offered in the back-and-forth of reconciling diverse interests—triggered Nollan-Dolan scrutiny. At that point, no local government official with a decent lawyer would have a conversation with a developer. Hence the need to reserve Nollan and Dolan, as we always have, for reviewing only what an official demands, not all he says in negotiations.
With that as backdrop, consider how this case arose. To arrest the loss of the State’s rapidly diminishing wetlands, Florida law prevents landowners from filling or draining any such property without two permits. See ante, at 2–3. Koontz’s property qualifies as a wetland, and he therefore needed the permits to embark on development. His applications, however, failed the District’s preliminary review: The District found that they did not preserve wetlands or protect fish and wildlife to the extent Florida law required. See App. Exh. 19–20, 47. At that point, the District could simply have denied the applications; had it done so, the Penn Central test—not Nollan and Dolan—would have governed any takings claim Koontz might have brought. See Del Monte Dunes, 526 U. S., at 702–703.
Rather than reject the applications, however, the District suggested to Koontz ways he could modify them to meet legal requirements. The District proposed reducing the development’s size or modifying its design to lessen the impact on wetlands. See App. Exh. 87–88, 91–92. Alternatively, the District raised several options for “off-site mitigation” that Koontz could undertake in a nearby nature preserve, thus compensating for the loss of wetlands his project would cause. Id., at 90–91. The District never made any particular demand respecting an off-site project (or anything else); as Koontz testified at trial, that possibility was presented only in broad strokes, “[n]ot in any great detail.” App. 103. And the District made clear that it welcomed additional proposals from Koontz to mitigate his project’s damage to wetlands. See id., at 75. Even at the final hearing on his applications, the District asked Koontz if he would “be willing to go back with the staff over the next month and renegotiate this thing and try to come up with” a solution. Id., at 37. But Koontz refused, saying (through his lawyer) that the proposal he submitted was “as good as it can get.” Id., at 41. The District therefore denied the applications, consistent with its original view that they failed to satisfy Florida law.
In short, the District never made a demand or set a condition—not to cede an identifiable property interest, not to undertake a particular mitigation project, not even to write a check to the government. Instead, the District suggested to Koontz several non-exclusive ways to make his applications conform to state law. The District’s only hard-and-fast requirement was that Koontz do something—anything—to satisfy the relevant permitting criteria. Koontz’s failure to obtain the permits therefore did not result from his refusal to accede to an allegedly extortionate demand or condition; rather, it arose from the legal deficien-cies of his applications, combined with his unwillingness to correct them by any means. Nollan and Dolan were never meant to address such a run-of-the-mill denial of a land-use permit. As applications of the unconstitutional conditions doctrine, those decisions require a condition; and here, there was none.
Indeed, this case well illustrates the danger of extending Nollan and Dolan beyond their proper compass. Consider the matter from the standpoint of the District’s lawyer. The District, she learns, has found that Koontz’s permit applications do not satisfy legal requirements. It can deny the permits on that basis; or it can suggest ways for Koontz to bring his applications into compliance. If every suggestion could become the subject of a lawsuit under Nollan and Dolan, the lawyer can give but one recommendation: Deny the permits, without giving Koontz any advice—even if he asks for guidance. As the Florida Supreme Court observed of this case: Were Nollan and Dolan to apply, the District would “opt to simply deny permits outright without discussion or negotiation rather than risk the crushing costs of litigation”; and property owners like Koontz then would “have no opportunity to amend their applications or discuss mitigation options.” 77 So. 3d 1220, 1231 (2011). Nothing in the Takings Clause requires that folly. I would therefore hold that the District did not impose an unconstitutional condition—because it did not impose a condition at all.B
And finally, a third difficulty: Even if (1) money counted as “specific and identified propert[y]” under Apfel (though it doesn’t), and (2) the District made a demand for it (though it didn’t), (3) Koontz never paid a cent, so the District took nothing from him. As I have explained, that third point does not prevent Koontz from suing to invalidate the purported demand as an unconstitutional condition. See supra, at 1–2. But it does mean, as the majority agrees, that Koontz is not entitled to just compensation under the Takings Clause. See ante, at 11. He may obtain monetary relief under the Florida statute he invoked only if it authorizes damages beyond just compensation for a taking.
The majority remands that question to the Florida Supreme Court, and given how it disposes of the other issues here, I can understand why. As the majority indicates, a State could decide to create a damages remedy not only for a taking, but also for an unconstitutional conditions claim predicated on the Takings Clause. And that question is one of state law, which we usually do well to leave to state courts.
But as I look to the Florida statute here, I cannot help but see yet another reason why the Florida Supreme Court got this case right. That statute authorizes damages only for “an unreasonable exercise of the state’s police power constituting a taking without just compensation.” Fla. Stat. §373.617 (2010); see ante, at 12. In what legal universe could a law authorizing damages only for a “taking” also provide damages when (as all agree) no taking has occurred? I doubt that inside-out, upside-down universe is the State of Florida. Certainly, none of the Florida courts in this case suggested that the majority’s hypothesized remedy actually exists; rather, the trial and appellate courts imposed a damages remedy on the mistaken theory that there had been a taking (although of exactly what neither was clear). See App. to Pet. for Cert. C–2; 5 So. 3d 8, 8 (2009). So I would, once more, affirm the Florida Supreme Court, not make it say again what it has already said—that Koontz is not entitled to money damages.III
Nollan and Dolan are important decisions, designed to curb governments from using their power over land-use permitting to extract for free what the Takings Clause would otherwise require them to pay for. But for no fewer than three independent reasons, this case does not present that problem. First and foremost, the government commits a taking only when it appropriates a specific property interest, not when it requires a person to pay or spend money. Here, the District never took or threatened such an interest; it tried to extract from Koontz solely a commitment to spend money to repair public wetlands. Second, Nollan and Dolan can operate only when the government makes a demand of the permit applicant; the decisions’ prerequisite, in other words, is a condition. Here, the District never made such a demand: It informed Koontz that his applications did not meet legal requirements; it offered suggestions for bringing those applications into compliance; and it solicited further proposals from Koontz to achieve the same end. That is not the stuff of which an unconstitutional condition is made. And third, the Florida statute at issue here does not, in any event, offer a damages remedy for imposing such a condition. It provides relief only for a consummated taking, which did not occur here.
The majority’s errors here are consequential. The majority turns a broad array of local land-use regulations into federal constitutional questions. It deprives state and local governments of the flexibility they need to enhance their communities—to ensure environmentally sound and economically productive development. It places courts smack in the middle of the most everyday local government activity. As those consequences play out across the country, I believe the Court will rue today’s decision. I respectfully dissent.
1 The majority’s sole response is that “the unconstitutional conditions analysis requires us to set aside petitioner’s permit application, not his ownership of a particular parcel of real property.” Ante, at 17, n. 1. That mysterious sentence fails to make the majority’s opinion cohere with the unconstitutional conditions doctrine, as anyone has ever known it. That doctrine applies only if imposing a condition directly—i.e., independent of an exchange for a government benefit—would violate the Constitution. Here, Apfel makes clear that the District’s condition would not do so: The government may (separate and apart from permitting) require a person—whether Koontz or anyone else—to pay or spend money without effecting a taking. The majority offers no theory to the contrary: It does not explain, as it must, why the District’s condition was “unconstitutional.”
2 The majority argues that existing state-court precedent will “greatly reduce the practical difficulty” of developing a uniform standard for distinguishing taxes from monetary exactions in federal constitutional cases. Ante, at 20, n.2. But how are those decisions to perform that feat if they themselves are all over the map?
3 Our Penn Central test protects against regulations that unduly burden an owner’s use of his property: Unlike the Nollan-Dolan standard, that framework fits to a T a complaint (like Koontz’s) that a permitting condition makes it inordinately expensive to develop land. And the Due Process Clause provides an additional backstop against excessive permitting fees by preventing a government from conditioning a land-use permit on a monetary requirement that is “basically arbitrary.” Eastern Enterprises v. Apfel, 524 U. S. 498 –558 (1998) (Breyer, J., dissenting). My point is not, as the majority suggests, that these constraints do the same thing as Nollan and Dolan, and so make those decisions unnecessary. See ante, at 21. To the contrary, Nollan and Dolan provide developers with enhanced protection (and localities with correspondingly reduced flexibility). See supra, at 8. The question here has to do not with “overruling” those cases, but with extending them. Ante, at 21. My argument is that our prior caselaw struck the right balance: heightened scrutiny when the government uses the permitting process to demand property that the Takings Clause protects, and lesser scrutiny, but a continuing safeguard against abuse, when the government’s demand is for something falling outside that Clause’s scope.
4 The Court declines to consider whether the District demanded anything from Koontz because the Florida Supreme Court did not reach the issue. See ante, at 13. But because the District raised this issue in its brief opposing certiorari, Brief in Opposition 14–18, both parties briefed and argued it on the merits, see Brief for Respondent 37–43; Reply Brief 7–8, Tr. of Oral Arg. 7–12, 27–28, 52–53, and it provides yet another ground to affirm the judgment below, I address the question.
ORAL ARGUMENT OF PAUL J. BEARD, II, ON BEHALF OF THE PETITIONER
Chief Justice John G. Roberts: We will hear argument next this morning in Case 11-1447, Koontz v. St. Johns River Water Management District.
Paul J Beard Ii: Thank you, Mr. Chief Justice, and may it please the Court:
This case is about the extent to which Nollan and Dolan review should be made available to individuals to challenge excessive exactions imposed as conditions to land use approval.
Here, before he could make small use of his property, Coy Koontz was told by the district that he had to finance enhancements to 50 acres of publicly held--
Justice Ruth Bader Ginsburg: Let's back up.
When he asked for a permit, he voluntarily said, As mitigation for the loss of wetlands, I am going to voluntarily create a conservation easement on the rest of my property.
So he recognized from day one that there had to be some mitigation for what he was seeking to do in the permit.
Is that right?
Paul J Beard Ii: --That is correct.
With his application, Justice Ginsburg, he did offer a mitigation in the form of a conservation easement on most of his property.
Justice Ruth Bader Ginsburg: And if he had offered nothing and he just said, I want this permit to develop my land, and the agency said, You have offered no mitigation, we deny your permit, would he have a claim?
Paul J Beard Ii: If there was no condition attached to the permit denial, then there would be no claim; although it would be up to the district, under Nollan and Dolan, to make the individualized determination, both of the amount of impact to wetlands and the amount necessary to offset.
Justice Ruth Bader Ginsburg: Suppose he just put in the application, no mitigating -- no mitigation of any kind, and the agency says no.
You recognize that he would have no claim, right?
That he had an obligation to mitigate.
Paul J Beard Ii: It depends, Your Honor.
If the denial was based on the idea that he was obligated to offer mitigation, and that was the extent of the district's communication with him -- in other words, that the district told him, You must offer us something, we won't tell you what and we'll let you decide what you want to offer in mitigation -- if that was in the record, and that was the -- and the result of that was a permit denial because Mr. Koontz said, for example, Well, gee whiz, I don't know how much I need to mitigate for, you haven't told me, I still believe there would be a Dolan violation because in Dolan the Court made clear, there has to be an individualized determination--
Justice Antonin Scalia: For what?
You wouldn't -- you wouldn't know what property was taken.
Paul J Beard Ii: --He wouldn't know where--
Justice Antonin Scalia: You are posing a situation in which he never came forward with any suggestion.
They never came forward with any suggestion.
You say he still has a cause of action for a taking?
Paul J Beard Ii: --Not for--
Justice Antonin Scalia: A taking of what?
Paul J Beard Ii: --Not for a taking, Your Honor, but he -- he may have a cause of action under Nollan and Dolan for the imposition of an unconstitutional condition that may not -- the contours of which may not be known.
But the fact that the district told him, You need to--
Justice Antonin Scalia: I think the other side says that you may have such a cause of action here.
Paul J Beard Ii: --Excuse me, I didn't understand.
Justice Antonin Scalia: Wouldn't -- wouldn't the other side in this case acknowledge that you have such a cause -- that you may have such a cause of action here?
Paul J Beard Ii: Yes, Your Honor.
I believe they -- well, their argument--
Justice Antonin Scalia: They are just saying you don't have a cause of action for a taking.
Paul J Beard Ii: --That is correct.
They are saying that we don't have a cause of action for a taking.
Of course, in Nollan and Dolan, there was no transfer of property from the applicant to the relevant agencies.
As this Court will recall in both Nollan and Dolan, there was an imposition of an exaction and immediately the applicant in both cases sued to prevent the unlawful exaction from being consummated.
Justice Sonia Sotomayor: Counsel, I've had a problem with your argument, okay?
From the record it's very clear that a conservation offer is not considered mitigation because there's still a net loss of wetlands.
The policy is abundantly clear, stated, and undisputed.
So, given that policy, why are we even in this case?
Meaning whether there was an exaction or no exaction or whatever happened in terms of the denial, you couldn't win on your offer because the policy of the State was clear, and in my mind, unassailable.
We have to preserve wetlands.
Conservation of other wetlands is not enough.
Mitigation means make sure that we get a net gain of wetlands.
So why are we here?
Paul J Beard Ii: --Justice Sotomayor, we don't contest the legitimacy of the policy, of course, in preserving wetlands; nor do we contest, for that matter, the ratios that the district has imposed via its regulations.
It is undisputed, the trial court found below and the Court of Appeals affirmed and the finding was undisturbed in the Florida Supreme Court, that in fact the offsite mitigation, that part of the mitigation that went beyond the conservation easement, was in excess; it violated Nollan and Dolan.
So the underlying factual findings are not in dispute.
Justice Ruth Bader Ginsburg: I think you -- I think you have a problem with that, Mr. Beard, because if you look at the record, the record is very clear that it was not -- that the district didn't come back and say, Take it or leave it, you -- you improve our wetlands or you get no permit.
There was and if you -- they are set out in the Respondent's brief at pages 13 to 15, oh, at least half a dozen, maybe more, that the district said here are several ways, several ways that you could sufficiently offset the adverse impact.
And some of them had nothing to do with improving the government's own land.
So if we can't -- we really can't say this was a take it or leave it, either you do the improvements that we are asking you to do or you get no permit, what do you do with the fact that as the appendix certainly bears out, that the district offered a range.
It offered many, many ways that this permit might be granted, and then it says, Then you are free to come up with some other, something else.
Paul J Beard Ii: Justice Ginsburg, it's true that there were negotiations and that a range of offers were made.
On Mr. Koontz's application to use 3.7 acres of his property in conjunction with the conservation easement, the district made a final decision denying him his permit because he would not go beyond the easement and offer offsite mitigation.
And that is--
Justice Ruth Bader Ginsburg: And that is because he wouldn't go beyond what he was offering, but that's -- some of these options -- one was that he -- that he adjust the size of his project, that he make it smaller.
The staff suggested eliminating -- no, that's a different one.
But there was one that suggested that he -- he reduce the scale, the Petitioner reduce the scale of his project to 1 acre, and preserve the rest for the conservation easement.
Now, if he took that, would you have any -- any case here?
Paul J Beard Ii: --I'm sorry, Justice Ginsburg?
If we took--
Justice Ruth Bader Ginsburg: If they said, we will give you a permit if you reduce the scale of your project to 1 acre, and then preserve the rest by a conservation easement.
Paul J Beard Ii: --Unlikely not, Your Honor, because the trial court did conclude based on the evidence that he was having minimal impact on any viable wetlands.
And so even a reduction in the size of the project with an increase in the amount of mitigation would have a fortiori gone beyond even what we have in this case.
The court of appeals made clear as a matter of law that Mr. Koontz was entitled to a determination on the application he submitted.
He submitted that application and, as the district admitted in a pretrial statement right before trial, the denials were based exclusively -- and this is a quote --
"the denials were based exclusively on the fact that the plaintiff would not provide additional mitigation to offset impacts from the proposed project. "
Justice Elena Kagan: Mr. Beard, can I go back to Justice Ginsburg's first question and make sure I understand your answer to it?
Suppose that the State just had a policy that said, we're concerned about wetlands; in order to develop your piece of property, you have to come forward with a proposal, a mitigation proposal, and an adequate mitigation proposal.
And then it gives some guidance about what an adequate mitigation proposal would mean, but it really leaves it up to the landowner.
And the landowner says, sorry, I'm not giving you anything.
I think I should be able to develop this on my own without providing any mitigation.
And the State says, well, then, sorry, you don't get a permit.
Is that a taking?
Does the man have a takings claim?
I heard you answer the question yes.
Paul J Beard Ii: My answer was that he may have a Nollan-Dolan claim.
I don't want to get confused about the term taking, because taking could imply many types of regulatory takings claims.
Justice Elena Kagan: Well, that's the next question I was going to ask you, because my understanding of Nollan and Dolan was that it assumed the conditions, if taken alone, would constitute a taking.
Do you disagree with that?
Paul J Beard Ii: I do not disagree with that, Your Honor.
Justice Elena Kagan: Okay.
So then you need a taking someplace in the picture.
Isn't that right?
Nollan-Dolan said this is how we analyze takings in the context of a permit scheme.
So we have to look for a taking.
So in my example, where is the taking?
This was Justice Ginsburg's example.
Paul J Beard Ii: Right.
And I think that's correct, that under Nollan and Dolan you would have to have a condition that was imposed on you.
My only point was would it be lawful, would it be a problem in the district shifting its burden on to the applicant and saying: We're not going to establish what mitigation is required; we're not going to establish what the impacts are; we'll leave that up to you; you give us what you think is necessary.
Justice Anthony Kennedy: Suppose the district did have, as I think it did here, a uniform policy that for every acre you develop, you have to preserve 10 wetlands, 10 acres of wetlands.
And then two cases, both hypothetical.
One is somebody had an 100-acre parcel and they want to develop 5 acres, and they have 50 acres that they mitigate for wetlands.
The other person has only 1 acre and he wants to -- and he has to develop the whole acre.
Can the district then say, we'll give you the 1-acre development permit if you reclaim wetlands on 10 other acres that you -- that we can designate for you elsewhere?
The hypothetical being designed to point out whether or not the crux of your argument is that he had to go off offsite.
Paul J Beard Ii: The crux is not that he had to go offsite, but that -- that did play into the trial court's analysis as to the connection between his impact and what was being required.
And there was testimony below that there was no connection there.
And the fact that the mitigation was 4 to 7 miles away played into the analysis as to whether there was a connection.
Justice Anthony Kennedy: So in my hypothetical you would -- would there be a violation in my hypothetical as you understood it?
Paul J Beard Ii: It depends, Your Honor, because you have to determine what in each respective hypothetical, what the impact was actually to the wetlands, and then determine what the appropriate mitigation--
Justice Sonia Sotomayor: How do you decide whether the agency has done that right or not?
Paul J Beard Ii: --Excuse me?
Justice Sonia Sotomayor: How do you normally decide?
Let's assume Justice Kagan's question or Justice Ginsburg's question.
No -- it just says, come to us with a mitigation plan.
And you say, this is what I offer and it's enough.
And they say, no, it's not enough; denied.
Would you go through the State administrative process to figure out whether that was arbitrary and capricious, whether it was a Penn Central violation?
What would you do with that claim in the normal circumstance?
Justice Kennedy's question.
Paul J Beard Ii: In the normal circumstance, if there was no condition imposed, there would not be a Nollan and Dolan claim.
There may be another kind of claim, say, under Penn Central.
And that could be brought.
That wouldn't have to be brought via administrative remedies if there was a final agency action.
Justice Sonia Sotomayor: It would be an inverse condemnation.
Paul J Beard Ii: Correct.
It could be an inverse condemnation type of a claim.
Justice Stephen G. Breyer: So what I think might be driving some of these questions is the district court says, just as you say, had Koontz offered additional mitigation, the additional, that would have cost $10,000, he would have gotten the permit.
That's what he said.
So then you look back to see what additional mitigation.
And here we have in the record, at least that my law clerk finds, he noted that they went to Koontz and they said, here are some choices: Install a subsurface stormwater management system in the development, I mean right on your land; or reduce the size to 1 acre; or eliminate the filling of the slide slope areas; or replace 15 culverts and eliminate a ditch system somewhere else; or enhance 50 acres somewhere else.
Now, at that point -- and then they said, won't you negotiate for 30 more days, maybe we can find some other things?
He says, no, I'll bring a lawsuit.
Now, I absolutely can see a Penn Central claim there.
But the land -- what you're talking about is not some land somewhere off the site.
We're talking about his land.
If after all they said you have to leave all the coal in the mine to hold up the ceiling -- you know what I'm referring to?
Then they go too far.
And here, if we look at all these conditions proposed and said -- you know, this is just terrible, they don't do it for anybody else, your client's the only one, it bears no relation, oh, it just goes too far, you win under Penn Central.
So I can see the framework here.
I'm not saying you're going to win, but I got it clear what the framework is.
But suddenly you bring this Nollan-Dolan business into it and I get confused.
And the reason is because there was a different piece of land in Nollan and Dolan.
The piece of land that was different was an easement in front of -- and an easement is a piece of property in Nollan, and there was a bike path in Dolan, right across his property.
So I don't see how Nollan and Dolan have to do with this.
I see everything that Penn Central has to do with it, and that grows out of the nature of what was being offered.
You were saying what they are offering you is simply going too far.
I've got that conceptually.
I ask this question because all these briefs are about Nollan and Dolan, and I don't understand what they have to do with it.
I must be missing something, and that's why I am asking you.
Paul J Beard Ii: Justice Breyer, Nollan and Dolan fundamentally are about whether a property owner has been singled out to bear public burdens.
Justice Stephen G. Breyer: But of course, they are land claims because they took a piece of land which everybody assumes -- right in front of his house -- and said you've got to let everybody from the beaches walk back and forth from one beach in the north to another one in the south.
And they are going to walk over your land.
And the Court said you can't take his land unless you have a nexus to some public purpose that is related to his building the house.
I got it.
I just don't see what it has to do with this case.
Paul J Beard Ii: Because you can have an unconstitutional condition imposed on your right to do something, in this case make use of your property.
Justice Stephen G. Breyer: Of course you can.
You backed out too much coal.
That's an unconstitutional condition.
It goes too far, and there is a framework called Penn Central which deals with it.
Paul J Beard Ii: --Penn Central is a special takings case that goes to the question of whether a regulation of the use of property that is sought to be developed has gone too far so as to affect the taking.
Penn Central is not--
Justice Sonia Sotomayor: Which -- how does that not address going too far?
You just said it.
If -- if this is unrelated to the denial of your permit of all uses of your land and you're saying that's the problem, which is I still have a use, I just want more, why does that entitle you to your lost profits?
When were you ever entitled to start with the claim that somehow you're entitled to a permit as a matter of law?
Paul J Beard Ii: --We're entitled under the Unconstitutional Conditions Doctrine to not have to bear a public burden that has no bearing on the impact that we're trying to use on our property.
Justice Antonin Scalia: Yes, that's fine.
That -- that would enable you to challenge the denial of the permit, saying it's based upon an unconstitutional condition.
But how does it -- how does it enable you to say there's been a taking?
What has been taken?
Paul J Beard Ii: What has been -- what has been taken in effect is his funds that have to be put now to a public use, the enhancement of 50 acres of public wetlands.
And there is nothing in the takings clause, nothing--
Justice Antonin Scalia: It hasn't -- it hasn't been taken.
I mean, he turned it down.
Paul J Beard Ii: --Nothing was taken in Nollan and Dolan, either.
What was proposed there, though, was a threat of a taking.
Justice Antonin Scalia: The -- the -- the permit was granted in Nollan and Dolan.
And -- and the condition attached to the permit, therefore, took effect; namely, that you had to dedicate this easement over your -- over your beach whereas -- as my colleague pointed out, anybody could walk back and forth barefooted.
Paul J Beard Ii: Justice Scalia, in Nollan and Dolan, there was approval -- approval with conditions.
There were no permits issued, and that's -- that is an important distinction to make that most agencies, including this one, you approve a permit with a -- with conditions, which means, We will give you your permits as soon as you comply; which is substantively the same as saying, We won't give you your permits until you say yes to our conditions.
Justice Stephen G. Breyer: All right.
But it's the same question.
I just want an answer to my question.
And for the purposes of this question, I am assuming enormously in your favor.
I am assuming that this set of conditions is the worst thing since sliced bread.
I think there -- all right, I'm assuming that in your favor.
Justice Antonin Scalia: Sliced bread's supposed to be good.
Justice Stephen G. Breyer: No, no, it's been proved bad.
But -- but in any case, the -- the -- the point is, you see, I assume that in your favor.
I'm trying to figure out the conceptual framework.
I assume that in your favor.
I assume whether they didn't issue the permit and would have, but they haven't quite or maybe they have, it means nothing.
Now, having assumed that, it seems to me what your argument is, is that this is a form of regulatory taking of the kind that Holmes was talking about, and that -- that's what was going on in Penn Central, and so we simply look to see if it went too far or whatever.
The lower courts could do that.
I got that part.
Now I want you to answer the question, which is, am I right?
Is there another part, a different part to this case called the Nollan, Dolan part and explain that to me.
That's why I asked the question.
I want to hear what you're going to say.
Paul J Beard Ii: Justice Breyer, there is another part, a very distinct part, and that part goes to the question of the condition that produced the denial.
So there are -- there are actually two parts here.
There's the conditioning of your permit.
In other words, We will not issue you permits unless you agree to perform offsite mitigation.
Now, the question under Nollan and Dolan is, was that condition constitutional?
Was he asked to give up something that the State or the district in this case should not have asked him to give up in exchange for his right to use his property?
Now, it's true as -- as, Justice Breyer, you mentioned, that the permit denial and whether that affects a regulatory taking of his land, of the thing he wants to use, that's an entirely different question, and it may raise another kind of claim, another kind of taking claim.
But the crux of the claim that was litigated in this case from the trial court all the way up to the Florida Supreme Court is: Was the condition to perform offsite mitigation, and that was accepted as true by the courts below, that this was a condition that had been--
Justice Ruth Bader Ginsburg: Suppose the record just doesn't bear that out.
The record shows that it wasn't one option.
They gave him a laundry list of things he could do, some of them having nothing whatever to do, anything off his own property.
Suppose the -- whatever the district court might have said, the record shows that the agency said, You're right, seven things you could do, come up with something else if you have something else.
And some of them have absolutely nothing to do with other properties.
Paul J Beard Ii: --We agree that there were negotiations and that even in the orders allege that various options were provided to Mr. Koontz, but ultimately the decision, as the district admits, the decision, the final decision to deny the permit application for 3.7 acres of use was Mr. Koontz's refusal to acquiesce in the condition that he perform 50 acres of offsite improvements.
And by the way, the reference--
Justice Ruth Bader Ginsburg: Where -- where is that?
Paul J Beard Ii: --It's in the Joint Appendix, pages 70 to 71, which is the pretrial statement where each party sets forth his and her position.
There the court -- I'm sorry -- the district made clear that the condition that had been refused and was the cause of the permit denial was the one to perform offsite mitigation at a cost of a range between $10,000 on the low end, our experts said in the range of 100 to 150,000 -- 90 to 150,000.
So, the district later on, even in the Florida Supreme Court, Justice Ginsburg, said in its petitioner's brief on jurisdiction at page 1 that it required additional mitigation before it would authorize the permits and that quote:
"Additional mitigation would be offsite because the available conservation land on site was, in the district's view, insufficient mitigation. "
So there's no question that an actual condition was imposed, whose rejection produced a permit denial.
Justice Elena Kagan: Mr. -- Mr. Beard, I don't think anybody is contesting that there was a condition imposed or maybe there are.
But -- you know, there's another question whether that position is a taking.
And we've been trying to figure out what's the taking here.
In Nollan and Dolan, they took an easement, they took a piece of land.
So that's the taking.
Now, you said the funds are the taking; is that correct?
Any time that somebody comes up with a proposal for -- for a developer to pay money in order to compensate the State for the costs that are associated with his development, that that is itself a taking?
Paul J Beard Ii: I want to be clear that we're not saying that all monetary fees or exactions would be subject to Nollan and Dolan, only within the permit context, the special context of land use permitting.
Justice Elena Kagan: No, I understand.
But in the permit context, a State can't say to somebody, You have to pay to perform some service or to compensate without it being a taking and without it being subject to Nollan and Dolan analysis.
Paul J Beard Ii: Correct.
If the State or the government or the permitting authority asks for the -- for the property owner to give up property, even money to be put to a public use and it's not an application for your user fee or something like that, it's for mitigation, that should be subject--
Justice Elena Kagan: So -- so, for example, and I'll try to do this very quickly, if -- if the State just had a policy for every acre of wetlands you fill in, it costs us $10,000, you need to pay $10,000, that's subject to Nollan and Dolan analysis, too.
Paul J Beard Ii: --Correct, it would be subject to Nollan and Dolan analysis to determine if they're really on the ground, there's a connection between the impact--
Justice Antonin Scalia: No, it would be subject to Nollan and Dolan analysis if they took the $10,000.
If they issued the permit, the developer went ahead with the development and the State then attached the bank account in the amount of $10,000 or whatever, that would be Nollan -- and Nollan and Dolan -- in Nollan, there was a taking.
He had gone ahead with the -- with the development of his house under the permit which said if he did that, he gave away the easement.
So there -- there was a -- a taking there.
The easement would have been taken automatically.
In -- in -- in Dolan, there was -- the individual had not gone ahead with the development, but it was clear that any development the person undertook would be subject to the -- the exaction that the municipality required.
So there was a -- a taking there, we said.
Here, there's nothing that happens.
The permit was denied, unlike in -- unlike in -- in Dolan where the permit was granted and it was understood that if she went ahead with it, she was going to lose -- lose some land rights.
Here, the permit's been denied.
I can't see where there's a taking here.
Nothing's been taken.
Paul J Beard Ii: --In Nollan and Dolan, Your Honor, nothing was taken, either.
In Nollan you had a permit approval with conditions.
It's true that development had not gone forward, but here as well development had not gone forward.
Presumably -- theoretically if the development had gone forward he might have been subject to conditions that he would have had to satisfy.
But I would submit to the Court--
Justice Antonin Scalia: The permit had issued.
The permit had issued in both of those cases, and therefore the person was saying: To go ahead with this permit I give up this land.
Paul J Beard Ii: --The permits in Nollan and Dolan actually did not issue.
There was only approval with conditions and there is a difference.
And that is no different from what happened here.
The threat is the same.
You don't get a permit issued to you until you--
Justice Antonin Scalia: There was no approval with conditions.
There's one thing for a municipality to issue an approval with conditions, and a municipality saying we can't approval it unless you agree to these conditions.
And the person doesn't agree and the municipality says we don't approve it.
Paul J Beard Ii: --But in either case he faces the threat, the unconstitutional condition on his use of his property: You don't get your use until you comply with our conditions.
Mr. Chief Justice--
Justice Anthony Kennedy: I have one question.
I know you are running short on your rebuttal time.
Assume that when we look at this record, assume we think there is a due process violation, not a taking violation.
That is not before us here, is it?
Paul J Beard Ii: --No.
The due -- there is no due process claim here.
There is only a State statute that embodies sort of a due process standard, but there is no due process claim here.
And may I reserve the balance of my time, Your Honor?
Chief Justice John G. Roberts: And I will afford you some additional time since our questioning intruded on yours.
Paul J Beard Ii: Thank you.
Chief Justice John G. Roberts: Mr. Wolfson?
ORAL ARGUMENT OF PAUL R.Q. WOLFSON ON BEHALF OF THE RESPONDENT
Paul Rq Wolfson: Mr. Chief Justice and may it please the Court:
The parties agree that Florida may require a landowner to perform mitigation as a condition for a permit that would allow the destruction of a wetlands.
The parties disagreed as to how much mitigation was appropriate in this case.
The district thought that Mr. Koontz's proposal was insufficient to mitigate the damage to wetlands.
Mr. Koontz rejected the district's counterproposals and he refused to do anything more.
And the district denied his permit application because he refused to do anything more.
Chief Justice John G. Roberts: Does it make any difference in his refusing to do anything more whether the condition is onsite or offsite?
Paul Rq Wolfson: I don't think it makes any difference, Mr. Chief Justice.
I mean, the -- under the Florida regulatory regime, we cannot demand certain conditions from the landowner.
The -- we are obligated -- if the -- if the permit -- the landowner has to establish under his permit application, and it's his burden, that he meets the various standards, the public interest standard which includes no adverse impact--
Chief Justice John G. Roberts: State law provisions you are talking about.
Paul Rq Wolfson: --Correct.
Chief Justice John G. Roberts: What about is there anything in the Federal Constitution that limits the conditions that you can demand?
Paul Rq Wolfson: I don't -- not -- not -- if I understand your question, Mr. Chief Justice, I don't think so.
I think that the question is, when you are talking about what analytical rubric you should apply, whether it be Nollan or Dolan or Penn Central, I think you can always argue that the impact of any of the conditions that we would demand -- and I will assume here that they are true demands -- you can always argue that the impact of the conditions, be they onsite, offsite, or monetary, would be so burdensome that it would called into play Penn Central or--
Chief Justice John G. Roberts: But there is no, there is no restraint on the agency.
It can ask for the moon -- before it will give a permit?
Paul Rq Wolfson: --Well, I don't -- I think that Penn -- first of all, I think there are many restraints on the agency.
First of all, I think Penn Central imposes a restraint on the agency.
Chief Justice John G. Roberts: Do you know of any case where the government has lost a Penn Central case?
Paul Rq Wolfson: Yes.
There are several in this case, Mr. Chief Justice.
I mean, Hodel v. Irving is a Penn Central case, I believe, and I think Kaiser-Aetna was also a Penn Central case.
Chief Justice John G. Roberts: May we -- I'm sorry.
Paul Rq Wolfson: It does -- it certainly doesn't--
Chief Justice John G. Roberts: It doesn't happen very often.
Paul Rq Wolfson: --Well, it is -- certainly the burden is on the landowner.
But I think that Penn Central, I think in Lingle when this Court tried to sort of restore some coherence to the takings jurisprudence and repudiated the Agins point, the Court pointed out that they -- that the normal -- sort of the normal jurisprudence is that the government is not required to establish by a heightened scrutiny sort of that there is a connection between means-ends analysis when it engages in economic regulation.
Chief Justice John G. Roberts: Just to nail it down, your position is that there is no limit in the Federal Constitution on what the agency can demand as a condition for the issuance of a permit?
Paul Rq Wolfson: --No, no, no, I don't think that is our position.
First of all, the Due Process Clause may certainly impose conditions.
The Equal Protection Clause may certainly impose conditions.
Chief Justice John G. Roberts: But the Takings Clause does not.
Paul Rq Wolfson: If the conditions are so onerous that it would make it essentially impossible to derive any value from the land, that may very well call into question Penn Central or Lucas.
I mean, in many ways this case could have been litigated as a very straightforward Penn Central case.
Justice Anthony Kennedy: Suppose -- suppose the agency said, we are really short of revenue; we will let you develop your land if you contribute a million dollars to our new football stadium.
Paul Rq Wolfson: Justice Kennedy, I think that that may very well raise a Penn Central or Lucas claim.
It also sounds like--
Justice Antonin Scalia: It doesn't raise Penn Central.
You keep on running away from it by saying Penn Central or Lucas.
Paul Rq Wolfson: --Well, it's not--
Justice Antonin Scalia: It does not deprive the land of all value.
The land still has some value.
Penn Central is totally out of the case.
Paul Rq Wolfson: --It's not a Nollan or Dolan claim is my point, Justice Kennedy, and it's not a Nollan or Dolan claim because it's not a -- the, as my friend acknowledged, the question in Nollan and Dolan or the rationale of Nollan and Dolan is would the condition by itself, if demanded unilaterally and outside the permitting context, would that have been a taking of property for which just compensation would have been required.
Chief Justice John G. Roberts: Sure it would have been.
Sure it would have been if they just went along -- to a landowner and the landowner is there minding his own business and they say, well, you own some property, so give us a 1 million dollars to build a football stadium.
That would be -- that would be unconstitutional, right?
Paul Rq Wolfson: I think that would -- I mean I think that would violate, could well violate the Due Process Clause.
It's hard to see what the rationality of it is.
But I don't think that this Court has ever extended the concept of a taking to requirements that a landowner, that anybody or a landowner, either pay money or, more importantly because I think what really is this case, is come into compliance with a regulatory requirement that would have -- which he would have to expend money to comply with.
Justice Samuel Alito: I'm trying to understand what would be -- what would be left of Nollan and Dolan if we agree with you.
Let me give you three situations.
First, the petition -- the district says, we are granting your permit on the condition that you give us one-third of your land.
That's Nollan and Dolan, right?
Paul Rq Wolfson: Yes.
Justice Samuel Alito: Okay.
Situation number 2: Permit is denied, but it will be granted if you give us one-third of your land.
What about that?
Paul Rq Wolfson: I think in that situation, in other words, if the situation is really exactly the same like Nollan and Dolan, but the permit is denied but it's clear that it is a concrete -- concrete condition, the landowner can go up through the judicial review process and say, this is -- you know, the denial of the permit application is predicated on an unconstitutional condition, and you should set that aside.
Justice Samuel Alito: Is that the same as the first example for purposes of Nollan and Dolan?
Paul Rq Wolfson: Almost.
Almost, Justice Alito.
Justice Samuel Alito: All right.
I want to get to my third.
The permit is denied but it will be granted if you give us the fair market value of the third of the land, and once you have done that then we're going to condemn your land and pay you the fair market value for it.
Paul Rq Wolfson: Justice Alito, I think that this Court's decision, this Court decision in Village of Norwood, essentially says if what is going on is just a pure contrivance to avoid the requirement of compensation in the Just Compensation Clause, that the Court has said, no, it will look through to the substance of the demand and determine that there was -- you know, essentially an evasion of the just compensation requirement.
Justice Antonin Scalia: As I understand your position, cash is magical, right?
The government can come in and come into my house, take all of the cash that's there, and that is not the basis for takings claim, right?
Because cash is not -- is not a taking.
Does that make any sense?
Paul Rq Wolfson: First of all, Justice Scalia, of course this case we don't believe involves cash.
It involves a requirement to do something that costs money, which is different than cash.
Cash is -- the problem with extending -- the problem with extending the takings concept to a monetary obligation which can be paid for out of sort of undifferentiated funds--
Justice Antonin Scalia: Right.
Paul Rq Wolfson: --is that it has no logical stopping point.
I mean, the court--
Justice Antonin Scalia: The stopping point is don't take my cash.
Your answer to my question is: That's okay, it's not a taking, right?
I may have some other cause of action, but not a -- not a taking?
The government's come in and taken my money.
Paul Rq Wolfson: --It's not a -- it's not a Nollan and Dolan claim for the government to say if you want--
Justice Antonin Scalia: I'm not talking Nollan and Dolan.
I'm talking about your position that the taking of cash cannot be a taking.
Paul Rq Wolfson: --Well, if a -- I'm sorry, Justice Scalia.
If the government is seizing the identifiable dollar bills that are in your house, I mean that sounds more like a case like--
Justice Antonin Scalia: I see, I see.
Paul Rq Wolfson: --Webb's Fabulous Pharmacies, where--
Justice Antonin Scalia: If they -- if they say, You have to turn over to us whatever money you have in your house, or you have to turn over to us whatever's in your bank account, that's not a taking.
Paul Rq Wolfson: --Justice Scalia, I think there are many -- there are many constitutional claims that could be made.
And I also want to add, there is an extensive overlay of State law in this area that protects landowners from arbitrary, irrational, intrusive, excessive demands by government agencies.
Chief Justice John G. Roberts: One of the things the Federal provision, the Takings Clause, is designed to prevent property owners from having to bear the costs that should be borne by the people as a whole.
The football stadium example.
There is no reason that a particular landowner should have to pay for the football stadium simply because he owns property.
The Takings Clause was designed to make sure that those exactions are not imposed on property owners but spread more evenly across the citizens who benefit from it.
And I guess I don't understand why you say that the Takings Clause is the one provision that doesn't apply in that type of situation.
Paul Rq Wolfson: Mr. Chief Justice, the -- the Armstrong policy of the -- that the government -- that an individual person should not be forced to bear what society should -- what should be spread to society as a whole -- is not violated when the government insists that a landowner comply with a generally applicable regulation.
Now, of course--
Chief Justice John G. Roberts: The generally applicable regulation in the football stadium hypothetical is not generally applicable.
It says, You are the owner of this property, and if you want to develop it, you've got to build a football stadium.
Paul Rq Wolfson: --Well, I think that is saying to one particular landowner, You may have to build a football stadium where no other type of similar regulation or requirement would ever be imposed on any other landowner sounds -- you know, like -- you know, sounds like an equal protection claim if the government just picks out one landowner.
Justice Antonin Scalia: What if they do it to five or six other landowners, okay?
Paul Rq Wolfson: Then, Justice Scalia, I think you have to ask what -- what regulatory scheme is the government--
Justice Anthony Kennedy: Let's -- let's put -- let's put it this way.
I take it it's a given that the government cannot take an easement on your property.
It cannot use your property for its own purposes.
It cannot park its trucks there.
It cannot cut the grass.
Why is it that if it can't do those, it can still force you, as a condition to using your property to its highest and best use, to pay them money?
Paul Rq Wolfson: --Well, I think--
Justice Anthony Kennedy: Why isn't that an equal burden -- why isn't that an equal use of the property by the government?
Paul Rq Wolfson: --I think for several reasons, Justice Kennedy.
First of all, I think that this nation has a long legal tradition of giving unique legal protection to property as opposed to money.
I mean, there are many circumstances -- many circumstances -- where the government can say to an individual, You must give me $1,000, but cannot say -- or a group of individuals -- but cannot say to the same group or individual, You must give me land worth $1,000.
I mean, there -- that is what the Just Compensation Clause--
Justice Antonin Scalia: Really?
Gee, that doesn't strike me as -- as entirely true.
Paul Rq Wolfson: --Well, Justice Scalia, the government obviously--
Justice Antonin Scalia: You mean a tax that is imposed only on landowners, and it's -- you know, it's a tax -- $5,000 per landowner, if that were replaced by a provision that said, Every landowner shall contribute to the State a portion of his property worth $5,000.
Paul Rq Wolfson: --I think that would--
Justice Antonin Scalia: --the latter is bad and the former's okay?
Paul Rq Wolfson: --I think that would raise very serious questions.
I mean, I don't know that this Court has ever -- has ever been faced with exactly such a case, but I think that would raise a very serious question.
Justice Stephen G. Breyer: So that -- am I wrong about -- I might have this -- I thought the framework roughly is the following: It is not the case that Penn Central applies only where there is a physical invasion of property, or there is total destruction of the value of the property.
In those two situations, what we said in Lucas is it applies without case-specific inquiry, but there are another set of cases where Penn Central and McMahon apply with case-specific inquiry.
And those to discover whether you have one, you look into such things as whether the regulation destroys investment-backed expectations, and then you look to the nature of the government interest and the relationships, et cetera.
That's what I thought the framework was.
Now, if that's the framework, then when the government says, I will let you develop your land if and only if you give $50,000 to the Shriners hospital, you would say, I can't develop my land.
And besides, that significantly interferes with my investment-backed expectations.
And besides, there is no relation whatsoever.
Therefore, I win under the Takings Clause.
Now, I spell all that out, because if I'm wrong about that framework -- if I am right about the framework, that could apply to this case.
If I am wrong about the framework, I want to know where in the cases I'm wrong.
Paul Rq Wolfson: Justice Breyer, we think that you are right about that framework.
That -- and just 6 weeks ago in the--
Justice Antonin Scalia: That surprises me.
Paul Rq Wolfson: --Well, just 6 weeks ago, in the Arkansas Fish and Game Commission case, this Court reiterated that Penn Central is presumed to be the test.
Justice Stephen G. Breyer: Okay.
So if I'm right about the framework, that takes care of all the hypotheticals you were asked.
In those cases, there is a significant interference with investment-backed expectation, and there's no justification whatsoever, so the Takings Clause applies.
Paul Rq Wolfson: We agree, Justice Scalia, and we don't--
Justice Antonin Scalia: Justification is the protection of wetlands.
That's a justification.
The protection of wetlands.
There's no necessary comparison, as Nollan and Dolan requires, between the harm that would be occasioned if the permit were granted and what the State is exacting in order to mitigate.
That doesn't exist anywhere in -- in the analysis that you are talking about.
Paul Rq Wolfson: --Well, Justice Scalia, there are -- there is another problem with the Nollan and Dolan claim in this case, which is, it's hard to see how you can have an exactions takings claim when nothing has ever actually been exacted.
Justice Antonin Scalia: Now, that is a problem.
Paul Rq Wolfson: Right.
And so -- and in this case, if the -- if the claim for the taking -- for the compensation is based on Nollan and Dolan, it seems that there is a mismatch, and that what the Petitioner is trying to do is sort of take the Nollan-Dolan heightened scrutiny government bears the burden of proof analysis and sort of convert that into what is the regulatory takings analysis for the entire parcel of his land, which is -- which is the measure of damages that he received.
So I think that there is the mismatch.
And now, this is--
Chief Justice John G. Roberts: I think that your point goes to the question that has been raised about -- there's no permit issued.
He didn't accept the permit.
And I don't understand that proposition.
Are you saying that if you are confronted with an unconstitutional condition, you have to accept it, and then you can challenge it?
You can't simply say you denied that on the basis of an unconstitutional condition, and that's wrong?
Paul Rq Wolfson: --No, that's not our argument, Mr. Chief Justice.
Florida has opened an avenue for judicial relief for you to go up through the Florida EPA process just like the Federal EPA, where you can say, Stop -- stop the district from doing this to me; they are predicating their -- either their grant or--
Chief Justice John G. Roberts: Okay.
I'm trying to get to the Federal.
You often fall back to the State provisions.
I'm looking at the Federal Constitution, and assuming the State provisions give you no relief, is it your position that he has no claim unless he accepts a permit with unconstitutional conditions?
Paul Rq Wolfson: --If there is no -- if there's no claimed avenue as I was saying, then I would think we would then -- you would have to obtain -- you have to seek compensation, but your compensation is for the value of your land that was taken.
And in Lingle, this Court reiterated that the Takings Clause is not a substantive limitation on the government's power to regulate.
The Takings Clause -- or as I should call it, the Just Compensation Clause -- is a requirement that if -- that the government will pay you just compensation for any property or property interest it has seized from you.
It does not -- it does not itself impose a -- a requirement that the government substantively justify its regulation.
Justice Ruth Bader Ginsburg: Mr. Wolfson, why isn't it entirely reasonable to say, If you are going to put a condition on a permit, that condition has to have some rough proportionate relationship to the harm that is being done to the permit -- that seems to me permanently sensible, that if they are going -- if they are going to exact a condition, the condition has to have some discrete proportional relationship to the harm?
Paul Rq Wolfson: Justice Ginsburg, I think that the district thought that they were acting roughly proportional.
In other words, we are not saying that the government shouldn't act -- that government should not act reasonably.
But I think when you force these cases into court under the Nollan, Dolan framework, you have a -- you have basically a mismatched and extraordinarily complex situation, and you have -- you run right into what this Court said in Lingle, which is that it is not ordinarily the Court's jurisdiction -- the appropriate approach to require the government to bear the burden of proof.
Justice Anthony Kennedy: Well, in Penn Coal v. Mahon, the government didn't enter the property.
It didn't take the property in the physical sense of moving in and appropriate it.
It just says, congratulations, you have some coal under your land, and we hope you enjoy it because you can't move it.
And we said that is a taking; that is a regulation that goes too far, and it deprived, as Justice Breyer indicated, the owner of investment-backed expectations, although that word wasn't in that Penn-Mahon.
Paul Rq Wolfson: Correct.
And, Justice Kennedy, nobody is disputing that Mr. Koontz could have made the argument that the regulation goes too far in the sense of the burden on his proposed project.
I mean, he had all of those arguments available to him.
He bought the -- he says he bought the land before the regulation went into effect.
He had investment-backed expectations and all the rest of it.
But that is not the claim that he is advancing to this Court.
Chief Justice John G. Roberts: Thank you, Mr. Wolfson.
ORAL ARGUMENT OF EDWIN S. KNEEDLER, FOR UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE RESPONDENT
Edwin S. Kneedler: Mr. Chief Justice, and may it please the Court:
I would like to emphasize at the outset that Petitioner's argument that Nollan and Dolan should apply in this context would -- would constitute a radical change in the -- in the way standard generally applicable regulatory programs are operated.
It is standard procedure when someone applies for a permit from the government, it is the permit applicant's burden to establish that he complies with the regulatory program.
Nollan and Dolan shift that burden to the government.
That has never been the case under regulation, including land use regulation.
Justice Antonin Scalia: What was taken in Nollan and Dolan?
Edwin S. Kneedler: If--
Justice Antonin Scalia: In Nollan and Dolan, wasn't the easement what was taken?
Edwin S. Kneedler: --That is what -- if -- if the permit had issued and an easement was granted, yes, it was the easement.
Justice Antonin Scalia: Well, but it -- wasn't what was taken unreasonably the ability of this homeowner to make the alterations to his house that he wanted to make?
He wanted to add another story and the court -- and the State said, you can't do it.
And its only basis for saying, you can't do it was, because you wouldn't give us the easement.
Edwin S. Kneedler: The basis of the -- the theory of Nollan and Dolan, and the Court made this clear in Lingle and in Delmonte Dunes, for that matter, is those two cases apply in a specific situation where there is an exaction of a right of access, an easement for the public to enter the land as a condition.
And the reason for that, the Court explained in Lingle, there are really two reinforcing points.
The first was that there would be public access, which is a permanent physical occupation, which is one of the exceptions to the general Penn Central test for regulatory takings.
The other is that it was a per se taking.
It was per se that the government could not have acquired that easement for paying -- without paying compensation; therefore, the government could not attach as a condition to the granting of a permit that the person convey something unless it was proportional.
So the theory began with the idea that the easement itself would have been -- the taking of that would have been a per se taking.
This is a very different situation because the other way in which Petitioner's theory would constitute a radical departure is that compliance with regulatory programs frequently, maybe almost always, requires the expenditure of money.
If someone wants to build a power plant, a coal-fired power plant, he's going to have to install a scrubber to protect the air, to prevent no diminution of air quality.
Constructing that costs money.
It can't be that the requirement to spend money to comply with a regulatory program is itself a taking.
The taking would be--
Chief Justice John G. Roberts: What about -- what about the football stadium?
Do they -- can you pick a particular landowner?
I mean, you took a case in which there is no question under Nollan and Dolan about the relationship, proportionality, and nexus.
Let's put those to one side because the issue is whether Nollan and Dolan apply.
Can the government say, okay, you want a permit, we will give you the permit if you fund the new football stadium?
Edwin S. Kneedler: --I think in that situation there would be a very substantial equal protection challenge because one landowner is being singled out with no rational basis.
Chief Justice John G. Roberts: But the one constitutional provision that is concerned with protecting property owners from having to bear burdens that should be borne by the public at large is not applicable?
Edwin S. Kneedler: Well, that -- it applies when there is an identifiable property taken--
Justice Stephen G. Breyer: No, no.
Why isn't the answer yes, it is applicable?
Of course it's applicable.
I own a piece of land and they have significantly interfered with my investment-backed expectation.
Edwin S. Kneedler: --Right, right, right.
Justice Stephen G. Breyer: And to say that I can't put a house on this because I'm supposed to pay for a football field, which has nothing to do with it, is as close to insisting that you have to have 4,000 columns of coal in your mine so that you can never use it as I can think of.
It's Holmes brought up to date.
Edwin S. Kneedler: Well, certainly--
Justice Stephen G. Breyer: At least that argument would be made--
Edwin S. Kneedler: --Certainly--
Justice Stephen G. Breyer: --And why wouldn't it be a winning argument?
Edwin S. Kneedler: --Certainly a Penn Central argument could be made there, but I think that's very different from a Nollan argument--
Justice Stephen G. Breyer: I agree with you--
Edwin S. Kneedler: --which -- which imposes the -- the burden on the government and basically treats the payment of money as itself a taking.
Justice Sonia Sotomayor: Mr. Kneedler, can I go back to the questions presented for a moment?
The court below did two separate rulings, I think.
One is there can't be a taking if the -- if the claim is that it's of an undifferentiated money, not a risk.
And I think you would agree with that.
If the only issue is an obligation to pay money, that that's not a takings claim, correct?
Edwin S. Kneedler: Yes.
And this is not even an obligation to pay money.
It's an obligation to spend money to come into compliance.
Justice Sonia Sotomayor: Right.
There was a second holding, however, which really gets eclipsed by the second, which is a denial of a permit doesn't permit you to raise the Nollan-Dolan case, and it appears to me even if there is an easement situation, so even if there is an actual takings claim at issue.
Do you agree with that first holding by the court below?
Edwin S. Kneedler: We think--
Justice Sonia Sotomayor: Assuming we narrow it not to undifferentiated money, but is there a difference between a denial or a grant?
Edwin S. Kneedler: --No.
If the -- if the agency decision is written where there is an express condition, we don't think that it matters -- an express condition satisfying Nollan and Dolan; in other words, an exaction, a per se taking, we don't think it matters whether the -- whether it's a permit grant or permit denial.
There was no actual taking in the sense that compensation would be owed, but it could be challenged as an unconstitutional condition under the Nollan and Dolan analysis.
But we think it's critical when thinking about that that the permit denial -- that only applies if the permit denial expressly is based on the condition, because otherwise you would get into a situation of negotiations and what was discussed and liability could turn on an exchange of ideas, whereas it should turn on the formality of the agency's final decision.
It's akin to the Williamson County final decision requirements.
Chief Justice John G. Roberts: Do you agree -- your friend on the other side cited a number of places in the record where he thought your condition was satisfied, that the denial of the permit was expressly based on the failure to comply with the offered conditions.
Edwin S. Kneedler: Well, if you look at the orders denying the permit applications in the record at, I believe it's 49 to 51 and 59 to 61.
In those situations it says the permits were denied because the plaintiff did not give the reasonable assurances that the statute requires in order to get the permit, the reasonable assurances of no loss of wetlands functions.
Justice Antonin Scalia: Isn't this unreal?
I mean, you are saying all along in the negotiations the agency says, If you do X, you get the permit.
And X is -- would -- would be an unconstitutional condition.
Okay, he refuses to do X.
The permit is denied with a general statement like this: The permit is denied because he has refused to do the necessary mitigation.
Isn't it clear that the reason he's refused to do the necessary mitigation is he has refused the last demand of the agency?
Edwin S. Kneedler: But the ultimate standard under the statute is whether he has provided reasonable assurances.
What assurances -- the way in which he goes about it, whether offsite or onsite -- the offsite part just arises because this is a wetlands case.
Normal regulation wouldn't raise the offsite -- onsite problem.
But the ultimate question is he didn't carry his burden of establishing no net loss of wetlands.
Justice Stephen G. Breyer: --What he's going to say in part is, I guess, I did a little numbers from your brief, the 37 million acres in Florida, say about 4 million are bodies of water, and say a third of them are built up, and we have 11 million that are wetland and 11 million that aren't.
So they're saying why in heaven's name are we supposed to -- everybody wants to build, and why should the people that happen to live in wetland have to pay for all the other wetland?
That's just coincidence.
So he is going to say that that is like the Shriners Hospital.
You are going to say, No, it isn't like the Shriners Hospital.
Now, all I'm saying is, isn't it at least an issue under the takings clause whether it is or isn't?
Edwin S. Kneedler: I think it's clearly not like the Shriners Hospital--
Justice Stephen G. Breyer: I know you'll say that.
He will say that it is.
Edwin S. Kneedler: --But I did want to come back to Justice Scalia's question.
The permit denials, just general permit denials, the Court made clear in Del Monte Dunes are not covered by Nollan and Dolan.
They are covered by Penn Central.
And the Court made clear in Nollan that the Court could have denied the permit without attaching the condition.
We think it's important that the agency always have that option.
And the third point is--
Justice Samuel Alito: You made the reference -- you are making Nollan and Dolan a trap only for really stupid districts -- you know.
They -- they say the right words and then they are out from under it, isn't that right?
Edwin S. Kneedler: --Well, I don't think so because -- because there are situations in which an agency actually wants to get the easement.
But this Court, in Lingle, made clear that the general rule is Penn Central with only the two exceptions for regulatory--
Justice Samuel Alito: It shouldn't matter whether the -- whether the permitting authority says expressly in the denial,
"it's denied because you didn't do this. "
or it just says, it's denied, but it's perfectly well understood what was needed, what they were going to demand in order to get.
Edwin S. Kneedler: --If may I answer, because the agency has to reserve, has to have the ability to deny the permit because the conditions required by the statute were not met, and Nollan and Dolan deal with formality and the formality of conveyance of an easement.
If there is not a document that requires that, then the strict requirements for the narrow exception for Nollan and Dolan do not apply.
Chief Justice John G. Roberts: Thank you, Mr. Kneedler.
Mr. Beard, you have three minutes.
REBUTTAL ARGUMENT OF PAUL J. BEARD, II, ON BEHALF OF THE PETITIONER
Paul J Beard Ii: Thank you, Mr. Chief Justice.
I would just like to point the Court, and particularly Justice Scalia, to pages 30 and 31 of our brief on the merits where we describe with citations to the Nollan and Dolan, what precisely happened there.
I want to make sure that it's clear that what they did there was not issue permits.
They approved with conditions, but the property owner still had to satisfy the conditions in order to receive the permit.
As to the question about--
Justice Sonia Sotomayor: What do we do with what Mr. Kneedler says is a ruling in your favor on this question, that all denials are subject to Nollan and Dolan?
What do we do with that?
What's the -- I see an enormous flood gate here, and one in which we are sending a signal that perhaps States should be more quiet rather than more engaging.
They should just say no, because anything they offer is going to be seen as an -- potentially as an unconstitutional taking.
They should just plain say no, not explain why, not engage in any work with you to mitigate.
Paul J Beard Ii: --Justice Sotomayor, I don't believe that negotiations will suddenly break down, and we will see a flurry of permit denials if the Court rules in our favor.
What will happen, instead -- it's true, I should say, they will lose flexibility in demanding whatever it is that they want under the Takings Clause.
They won't have any review.
But the benefit of applying our rule that says monetary exaction should be treated like other exactions and be reviewed under Nollan and Dolan--
Justice Sonia Sotomayor: But they're not.
People are asked to pay taxes.
Homeowners are asked to pay taxes all the time; development fees if they want to develop something.
People are subject to money exactions all of the time in this society.
Paul J Beard Ii: --No question that we all are subject on a daily basis to government demands that we pay, that we have a financial obligation.
Justice Sonia Sotomayor: So what happens in just -- when the legislature passes a development fee?
Are you now saying that's subject to Nollan and Dolan, too?
Paul J Beard Ii: If the legislation requires an agency who processes a permit to impose a fee in exchange for a permit -- again, within the land-use context, we are not talking about taxes, homeowners fees, we are talking within the discretionary land-use process -- that is imposed there, then the risk of coercion, undue influence and the like arise and Nollan and Dolan should apply.
But I wanted to respond specifically to Justice Breyer's questions about Penn Central.
I think conceptually there is an important difference between the unconstitutional conditions doctrine which is what we seek to apply here, and what would be a permit -- or what would be a Penn Central claim.
The unconstitutional conditions doctrine, the offense there is the--
Chief Justice John G. Roberts: Finish your thought.
Paul J Beard Ii: --The offense there is the conditioning, the improper conditioning of a permit.
It's not did the condition force me to lose the value in my land.
That's a very different question that a case like Penn Central might answer subsequent to a permit denial.
The Unconstitutional Conditions Doctrine focuses exclusively on the permit exaction and on the conditioning, not on subsequent decisions by the government, for example, to deny.
Chief Justice John G. Roberts: Thank you, counsel.
Paul J Beard Ii: Thank you.
Chief Justice John G. Roberts: The case is now submitted.
Chief Justice John G. Roberts: Justice Alito has the opinion of the court in two cases this morning.
Justice Samuel Alito: The first case is Koontz versus Saint Johns River Water Management District, No. 11-1447.
This case involves two of our important land-use precedents, Nollan versus California Coastal Commission and Dolan versus City of Tigard.
Those cases held that a unit of local government may demand property as a condition of its approval of a land-use permit only if the demand has a nexus with and is roughly proportional to the public arms that the proposed land-use would cause.
Those cases thus served to place at least some limits on the ability of local authorities to abuse their power.
In this case, petitioner Coy Koontz applied to the Saint Johns River Water Management District for a permit to build on land he owned East of Orlando, Florida.
The district denied the application telling Mr. Koontz that it would approve the application only if he agreed to pay for improvements to state-owned property several miles away.
Mr. Koontz refused and instead sued in state court alleging that the district's demand ran afoul of our decisions in Nollan and Dolan.
The trial court applied those precedents and ruled for Mr. Koontz, but the Florida Supreme Court reversed finding Nollan and Dolan distinguishable on two grounds.
Today, we reject both of those rationales and therefore reverse.
First, the Florida Supreme Court thought that it made a difference whether a local authority says, “Your permit is granted on the condition that you give us your property,” as suppose to saying, “Your permit is denied because you refused to give us your property.”
We hold that Nollan and Dolan cannot be so easily circumvented.
They are special applications of the unconstitutional conditions doctrine which forbids the government from coercing someone into giving up a constitutional right.
We have repeatedly held that this doctrine applies with equal force, regardless of whether the government phrases its demand as a condition precedent or a condition subsequent to obtaining a governmental benefit.
Under that, well-settled principle, Nollan and Dolan apply, regardless of whether permitting officials used the words “only, if, or, not, unless.”
Second and for similar reasons, we hold that the State Supreme Court should have applied Nollan and Dolan even though respondents demand was for money rather than a tangible interest in real property.
Demands for money in the land use permitting context implicate the central concern of Nollan and Dolan that the government may abuse its broad discretion to regulate land use to extort property that the Takings Clause would otherwise require it to pay for.
As a practical matter, there is not much difference between a demand that a landowner give up a certain portion of its property and a demand that the landowner pay the value of the property in question, which of course would allow the land use authority than to turn around if it has the eminent domain power, condemn the land and acquire the land in that way.
Again, Nollan and Dolan cannot be so easily circumvented.
Despite respondent's argument to the contrary, this case does not implicate Eastern Enterprises versus Apfel in which five Justices took the position that a governmental demand for money from an unspecified source cannot give rise to a taking.
Unlike the demand at issue in that case, here, the District's demand burdened the ownership of a specific parcel of real property.
The judgment of the Florida Supreme Court is reversed.
Justice Kagan has filed a dissenting opinion in which Justices Ginsburg, Breyer, and Sotomayor have joined.