Zoning and Land Use Planning

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1 Alan C. Weinstein* and Brian W. Blaesser** The Supreme Court's 2012 Takings Cases The U.S. Supreme Court has three cases on its docket this term that explore the meaning of the fth amendment's prohibition on the taking of private property without payment of just compensation. Of the three, by far the most relevant to real estate development and land use regulation and also the most intriguing is Koontz v. St. Johns River Water Management Dist., 1 an exactions case from the Florida Supreme Court, which was argued on January 15, We discuss this case at some length below, but start with brief discussions of the other two cases: Arkansas Game and Fish Commission v. U.S., 2 which the Court decided on December 4th, and Horne v. U.S. Department of Agriculture, 3 for which the Court granted certiorari on December 5. The Horne case, involving a federal marketing program for raisins, has no relevance to real estate concerns. Brie y, the case involves whether a takings challenge to the program's reserve tonnage requirement 4 brought by these particular plainti s, who claim they are not properly governed by the program, may be brought in federal district court rather * Alan C. Weinstein holds a joint faculty appointment at Cleveland State University's Colleges of Law and Urban A airs. He is also the coauthor of FEDERAL LAND USE LAW & LITIGATION for West. ** Brian W. Blaesser is a partner and heads the Land Use and Real Estate Development Group in the Boston o ce of the rm of Robinson & Cole LLP. He is the author of DISCRETIONARY LAND USE CONTROLS: AVOIDING INVITATIONS TO ABUSES OF DISCRETION and the coauthor of FEDERAL LAND USE LAW & LITIGATION for West. 1 St. Johns River Water Management Dist. v. Koontz, 77 So. 3d 1220 (Fla. 2011), cert. granted, 133 S. Ct. 420 (2012). 2 Arkansas Game and Fish Com'n v. U.S., 133 S. Ct. 511, 75 Env't. Rep. Cas. (BNA) 1417 (2012). 3 Horne v. U.S. Dept. of Agriculture, 673 F.3d 1071 (9th Cir. 2012), cert. granted, 133 S. Ct. 638 (2012). 4 Under the reserve tonnage requirement, some of the annual raisin crop must be held in reserve and sold only in markets where competition does not exist, such as school-lunch programs, with the proceeds used 512 Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring 2013

2 than the Court of Federal Claims as required by the statute under which the program is enforced. Of more relevance to readers of this journal, is Arkansas Game and Fish Commission. The Commission sued the U.S. Army Corps of Engineers, alleging that periodic releases of water from an upstream dam caused recurring ooding that ultimately destroyed woodlands in a 23,000 acre Wildlife Management Area owned by the Commission, and therefore the Corps had taken its property without just compensation. The Court of Federal Claims ruled that the United States had taken a temporary owage easement over the Commission's property and awarded the Commission $5,778, in damages. 5 On appeal, the Federal Circuit reversed in a split decision, 6 with the majority concluding there was no taking because the ooding, while recurring, was temporary rather than permanent, and that the Corps did not intend to in ict permanent ooding or damage. The ooding at issue here occurred numerous times between 1993 and 2000 when the Corps deviated from its planned releases of water from a dam 115 miles upstream from the Commission's property. Those deviations, made at the request of farmers, led to water being released at a slower rate than normal, which provided downstream farmers with a longer harvest season. But slowing the releases meant that more water than normal remained behind the dam, and so the period of time when the water releases occurred had to be extended. And, while slower but longer releases of water bene tted farmers, it resulted in recurring ooding that harmed the woodlands owned by the Commission. After the Commission objected to the Corps' deviations in water releases multiple times between 1993 and 2000, the Corps examined the e ect of the deviations on the Commissions' woodlands and, in 2001, decided not to deviate from its water release plan in the future. In 2005, the Commission sued, claiming that the cumulative impact of the ooding incidents had both destroyed timber and to pay the costs of running the reserve tonnage program. The plainti s claim that this is a taking of their property without just compensation. 5 Arkansas Game and Fish Com'n v. U.S., 87 Fed. Cl. 594 (2009), rev'd, 637 F.3d 1366 (Fed. Cir. 2011), cert. granted, 132 S. Ct. 1856, 182 L. Ed. 2d 641 (2012) and rev'd and remanded, 133 S. Ct. 511, 75 Env't. Rep. Cas. (BNA) 1417 (2012). 6 Arkansas Game & Fish Com'n v. U.S., 637 F.3d 1366 (Fed. Cir. 2011), cert. granted, 132 S. Ct. 1856, 182 L. Ed. 2d 641 (2012) and rev'd and remanded, 133 S. Ct. 511, 75 Env't. Rep. Cas. (BNA) 1417 (2012). Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring

3 Real Estate Law Journal [Vol. 41:4 2013] substantially changed the character of the terrain, necessitating costly reclamation measures. 7 The question for the Supreme Court in this case was whether the Federal Circuit majority had gotten it right in reversing the Court of Claims award to the Commission on the ground that cases involving ooding and [ owage] easements 8 were a categorical exception to the general rule of the Court's First English 9 decision that temporary government action may give rise to a takings claim if permanent action of the same character would constitute a taking. Whether temporary ooding caused by government action can ever give rise to a takings claim, of course, is a question that goes well beyond the unique facts in this case. Writing for a unanimous court, 10 Justice Ginsburg, declined the government's invitation to carve out a categorical takings exemption for temporary ooding, and ruled that government-induced ooding temporary in duration gains no automatic exemption from Takings Clause inspection. 11 Noting that takings claims based on temporary ooding should be assessed by a case-speci c factual inquiry, 12 Justice Ginsburg set out the factors that courts should consider in such cases: (1) the duration of the ooding, (2) the degree to which the invasion is intended or is the foreseeable result of authorized government action, (3) the character of the land at issue and the owner's reasonable investment-backed expectations regarding the land's use, and (4) the severity of the interference. 13 Having ruled that temporary ooding could support a tak- 7 Arkansas Game and Fish Com'n v. U.S., 133 S. Ct. 511, , 75 Env't. Rep. Cas. (BNA) 1417 (2012). 8 Arkansas Game and Fish Commission, 637 F.3d at First English Evangelical Lutheran Church of Glendale v. Los Angeles County, Cal., 482 U.S. 304, 107 S. Ct. 2378, 96 L. Ed. 2d 250, 26 Env't. Rep. Cas. (BNA) 1001, 17 Envtl. L. Rep (1987). 10 Justice Kagan did not participate in the case due to her prior involvement with the matter as Solicitor General. 11 Arkansas Game and Fish Commission, 133 S.Ct. at Id. citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 n.12, 102 S. Ct. 3164, 73 L. Ed. 2d 868, 8 Media L. Rep. (BNA) 1849 (1982). 13 Id., citing Palazzolo v. Rhode Island, 533 U.S. 606, 618, 121 S. Ct. 2448, 150 L. Ed. 2d 592, 52 Env't. Rep. Cas. (BNA) 1609, 32 Envtl. L. Rep (2001) and Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, , 98 S. Ct. 2646, 57 L. Ed. 2d 631, 11 Env't. Rep. Cas. (BNA) 1801, 8 Envtl. L. Rep (1978). 514 Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring 2013

4 ings claim, the Court reversed and remanded, noting that because the Federal Circuit had based its reversal of the Court of Claims entirely on there being no takings claim for a temporary ooding, it had not addressed several challenges the government had raised to the trial court's award of damages. 14 Arkansas Game and Fish Commission clari ed that government-induced temporary ooding can give rise to a takings challenge and speci ed the factors courts should consider in considering such challenges. This approach is best seen as a variant of Penn Central s ad-hoc factual inquiry tailored to t the factual considerations that arise in a ooding case. While Arkansas Game and Fish Commission is certainly an important case, its reach is quite circumscribed. In contrast, the Court's third takings case this term, Koontz v. St. Johns River Water Management District, 15 potentially has a far-reaching e ect. Koontz involves a challenge to a development exaction. Local governments frequently require such exactions, or attach other conditions, as a prerequisite to development approvals in an e ort to address the environmental impacts of the development or the need for new infrastructure created by the development project. These most frequently take the form of either exactions such as easement dedication requirements or required cash payments in the form of fees-in-lieu of dedication requirements or development impact fees. 16 The Court has ruled previously in two cases involving exactions: Nollan v. California Coastal Commission 17 and 14 Arkansas Game and Fish Commission, 133 S.Ct. at 523. The government had challenged several of the trial court's ndings, including those related to causation, foreseeability, sustainability and the amount of the damage award. 15 St. Johns River Water Management Dist. v. Koontz, 77 So. 3d 1220 (Fla. 2011), cert. granted, 133 S. Ct. 420 (2012). 16 See generally, Brian W. Blaesser & Alan C. Weinstein, Federal Land Use Law & Litigation, 3:38 to 3:42 (2012); 1 James A. Kushner, Subdivision Law and Growth Management, 6:31 (2nd ed. 2012); James C. Nicholas, Arthur C. Nelson & Julian C. Juergensmeyer, A Practitioner's Guide to Development Impact Fees (1991). 17 Nollan v. California Coastal Com'n, 483 U.S. 825, 107 S. Ct. 3141, 97 L. Ed. 2d 677, 26 Env't. Rep. Cas. (BNA) 1073, 17 Envtl. L. Rep (1987). Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring

5 Real Estate Law Journal [Vol. 41:4 2013] Dolan v. City of Tigard. 18 These cases established the socalled Nollan/Dolan test that applies a distinctive takings framework to exaction claims. Under that framework, the government defendant has the burden of proving that the exaction it seeks to impose is su ciently related to a governmental interest and proportionate to the problems caused by the plainti developer's or landowner's proposed development. In the language of the Nollan/Dolan rulings, that means that the exaction bears both an essential nexus to the governmental interest and rough proportionality to the development's projected impacts. 19 This approach is often referred to as the Nollan/Dolan Dual Nexus test. We note two interesting aspects of the Nollan/Dolan approach. First, it does not focus on the diminution in value of the plainti 's property, which is the hallmark of both the Lucas per se takings rule for a regulation that leaves an owner with no economically viable use, 20 and the Penn Central balancing test, which requires a weighing of three principal factors economic impact, interference with distinct investment-backed expectations, and the character of the government action. 21 So, in that way, the Nollan/ Dolan Dual Nexus test resembles the Court's per se test for permanent physical invasions or occupations announced in the Loretto case. 22 That makes sense because exactions when they are in the form of dedication of land requirements involve the same loss of the rights to exclusive possession and to exclude others as occurs with permanent physical invasions or occupations. The second interesting aspect of the Nollan/Dolan ap- 18 Dolan v. City of Tigard, 512 U.S. 374, 114 S. Ct. 2309, 129 L. Ed. 2d 304, 38 Env't. Rep. Cas. (BNA) 1769, 24 Envtl. L. Rep (1994). 19 See generally, Brian W. Blaesser & Alan C. Weinstein, Federal Land Use Law & Litigation, 3:38 to 3:42 (2012). 20 Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S. Ct. 2886, 120 L. Ed. 2d 798, 34 Env't. Rep. Cas. (BNA) 1897, 22 Envtl. L. Rep (1992). See generally, Brian W. Blaesser & Alan C. Weinstein, Federal Land Use Law & Litigation, 3:33 (2012). 21 Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631, 11 Env't. Rep. Cas. (BNA) 1801, 8 Envtl. L. Rep (1978). See generally, Brian W. Blaesser & Alan C. Weinstein, Federal Land Use Law & Litigation, 3:34 to 3:37 (2012). 22 Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S. Ct. 3164, 73 L. Ed. 2d 868, 8 Media L. Rep. (BNA) 1849 (1982).). See generally, Brian W. Blaesser & Alan C. Weinstein, Federal Land Use Law & Litigation, 3:32 (2012). 516 Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring 2013

6 proach is that it is the sole remaining vestige of the Court's applying substantive due process analysis in the takings context. Readers will recall that the Court introduced a due process element in takings in Agins v. Tiburon, 23 when it announced that a taking occurs if a regulation either deprived an owner of all economically viable use or failed to substantially advance a legitimate governmental interest. But 25 years after Agins, inlingle v. Chevron, 24 the Court rejected Agins and announced that the substantially advances a legitimate governmental interest test was not appropriate for determining whether a regulation e ects a talking under the Fifth Amendment. 25 So, with these preliminary comments as background, what happened in Koontz and why did the Court take this case? Back in the 1990's, Mr. Koontz, senior, since deceased, wanted to build a shopping mall on 3.7 acres of a 14.2-acre lot. Because the wetlands, and actually most of the lot, were part of a designated riparian habitat protection zone in fact, so was most of the lot and Mr. Koontz's plans called for dredging and lling those wetlands, he needed to obtain a permit from the St. John's River Water Management District. 26 Because Florida law protects wetlands, and requires mitigation for the loss of any wetlands, Mr. Koontz stated in his development application, that he would mitigate the loss of 3.4 acres of wetlands plus about 1/3 acre of protected uplands by dedicating a conservation easement on the remaining 10.5 acres of the property that would prohibit any further development. 27 That sounds reasonable, right? Well, the problem is that the District's guidelines implementing Florida's wetlands mitigation law requires a 10:1 mitigation 23 Agins v. City of Tiburon, 447 U.S. 255, 100 S. Ct. 2138, 65 L. Ed. 2d 106, 14 Env't. Rep. Cas. (BNA) 1555, 10 Envtl. L. Rep (1980) (abrogated by, Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 125 S. Ct. 2074, 161 L. Ed. 2d 876, 35 Envtl. L. Rep (2005)). See generally, Brian W. Blaesser & Alan C. Weinstein, Federal Land Use Law & Litigation, 3:09 (2012). 24 Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 125 S. Ct. 2074, 161 L. Ed. 2d 876, 35 Envtl. L. Rep (2005). 25 See generally, Brian W. Blaesser & Alan C. Weinstein, Federal Land Use Law & Litigation, 3:26 (2012). 26 St. Johns River Water Management Dist. v. Koontz, 77 So. 3d 1220, 1224 (Fla. 2011), cert. granted, 133 S. Ct. 420 (2012). 27 St. Johns River Water Management Dist. v. Koontz, 77 So. 3d 1220, 1224 (Fla. 2011), cert. granted, 133 S. Ct. 420 (2012). Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring

7 Real Estate Law Journal [Vol. 41:4 2013] ratio for loss of wetlands. 28 In other words, if you want to destroy an acre of wetlands, you need to insure that 10 acres of existing wetlands are preserved. So, Mr. Koontz's o er was about a 3:1 ratio, rather than a 10:1 ratio. Based on that o er, the District could have simply denied Mr. Koontz's application. Instead, the District identi ed several possible exactions that, if accepted by Mr. Koontz, would have allowed the development to proceed and discussed these informally with Mr. Koontz. For example, the District said it was willing to grant the development permit on the condition that Koontz perform o site mitigation by agreeing to plug ditches, replace damaged culverts, or perform some equivalent mitigating act on other properties within the river's drainage area. Alternatively, the District told Mr. Koontz that he could avoid doing any o -site wetlands mitigation by reducing the size of his project to the point where the destruction of protected territory would be limited to one acre. But Mr. Koontz, refused to consider those proposals, and the government ultimately denied the development request outright. 29 Normally, a developer in this situation would have sought an administrative appeal of the District's denial, perhaps sought a variance, etc. But Mr. Koontz sued instead, and here is where things get interesting. Mr. Koontz claimed that the District had proposed conditions that amounted to an unconstitutional taking for which compensation would be due. Note that these were not conditions that the District actually had imposed on Mr. Koontz, but rather conditions that the District merely had proposed during informal discussions. At that point, under the Court's existing takings jurisprudence, Mr. Koontz faced the following di culties in successfully asserting a takings claim based on the District's denial of his application. There was no Loretto claim based on physical invasion/occupation because he still exclusively owned all of his land. Also, because he still could develop his land the District said he could develop on one acre if he placed a conservation easement on the rest of the property there was no claim for deprivation of all economic use under Lucas. Finally, it would be unlikely that he could prevail on a Penn 28 Timothy M. Mulvaney, Proposed Exactions, 26 J. Land Use 279, 293 n St. Johns River Water Management Dist. v. Koontz, 77 So. 3d 1220, 1224 (Fla. 2011), cert. granted, 133 S. Ct. 420 (2012). 518 Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring 2013

8 Central takings claim because his property could be found to still have some value as measured by what his reasonable investment-backed expectations could be for a parcel that is almost entirely wetlands. That leaves a challenge of the proposed exaction as unconstitutional under the Nollan/ Dolan test for exactions. 30 This last takings argument is critical to understanding the viewpoint of the plainti now Mr. Koontz junior and his legal counsel, which is the Paci c Legal Foundation, a property-rights advocate. The Foundation's briefs in this case describe the government as an entity that whittles away at property rights with strict environmental regulations that amount to extortion and are implemented by guidelines that are unnecessary and excessive and result in a land grab while also requiring payment for unnecessary public improvements on government land. 31 Whether one views government environmental and land use regulations as extortion or often excessive or unfair, one way to curb such outcomes is through judicial expansion of protection for property rights both doctrinally and through heightened judicial scrutiny. That is what this case is all about. In fact, the property rights movement has successfully enhanced the protection of property rights through a series of victories beginning in 1982 with Loretto, 32 and continuing for the next two decades with First English, 33 Nollan, 34 Lu- 30 He could not claim a taking on the ground that the exaction requirement fails to substantially advance a legitimate state interest because the Court ruled in Lingle that a claim like that is properly brought under the Due Process clause and not the Takings clause. 31 Koontz v. St. John's Water Management District, Petitioner's Brief on the Merits. 32 Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S. Ct. 3164, 73 L. Ed. 2d 868, 8 Media L. Rep. (BNA) 1849 (1982) (establishing per se takings test for permanent physical invasion or occupation). 33 First English Evangelical Lutheran Church of Glendale v. Los Angeles County, Cal., 482 U.S. 304, 107 S. Ct. 2378, 96 L. Ed. 2d 250, 26 Env't. Rep. Cas. (BNA) 1001, 17 Envtl. L. Rep (1987) (establishing that the fth amendment requires compensation as the remedy for all takings, whether permanent or temporary). 34 Nollan v. California Coastal Com'n, 483 U.S. 825, 107 S. Ct. 3141, 97 L. Ed. 2d 677, 26 Env't. Rep. Cas. (BNA) 1073, 17 Envtl. L. Rep (1987) (establishing essential nexus requirement for land dedication exactions). Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring

9 Real Estate Law Journal [Vol. 41:4 2013] cas, 35 Dolan, 36 Del Monte Dunes 37 and Palazzolo. 38 But the property rights position did not prevail in the Tahoe-Sierra 39 case in 2002, where the Court rejected a claim that any delay in granting a land-use approval should be considered a compensable temporary taking, and, more famously, in the Kelo 40 case in 2005, where a majority ruled that economic development was a proper public purpose for the exercise of eminent domain. In this case, after remand of an earlier ruling, Koontz prevailed both at trial and in an intermediate court of appeal on the theory that the Nollan/Dolan Dual Nexus test (1) applies to exactions beyond those that require public occupation of or access to private land, and (2) is applicable at the point in time when an exaction is proposed but not yet imposed. 41 But the Florida Supreme Court reversed, ruling that Nollan/Dolan does not apply to exactions that do not involve the dedication of land and neither does it apply to proposed exactions. The majority argued that this ruling had two major advantages over a rule that would potentially allow compensation for proposed exactions. First, if a property 35 Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S. Ct. 2886, 120 L. Ed. 2d 798, 34 Env't. Rep. Cas. (BNA) 1897, 22 Envtl. L. Rep (1992) (establishing per se takings test for regulations that deny owner of all economically viable use). 36 Dolan v. City of Tigard, 512 U.S. 374, 114 S. Ct. 2309, 129 L. Ed. 2d 304, 38 Env't. Rep. Cas. (BNA) 1769, 24 Envtl. L. Rep (1994) (establishing rough proportionality requirement for land dedication exactions). 37 City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 119 S. Ct. 1624, 143 L. Ed. 2d 882, 48 Env't. Rep. Cas. (BNA) 1513, 29 Envtl. L. Rep (1999)(approving jury's award of compensation based on city's repeated denials of applications for development approval). 38 Palazzolo v. Rhode Island, 533 U.S. 606, 121 S. Ct. 2448, 150 L. Ed. 2d 592, 52 Env't. Rep. Cas. (BNA) 1609, 32 Envtl. L. Rep (2001) (establishing that the fact that a takings claim is not barred by the fact that the property owner at the time of acquisition of the subject property had notice of the challenged regulation restricting the use of that property). 39 Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 122 S. Ct. 1465, 152 L. Ed. 2d 517, 54 Env't. Rep. Cas. (BNA) 1129, 32 Envtl. L. Rep , 10 A.L.R. Fed. 2d 681 (2002). 40 Kelo, et. al. v. City of New London, Conn., 545 U.S. 469, 125 S. Ct. 2655, 162 L. Ed. 2d 439, 60 Env't. Rep. Cas. (BNA) 1769, 35 Envtl. L. Rep , 10 A.L.R. Fed. 2d 733 (2005). 41 St. Johns River Water Management Dist. v. Koontz, 5 So. 3d 8 (Fla. 5th DCA 2009), decision quashed, 77 So. 3d 1220 (Fla. 2011), cert. granted, 133 S. Ct. 420 (2012). 520 Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring 2013

10 owner could le takings claims any time that unsuccessful negotiations with a government body led to a permit denial, then land use regulation would become prohibitively expensive due to the costs of litigation. Second, governments would respond to this risk of litigation by simply issuing outright denials rather than risk the crushing costs of litigation if they entered into negotiations about the conditions under which development could occur. 42 There is understandable appeal to the Foundation's argument to the Supreme Court. In other words, why should Developer A, who refuses to be extorted and declines to accept the conditions, not be able to take advantage of the heightened scrutiny he gets with a Nollan/Dolan claim if he challenges the proposed conditions? Why should he have to go through the time, cost and nancial risk of an entire regulatory process and reach a nal deal in other words, be issued a permit subject to one or more speci ed conditions in order to use Nollan/Dolan to challenge the fairness of the conditions imposed? Particularly in the current economy, the uncertainty of potential exactions being imposed on an ad hoc basis through the development approval process presents a major obstacle to real estate development. Nevertheless, there are several reasons from the Supreme Court's takings jurisprudence why the Court will probably reject the claim that Nollan/Dolan should apply to proposed conditions. First, where conditions have only been proposed, it is not clear what property interest has been taken from the applicant that can be protected by the Takings Clause. Koontz had a permit application denied. If Koontz wanted to challenge that as a taking based on diminution in the value of his property because his development plan has been rejected he could do so under Penn Central. But it is di cult to see how the Court will nd a property interest that has been taken that would trigger a Nollan/Dolan analysis. Compare that to a permit approval with a condition attached. In that case, the applicant can say to the Court: If you examine the permit approval, you will see precisely what property interest is being taken from me as a condition of the approval. The taking of that interest does not meet the Nollan/Dolan Dual Nexus test. Second, allowing a takings claim for proposed conditions 42 St. Johns River Water Management Dist. v. Koontz, 77 So. 3d 1220, 1230 (Fla. 2011), cert. granted, 133 S. Ct. 420 (2012). Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring

11 Real Estate Law Journal [Vol. 41:4 2013] would con ict with the Court's long-standing ripeness and nality requirements as developed through a series of decisions beginning with Williamson County Regional Planning Com'n v. Hamilton Bank. 43 In fact, the two concurring Justices in the Florida Supreme Court argued that Koontz's claim was unripe because, given the factual posture of the case; Florida law required the landowner to exhaust his administrative remedies before bringing a regulatory taking action. 44 What makes this case intriguing is that Justice Scalia, the strongest defender of property rights on the Court, dissented to the Court's denial of certiorari in Lambert v. San Francisco, 45 a 2000 case that raised the same issue as Koontz: whether a proposed condition could give rise to a takings claim. Lambert involved a San Francisco regulatory program that sought to mitigate the e ects of developers' converting inexpensive single-room occupancy residential units into much pricier accommodations for the city's booming tourist industry. Under that program, permission to convert the residential units to tourist accommodations was conditioned on the developer providing either a one-to-one replacement or paying for the cost of a replacement unit for each residential unit converted to tourist use. When negotiations between the developer and the city over the amount the developer should pay for replacement units failed, the city denied the permit for the proposed conversion and the developer sued, claiming that the denial was a taking that should be decided by using Nollan/Dolan to test the constitutionality of the payment for providing replacement units that the city had proposed. 46 Although the Court declined to accept the case, Justice Scalia, joined by Justices Thomas and Kennedy, authored a 43 Williamson County Regional Planning Com'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 105 S. Ct. 3108, 87 L. Ed. 2d 126 (1985). 44 St. Johns River Water Management Dist. v. Koontz, 77 So. 3d 1220, (Fla. 2011), cert. granted, 133 S. Ct. 420 (2012). 45 Lambert v. City and County of San Francisco, 529 U.S. 1045, 120 S. Ct. 1549, 146 L. Ed. 2d 360 (2000). 46 Id. 120 S.Ct at That claim had been rejected by the Court of Appeals, which is the decision for which review was sought at the Supreme Court after the California Supreme Court declined review. Lambert v. City & County of San Francisco, 67 Cal. Rptr. 2d 562 (App. 1st Dist. 1997), review granted and opinion superseded, 71 Cal. Rptr. 2d 215, 950 P.2d 59 (Cal. 1998) and review dismissed, cause remanded, 87 Cal. Rptr. 2d 412, 981 P.2d 41 (Cal. 1999). 522 Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring 2013

12 dissent from the denial of certiorari that brie y discussed precisely the same issue raised in Koontz: the fact that the [California] court's refusal to apply Nollan and Dolan might rest upon the distinction that it drew between the grant of a permit subject to an unlawful condition and the denial of a permit when an unlawful condition is not met. 47 Justice Scalia's dissent however, suggests that he may be reluctant to extend Nollan/Dolan to proposed exactions. Justice Scalia acknowledged that there were merits on both sides of the question: rst arguing that [t]here is no apparent reason why the phrasing of an extortionate demand as a condition precedent rather than as a condition subsequent should make a di erence; and then recognizing that [i]t is undeniable, on the other hand, that the subject of any supposed taking is far from clear. He later identi ed this latter concern as at least a plausible one justifying the California court's declining to apply Nollan/Dolan to the city's proposed condition for permit approval. At oral argument, Justice Scalia continued to express strong doubts about the wisdom of extending Nollan/Dolan to a proposed exaction. The following exchange between counsel for the Water Management District underscores this point: Counsel: 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 Scalia: Now, that is a problem. (Laughter). 48 The fact that Justice Scalia, the Court s leading defender of property rights, expressed such skepticism at oral argument about the plainti s claim suggests that a majority of the Court will decline to expand the reach of the Nollan/ Dolan exactions analysis to proposed conditions on development permits. 47 Id. 120 S.Ct at O cial Transcript of Oral Argument in Koontz v. St. John s River Water Management District, No (January 15, 2013), p. 42, lines In a previous exchange with counsel for Mr. Koontz, Justice Scalia expressed similar skepticism: I can t see where there s been a taking here. Nothing s been taken. Id., p. 25, lines Thomson Reuters E Real Estate Law Journal E Vol. 41 Spring