Paul J. Beard II, principal attorney for the Pacific Legal Foundation, which represented the landowner, said “The ruling is a powerful victory for everybody’s constitutional property rights, from coast to coast … Regulators can’t hold permit applicants hostage with unjustified demands for land or other concessions – including, as in this case, unjustified demands for money.”
As things stand now after this ruling, private property owners can claim that local governments attaching questionable requirements to permits for land-use tantamount to “taking” of private property without “just compensation,” and thus against the 5th Amendment.
Justice Samuel A. Alito Jr., writing on behalf of the majority, observed “extortionate demands” made by government agencies in exchange of granting a permit application are prohibited by court precedents, as they “frustrate the Fifth Amendment right to just compensation.”
The court held that a government demand for money in the instant case could constitute a taking of property, and even if nothing was taken, the landowner could still make the argument if his permit was denied for no other reason.
Coy Koontz Sr. initially applied for permits to build on four acres of his 15-acre property, mostly wetlands. He also offered to dedicate the rest of his property as protected wetlands. However, the district told him that if he wanted a building permit, he would either need to reduce the size of his development, or pay for improvements made on district-owned land lying several miles away from Koonz’s property.
Koontz refused to pay the demands of the water district, and his application for a building permit was denied.
Consequently, Koontz sued and won his case in the state District Court, but the Florida Supreme Court reversed the decision holding that the water management agency had not taken his property by refusing him the building permit.
The U.S. Supreme Court disagreed.
However, in dissent, Justice Elena Kagan warned that the decision was adventurous and “threatens to subject a vast array of land-use regulations, applied daily in states and localities throughout the country, to heightened constitutional scrutiny.”
The Obama administration, as well as the attorney generals of about 20 states had urged the court to side with the government and not with the private property owner. The principal concerns of the states, as submitted mentioned, “The risk of such litigation will place those governments in the uncomfortable position of having to choose between denying otherwise beneficial projects and permitting development to proceed without mitigating its impacts.”