James Knight v. Metro Gov't of Nashville
23a0098p.06 (6th Cir. May 10, 2023) (2023)
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Rule of Law:
The Fifth Amendment's unconstitutional-conditions test, requiring a nexus and rough proportionality between a permit condition and a project's social costs, applies to both legislatively compelled and administratively imposed property exactions.
Facts:
- The Metropolitan Government of Nashville and Davidson County ('Nashville') passed a 'sidewalk ordinance' that imposes sidewalk-related conditions on landowners seeking building permits for single- or two-family homes, multi-family homes, and nonresidential buildings in designated areas.
- The ordinance requires permit applicants to dedicate a 'right-of-way and/or public pedestrian easement' across their property, and either build a sidewalk or pay an 'in-lieu' fee that Nashville uses to build sidewalks elsewhere.
- James Knight sought to construct a single-family home on a vacant lot on Acklen Park Drive, which lacked existing sidewalks, and was allegedly told by Nashville's public-works department that a sidewalk would cause stormwater problems.
- Knight requested a waiver from the zoning administrator for all sidewalk requirements, which was denied; his subsequent appeal to the Board of Zoning Appeals for a variance was also rejected, with officials calculating his in-lieu fee at $7,600.
- Knight refused to pay the in-lieu fee or build a redesigned sidewalk, leading to his permit expiring.
- Jason Mayes sought to construct a single-family home on his lot on McCall Street, which also lacked sidewalks on his side of the street.
- Mayes's request for a waiver from the zoning administrator was denied because he could pay the in-lieu fee, calculated at $8,883.21.
- Mayes paid the fee to avoid construction delays and sought a variance from the Board of Zoning Appeals, which was rejected, and Nashville subsequently used his funds to improve sidewalks approximately 2.5 miles from his property.
Procedural Posture:
- Nashville enacted its sidewalk ordinance, requiring permit applicants to dedicate easements and build sidewalks or pay in-lieu fees.
- James Knight sought a waiver from the zoning administrator, which was denied.
- Knight appealed the denial to the Board of Zoning Appeals, which rejected his request for a variance and required him to pay an in-lieu fee or construct a sidewalk.
- Jason Mayes sought a waiver from the zoning administrator, which was denied.
- Mayes paid the in-lieu fee and subsequently sought a variance from the Board of Zoning Appeals, which was rejected.
- Knight and Mayes (Plaintiffs-Appellants) sued the Metropolitan Government of Nashville and Davidson County (Defendant-Appellee) in the United States District Court for the Middle District of Tennessee, alleging violations of the Fifth Amendment's Takings Clause and seeking an injunction and restitution.
- The district court granted summary judgment to Nashville, applying the Penn Central balancing test and concluding that the ordinance 'easily' met that test.
- Knight and Mayes appealed the district court's decision to the United States Court of Appeals for the Sixth Circuit.
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Issue:
Does the Nollan/Dolan 'unconstitutional-conditions' test apply to generally applicable legislative conditions on building permits, or is its application limited only to ad hoc administrative conditions?
Opinions:
Majority - Murphy, Circuit Judge
Yes, Nollan's unconstitutional-conditions test applies to legislatively compelled permit conditions just as it does to administratively imposed ones. The court found nothing in the text or original understanding of the Fifth Amendment's Takings Clause or the Fourteenth Amendment that distinguishes between legislative and administrative acts when assessing a 'taking.' The clause focuses on the 'act' of taking private property without just compensation, not on who commits the act. Historically, the Takings Clause was often seen as a check on legislative power, reinforcing that legislative acts are subject to its strictures. Supreme Court precedent in unconstitutional-conditions cases, across various constitutional rights, has consistently applied the same test regardless of whether the condition originated from a legislature or an administrator. The Court's decision in Cedar Point Nursery v. Hassid underscored that the choice of takings test depends on the nature of the government action (e.g., physical taking vs. regulatory use restriction), not its source. The distinction between 'adjudicative' and 'legislative' conditions, previously mentioned in Dolan, was clarified as a distinction between permit conditions that force property conveyance versus general use restrictions, not between the source of the rule. The 'extortion' risk that Nollan sought to prevent exists regardless of whether the condition is legislative or administrative, as politically sensitive legislators can also shift the costs of public programs onto a minority of permit applicants. Because Nashville waived any argument that it could satisfy the Nollan/Dolan test, the court did not evaluate whether the conditions met the nexus and rough proportionality requirements, instead remanding the case for a determination of appropriate remedies.
Concurring - White, Circuit Judge
Yes, I agree with the majority's conclusion that the Supreme Court would apply the Nollan/Dolan test to the provisions of Nashville’s sidewalk ordinance challenged here and in its decision to remand the case for further proceedings. This means the strict requirements for government exactions apply.
Analysis:
This decision significantly broadens the application of the Nollan/Dolan unconstitutional-conditions test to include legislative exactions, not just those imposed on an ad hoc, administrative basis. It ensures that municipalities cannot bypass heightened judicial scrutiny for property-related permit conditions by embedding them in generally applicable ordinances. The ruling solidifies federal court jurisdiction over such challenges post-Knick v. Township of Scott, potentially leading to more federal litigation over municipal zoning and development fees, and compelling local governments to demonstrate a clear 'nexus' and 'rough proportionality' for all property exactions, regardless of their legislative origin.
