Sheetz v. El Dorado County
601 U.S. 267 (2024)
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Rule of Law:
The Takings Clause of the Fifth Amendment, applied to the States through the Fourteenth Amendment, does not distinguish between legislative and administrative conditions imposed on land-use permits, meaning the Nollan/Dolan "essential nexus" and "rough proportionality" test applies to both.
Facts:
- El Dorado County, California, experienced significant population growth and increased new development, leading to greater demand for public services.
- The County's Board of Supervisors, a legislative body, adopted a planning document called the General Plan to address issues like traffic congestion.
- The General Plan required developers to pay a traffic impact fee as a condition for receiving a building permit, with the fee amount determined by a rate schedule based on development type and location, not specifically attributable to a particular project's impact.
- George Sheetz owned property in the County classified as "Low Density Residential" and sought a permit to build a modest prefabricated house on his parcel.
- As a condition of receiving his building permit, El Dorado County required George Sheetz to pay a traffic impact fee of $23,420, as dictated by the General Plan's rate schedule.
Procedural Posture:
- George Sheetz paid the $23,420 traffic impact fee under protest and obtained his building permit.
- Sheetz requested a refund from El Dorado County, which the County did not provide.
- Sheetz sought relief in state trial court, claiming that conditioning the building permit on the payment of a traffic impact fee constituted an unlawful "exaction" of money in violation of the Takings Clause.
- The state trial court rejected Sheetz's claim.
- Sheetz appealed to the California Court of Appeal.
- The California Court of Appeal affirmed the trial court's decision, holding that the Nollan/Dolan test only applies to permit conditions imposed "on an individual and discretionary basis" by administrators, not to fees imposed by legislative action on "a broad class of property owners."
- The California Supreme Court denied review.
- The U.S. Supreme Court granted certiorari to resolve a split among state courts on the question of whether the Takings Clause recognizes a distinction between legislative and administrative conditions on land-use permits.
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Issue:
Does the Takings Clause of the Fifth Amendment, as applied through the Fourteenth Amendment, exempt land-use permit conditions imposed by a legislative body from the "essential nexus" and "rough proportionality" requirements established in Nollan v. California Coastal Comm'n and Dolan v. City of Tigard?
Opinions:
Majority - Justice Barrett
No, the Takings Clause does not distinguish between legislative and administrative permit conditions, and therefore the Nollan/Dolan test applies to both. The Court found no textual justification in the Fifth or Fourteenth Amendments for differentiating how the Takings Clause applies based on the branch of government imposing the condition. Historically, eminent domain was often exercised through legislation, and early constitutional theorists understood the Takings Clause to bind legislatures specifically. Precedent, including cases on physical takings (e.g., Loretto v. Teleprompter Manhattan CATV Corp., Horne v. Department of Agriculture) and regulatory takings (e.g., Pennsylvania Coal Co. v. Mahon, Palazzolo v. Rhode Island), also demonstrates no distinction between legislative and administrative acts for takings analysis. Furthermore, exempting legislative conditions would conflict with the unconstitutional conditions doctrine, which the Nollan/Dolan test models, and which has been applied to legislation affecting other constitutional rights. The Court emphasized that property rights should not be afforded less protection from legislators than from administrators.
Concurring - Justice Sotomayor
Justice Sotomayor joined the majority but underscored that the Nollan/Dolan scrutiny applies only if the permit condition would have been a compensable taking if imposed outside the permitting context, which serves as "a predicate for any unconstitutional conditions claim." This important threshold question was not addressed by the California Court of Appeal nor resolved by this Court.
Concurring - Justice Gorsuch
Justice Gorsuch joined the majority, reiterating that the Constitution deals in substance, not form, and the same constitutional rules apply regardless of how the government chooses to act. He further opined on the question explicitly left open by the majority regarding whether the Nollan/Dolan test operates differently when an alleged taking affects a "class of properties" versus a "particular development." In his view, the test's requirements for "essential nexus" and "rough proportionality" do not depend on whether the condition applies to a large class or a single tract, citing Nollan and Dolan as precedents where comprehensive programs or plans were at issue but individualized determinations were still deemed necessary.
Concurring - Justice Kavanaugh
Justice Kavanaugh joined the majority but emphasized that the Court explicitly declined to decide whether "a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development." He clarified that the decision does not address or prohibit the common government practice of imposing permit conditions, such as impact fees, on new developments through reasonable formulas or schedules that assess the impact of classes of development, as Nollan and Dolan considered conditions tailored to specific parcels and had no occasion to address class-based fees.
Analysis:
This decision significantly broadens the scope of Nollan/Dolan scrutiny by explicitly rejecting a legislative exception to its application. It ensures that legislative enactments imposing land-use permit conditions, such as impact fees, are subject to the same "essential nexus" and "rough proportionality" requirements as administrative actions. This ruling reinforces the Fifth Amendment's protection against uncompensated takings, potentially leading to increased challenges against broadly applied development fees and requiring local governments to better justify the specific amount and purpose of such fees relative to the impact of new development. Future cases will likely clarify the degree of specificity required for legislative, class-based fees under the Nollan/Dolan test.
