570 U.S. 595 (2013)
In 1972, Coy A. Koontz, Sr. purchased an undeveloped 14.9-acre tract of land on the south side of Florida State Road 50 east of Orlando that lies entirely within the jurisdiction of the St. Johns River Water Management District.1
The property contains wetlands as defined by Florida statute.2 A drainage ditch runs along the property's western edge, and high-voltage power lines bisect it into northern and southern sections.3 The northern 3.7-acre section drains well despite its classification.4 The southern section includes a small creek, forested uplands, and wetlands that sometimes have water as much as a foot deep.5
In 1984 the District adopted a rule requiring permit applicants whose projects would adversely impact wetlands to offset that loss by creating, enhancing, or preserving wetlands elsewhere.6 That requirement could be satisfied by purchasing credits from a mitigation bank.7 In 1994 Koontz applied to the District for Management and Storage of Surface Water and Wetlands Resource Management permits to develop the northern 3.7 acres.8 He proposed to raise the elevation of the building site, install a dry-bed pond, and grant a conservation easement over the remaining 11 acres.9
The District found the mitigation inadequate.10 It stated it would approve the permits only if Koontz reduced the development to one acre and deeded the remaining 13.9 acres to the District.11 In the alternative, Koontz could pay contractors to replace culverts or fill ditches on District-owned land several miles away to enhance approximately 50 acres of wetlands. Koontz found both alternatives unacceptable and filed suit in Florida circuit court under Fla. Stat. § 373.617(2) alleging that the demands constituted an unreasonable exercise of the state's police power.12
After a two-day bench trial at which experts testified that the northern section had already been seriously degraded by surrounding construction, the trial court found the demands lacked the required nexus and rough proportionality and awarded damages. The Florida District Court of Appeal affirmed, but the Florida Supreme Court reversed on the grounds that the permit denial was not a taking and that the District had not actually demanded any property from Koontz.13
The United States Supreme Court granted certiorari to resolve a conflict among state courts of last resort on whether the Nollan and Dolan standards apply to a land-use agency's demand for money.14
Whether the standards set forth in Nollan v. California Coastal Comm'n and Dolan v. City of Tigard apply when a land-use agency denies a permit application rather than conditioning approval on the applicant's agreement to the agency's demands?15
The unconstitutional conditions doctrine provides that the government may not deny a benefit to a person on a basis that infringes his constitutionally protected right to just compensation.16 Nollan and Dolan reflect a special application of that doctrine in the land-use permitting context that prevents the government from coercing owners into giving up property without just compensation.17
Yes. The District denied Koontz's permit application for the 3.7-acre northern section after he refused to reduce development to one acre and deed the remaining 13.9 acres or pay for offsite wetland improvements on District land several miles away.18 The Florida Supreme Court erred by holding that such a denial cannot trigger Nollan and Dolan scrutiny.19 The doctrine forbids burdening the Fifth Amendment right by coercively withholding benefits regardless of whether the condition is phrased as a condition precedent or subsequent.20
The Nollan and Dolan standards apply when a land-use agency denies a permit because the applicant refuses to accede to the agency's demands.21
Related opinions on this issue
Joined by Justices Ginsburg, Breyer, And Sotomayor
Justice Kagan agreed that Nollan and Dolan apply to permit denials as well as approvals.22 An owner may challenge the denial on the ground that the government's condition lacks the required nexus and rough proportionality.23 She emphasized that when the government denies the permit nothing has actually been taken.24
Any remedy would arise under state law rather than the Fifth Amendment.25 Justice Kagan parted ways with the majority only on whether the District's actions constituted a taking in this case.26
Whether those standards apply when the agency's demand is for a monetary payment rather than the transfer of an interest in real property?27
Monetary exactions in the land-use permitting context are subject to Nollan and Dolan scrutiny because they burden the Fifth Amendment right to just compensation by directing the owner of a specific parcel to make a payment linked to that property.28 This creates the same risk of extortionate demands that lack an essential nexus and rough proportionality to the effects of the proposed use.29
Yes. The District offered Koontz the alternative of paying contractors to replace culverts or fill ditches on District-owned land several miles away to enhance approximately 50 acres of wetlands after finding his proposed 11-acre conservation easement inadequate.30 The Florida Supreme Court wrongly concluded that demands for money fall outside Nollan and Dolan.31 The Supreme Court held that such demands operate upon an identified property interest and must satisfy the nexus and rough proportionality requirements to prevent evasion of the Takings Clause.32
The Nollan and Dolan standards apply when a land-use agency's demand is for a monetary payment rather than the transfer of an interest in real property.33
Related opinions on this issue
Joined by Justices Ginsburg, Breyer, And Sotomayor
Justice Kagan dissented from the majority's extension of Nollan and Dolan to demands for monetary payments.34 She relied on Eastern Enterprises v. Apfel to argue that a requirement to pay or spend money does not constitute a taking.35 Such an order does not affect a specific and identified property interest but instead imposes a general liability.36
Extending the heightened scrutiny of Nollan and Dolan to ordinary permitting fees would subject a vast array of routine local land-use regulations to federal constitutional challenges.37 This would deprive state and local governments of necessary flexibility without sufficient justification.38 Justice Kagan would have affirmed the Florida Supreme Court's decision on this ground.39
Whether a taking can occur when the government denies a permit because the applicant refuses to accede to an allegedly unconstitutional condition?40
A taking does not occur when the government denies a permit and the condition is never imposed because no property changes hands.41 Although the unconstitutional condition burdens the right to just compensation and may support a claim for damages under the state-law cause of action invoked by the owner.42
No. Koontz never agreed to either of the District's proposed conditions and therefore conveyed no easement or made any payment. The District took nothing from him despite denying the permits after the two-day bench trial established that the northern section had already been seriously degraded.43 The Supreme Court held that while the denial itself can give rise to a cognizable injury under the unconstitutional conditions doctrine, the Fifth Amendment just-compensation remedy is unavailable because no actual taking occurred and any monetary relief depends on the scope of Florida Statute section 373.617.44
No taking occurred when the government denied the permit because the applicant refused to accede to the condition, though the claim may proceed under state law.45
Related opinions on this issue
Joined by Justices Ginsburg, Breyer, And Sotomayor
Justice Kagan agreed that no taking occurred because Koontz never acceded to any demand and no property changed hands.46 The District never actually made a concrete demand at all but instead offered non-exclusive suggestions for bringing the applications into compliance with Florida law.47 The state statute authorizing damages only for a taking without just compensation provides no remedy when no taking has taken place.48
Justice Kagan would have affirmed the judgment below on these independent grounds as well.49