Supreme Court Sides With Florida Landowner In Permit Fight

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THE CAPITAL, TALLAHASSEE, June 25, 2013………The U.S. Supreme Court on Tuesday backed a Florida landowner in a nearly two-decade dispute about developing property near Orlando — with dissenting justices warning that the case could have broad implications for permitting decisions across the country.

Justices, in a 5-4 decision, overturned a Florida Supreme Court ruling in the battle between the estate of landowner Coy Koontz, Sr., and the St. Johns River Water Management District. The case stemmed from Koontz’s plan to develop 3.7 acres of land and the district’s decision to deny wetland-related permits.

Koontz, who died during the case, contended that requests by the district during the permitting process amounted to an unconstitutional “taking” of his property. That argument centered on a proposal by the district that Koontz pay for improving wetlands on another site as a way to mitigate damage to his land.

Tuesday’s majority opinion, written by Justice Samuel Alito, pointed to earlier rulings that required a “nexus” and “rough proportionality” when government agencies make demands of property owners in connection with issuing permits. Such demands can involve such things as widening roads to accommodate increased traffic, but the majority said the “nexus” and “rough proportionality” tests also apply when government requests involve “monetary exactions,” as in the Koontz case.

The majority opinion said the Koontz case “implicates … the risk that the government may deploy its substantial power and discretion in land-use permitting to pursue governmental ends that lack an essential nexus and rough proportionality to the effects of the proposed use of the property at issue.”

But Justice Elena Kagan, in a dissenting opinion, warned that the majority’s opinion could have far-reaching consequences as government agencies make land-use and permitting decisions.

“The majority turns a broad array of local land-use regulations into federal constitutional questions,” Kagan wrote. “It deprives state and local governments of the flexibility they need to enhance their communities —to ensure environmentally sound and economically productive development. It places courts smack in the middle of the most everyday local government activity. As those consequences play out across the country, I believe the Court will rue today’s decision.”

The Supreme Court’s more-conservative members, Alito, Chief Justice John Roberts, and justices Anthony Kennedy, Antonin Scalia and Clarence Thomas agreed on the majority opinion. The more-liberal members, Kagan and justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor, dissented.

Paul J. Beard, a Pacific Legal Foundation attorney who represented Koontz’s son, Coy Jr., in the case, praised the ruling, saying it protects landowners from “government extortion.”

“The Koontz family was challenging permit demands that were wildly excessive and had no connection to their land use proposal,” Beard said in a statement posted on the website of the conservative legal foundation. “Today, the court recognized that the Koontz family was the victim of an unconstitutional taking.”

As a sign of the potential stakes in the case, numerous groups and the Obama administration filed briefs. Those backing Koontz included the Association of Florida Community Developers, the National Federation of Independent Business and the National Association of Home Builders.

Among the groups supporting the water management district were the National Governors Association, the National Association of Counties and the federal government.

Kerri Barsh, a Miami attorney who is co-chair of the National Environmental Practice for the firm Greenberg Traurig, said much of the oral argument in the case centered on an issue that appeared to draw relatively little disagreement Tuesday among justices.

That issue focused on whether there could be a claim about unconstitutional taking of property when government denies a permit because a landowner refuses to go along with a condition. The court said such a claim could be pursued, as in the Koontz case.

“It makes no difference that no property was actually taken in this case,” the court ruled. “Extortionate demands for property in the land-use permitting context run afoul of the Takings Clause (of the U.S. Constitution) not because they take property but because they impermissibly burden the right not to have property taken without just compensation.”

But the court divided about the other main question, which involved whether to apply the “nexus” and “rough proportionality” tests when government agencies seek money, rather than taking physical property, as a condition for permitting.

“To make a distinction between real property and money seems to be somewhat form over substance,” Barsh, who was not involved in the case but has closely followed it, said in discussing the majority ruling.

The case started in 1994 when the elder Koontz sought to develop part of more than 14 acres that he owned near State Road 50 and the East-West Expressway in Orange County. The property, which included wetlands, was part of the Econlockhatchee River Hydrologic Basin and was in a designated protection area.

Koontz agreed to preserve more than 11 acres, but the water-management district wanted additional steps to mitigate damage to wetlands on the site. In a court brief, the district said it gave Koontz a series of mitigation options, but the case focused on the proposal to pay for improvements to wetlands on district-owned land that was miles away.

After Koontz rejected that proposal and the permits were denied, he filed the lawsuit. A circuit judge sided with Koontz, awarding $376,000 in compensation based on lost expected rental income. But the Florida Supreme Court in 2011 overturned the ruling, prompting the appeal to the U.S. Supreme Court.

Tuesday’s ruling will send the case back to state courts for further action, as the majority said state law addresses issues such as potential damages.