Sheetz v. El Dorado County, 601 U.S. ___ (2024)
George Sheetz sought to build a small, prefabricated home on his residential parcel of land in El Dorado County, California. However, to obtain a permit, he was required to pay a substantial fee to mitigate local traffic congestion. Sheetz challenged this fee as an unlawful “exaction” of money under the Takings Clause, arguing that the fee amount should be necessary to offset traffic congestion attributable to his specific development. The County’s predetermined fee schedule, Sheetz argued, failed to meet that requirement.
The trial court rejected Sheetz’s claim and the California Court of Appeal affirmed. The Court of Appeal asserted that the Nollan/Dolan test, which requires permit conditions to have an “essential nexus” to the government’s land-use interest and “rough proportionality” to the development’s impact on the land-use interest, applies only to permit conditions imposed “on an individual and discretionary basis.” Fees imposed on “a broad class of property owners through legislative action,” it said, need not satisfy that test. The California Supreme Court denied review.
The Supreme Court of the United States vacated the judgment of the California Court of Appeal. The Supreme Court held that the Takings Clause does not distinguish between legislative and administrative permit conditions. The Court found no basis in constitutional text, history, or precedent for affording property rights less protection in the hands of legislators than administrators. The Court did not address the parties’ other disputes over the validity of the traffic impact fee, including 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. The case was remanded for further proceedings not inconsistent with this opinion.
The Takings Clause of the Fifth Amendment prohibits legislatures and agencies alike from imposing unconstitutional conditions on land-use permits.
SUPREME COURT OF THE UNITED STATES
Syllabus
SHEETZ v. COUNTY OF EL DORADO, CALIFORNIA
certiorari to the court of appeal of california, third appellate district
No. 22–1074. Argued January 9, 2024—Decided April 12, 2024
As a condition of receiving a residential building permit, petitioner George Sheetz was required by the County of El Dorado to pay a $23,420 traffic impact fee. The fee was part of a “General Plan” enacted by the County’s Board of Supervisors to address increasing demand for public services spurred by new development. The fee amount was not based on the costs of traffic impacts specifically attributable to Sheetz’s particular project, but rather was assessed according to a rate schedule that took into account the type of development and its location within the County. Sheetz paid the fee under protest and obtained the permit. He later sought relief in state 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. In Sheetz’s view, the Court’s decisions in Nollan v. California Coastal Comm’n, 483 U.S. 825, and Dolan v. City of Tigard, 512 U.S. 374, required the County to make an individualized determination that the fee imposed on him was necessary to offset traffic congestion attributable to his project. The courts below ruled against Sheetz based on their view that Nollan and Dolan apply only to permit conditions imposed on an ad hoc basis by administrators, not to a fee like this one imposed on a class of property owners by Board-enacted legislation. 84 Cal. App. 5th 394, 402, 300 Cal. Rptr. 3d 308, 312.
Held: The Takings Clause does not distinguish between legislative and administrative land-use permit conditions. Pp. 4–11.
(a) When the government wants to take private property for a public purpose, the Fifth Amendment’s Takings Clause requires the government to provide the owner “just compensation.” The Takings Clause saves individual property owners from bearing “public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49. Even so, the States have substantial authority to regulate land use, see Village of Euclid v. Ambler Realty Co., 272 U.S. 365, and a State law that merely restricts land use in a way “reasonably necessary to the effectuation of a substantial government purpose” is not a taking unless it saps too much of the property’s value or frustrates the owner’s investment-backed expectations. Penn Central Transp. Co. v. New York City, 438 U.S. 104, 123, 127. Similarly, when the government can deny a building permit to further a “legitimate police-power purpose,” it can also place conditions on the permit that serve the same end. Nollan, 483 U. S., at 836. For example, if a proposed development will “substantially increase traffic congestion,” the government may condition the building permit on the owner’s willingness “to deed over the land needed to widen a public road.” Koontz v. St. Johns River Water Management Dist., 570 U.S. 595, 605. But when the government withholds or conditions a building permit for reasons unrelated to its legitimate land-use interests, those actions amount to extortion. See Nollan, 483 U. S., at 837.
The Court’s decisions in Nollan and Dolan address the potential abuse of the permitting process by setting out a two-part test modeled on the unconstitutional conditions doctrine. See Perry v. Sindermann, 408 U.S. 593, 597. First, permit conditions must have an “essential nexus” to the government’s land-use interest, ensuring that the government is acting to further its stated purpose, not leveraging its permitting monopoly to exact private property without paying for it. See Nollan, 483 U. S., at 837, 841. Second, permit conditions must have “rough proportionality” to the development’s impact on the land-use interest and may not require a landowner to give up (or pay) more than is necessary to mitigate harms resulting from new development. See Dolan, 512 U. S., at 391, 393; Koontz, 570 U. S., at 612–615. Pp. 4–6.
(b) The County’s traffic impact fee was upheld below based on the view that the Nollan/Dolan test does not apply to monetary fees imposed by a legislature, but nothing in constitutional text, history, or precedent supports exempting legislatures from ordinary takings rules. The Constitution provides “no textual justification for saying that the existence or the scope of a State’s power to expropriate private property without just compensation varies according to the branch of government effecting the expropriation.” Stop the Beach Renourishment, Inc. v. Florida Dept. of Environmental Protection, 560 U.S. 702, 714 (plurality opinion). Historical practice similarly shows that legislation was the conventional way that governments at the state and national levels exercised their eminent domain power to obtain land for various governmental purposes, and to provide compensation to dispossessed landowners. The Fifth Amendment enshrined this long standing practice. Precedent points the same way as text and history. A legislative exception to the Nollan/Dolan test “conflicts with the rest of [the Court’s] takings jurisprudence,” which does not otherwise distinguish between legislation and other official acts. Knick v. Township of Scott, 588 U.S. 180, 185. That is true of precedents involving physical takings, regulatory takings, and the unconstitutional conditions doctrine which underlies the Nollan/Dolan test. Pp. 7–10.
(c) As the parties now agree, conditions on building permits are not exempt from scrutiny under Nollan and Dolan just because a legislative body imposed them. 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 is an issue for the state courts to consider in the first instance, as are issues concerning whether the parties’ other arguments are preserved and how those arguments bear on Sheetz’s legal challenge. Pp. 10–11.
84 Cal. App. 5th 394, 300 Cal. Rptr. 3d 308, vacated and remanded.
Barrett, J., delivered the opinion for a unanimous Court. Sotomayor, J., filed a concurring opinion, in which Jackson, J., joined. Gorsuch, J., filed a concurring opinion. Kavanaugh, J., filed a concurring opinion, in which Kagan and Jackson, JJ., joined.
Judgment VACATED and case REMANDED. Barrett, J., delivered the opinion for a unanimous Court. Sotomayor, J., filed a concurring opinion, in which Jackson, J., joined. Gorsuch, J., filed a concurring opinion. Kavanaugh, J., filed a concurring opinion, in which Kagan and Jackson, JJ., joined. |
Argued. For petitioner: Paul J. Beard, II, Los Angeles, Cal. For respondent: Aileen M. McGrath, San Francisco, Cal.; and Erica L. Ross, Assistant to the Solicitor General, Department of Justice, Washington, D. C. (for United States, as amicus curiae.) |
Motion of the Solicitor General for leave to participate in oral argument as amicus curiae and for divided argument GRANTED. |
Reply of George Sheetz submitted. |
Reply of petitioner George Sheetz filed. (Distributed) |
Motion of United States for leave to participate in oral argument and for divided argument submitted. |
Amicus brief of National Association of Clean Water Agencies and Association of Metropolitan Water Agencies submitted. |
Amicus brief of Lawyers’ Committee for Civil Rights Under Law and the Public Interest Law Project submitted. |
Amicus brief of United States submitted. |
Amicus brief of Constitutional Accountability Center submitted. |
Brief amici curiae of National Association of Clean Water Agencies, et al. filed. (Distributed) |
Brief amicus curiae of United States filed. (Distributed) |
Motion of the Solicitor General for leave to participate in oral argument as amicus curiae and for divided argument filed. |
Brief amici curiae of Lawyers’ Committee for Civil Rights Under Law, et al. filed. (Distributed) |
Brief amici curiae of California, et al. filed. (Distributed) |
Brief amicus curiae of Constitutional Accountability Center filed. (Distributed) |
Amicus brief of State of California submitted. |
Amicus brief of City And County Of San Francisco, et al. submitted. |
Brief amici curiae of City And County Of San Francisco, et al. filed. (Distributed) |
Brief amici curiae of California State Association of Counties, League of California Cities, and California Special Districts Association filed. (Distributed) |
Amicus brief of California State Association of Counties, League of California Cities, and California Special Districts Association submitted. |
Brief amici curiae of California State Association of Counties, et al. filed. (Distributed) |
Brief of respondent County of El Dorado, California filed. (Distributed) |
Brief of County of El Dorado, California submitted. |
CIRCULATED |
Record received from the Court of Appeal of California, Third Appellate District. The record is electronic and is available with the Clerk. |
Amicus brief of Charles Gardner and Emily Hamilton, Ph.D. submitted. |
Record requested from the Court of Appeal of California, Third Appellate District. |
Brief amici curiae of Charles Gardner, et al. filed. |
Amicus brief of Hotel Des Arts, LLC; San Francisco Apartment Association; California Apartment Association; and Small Property Owners of San Francisco Institute submitted. |
Amicus brief of Bay Area Council submitted. |
Amicus brief of American Planning Association submitted. |
Amicus brief of Citizen Action Defense Fund submitted. |
Amicus brief of NATIONAL ASSOCIATION OF REALTORS®, AMERICAN PROPERTY OWNERS ALLIANCE, REALTORS® LAND INSTITUTE, CALIFORNIA ASSOCIATION OF REALTORS®, AND CALIFORNIANS FOR HOMEOWNERSHIP submitted. |
Amicus brief of California Housing Defense Fund, California YIMBY, and Yes In My Back Yard submitted. |
Amicus brief of Atlantic Legal Foundation submitted. |
Amicus brief of Buckeye Institute submitted. |
Amicus brief of Cato Institute submitted. |
Amicus brief of Chamber of Commerce of the United States of America submitted. |
Brief amicus curiae of Chamber of Commerce of the United States of America filed. |
Brief amici curiae of California Housing Defense Fund, et al. filed. |
Brief amici curiae of Citizen Action Defense Fund, et al. filed. |
Brief amici curiae of Hotel Des Arts, LLC; et al. filed. |
Brief amicus curiae of American Planning Association in support of neither party filed. |
Brief amici curiae of Hotel Des Arts, LLC, et al. filed. |
Brief amici curiae of Buckeye Institute, et al. filed. |
Brief amicus curiae of Cato Institute filed. |
Brief amicus curiae of Bay Area Council filed. |
Brief amicus curiae of Atlantic Legal Foundation filed. |
Brief amici curiae of National Association of Realtors, et al. filed. |
SET FOR ARGUMENT on Tuesday, January 9, 2024. |
Amicus brief of California Building Industry Association and National Association of Home Builders submitted. |
Amicus brief of Building Industry Association of the Greater Valley submitted. |
Brief amicus curiae of Building Industry Association of the Greater Valley filed. |
Brief amici curiae of California Building Industry Association, et al. filed. |
Brief amicus curiae of Claremont Institute's Center for Constitutional Jurisprudence filed. |
Amicus brief of Claremont Institute's Center for Constitutional Jurisprudence submitted. |
Amicus brief of Southeastern Legal Foundation and Beacon Center of Tennessee submitted. |
Brief amici curiae of Southeastern Legal Foundation, et al. filed. |
Brief of George Sheetz submitted. |
Joint Appendix submitted. |
Joint appendix filed. (Statement of costs filed) |
Brief of petitioner George Sheetz filed. |
Petition GRANTED. |
DISTRIBUTED for Conference of 9/26/2023. |
Reply of petitioner George Sheetz filed. (Distributed) |
Brief of respondent County of El Dorado, California in opposition filed. |
Brief amicus curiae of Buckeye Institute filed. |
Brief amici curiae of California Building Industry Association and National Association of Home Builders filed. |
Brief amicus curiae of Cato Institute filed. |
Brief amicus curiae of Texas Public Policy Foundation, et al. filed. |
Brief amicus curiae of Pacific Legal Foundation filed. |
Motion to extend the time to file a response is granted and the time is extended to and including July 5, 2023. |
Motion to extend the time to file a response from June 5, 2023 to July 5, 2023, submitted to The Clerk. |
Petition for a writ of certiorari filed. (Response due June 5, 2023) |