A California man’s challenge against his county charging him a $23,000 traffic impact fee for building a small manufactured home on his property is being heard in front of the United States Supreme Court today, potentially paving the way for challenges to exorbitant permitting fees nationwide.
El Dorado resident George Sheetz, a retiree, sought to build a small manufactured home to live in on a parcel of land he bought in the rural county, but was forced to pay a $23,000 “traffic impact fee” for the right to do so, as the cash-strapped county was in the middle of a $800 million road expansion program. Sheetz paid the fee to build his home under protest, allowing him to move forward with both construction and a lawsuit.
Sheetz, represented by FisherBroyles with co-counsel from the Pacific Legal Foundation, claims the Supreme Court, based on previous rulings tying government fees and requests to Fifth Amendment protections against seizure of private property for public use without just compensation, should find the fee unconstitutional.
Sheetz’ suit first draws upon Nollan v. California Coastal Commission, in which a family with beachfront property was told it could only build a larger house if it gave up much of the property for public use, and the Supreme Court’s ruling in favor of the Nollans that there must be an “essential nexus” between the legitimate state interest and the permit condition imposed by the government” and that the demand did not address the impact of the proposed development.
Sheetz’ suit then draws upon Dolan v. City of Tigard, in which city requirements that Dolan dedicate a large portion of her property to a public greenway, a bicycle and pedestrian pathway, in exchange for being able to expand her store were found by the Supreme Court to not be roughly proportional to the impact of the proposed development.
Combining the “essential nexus” and “roughly proportional” tests was St. Johns River Water Management District v. Koontz, in which the Supreme Court ruled on water district’s demands that Koontz either reduce the size of his land for development and create conservation easement for the water district over the remainder of his property or hire contractors to make improvements to water district wetlands miles away. The Supreme Court found Koontz was in the right and expanded the two tests by requiring that monetary exactions from the government — whether fees or offsite improvements—meet both the “essential nexus” and “roughly proportional” standards.
Sheetz’ lawyers argue that based on the Nollan, Dolan, and Koontz cases, the $23,000 traffic impact fee for a single home fails to meet the “essential nexus” and “rough proportionality” standards and thus must be ruled unconstitutional.
El Dorado County, meanwhile, argues that the “essential nexus” and “rough proportionality” tests do not apply because its traffic impact management fees were created by legislation, not bureaucratic determination, saying the Koontz ruling — argued and won by Philip Beard, a former PLF lawyer and now Sheetz’ primary lawyer in the case — found legislative actions, whether taxes, assessment fees, or user fees, are exempt from these standards. Moreover, the county argues that because its fees follow a general formula not tailored to specific parcels of land, that it overcomes the reasoning behind the nexus and proportionality standards, which it claims were created to combat site-specific demands on individual properties.
Lastly the county argues that the Fifth Amendment’s Takings Clause was designed to apply only to direct public appropriation of public property, and that its fee charged to all developers to improve impacted public infrastructure is broadly accepted government practice.
If Sheetz prevails, fees created by legislatures — not just those tailored to individuals via bureaucratic determination — would be subject to the “essential nexus” and “rough proportionality” tests, which could result in widespread legal challenges to government taxes and fees nationwide. If the county prevails, general fees and taxes created by legislatures would remain protected from the Nollan and Dollan standards.
“It is an honor to argue my second case before the Supreme Court of the United States, 10 years after the Court ruled to strengthen the constitutional rights of property owners against monetary exactions imposed by permit agencies,” said Beard in a public statement. “Clarifying the status of land-use permit exactions under the Takings Clause of the Fifth Amendment builds on my prior Supreme Court win in Koontz – and on decades of my work in this area of the law.”
