Supreme Court Case Could Impact Land Use Regulations

In a decision that may affect a wide range of land-use regulations, the U.S. Supreme Court ruled that a Central Florida property owner was unfairly required to compensate for the proposed destruction of some wetlands on his land nearly two decades ago. The case involves a 15-acre tract in east Orange County owned by the estate of Coy Koontz, a veteran Orlando developer who sought permits in 1993-94 to prepare his land for commercial development by filling in wetlands that drain to the Econlockhatchee River.

Koontz sued the St. Johns River Water Management District when it suggested he could obtain a permit to fill the wetlands if he paid to have wetlands restored elsewhere in Orange County. His lawsuit led to several decisions in state courts, culminating in a ruling last year by the Florida Supreme Court that the water district had acted appropriately.

However, the Supreme Court reversed that decision, with the justices deciding 5-4 that the condition contained in the district’s permit offer was not tied directly enough to the planned loss of wetlands on Koontz’s property. Some lawyers said they think the ruling may limit governments’ ability to require that landowners, in exchange for permission to build on their property, do things like build sidewalks, help pay to widen a road or compensate for environmental damage.

Speaking for the court’s majority, Justice Samuel Alito said: “Extortionate demands of this sort frustrate the Fifth Amendment right to just compensation.” He went to say that the principles beneath previous Supreme Court decisions concerning property rights “do not change depending on whether the government approves a permit on the condition that the applicant turn over property or denies a permit because the applicant refuses to do so.” Those principles require that a government agency’s decisions have both a “nexus” to and a “rough proportionality” between the landowner’s intentions and such plans’ effects.

Justice Elena Kagan sided with the water district, however, labeling it “unwise” for the court to undermine a routine part of how government regulators conduct business. This case was overshadowed by other controversial decisions that were announced on the same day.

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