The Supreme Court today wrestled with a Florida landowner's claim that he is owed compensation by a land-use agency after it declined to issue permits for a wetlands area he wanted to develop because he wouldn't agree to certain conditions.
It is not clear how the court will rule, although the decision could rest on whether a majority of justices conclude that a taking, subject to compensation under the takings clause of the Fifth Amendment, even occurred.
The case, Koontz v. St. Johns River Water Management District, raises major questions about the right of government to impose conditions in return for permit approval.
It hinges in part on whether Supreme Court precedents limiting the ability of government entities to place conditions on landowners in exchange for permits applies to "money, services, labor or any other type of personal property."
The court is also weighing whether a constitutional violation occurs even when no permit is actually issued, which could end up being the key issue.
Coy Koontz Sr. owned land in Orange County, Fla., and wanted to develop 3.7 acres, which are in a habitat protection zone controlled by the local St. Johns River Water Management District.
Koontz applied for two permits in December 1993 and February 1994 for his 14.9-acre property. All but 1.4 acres was part of a state riparian habitat protection zone. His proposal would have led to the destruction of 3.4 acres of wetlands and 0.3 acre of protected uplands.
In return for the permit, Koontz offered to place 11 acres of the property into a conservation easement.
The district said he would need to not only dedicate the 11 acres but also provide more mitigation, most likely in the form of work he would pay for to improve wetlands owned by the district several miles away.
Koontz, who died in 2000, refused the deal, and his permit application was denied.
He filed suit, claiming he was owed compensation because, under two Supreme Court precedents, there needs to be an "essential nexus" between the government request and the need to alleviate a problem created by the property owner's proposal.
The court has also held that there needs to be "rough proportionality" between the conditions imposed and the impact of the proposed development.
A state court awarded Koontz's son, Coy Koontz Jr., $327,500 for the temporary regulatory taking from the date the permit was denied to the date it was issued in 2005.
The Florida Supreme Court later ruled in favor of the government agency, saying the Supreme Court precedent did not apply in the case. The court held that there was no "dedication of real property," and the agency had not issued a permit in exchange.
During today's argument, some justices queried whether a taking occurred, including Justice Antonin Scalia, one of the conservative members of the court.
"I can't see where there's a taking here," he said at one point.
Other justices also delved into the history of the case in probing Koontz Sr.'s claims.
Justices Ruth Bader Ginsburg and Sonia Sotomayor both suggested that the regulations in question made it clear that the conservation easement offer made by Koontz was not enough.
Furthermore, Ginsburg noted, the district had given Koontz a list of possible options and was willing to continue the discussion.
"The record is very clear. The district didn't come back and say take it or leave it," she said.
Rather than focus on the two Supreme Court precedents on permitting conditions, some justices seemed to agree with the Obama administration that, if Koontz did have a claim, it would be in the form of a "regulatory takings" argument that concerns regulations that are so burdensome they can constitute a taking.
The dispute makes more sense in that context, Justice Stephen Breyer said. Once the permitting conditions cases are brought into the mix, "I get confused," he added.
Justice Samuel Alito offered a ray of hope for Koontz in raising concerns that a ruling in favor of the district would weaken the Supreme Court precedents in question.
There's a danger of the balance tilting too far in favor of government agencies, to the extent that the law limiting the ability of government to impose conditions would only be "a trap for really stupid districts," Alito said.