The Supreme Court will hear back-to-back two major property rights cases this term. On January 9, 2024, the Supreme Court will hear argument in Sheetz v. County of El Dorado, California. And a week later, on January 16, the Court will hear argument in Devillier v. Texas. Both cases raise significant constitutional and public policy issues, and both have garnered significant amicus support.

The Unconstitutional Conditions Doctrine

The Sheetz case asks the Court to examine the reach of the unconstitutional conditions doctrine. This doctrine is reflected in Nollan v. California Coastal Commission, which held that there must be a “nexus” between an assessed exaction and the stated public purpose of the exaction, and in Dolan v. City of Tigard, which held that there must be a rough proportionality between the exaction and the burden created by the proposed development.

Sheetz involves a takings challenge brought against a California county’s “Traffic Relief” road improvement program financed, under county-enacted legislation, by a “monetary exaction” scheme imposed on all applicants for building permits. George Sheetz was forced to pay a substantial exaction (i.e., fee) as a condition for obtaining a residential permit to construct a modest, manufactured home on his property. There is no evidence that this proposed construction would generate any specific traffic burdens that the fee was designed to offset. Rather, the fee scheme came first, years before Mr. Sheetz proposed his construction.

Mr. Sheetz challenged the fee exaction in state court, and the California Court of Appeal concluded that the permit exaction was constitutional because, under California law, a local government’s permit exactions imposed through a legislative process are exempt from review under the unconstitutional conditions doctrine. The rationale for this exemption is that any legislative abuses of individual property rights can be addressed at the ballot box.

But as critics have noted, there is no difference between the constitutional injury that results from a legislatively imposed exaction and that from an administratively imposed exaction. And as Justice Thomas wrote in a dissenting opinion: “It is not clear why the existence of a taking should turn on the type of governmental entity responsible for the taking. A city council can take property just as well as a planning commission.”

The amicus brief filed by the American Planning Association supports maintaining this exemption because permit exactions provide funding for achieving important governmental goals that benefit communities as a whole. Here, for instance, the County of El Dorado uses the extra funds from the permit exactions to pay for street widenings and construction of new roads. These expenditures benefit the public. But the argument is met by the admonition in Armstrong v. United States that government should not force individuals “to bear public burdens” which, in “fairness and justice, should be borne by the public as a whole.”

The Sheetz case tests whether there is any constitutionally relevant difference between exactions made by the legislature and those made administratively such that the former should be exempt from review under the unconstitutional conditions doctrine.

The Self-Executing Nature of the Fifth Amendment

The Devillier case raises another fundamental question of takings jurisprudence: Whether a landowner whose property has been physically taken must have state authorization to sue to recover constitutionally guaranteed just compensation. The facts that give rise to this case are not unusual. The Texas Department of Transportation installed a 3-foot high, impenetrable, centerline concrete barrier to block floodwaters from the north from reaching the south side of a state highway. But following heavy rainfalls, this deliberately constructed highway dam has caused repeated flooding of the landowners’ farms and ranches on the north side of the highway, resulting in the physical taking of the landowners’ properties.

To recover just compensation, the landowners filed state-court inverse-condemnation suits against the State of Texas, but the state removed the cases to federal district court. There, the state argued that their inverse-condemnation claims can only be brought in federal court under 42 U.S.C. § 1983 (civil action for deprivation of rights), but that, since a state is not a “person” within the meaning of § 1983, their claims must be dismissed.

The district court rejected the state’s argument and refused to dismiss the case, but the Fifth Circuit, in an abbreviated opinion, vacated and remanded. Five judges dissented from the denial of rehearing en banc.

This case would seem to fall directly under the Supreme Court’s ruling in First English Evangelical Lutheran Church v. Los Angeles County, which flatly rejected the argument that the Fifth Amendment does not directly provide a cause of action to challenge a state’s uncompensated taking of private property. Further, takings claims against the United States for money damages (payment of just compensation) are brought in the U.S. Court of Federal Claims directly under the Constitution. There is thus no constitutional reason takings claims against states could not be brought directly under the Fifth Amendment. Many Supreme Court and lower court decisions reflect an understanding that the Fifth Amendment’s right to just compensation is self-executing.

The state’s argument against a landowner’s right to seek just compensation in federal court has focused on procedural issues, avoiding the key constitutional issue at stake. But, by granting the petition, the Supreme Court has signaled its interest in addressing that constitutional issue.

More Home Runs for Property Rights?

If last term is any indication, we can anticipate more rulings this year that reject efforts to undermine protections under the Fifth Amendment. Last year, in Tyler v. Hennepin County, Minn., the Court rejected a county’s argument that it had the right to retain for itself all proceeds from a tax lien sale exceeding the amount of the fine and administrative costs at issue. Writing for a unanimous Court, Chief Justice Roberts stated, “The taxpayer must render unto Caesar what is Caesar’s, but no more.”

 

Disclosure: Nancie Marzulla authored an amicus brief in each of these cases for the Atlantic Legal Foundation.

Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. We welcome responses to the views presented here. To join the debate, please email us at info@fedsoc.org.