Saturday, June 29, 2013

A Property Rights Victory

Government can't use permitting to extort from landowners.

Property rights don't always get the respect they deserve at the Supreme Court, but this year has been different. On Tuesday the Justices delivered their third rebuke of the term against government abuse of the Constitution's Takings Clause in Koontz v. St. Johns River Water Management.

The case centered on whether a Florida wetlands district could set excessive conditions on the approval of a land-use permit. In 1994, landowner Coy Koontz applied for a permit to develop a 3.7-acre section of his wetlands property. As required by state law, Mr. Koontz offered to compensate for any wetland damage by deeding an 11-acre easement to the district for conservation.

That wasn't enough for local regulators, who gave Mr. Koontz an ultimatum: He could scale back his development to one acre and surrender the rest of his property to the district. Or he could proceed with his project with the 11-acre easement and pay thousands to improve district land miles away that was unaffected by his development.

Mr. Koontz declined the offer and sued under a Florida law that allows monetary damages when an "unreasonable exercise of the state's police power" constitutes "a taking without just compensation." Florida's Supreme Court ruled that Mr. Koontz didn't have a claim since his permit had been denied. Ergo, his property was not actually taken. By this logic, a landowner must first succumb to government property extortion in order to have a case.

Writing for the 5-4 majority, Justice Samuel Alito reversed the state court on grounds that "extortionate demands for property in the land-use permitting context run afoul of the Takings Clause not because they take property but because they impermissibly burden the right not to have property taken without just compensation."

The ruling extends the Court's Nollan (1987) \ and Dolan (1994) Takings Clause precedents to government denial of permits and government demands for offsite mitigation rather than a direct invasion of private property. This is a big deal because governments find multiple ways to extort property.

Property cases don't get the media attention that free speech issues do, but the Constitution's bar against unjust takings remains a bedrock protection against government abuse. Now if only Justice Anthony Kennedy would revisit his vote tolerating the abuse of eminent domain in Kelo v. City of New London. It's not too late, sir.

Source: A version of this article appeared June 28, 2013, on page A12 in the U.S. edition of The Wall Street Journal, with the headline: A Property Rights Victory. * June 27, 2013, 7:24 p.m. ET

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