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Extortion and Eminent Domain

It is common knowledge that the government cannot take your land unless it pays you for it.  But, less well understood, even by some local government officials, is that the Constitution also prevents local government agencies from coercing or manipulating land owners into giving up Constitutionally protected property rights in exchange for land use or zoning permits.  Yet, it still happens.

 On June 25, 2013, the Supreme Court created a new avenue for legal recourse against government agencies that try to exploit perceived loopholes in the law to avoid paying landowners for land (or property rights) that they take during the land use approval process.  Before the Court’s decision, the law was clear that a local government could not condition approval of a zoning or land use permit application on the applicant’s surrender of other land or other property rights unless either 1) there was a logical connection between the application and the land to be taken or, 2) if not, the local government paid just compensation to the applicant.  While it should have been obvious that a local government cannot end run such a principle by simply denying a permit unless a landowner gives up property, apparently it was not obvious to St. Johns River Water Management District in Florida.  But, it was obvious to Coy Koontz, Jr., and he sued and won.

 While Koontz was willing to give up 11 acres to the water management district so that he could develop 3.7 acres, he was not willing to give up almost 14 acres in exchange for only developing one acre.  And, the courts in his case agreed that there was not a sufficient connection to the environmental impact of his proposal to justify the disproportionate demand that he give up fourteen acres without compensation.  While the water management district never was required to authorize a change in land use in the first instance, because it had a process in place for changes of land use it could not require Koontz to waive his Constitutional rights in exchange for the permit.

 The Supreme Court succinctly explained that the law enables “permitting authorities to insist that applicants bear the full costs of their proposals while still forbidding the government from engaging in ‘out-and-out…extortion’ that would thwart the Fifth Amendment right to just compensation.” 

 The lesson is that local governments may have to pay if they want land or property rights in exchange for approval of a land use or zoning permit.

About D.J. Young

D. J. Young writes the DelawareO legal blog. He is a 1998 graduate of the University of Notre Dame Law School. He is a partner with the Delaware, Ohio law firm of Firestone, Brehm, Wolf, Whitney & Young LLP, and can be found on the web at www.fbylaw.com. This blog contains news and commentary and is not intended to be legal advice directed to any particular group or person. Interested persons must see an attorney to discuss their particular factual and legal circumstances.

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