By Bonner Cohen, Ph. D.

Dealing an unexpected blow to power-hungry local officials accustomed to running roughshod over landowners, the U.S. Supreme Court June 25 ruled in favor of property rights and against government abuse of the U.S. Constitution’s Takings Clause.

The 5-to-4 ruling marks the culmination of a nearly two-decade-old case involving a Florida developer and a local water management agency. In 1994, Coy Koontz (since deceased) applied for a permit to develop a 3.7-acre section of his wetlands property in northeastern Florida. As required by state law, Koontz offered to compensate for any loss of or damage to wetlands by deeding an 11-acre easement to the county for conservation.

For his trouble, Koontz was presented an ultimatum by local regulators: He could both scale back his development to 1 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 of dollars to improve district land miles away that was unaffected by his commercial development. Koontz decided to sue, saying his property had been “taken” by the district under the Fifth Amendment to the Constitution.

The Right Not to Have Property Taken

In Koontz v. St. Johns River Management, the High Court overturned a Florida Supreme Court decision that had argued that Koontz had not suffered a taking of his property, because he had never been awarded a permit. Writing for the majority, Justice Samuel Alito wrote 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.”

As the Wall Street Journal (June 28) wrote in an editorial: “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 property. This is a big deal because governments find multiple ways to extort property.”

That the court’s ruling is a “big deal” was confirmed by those displeased by the decision. Justice Elena Kagan, an Obama appointee, wrote that the majority’s opinion “threatens to subject a vast array of land-use regulations, applied daily in states and localities throughout the country, to heightened constitutional scrutiny.”

Equally horrified was Vermont Law School professor John D. Echeverria, whose op-ed in the June 26 New York Times bore the ominous headline: “A Legal Blow to Sustainable Development.” Echeverria lamented that the decision would undermine “the traditional court approach of according deference to elected officials and technical experts on issues of regulatory policy. Moreover, this heightened standard will result in a huge number of costly legal challenges to local regulations.”

But “heightened constitutional scrutiny” that will rein in the power of “technical experts” is just what the Framers had in mind when they included the Fifth Amendment and its Takings Clause in the Constitution. Unscrupulous government officials, often working hand in glove with powerful outside interests, have devised myriad ways to “take” property from its rightful owners. The High Court’s latest ruling opens up new ways for landowners to fight back.

Bonner R. Cohen, Ph. D., is a senior policy analyst with CFACT.