The Supreme Court Just Handed Real Estate Developers a Huge Win

BY: EMILY BADGER

The Supreme Court handed down a decision Tuesday morning that’s gotten considerably less attention than this term’s blockbuster battles over same-sex marriage and voting rights. But Koontz v. St. Johns River Water Management District will likely prove a historic property-rights ruling, with far-reaching implications for the leverage local land-use agencies may use to extract concessions from property owners and developers for the common and environmental good.

The question lurking behind the case – how much and what can the public ask for when a private property owner’s actions cause wider harm or societal burdens? – has the potential for much broader impact than the technical details of one Florida man’s property dispute would suggest. And the 5-4 ruling surprised court-watchers who felt the government made a convincing case at oral arguments in January. In a majority opinion written by Justice Samuel Alito, the court sided with the property owner.

“It’s a very important decision that seriously undermines the authority of local communities across the country,” says John Echeverria, a legal scholar at the University of Vermont Law School who has written extensively on “takings” law. The two factions of the Supreme Court, on the other hand, disagree over whether this ruling will “work a revolution in land-use law.”

The case revolves around a 14.9-acre property – primarily wetlands – east of Orlando purchased by Coy Koontz, Sr., in 1972. In the 1990s, he sought a permit from the local water management district to develop 3.7 acres of the land, dredging and filling it in to construct a building, a parking lot, and a retention pond. Under Florida law designed to protect the state’s dwindling wetlands, anyone who wants to dredge or fill wetlands must get a special permit. And the land-use agencies that issue those permits can require property owners to offset any environmental damage to get one.

In this case, Koontz offered to permanently conserve the rest of his land from development in exchange for the permit to develop the 3.7 acres. The St. Johns River Water Management District argued that his offer was insufficient. The agency proposed instead that he develop only one acre and conserve the rest, or that he pay for contractors who would make improvements to other government-owned wetlands within the same watershed but several miles away. Koontz turned down both options and sued instead. In the 11 years this case has been winding through the legal system, Koontz died. The property owner is now his son, Coy Koontz, Jr.

The legal issue at play here comes from the Fifth Amendment – the Just Compensation Clause that states “…nor shall private property be taken for public use, without just compensation.” There is a long and complicated legal history sketching out what constitutes a government “taking” of private property, and when public agencies must compensate property owners for that taking. In Koontz, the central question was whether or not the St. Johns River Water Management District violated Koontz’ property rights by denying him a permit when he wouldn’t agree to the District’s conditions to develop his land. Continue reading

Justices Broaden the Basis for Damages Over Floods

By 
Published: December 4, 2012

Supreme Court Justices

WASHINGTON — The Supreme Court on Tuesday ruled that people whose property was damaged by intermittent flooding caused by the government may seek compensation. The decision, which was unanimous, reversed a lower court ruling that had barred claims for flood damage unless the flooding was “permanent or inevitably recurring.”

The case arose from the activities of the Army Corps of Engineers, which periodically flooded 23,000 acres along the banks of the Black River in northeastern Arkansas. The Arkansas Game and Fish Commission managed the land, harvesting timber and operating a wildlife and hunting preserve.

From 1993 to 2000, in response to requests from farmers, the corps changed its pattern of releasing water from the Clearwater Dam, which is 115 miles upstream from the commission’s land. The flooding destroyed timber and altered the character of the terrain, requiring expensive reclamation efforts.

The commission sued the federal government under the Constitution’s takings clause, which says that property cannot “be taken for public use, without just compensation.” A lower court awarded the commission $5.7 million.

The United States Court of Appeals for the Federal Circuit reversed that decision, saying that the takings clause did not cover damage from such intermittent flooding. Justice Ruth Bader Ginsburg acknowledged that stray comments in earlier Supreme Court decisions provided some support for that view.

But she said that “no magic formula enables a court to judge, in every case, whether a given government interference with property is a taking.”

“No decision of this court,” she continued, “authorizes a blanket temporary-flooding exception to our takings clause jurisprudence, and we decline to create such an exception in this case.”

In general, she said, two things are clear: permanent physical occupation of property by the government and regulations that forever make all valuable uses of land impossible are takings requiring compensation. In the context of flooding, she went on, a dam that permanently submerged a plaintiff’s land was a taking, and so was damage caused by seasonally recurring flooding.

Beyond that, Justice Ginsburg wrote, things get murkier, requiring case-by-case judgment. She listed several factors to be balanced in the analysis.

The length of the government’s interference with private property matters, she said. So does “the degree to which the invasion is intended or is the foreseeable result of authorized government action.”

“So, too,” she went on, quoting from an earlier decision, “are the character of the land at issue and the owner’s ‘reasonable investment-backed expectation’ regarding the land’s use.” Finally, “severity of the interference figures in the calculus as well.”

Justice Ginsburg said the court would not address a new distinction proposed by the federal government when the case was argued in October: that downstream flooding should never count as a taking, whether permanent or temporary. That question, along with whether Arkansas law has a role to play in the analysis, should be considered in further proceedings before the appeals court, she wrote.

Justice Elena Kagan was disqualified from the case, Arkansas Game and Fish Commission v. United States, No. 11-597, presumably because she had worked on it as solicitor general.

Justice Ginsburg wrote that courts should be judicious in allowing takings claims for flood damage. “To reject a categorical bar to temporary-flooding takings claims,” she wrote, “is scarcely to credit all, or even many, such claims.”

“Today’s modest decision,” Justice Ginsburg wrote, selecting the apt metaphor, “augurs no deluge of takings liability.”

 

Source: New York Times