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Timothy M. Mulvaney, The State of Exactions, 61 Wm. & Mary L. Rev. 169 (2019).

Land-use regulation allows the government to condition approval of a land-use permit on the landowner’s surrender of a property interest (exaction) so long as there is an “essential nexus” and “rough proportionality” between the condition demanded and the anticipated impact of the proposed land use.  Professor Timothy Mulvaney has written extensively about the many legal and policy issues surrounding exactions and he continues to enlighten us in his new article, The State of Exactions.

Mulvaney reviewed the almost 130 cases in a five-year period that cited the Supreme Court’s 2013 decision in Koontz v. St. Johns River Water Management District to illustrate the various ways in which lower courts have applied the Koontz holdings.

In Koontz, the Court extended to two new circumstances the rather stringent scrutiny set out for physical exactions in the Court’s previous decisions in Nollan v. California Coastal Commission (“essential nexus”) and Dolan v. City of Tigard (“rough proportionality”).

First, both the majority and dissent in Koontz agreed that when the government denies a permit application because the applicant refuses to accept the suggested exaction, the proposed exaction will be subject to Nollan and Dolan scrutiny so long as the exaction was a concrete and specific demand. Prior to Koontz, courts had only applied Nollan and Dolan scrutiny to conditions attached to a permit that was issued to the applicant.

Second, the 5-4 majority required that permits conditioned on the payment of monetary, also called “in-lieu,” exactions were subject to Nollan and Dolan judicial scrutiny.

Some takings observers predicted that Koontz would provide momentum for a further expansion of takings protections across a range of specific regulatory issues moving forward. Mulvaney concludes that, five years on, these doctrinal predictions have not come to pass, a conclusion that he ultimately supports on normative grounds.

In my view, one of these specific regulatory issues on which Mulvaney concentrates is of special importance: whether exactions imposed via legislation are subject to the stringent scrutiny of the “nexus” and “proportionality” tests to which exactions imposed administratively are subject. The dissent in Koontz was particularly concerned that the majority decision would restrict local governments from charging reasonable permitting fees by applying higher judicial scrutiny to these legislatively-imposed requirements.

Mulvaney explains that 90 of the nearly 130 lower court decisions citing Koontz did so based on general principles, such as a summary of takings law and the unconstitutional conditions doctrine. However, the remaining cases addressed issues such as whether courts would apply Nollan and Dolan scrutiny to permit conditions imposed by broad legislative action.

Elsewhere, I have argued that, throughout land use law doctrines, increased judicial scrutiny has been imposed on government decisions that are individualized in nature rather than more generally applied to all landowners.1This increased scrutiny has generally been justified by concerns about government overreach in individualized situations. However, the limited empirical evidence available has shown that the government in the land use permitting context has not engaged in the extortionate behavior feared by some scholars, as well as the Koontz majority.

This distinction in judicial scrutiny for individualized decision-making has been captured by differentiating between adjudicative/administrative decision-making and legislative action. Mulvaney notes that eight of the ten courts addressing this issue since Koontz have not extended Nollan and Dolan scrutiny to permit conditions imposed through legislative action.

Only two post-Koontz decisions, both penned by Federal District Court Judge Charles Breyer, rejected the legislative-administrative distinction. These decisions were later limited in application by a subsequent Supreme Court decision and San Francisco’s repeal of the challenged ordinance.

Thus, contrary to concerns voiced by the Koontz dissent that Nollan and Dolan scrutiny would be expanded to apply heightened constitutional scrutiny to a “vast array of land-use regulations,” lower courts have not subjected legislative actions to increased scrutiny.

Nevertheless, following the Koontz decision, some scholars continue to argue that legislatively-imposed monetary fees should be subject to Nollan and Dolan scrutiny. Justice Clarence Thomas similarly maintains that the administrative/legislative distinction should not govern the level of scrutiny to be applied such that cities would be able to “legislatively impose exactions that would not pass muster if done administratively.”2

Professor Mulvaney touches on several other issues that space constraints preclude me from exploring. However, I will note that I concur with his opinion that the relationship between takings law and the unconstitutional conditions doctrine is particularly attenuated.

Mulvaney’s ’s review of post-Koontz decisions regarding exactions is very informative and his observations and conclusions are comforting to those of us who support the legislative-administrative distinction that supplies the underpinning of judicial review and legislative deference in land use decision-making.

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  1. See, e.g., Shelley Ross Saxer, When Local Government Misbehaves, 2016 Utah L. Rev. 105 (2016).
  2. See California Bldg. Industry Ass’n v. City of San Jose, Calif., 136 S.Ct. 928, 929 (2016) (J. Thomas, concurring in the denial of certiorari) (quoting Parking Assn. of Georgia, Inc. v. Atlanta, 515 U.S. 116, 117 (1995) (“I continue to doubt that ‘the existence of a taking should turn on the type of governmental entity responsible for the taking.’”).
Cite as: Shelley Ross Saxer, Post-Koontz Exactions, JOTWELL (January 28, 2020) (reviewing Timothy M. Mulvaney, The State of Exactions, 61 Wm. & Mary L. Rev. 169 (2019)),