Supreme Court Oral Argument Reveals Consensus Against “Legislative Exception” to Takings Clause

Yesterday, the Supreme Court heard oral argument in Sheetz v. County of El Dorado, a crucial Takings Clause property rights case. When the Supreme Court decided to take the case, the main issue was expected to be whether there is a “legislative exception” to takings liability in some situations where the Fifth Amendment otherwise requires the government to pay “just compensation.” In Nollan v. California Coastal Commission, Dolan v. City of Tigard, and other cases, the Supreme Court previously ruled that state and local governments sometimes violate the Takings Clause when they impose exactions as a condition of letting property owners develop their land. Some lower courts have held there is no Takings Clause liability for land-use exactions if the requirement was imposed by legislation, rather than by executive officials or regulatory agencies.

In Sheetz, a property owner had been barred from building a single-family home on his property unless he first payed a $23,420 “traffic mitigation” fee. The official question presented by the case is whether a permit condition qualifies as a taking, and if oral argument is any indication, the Supreme Court won’t have any trouble concluding the answer is “no.” The justices, as well as counsel for the County of El Dorado, seem to agree there is no legislative exception. It is overwhelmingly likely the Court will rule there is no such thing as a “legislative exception” to takings liability.

The difficult question that remains is what kinds of regulatory fees qualify as takings, and which do not. The justices struggled with this issue during oral argument, and it’s hard to predict what they will say if they try to resolve it. The Court could avoid these problems entirely by limiting its holding to the legislative exception issue and remanding the rest to the lower courts, but it is unclear if there are enough justices who will go along with that approach. For more analysis of the Sheetz oral argument, check out posts by Robert Thomas at Inverse Condemnation and Tim Mulvaney at PropertyProfblog. Mulvaney has additional details on what the Court might do if they decide to go beyond simply rejecting the legislative exception theory.