New Cert Petition And Amicus Brief On Nollan/Dolan Applicability To Legislative Exactions, In-Lieu Fees

A cert petition has been filed seeking review of the Ninth Circuit's decision in McClung v. City of Sumner, 548 F.3d 1219 (9th Cir. 2008), the case in which the court held:

This case presents an issue of first impression in this Circuit — whether a legislative, generally applicable development condition that does not require the owner to relinquish rights in the real property, as opposed to an adjudicative land-use exaction, should be reviewed pursuant to the ad hoc standards of Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978), or the nexus and proportionality standards of Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994). We affirm, holding that the Penn Central analysis applies to the 12-inch pipe requirement. 

The Ninth Circuit's opinion is available here.  The petition presents three questions:

As a condition for approving their building permit, the City of Sumner required Dan and Andrea McClung to replace a much undersized City-owned storm sewer that served their property and numerous other lots within a several block area.¹  While the McClungs' project contributed little to the need for the new larger pipe, they were nevertheless required to bear 85 percent of its cost. The McClungs ask the Court to resolve whether just compensation is due when a permit applicant is required to upgrade a public facility far beyond what is necessary to mitigate the impacts of the new development. The questions presented are:

1. When government requires a land use permit applicant to upgrade publicly-owned infrastructure facilities to legislatively prescribed standards, is just compensation due where the government fails to show that the burden of the upgrade is roughly proportional to the impacts of the new development?

2. Do the nexus and proportionality standards of Nollan v. California Coastal Commission, and Dolan v. City of Tigard, apply only to required dedications of real property, or do they equally apply to a monetary exaction that requires the permit applicant to upgrade a public infrastructure facility?

3. Is a property owner barred from seeking just compensation because he yields under financial duress to a permit condition that effects a taking of property?

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1.  The first sentence of the Ninth Circuit opinion inaccurately implies that the storm water pipe at issue belongs to the McClungs: “the McClungs … learned that their underground storm drain pipe did not meet the City’s requirement....” (emphasis added). App. A at 4a. The pipe is not the McClungs’ pipe; it is the City’s pipe. That fact is uncontroverted. App. D at 52a, App. G at 59a–60a.

Download the petition here.  The Pacific Legal Foundation, the Cato Institute and the Building Industry Association of Washington have filed an amicus brief, available here.  The amicus brief is also posted at JD Supra here, along with a summary of the case:

When Daniel and Andrea McClung applied for a permit to build a small business on their property, the City of Sumner, Washington, charged them nearly $50,000 to pay for improvements to the City's entire storm drainage system. The McClungs sued the City under the Fifth Amendment to the Constitution, whose Takings Clause prohibits the government from "taking" private property for public use without just compensation. They argue that the City cannot force them to pay fees for off-site pipes absent proof that their development would have a specific detrimental effect on the existing drainage system—and without any evidence that the impact was worth $50,000. The Ninth Circuit ruled in favor of the City, reasoning that money is not property (so there could be no unconstitutional taking) and that because the fees were imposed by ordinance (so the City's determination that the pipes needed upgrading was justification enough for the fees). The McClungs have now asked the Supreme Court to review their case. Cato, joined by the Pacific Legal Foundation and the Building Industry Association of Washington, argues that this case is a perfect vehicle for the Court to revisit the scope of Fifth Amendment protections. Our brief highlights the deep divisions among state and federal courts over several important issues, such as whether the Takings Clause applies to legislative (as opposed to bureaucratic) exactions and whether it applies to monetary exactions (not just burdens on land use). The Court should take this case to ensure that the standard for reviewing development conditions is uniform across the country and make clear that property right protections do not depend on ill-defined distinctions such as the form of property demanded by the government or the manner in which a condition is imposed.

The Supreme Court's docket for the case is available here.