When you are a property owner making a takings argument and Justice Scalia gives you a hard time at oral argument, you would be safe in thinking that you've got an uphill battle.
That was the situation today during the oral argument (transcript here) in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012), the case in which the Court is considering whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests for all exactions.
Justice Scalia, author of the Nollan opinion, did not seem all that concerned with the second Question Presented (whether only exactions of real property are subject to Nollan/Dolan), but more on whether a takings claim can be based on an excessive exaction attached to a permit when the property owner declined to accept the permit with the exaction:
JUSTICE SCALIA: Yes, that's fine. That -- that would enable you to challenge the denial of the permit, saying it's based upon an unconstitutional condition. But how does it -- how does it enable you to say there's been a taking? What has been taken?MR. BEARD: What has been -- what has been taken in effect is his funds that have to be put now to a public use, the enhancement of 50 acres of public wetlands. And there is nothing in the takings clause, nothing --JUSTICE SCALIA: It hasn't -- it hasn't been taken. I mean, he turned it down.MR. BEARD: Nothing was taken in Nollan and Dolan, either. What was proposed there, though, was a threat of a taking.JUSTICE SCALIA: The -- the -- the permit was granted in Nollan and Dolan. And -- and the condition attached to the permit, therefore, took effect; namely, that you had to dedicate this easement over your -- over your beach whereas -- as my colleague pointed out, anybody could walk back and forth barefooted.(Laughter.)MR. BEARD: Justice Scalia, in Nollan and Dolan, there was approval -- approval with conditions. There were no permits issued, and that's -- that is an important distinction to make that most agencies, including this one, you approve a permit with a -- with conditions, which means, We will give you your permits as soon as you comply; which is substantively the same as saying, We won't give you your permits until you say yes to our conditions.
Tr. at 16-18.
The other Justices echoed Justice Scalia's concerns. Their questions focused on the timing: whether it is critical to the takings question that the permit-with-conditions was turned down by the property owner, and not accepted and then challenged. That seems to be the bigger hurdle for the petitioner because it doesn't appear that the Justices are all that concerned with whether a cash exaction would fall within the Nollan/Dolan requirements were this case in the same posture as Nollan and Dolan, cases in which the Justices seem to think that the property owners were granted a permit with the condition, and then challenged the condition as a taking (an assumption the petitioner's counsel pointed out is not correct).
We're not offering a prediction on the outcome, not only because we filed an amicus brief in support of the property owner/petitioner so have a stake in the the case, but because the Justices seemed to press all three arguing counsel, and it is therefore hard to read the tea leaves with any certainty (with the exception of Justice Sotomayor, who we can safely count in the "no taking" camp, with Justice Breyer likely joining). At some points in the argument it seemed a free-for-all, with questions and comments being fired at arguing counsel without much let up.
Here's our take on what each Justice said; the highlights (or lowlights, depending on your perspective):
Justice Scalia: Turning down an extortionate demand isn't a "taking" (p. 18), but under the District's theory, a demand for cash is "magic" (p. 33).Justice Breyer: Sliced bread: not good (p. 19). He raised this in the context of a question to petitioner's counsel about whether this is a taking, and if so, if Penn Central doesn't supply the analytical framework, because the excessive demand "goes too far," as Justice Holmes said in that case.Justice Ginsburg: Here, the District didn't say "take it or leave it" (about the condition) (p. 7).Justice Sotomayor: Stopping landowners from developing their property is interfering with "lost profits." (p. 17).Justice Kennedy: Due Process, man, Due Process! (p. 26).Chief Justice Roberts: Is there no constitutional limit on what an agency can demand, as long as it does so prior to issuing a permit? (pp. 30-31).Justice Alito: Owners' Counsel of America, I read your brief! (He asks the hypothetical we pose at page 12 of our brief) (p.33).Justice Kagan: I might have a problem here if District is shifting burden to the property owner to propose mitigation measures, and not inform the owner what the District wants (p. 11).Justice Thomas: This would be a taking, but only if the planner has a Yale J.D. (we're kidding, he didn't say this - or anything else).
In a clever sleight-of-word, the District's counsel hit upon the government's core theory: that the Fifth Amendment doesn't really have a "Takings" Clause, but only a "Just Compensation" Clause:
And in Lingle, this Court reiterated that the Takings Clause is not a substantive limitation on the government's power to regulate.The Takings Clause -- or as I should call it, the Just Compensation Clause -- is a requirement that if -- that the government will pay you just compensation for any property or property interest it has seized from you. It does not -- it does not itelf impose a -- a requirement that the government substantively justify its regulation.
Tr. at 42. This issue will likely be more squarely addressed in the remaining takings case the Court is considering this term, Horne v. United States Dep't of Agriculture, No. No. 12-122 (cert. granted. Nov. 20, 2012). In that case, the Court is considering whether a property owner can assert a takings defense to the imposition of a fine levied for violating a federal regulation, or whether the owner must pay the fine and then bring a takings case for just compensation in the Court of Federal Claims. That case is in the briefing stage, and is scheduled to be argued on March 20, 2013.
So for now, we'll have to be content with the transcript in Koontz.