For more than 30 years, the Supreme Court has recognized that building permit conditions requiring a dedication of property to the public implicate the Fifth Amendment’s Takings Clause and are therefore subject to the unconstitutional conditions doctrine as set out by Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994). But for nearly as long as the Nollan/Dolan doctrine has been in place, state and lower federal courts have divided on the foundational question of whether the doctrine applies equally to all branches of government, or if it applies only to administrative exactions imposed by agencies on an ad hoc basis. See, e.g., California Bldg. Indus. Ass’n v. City of San Jose, 136 S. Ct. 928, 929 (2016) (Thomas, J., concurring in denial of certiorari) (acknowledging a decades-long split of authority); Parking Ass'n of Georgia, Inc. v. City of Atlanta, 515 U.S. 1116, 1117-18 (1995) (recognizing that the split of authority raises an important question of constitutional law).
The United States Supreme Court’s unanimous decision in in Sheetz v. County of El Dorado settled this split of authority by ruling that the unconstitutional conditions doctrine applies to all branches of government, including the legislature. 601 U.S. 267, 280 (2024). Although the holding drew support from the full Court, the opinion drew three concurring opinions commenting on additional questions may need to be determined on remand or in future litigation. Id. at 280-84.
This article reviews the state of the law regarding Nollan/Dolan’s special application of the doctrine of unconstitutional conditions both before and after the Sheetz case and discusses the questions posed by the concurring opinions—i.e., whether an impact fee is an exaction subject to Nollan and Dolan and whether class-based exactions should be held subject to the same heightened scrutiny, “essential nexus” and “rough proportionality” tests as all other exactions. The article then discusses the decision’s implications on other emerging takings issues, including whether sovereign immunity can bar property owners’ recovery of just compensation and the cognizability of judicial takings claims.
Highly recommended.