Developers Now Have Options to Fight Extortionate Permit Conditions and Permit Denials

In Koontz v. St. Johns River Water Management District, the US Supreme Court recently held that the takings clause of the US Constitution not only applies to cases in which a proposed development or project is approved with extortionate conditions, but to proposals that are denied because the developer refused to comply with the municipalities’ extortionate conditional demands. Prior to the decision in Koontz, a municipality could (and very often would) exert tremendous pressure on a developer by imposing costly conditions to approval of a development project. If the developer refused, the permit would be denied and the developer had few good options except to comply. The key consequence of Koontz is that the ruling expands the scope of takings law by clearly stating that the law applies to monetary /economic / financial takings such as burdensome preconditions to the approval of a proposed development or project, and to permit denials where the denial is due to the developer’s refusal to agree to those extortionate conditions.

Writing for the majority, Justice Alito wrote “[A municipality] may not leverage its legitimate business interest in mitigation to pursue governmental ends that lack an essential nexus and rough proportionality to those impacts.” He further stated, “Extortionate demands of this sort frustrate the Fifth Amendment right to just compensation, and the unconstitutional conditions doctrine prohibits them.”

If you are a developer and have been subjected to burdensome demands as a condition of approval of a development proposal or permit application, or have been denied approval due to your refusal to comply, contact an attorney at The Jacobs Law LLC today! One of our attorneys will review the proposal and/or application, the conditions and any other relevant documentation and information to assist you in determining what your options are.