Friday, August 26, 2022

Supreme Court of North Carolina eliminates legislative/adjudicative distinction for applying Nollan/Dolan/Koontz

In what I believe is a first since the U.S. Supreme Court denied cert in the CBIA v. San Jose case, a court has held that the Nollan/Dolan/Koontz exactions tests apply to legislative as well as adjudicative actions.  In its August 19, 2022 decision, the Supreme Court of North Carolina wrote in Anderson Creek Partners, L.P. v. Cnty. of Harnett, 2022-NCSC-93, ¶¶ 50-51:

In addition, we are not persuaded that the applicability of the test enunciated in Nollan and Dolan depends upon whether the challenged condition was imposed administratively or legislatively. As at least one member of the Supreme Court has recognized, the lower courts have reached differing conclusions with respect to this issue, which the Supreme Court has yet to address. See Cal. Bldg. Indus. Ass'n v. City of San Jose, 577 U.S. 1179, 136 S.Ct. 928, 194 L.Ed.2d 239 (2016) (Thomas, J., concurring in the denial of certiorari).13 After carefully reviewing the relevant decisions, we agree with plaintiffs that nothing in NollanDolan, or Koontz supports a view that those decisions only apply in the context of “administrative” decisions,14 with the Supreme Court having consistently described the “unconstitutional conditions” doctrine as “preventing the government from coercing people into giving up” a constitutional right rather than preventing a particular branch of government from acting in a particular manner. Koontz, 570 U.S. at 604, 133 S.Ct. 2586 (emphasis added); see also Dolan, 512 U.S. at 385, 114 S.Ct. 2309 (noting that “the government may not require a person to give up a constitutional right—here the right to receive just compensation when property is taken for a public use—in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property”) (emphasis added).

*19 12¶ 51 Admittedly, the fact that the challenged “capacity use” fees were imposed as the result of a legislative, rather than an administrative, process, may tend to suggest that those fees “more likely represent[ ] a carefully crafted determination of need tempered by the political and legislative process rather than a ‘plan of extortion’ directed at a particular landowner.” Curtis, 1998 Me. 63, ¶ 7, 708 A.2d 657 (citing Dolan, 512 U.S. at 387, 114 S.Ct. 2309). In light of that logic, the General Assembly's recent decision to enact the Public Water and Sewer System Development Act, S.L. 2017-138, 2017 N.C. Sess. Laws 996, which provides uniform guidelines for the implementation of water and sewer system development fees on a prospective basis, suggests that, in the future, such fees are likely to satisfy the “essential nexus” and “rough proportionality” requirement enunciated in Nollan and Dolan. Even so, as a constitutional matter, we believe that a decision to limit the applicability of the test set out in Nollan and Dolan to administratively determined land-use exactions would undermine the purpose and function of the “unconstitutional conditions” doctrine. See James Burling & Graham Owen, The Implications of Lingle on Inclusionary Zoning and other Legislative and Monetary Exactions, 28 Stan. Envtl. L. J., 397, 438 (2009) (observing that “[g]iving greater leeway to conditions imposed by the legislative branch is inconsistent with the theoretical justifications for the doctrine because those justifications are concerned with questions of the exercise [of] government power and not the specific source of that power”); David L. Callies, Regulatory Takings and the Supreme Court: How Perspectives on Property Rights Have Changed from Penn Central to Dolan, and What State and Federal Courts Are Doing About It, 28 Stetson L. Rev. 523, 567–68 (1999) (finding “little doctrinal basis beyond blind deference to legislative decisions to limit [the application of the test enunciated in Nollan and Dolan] only to administrative or quasi-judicial acts of government regulators”); see also Town of Flower Mound v. Stafford Ests. Ltd. P'ship, 135 S.W.3d 620, 641 (Tex. 2004) (expressing skepticism that “a workable distinction can always be drawn between actions denominated adjudicative and legislative” and noting that the conditions under consideration in both Nollan and Dolan were imposed pursuant to authority granted by state law). At the end of the day, we conclude that the applicability of the test enunciated in Nollan and Dolan hinges upon the fact that the government has demanded property from a land-use permit applicant, either through a dedication of land or the payment of money, as a pre-condition for permit approval rather than the identity of the governmental actor that imposed the challenged condition. See Koontz, 570 U.S. at 619, 133 S.Ct. 2586.

If anyone knows of another post-CBIA v San Jose case where a court reached the same holding as in North Carolina, I'd love the cite!

| Permalink