January 9, 2024
Oral Arguments at Supreme Court Promising for Land Use Exaction Case
The REALTORS® Land Institute is a participant with the National Association of REALTORS® in a amicus brief, submitting background to the Supreme Court in a land use exaction case from California - Sheetz vs. El Dorado. Oral arguments were heard on January 9, 2024. A Court decision is expected in the Summer of 2024.
Get answers to frequently asked questions about the case.
The following is a summary released on January 9, 2024 from the Pacific Legal Foundation's President and CEO, Stephen D. Anderson
This morning I was at the Supreme Court watching oral arguments in Sheetz v. El Dorado County, the property rights case brought by California retiree George Sheetz. (Pacific Legal Foundation joined George’s case several months ago as co-counsel, teaming up with our former PLF colleague Paul Beard at FisherBroyles, LLC.)
The facts of George’s case are infuriating, particularly to those of us who live in California. George was slapped with a $23,420 “traffic impact fee” when he applied for a building permit in El Dorado County, California. He faced “an impossible choice,” as Paul told the Supreme Court Justices today, “the taking of over $23,000 or the ability to use his land.”
Here’s how The Wall Street Journal editorial board summarized George’s case: “The question is simple: Can governments use building permits to extort property owners?”
Our answer, of course, is no.
“Everyone loves good roads and schools and public infrastructure,” Paul told the Court in his powerful rebuttal. “The government certainly has many tools at its disposal, including taxes, to pay for those. What we’re saying is the government can’t select a few property owners, who happen to need a permit at any given time, to bear the burden of paying for that public infrastructure.”
I’ve been to many Supreme Court oral arguments before. But today I saw something extraordinary. The County’s attorney conceded during the argument on the main question before the Court: whether permit conditions should be exempt from what’s called the “unconstitutional conditions doctrine” when they’re enacted legislatively.
“I thought we had taken the case to address that question,” Justice Neil Gorsuch said after the County’s attorney conceded that legislative exactions are not exempt. “I think there’s radical agreement on that question today.”
It was a promising moment for George Sheetz, who was in the Court watching. George has been fighting his case for seven years. He told ABC10 that at this point, it’s not about the money but about “trying to change things that are going on this country.”
Thank you to George for fighting and to all PLF supporters for being on his side.
Learn more about the case:
From The Wall Street Journal
From Bloomberg Law
From National Review
REALTORS® Land Institute Joins Amicus Brief to Protect Property Owners from Unjust and Costly Land Use Exactions
On November 20, 2023, the National Association of REALTORS® filed an amicus brief with the U.S. Supreme Court in a case involving "unconstitutional violations of the Takings Clause under the Fifth Amendment." RLI is a participant in the brief along with several other organizations.
According to NAR:
- In Sheetz v. County of El Dorado, California, a property owner applied for a building permit to construct a single-family residence on a property that he owns. The County required a land use exaction of over $23,000 in exchange for the building permit, which helped the County finance road improvements.
- The homeowner paid the fee and challenged the exaction as unconstitutional under the Takings Clause. The unconstitutional conditions doctrine as applied here, would prohibit the government from conditioning the approval of a land use permit on the owner’s conveyance of real property or money unless there is an essential nexus and rough proportionality between the government’s demand and the effects of the proposed land use.
- The Supreme Court agreed to hear the case and NAR submitted an amicus brief urging the Court to adopt a robust reading of the Fifth Amendment’s Takings Clause to protect private property rights from unjust government regulation.
- NAR was joined on the amicus brief by the American Property Owners Alliance, the REALTORS® Land Institute, the California Association of REALTORS®, and Californians for Homeownership. Oral arguments in the case will be in January, with a decision expected by the end of June.
Read the full article from NAR here.
U.S. Supreme Court rules in favor of private property rights in two significant cases.
On Thursday, May 25, 2023 the Supreme Court issued two favorable decisions on cases related to private property rights, one of which NAR directly supported (Tyler) and the other which directly impacts a rulemaking that NAR has been litigating that should also turn out favorably based on the Court’s decision (Sackett).
The first is Tyler v. Hennepin County, where an elderly homeowner who lost her condo to foreclosure alleged that the county violated the ban on takings without just compensation when it kept not only the $15,000 that she owed, but the excess profit from the sale of the condo as a windfall. NAR, along with the American Property Owners Alliance and the Minnesota REALTORS®, filed an amicus brief in support of the property owner’s entitlement to the surplus equity, arguing the state statute effectuates an unconstitutional taking of private property under the Fifth Amendment.
The court unanimously held today that Tyler has plausibly alleged a violation of the Takings Clause. “History and precedent dictate that, while the County had the power to sell Tyler’s home to recover the unpaid property taxes, it could not use the tax debt to confiscate more property than was due. Doing so effected a “classic taking in which the government directly appropriates private property for its own use.””
Today, most States and the Federal Government require excess value to be returned to the taxpayer whose property is sold to satisfy outstanding tax debt, but there are a number of states with laws like MN that should be changed as a result of this ruling. We are available to work with states to enact favorable statutes to prohibit home equity theft, which should be easier in light of this decision.
The second, is Sackett v. EPA, where two Idaho homeowners fought to develop a lot near a lake, but the EPA prohibited them from moving forward, stating the land was protected wetlands under the Clean Water Act (CWA). The “significant nexus” test was applied, which looks at whether there is a “significant nexus” between the wetlands and waters that are covered by the CWA, and whether the wetlands “significantly affect” the quality of those waters. NAR is part of ongoing litigation related to an EPA rule defining WOTUS, which will be impacted by this decision.
The Court held unanimously in favor of the property owners, rejecting the “significant nexus test” and narrowing the definition of what constitutes a wetland under the CWA. The Court rejected the broader view held by the EPA, stating that the CWA applies only to wetlands that are "as a practical matter indistinguishable from waters of the United States." Therefore, the party that wants the CWA to apply to adjacent wetlands must show that the adjacent body of water is a "water of the United States" -- that is, "a relatively permeable body of water connected to traditional interstate navigable waters" -- and that the wetland "has a continuous surface connection with that water, making it difficult to determine where the 'water' ends and the 'wetland' begins."
“By the EPA’s own admission, nearly all waters and wetlands are potentially susceptible to regulation under this test, putting a staggering array of landowners at risk of criminal prosecution for such mundane activities as moving dirt.”
Friend of the Court Brief Filed on Behalf of RLI, NAR and TAR in Appeals Case Regarding Warrantless Government Property Search
The case, Rainwaters v. TWRA, is currently before the Tennessee Court of Appeals. The case involves claims that agents of the Tennessee Wildlife Resources Agency violated rights protected under the Tennessee Constitution by entering private land without a warrant or exigent circumstances.
As counsel for the National Association of REALTORS®, REALTORS® Land Institute, and Tennessee Association of REALTORS®, Nate Kinard at Chambliss Law recently filed an amicus curiae brief in the Tennessee Court of Appeals. The filing of the brief is an important next step before oral arguments are heard by the court.
To better understand the Open Fields issue & what’s at stake for landowners, read an interview recently published in the Winter 2023 issue of Terra Firma.