Reply Brief — William A. Dabbs, Jr., Petitioner v. Anne Arundel County, Maryland

No. 18-54

In The

Supreme Court of the United States

____________________

WILLIAM A. DABBS, JR.,

Petitioner,

v.

ANNE ARUNDEL COUNTY, MARYLAND,

____________________

Respondent.

On Petition for Writ of Certiorari to

the Court of Appeals of Maryland

____________________

BRIEF IN REPLY TO OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

____________________

JOHN R. GREIBER, JR.

Smouse & Mason

125 West Street

Annapolis, Maryland 21401

Telephone: (410) 269-6620

BRIAN T. HODGES

Counsel of Record

Pacific Legal Foundation

10940 Northeast 33rd Place,

Suite 210

Bellevue, Washington 98004

Telephone: (425) 576-0484

Email: bth@pacificlegal.org

Counsel for Petitioner

Additional counsel listed inside cover

MERIEM L. HUBBARD

LAWRENCE G. SALZMAN

KAYCEE L. ROYER

Pacific Legal Foundation

930 G Street

Sacramento, California 95814

Telephone: (916) 419-7111

i

QUESTION PRESENTED

1.

Whether legislatively proscribed monetary

exactions on land use development are subject to

scrutiny under the unconstitutional conditions

doctrine as set out in Koontz v. St. Johns River Water

Management District, 570 U.S. 595 (2013); Dolan v.

City of Tigard, 512 U.S. 374 (1994); and Nollan v.

California Coastal Commission, 483 U.S. 825 (1987).

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED .......................................... i

TABLE OF AUTHORITIES ...................................... iii

INTRODUCTION ....................................................... 1

ARGUMENT ............................................................... 2

I.

THIS COURT HAS JURISDICTION .............. 2

II. DR. DABBS HAS STANDING TO

CHALLENGE THE IMPACT FEES ............... 4

III. THE COUNTY’S TAX CLAIM IS A STRAW

MAN ARGUMENT AND IS UNSUPPORTED

BY THE RECORD OR LAW ............................ 4

IV. THE LEGISLATIVE EXACTIONS

QUESTION IS PRESENTED AS A PURE

QUESTION OF LAW ....................................... 8

V.

THE COUNTY FAILS TO REFUTE THE

SUBSTANTIAL REASONS FOR RESOLVING

THE LEGISLATIVE EXACTIONS

QUESTION ...................................................... 9

CONCLUSION.......................................................... 11

iii

TABLE OF AUTHORITIES

Page

Cases

Am. Furniture Warehouse Co. v. Town of Gilbert,

__ P.3d __, 2018 WL 3359070

(Ariz. Ct. App. 2018)................................................ 7

Charleston Federal Savings & Loan Ass’n v.

Alderson, 324 U.S. 182 (1945)................................. 2

Dolan v. City of Tigard,

512 U.S. 374 (1994) ....................................... 1, 9, 10

E. Diversified Properties, Inc. v. Montgomery Cty.,

570 A.2d 850 (Md. 1990) ..................................... 6, 7

Herron v. Mayor & City Council, Annapolis

Maryland, 198 F. App’x 301 (4th Cir. 2006) .......... 4

Howard v. Montgomery Mut. Ins. Co.,

805 A.2d 1167 (Md. Ct. App. 2002)......................... 4

Illinois v. Gates, 462 U.S. 213 (1983) ......................... 3

Keeler v. Mayor & City Council of Cumberland,

940 F. Supp. 879 (D. Md. 1996) .............................. 3

Koontz v. St. Johns River Water Management

District, 570 U.S. 595 (2013) .................. 1, 5, 7-8, 10

Lucas v. South Carolina Coastal Council,

505 U.S. 1003 (1992) ............................................... 3

Michigan v. Long, 463 U.S. 1032 (1983) .................... 3

Nollan v. California Coastal Commission,

483 U.S. 825 (1987) ........................................... 1, 10

Raley v. Ohio, 360 U.S. 423 (1959) ............................. 2

Schenck v. Pro-Choice Network of W. New York,

519 U.S. 357 (1997) ................................................. 5

iv

Waters Landing Ltd. P’ship v. Montgomery Cty.,

650 A.2d 712 (Md. 1994) ......................................... 6

Federal Statutes

28 U.S.C. § 1257(a) ................................................. 2, 3

Constitution

Md. Const. art. XI-E, § 5 ............................................. 5

Other Authorities

Anne Arundel County Code

AACC § 17-11-204 ................................................... 7

AACC § 17-11-206(a) ............................................... 7

AACC § 17-11-206(d) ............................................... 7

1

INTRODUCTION

Respondent Anne Arundel County does not

contest any of the substantial reasons why this Court

should resolve the question whether legislatively

mandated exactions are subject to the nexus and

proportionality tests set out by Nollan v. California

Coastal Commission, 483 U.S. 825 (1987), and Dolan

v. City of Tigard, 512 U.S. 374 (1994). Indeed, the

County ultimately agrees that a categorical rule

exempting legislative actions from constitutional

scrutiny would likely conflict with Koontz v. St. Johns

River Water Management District, 570 U.S. 595

(2013). Opposition Brief (Opp.) at 22. The Maryland

Court of Appeals adopted such a rule when it

concluded that “[i]mpact fees imposed by legislation

applicable on an area-wide basis are not subject to

Nollan and Dolan scrutiny.” Pet. App. A at 29.

The County, however, opts to not address this

ruling. Instead, it fabricates a straw man argument by

claiming (without citation) that the court of appeals

“ruled that the County’s impact fees constitute taxes.”

Opp. at 17. Based on that misrepresentation, the

County argues that the Maryland court simply

followed settled law by holding a “tax” exempt from

the nexus and proportionality tests. Opp. at 11-24.

Not true. For the reasons discussed below, the County

never asked the state courts to rule that its fee was

actually a tax. Accordingly, each state court ruled only

that legislatively mandated “impact fees” are exempt

from the nexus and proportionality requirements. Pet.

App. A at 29; Pet. App. B at 25; Pet. App. C at 31.

The County’s jurisdictional arguments are

equally unavailing. This Court unquestionably has

jurisdiction over the federal constitutional question

2

decided by the Maryland Court of Appeals. 28 U.S.C.

§ 1257(a). Moreover, the court of appeals determined

that Dr. Dabbs paid the impact fees and has standing

to sue. Pet. App. A at 2, 7 n.9. The County’s arguments

regarding the adequacy of Dr. Dabbs’ initial pleadings

are irrelevant (and incorrect).

Finally, the County’s criticism of the merits of Dr.

Dabbs’ unconstitutional conditions case is misleading.

The Maryland state courts decided the legislative

exactions issue as a pure question of law. Pet. App. A

at 29; Pet. App. B at 25, n.7; Pet. App. C at 14, 31. The

County’s factual arguments are not relevant to this

Court’s determination of the question presented.

Certiorari is warranted and should be granted.

ARGUMENT

I

THIS COURT HAS JURISDICTION

Where a state court of last resort rules on a

question of federal constitutional law, any inquiry into

how or when the question was raised in the state

courts is irrelevant to this Court’s exercise of

jurisdiction. Charleston Federal Savings & Loan Ass’n

v. Alderson, 324 U.S. 182 (1945); Raley v. Ohio, 360

U.S. 423, 436-37 (1959) (“There can be no question as

to the proper presentation of a federal claim when the

highest state court passes on it.”). In its opinion below,

the Maryland Court of Appeals extensively analyzed

and ruled on a question of federal constitutional law

(Pet. App. A at 17-29), concluding that “[i]mpact fees

imposed by legislation applicable on an area-wide

basis are not subject to Nollan and Dolan scrutiny.”

Pet. App. A at 29. This Court unquestionably has

3

jurisdiction under 28 U.S.C. § 1257(a). 1 See Illinois v.

Gates, 462 U.S. 213, 218 n.1 (1983) (jurisdiction exists

where the record establishes that the federal

constitutional issues were “squarely considered and

resolved in state court”).

There is no risk that this Court’s exercise of its

jurisdiction would be “advisory” where a state court

decides a question of federal law. Michigan v. Long,

463 U.S. 1032, 1040-41 (1983). The possibility that a

Maryland court might, after reversal and remand,

reach the same result but on the merits of the proper

federal constitutional test does not render this Court’s

review advisory. See, e.g., Lucas v. South Carolina

Coastal Council, 505 U.S. 1003, 1031 (1992) (explicitly

contemplated that the government could still “win its

case” under the correct takings test).

This Court would be acting well within the

jurisdiction conferred by 28 U.S.C. § 1257(a) to grant

the petition in this case.

1 The County’s assertion that Dr. Dabbs did not raise a Nollan

and Dolan claim in his state court pleadings is baseless. Opp. at

7-8, 25. The state courts considered this federal constitutional

claim as part of his declaratory judgment cause of action, which

alleged a violation of his property rights. Pet. App. A at 15; Pet.

App. B at 20-25; Pet. App. C at 4, 31; see also Keeler v. Mayor &

City Council of Cumberland, 940 F. Supp. 879, 887 (D. Md. 1996)

(A complaint alleging violations of Articles 19 and 24 was

sufficient to state a claim for a violation of federal property rights

doctrines.).

4

II

DR. DABBS HAS STANDING TO

CHALLENGE THE IMPACT FEES

The court of appeals determined that all of the

Dabbs plaintiffs had paid the impact fees and had

standing to sue. Pet. App. A at 2, 7 n.9; see also Pet.

App. C at 2 (noting that the complaint alleged that the

plaintiffs had “paid [all] fees [and] were current

owners of property affected by the collection of the

development fees”). That conclusion is consistent with

case law recognizing that a homeowner will have

standing to challenge the constitutionality of an

impact fee where the fee is incorporated into the price

of the house. See Herron v. Mayor & City Council,

Annapolis Maryland, 198 F. App’x 301, 303 (4th Cir.

2006). The County’s passing reference to a case

concerning statutory standing to asserting a thirdparty tax appeal is irrelevant. Opp. at 3 n.2. Dr. Dabbs

properly alleged that the impact fees violated his

constitutional rights under Maryland’s declaratory

judgment statute, which authorizes injured persons to

assert such claims in the state courts. See Howard v.

Montgomery Mut. Ins. Co., 805 A.2d 1167, 1171 (Md.

Ct. App. 2002). The County’s claim that Dr. Dabbs

lacks standing is baseless. Opp. at 3, 6-8, 25.

III

THE COUNTY’S TAX CLAIM IS A

STRAW MAN ARGUMENT AND IS

UNSUPPORTED BY THE RECORD OR LAW

The bulk of the County’s opposition hinges on the

false claim that the court of appeals “ruled that the

County’s impact fees constitute taxes.” Opp. at 17.

Based on that representation, the County argues that

5

the state court merely followed settled law when it

held “taxes” exempt from heightened scrutiny under

Nollan and Dolan. Opp. at 15 (citing Koontz, 570 U.S.

at 615). This is a straw man argument.

The County provides no citation indicating where

the court of appeals concluded that the impact fee

constituted a tax—despite asserting this “fact” 15

times. Opp. at 4, 10-11, 17, 20-21, 24. That is because

the court did not enter such a conclusion.

The decision below is unequivocal. It holds,

without qualification, that “[i]mpact fees imposed by

legislation applicable on an area-wide basis are not

subject to Nollan and Dolan scrutiny.” Pet. App. A at

29. The County does not acknowledge or address this

conclusion in its opposition brief. On this basis alone,

this Court should reject the tax argument as

nonresponsive.

Furthermore, this Court should deem the tax

argument waived because the County deliberately

chose not to assert it below. Schenck v. Pro-Choice

Network of W. New York, 519 U.S. 357, 399 (1997)

(The Court will typically not consider claims that were

not raised to the trial court.). Indeed, had the County

argued that the fee constituted a tax in the state

courts, it would have effectively conceded that its

actions were unlawful. See Koontz, 570 U.S. at 617.

Maryland’s constitution requires that any local tax or

fee be specifically authorized by the State’s General

Assembly. Md. Const. art. XI-E, § 5. Here, the County

enacted its Impact Fee Ordinance under a state law

that authorized local governments to impose

development impact fees to offset the cost of

development impacts on certain public facilities. Opp.

at 1. The County did not enact the impact fee

6

ordinance under any state laws authorizing excise or

property taxes. See Opp. at 2-3 (citing E. Diversified

Properties, Inc. v. Montgomery Cty., 570 A.2d 850, 85455 (Md. 1990) (invalidating “development impact tax”

where the county enacted the tax without specific

legislative authority)). And the County has cited no

authority for a development tax in the course of this

litigation. Cf. Waters Landing Ltd. P’ship v.

Montgomery Cty., 650 A.2d 712, 717 (Md. 1994)

(upholding development tax as an excise tax enacted

under express statutory authority). It is improper to

raise this substantive (and likely determinative)

question for the first time in an opposition brief.

The County’s insistence that its impact fee

constitutes a tax is also inconsistent with its defense

of the ordinance throughout this litigation. In its

briefing below, the County argued that the fee was a

regulatory measure that applied only to persons

whose use of real property causes an impact to certain

public facilities. 2 The County insisted that the

ordinance exacted fees in an amount (it believed to be)

proportionate to those impacts. 3 The County further

argued that the ordinance limits its use of the exacted

fees to only those public facilities impacted by new

development. 4 And the County conceded that it could

not use any of the fees for general projects. 5 Thus, the

2 Corrected Brief of Appellee, at 4 (July 11, 2016) (citing AACC

§§ 17-11-203, 206); see also AACC § 17-11-202(2) (The purpose of

the County’s fee is to pay for impacts that are “reasonably

attributable” to development.).

3 Id. (citing AACC § 17-11-201(2)).

4 Id. (citing AACC § 17-11-209(a))

5 Id.; see also AACC § 17-11-208 (The County must “ensure that

all fees . . . are designated for improvements reasonably

7

County argued that its impact fees satisfied the nexus

and proportionality requirements (of course, this

argument was based on the County’s erroneous claim

that proportionality can be measured by aggregate

rather than individual impacts). 6 This argument

belies the County’s claim that its impact fee is

“indistinguishable” from the tax at issue in

E. Diversified, 570 A.2d at 854-55 (holding that an

exaction will constitute a fee where it is intended to

mitigate for the impacts of the development).

Finally, the ordinance, by its plain language,

operates upon a specified interest in real property.

Koontz, 570 U.S. at 617. The ordinance directs

permitting officials to determine the proposal’s

development category, then imposes a predetermined

impact fee based on the presumed impacts caused by

that type of development. AACC § 17-11-204. Even

though the impact fee is mandatory, the

determination of development categories frequently

calls upon permit officials to exercise their discretion.

See Am. Furniture Warehouse Co. v. Town of Gilbert,

__ P.3d __, 2018 WL 3359070, at *7 (Ariz. Ct. App.

2018). The ordinance requires the owner to pay all fees

as a condition on the issuance of a building permit.

AACC § 17-11-206(a) (“A permit or zoning certificate

of use may not be issued until any applicable

development impact fee has been paid.”). And, even

after issuance, the fee remains inextricably linked to

the specific permitted development proposal. AACC

§ 17-11-206(d) (“If a building permit expires and

construction under the permit has not commenced,

attributable to new development and are expended to reasonably

benefit the new development.”).

6 Id. at 33.

8

the feepayer is entitled to a refund of any development

impact fee paid as a condition of the permit’s

issuance[.]”).

For these reasons, the state courts correctly

analyzed the County’s impact fee as a regulatory fee.

IV

THE LEGISLATIVE EXACTIONS QUESTION IS

PRESENTED AS A PURE QUESTION OF LAW

The Maryland courts determined the legislative

exactions issue as a question of law. See Pet. App. B

at 25 n.7 (“Because the [Nollan/Dolan] test does not

apply to the impact fees in this case, we need not

address the merits of whether the County complied

with the test’s requirements.”); Pet. App. C at 14 (The

lawfulness of the impact fee is a “question of law.”).

The County’s attempt to insert issues of fact into

this legal question is misleading. In its statement of

facts, the County recounts the trial court’s criticism of

evidence offered in support Dr. Dabbs’ statutory

refund claim out of context to make it appear that the

trial court had ruled on the merits of the

unconstitutional conditions claim. 7 See Opp. at 8-9

7 The County, moreover, fails to acknowledge that the refund

claim asked only whether the County had expended the fees in

in a manner that reasonably benefitted the district in which the

property is located. Pet. App. C at 7-9. The unconstitutional

conditions doctrine asks the qualitatively different question of

whether the amount of the fee was proportional to the impacts

that a development had on public facilities. Koontz, 570 U.S. at

604-05. The County makes no effort to show that evidence

supporting the refund claim is in any way relevant to the

constitutional question.

9

(citing Pet. App. C at 12-13). It did not. See Pet. App.

C at 14, 31; Pet App. B at 25 n.7.

In truth, the only criticism that the trial court

aimed at the unconstitutional conditions claim was

that Dr. Dabbs had not “articulate[d] the analytical

basis for [his] argument.” Pet. App. C at 31. But that

is of no significance where the court of appeals found

the basis for his argument sufficiently clear: “[to

satisfy Nollan and Dolan], the County must

demonstrate that its expenditure of impact fees was

attributable reasonably to new development[.]” Pet.

App. A at 16-17; see also Dolan, 512 U.S. at 386 (Even

when a nexus exists, there still must be a “degree of

connection between the exactions and the projected

impact of the proposed development.”).

The question presented by the petition does not

involve any relevantly disputed facts.

V

THE COUNTY FAILS TO REFUTE THE

SUBSTANTIAL REASONS FOR RESOLVING

THE LEGISLATIVE EXACTIONS QUESTION

The County does not dispute that the legislative

exactions question raises an important question of

federal constitutional law. In fact, the County

ultimately agrees that a categorical rule exempting

legislative exactions from constitutional scrutiny

would likely conflict with Koontz and other cases

interpreting the Fifth Amendment. Opp. at 22. The

County, nonetheless, insists that this is not the right

case in which to resolve that question because

(according to the County) the court of appeals “never

mentioned the legislative adjudicative distinction” in

its decision. Opp. at 12. Not so. The court identified

10

the question presented as asking whether Nollan and

Dolan are applicable to impact fees “that are imposed

legislatively and set on a general basis across a

jurisdiction or district.” Pet. App. A at 17. And to

answer this question, the court examined the

differences between adjudicative conditions and

legislatively mandated conditions (id. at 22-24) and

considered a nationwide split of authority (id. at 2627 nn.20, 21) before ruling that, as a matter of law:

“Impact fees imposed by legislation applicable on an

area-wide basis are not subject to Nollan and Dolan

scrutiny.” Id. at 29. Clearly the Maryland court ruled

on the legislative exactions question. The County

provides no meaningful reason why review should not

be granted.

All of the County’s diversionary arguments aside,

this Court should not lose focus on the fundamental

conflict at issue in this case. In Nollan and Dolan, this

Court applied the well-recognized rule that

“government may not require a person to give up the

constitutional right . . . to receive just compensation

when property is taken for a public use—in exchange

for a discretionary benefit [that] has little or no

relationship to the property.” Dolan, 512 U.S. at 385;

Nollan, 483 U.S. at 837, 841. This Court has

consistently applied this rule to invalidate excessive

or extortionate permit conditions, without regard to

the specific branch of government from which the

demand originates. Indeed, this Court has twice

applied this rule to conditions mandated by generally

applicable legislation. See Koontz, 570 U.S. at 600;

Dolan, 512 U.S. at 377-80. The Maryland court’s

decision, however, threatens this essential protection

by adopting a categorical rule that exempts legislative

11

demands from constitutional scrutiny. Pet. App. A at

29. If allowed to stand, Maryland’s per se rule would

encourage the very type of unrelated and

disproportionate demands that Nollan and Dolan

intended to curtail.

CONCLUSION

The petition for writ of certiorari should be

granted.

DATED: August, 2018.

Respectfully submitted,

JOHN R. GREIBER, JR.

Smouse & Mason

125 West Street

Annapolis, Maryland 21401

Telephone: (410) 269-6620

MERIEM L. HUBBARD

LAWRENCE G. SALZMAN

KAYCEE L. ROYER

Pacific Legal Foundation

930 G Street

Sacramento, California

95814

Telephone: (916) 419-7111

BRIAN T. HODGES

Counsel of Record

Pacific Legal Foundation

10940 Northeast 33rd Place

Suite 210

Bellevue, Washington 98004

Telephone: (425) 576-0484

Email: bth@pacificlegal.org

Counsel for Petitioner