Amicus Curiae Brief — George Sheetz, Petitioner v. County of El Dorado, California
Supreme Court briefJun 5, 2023
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No. 22-1074
IN THE
Supreme Court of the United States
>>>>
GEORGE SHEETZ,
Petitioner,
v.
COUNTY OF EL DORADO,
Respondent.
On Petition for Writ of Certiorari to
the California Court of Appeal
Third Appellate District
BRIEF OF AMICI CURIAE
CALIFORNIA BUILDING INDUSTRY
ASSOCIATION (“CBIA”) AND
NATIONAL ASSOCIATION OF HOME
BUILDERS (“NAHB”) IN SUPPORT OF
PETITION FOR WRIT OF CERTIORARI
June 5, 2023
David P. Lanferman
Counsel of Record
Douglas J. Dennington
RUTAN & TUCKER, LLP
Counsel for Amici Curiae
California Building Industry
Association and National
Association of Home Builders
455 Market Street, Suite 1870
San Francisco, California 94105
650-263-7900
dlanferman@rutan.com
ddennington@rutan.com
i
TABLE OF CONTENTS
Page
IDENTITIES AND INTERESTS OF THE
AMICI CURIAE ........................................................... 3
INTRODUCTION AND SUMMARY OF
ARGUMENTS .............................................................. 5
WHY CERTIORARI SHOULD BE GRANTED .......... 9
A.
THE COURT SHOULD PROVIDE
CLARITY WHETHER NOLLAN
AND DOLAN APPLY CONSISTENTLY
TO ALL DEVELOPMENT FEES
AND EXACTIONS OR WHETHER
THERE IS A CONSTITUTIONAL
BASIS FOR EXEMPTING
“LEGISLATIVELY-ESTABLISHED”
FEES FROM THOSE REQUIREMENTS. ... 9
B.
THE COURT SHOULD DETERMINE
IF THERE IS ANY VALID BASIS
UNDER THE CONSTITUTION, OR
UNDER LAND USE LAW, FOR A
DISTINCTION BETWEEN
DEVELOPMENT FEES IMPOSED
“LEGISLATIVELY” AND THOSE
IMPOSED “ADMINISTRATIVELY”
FOR NOLLAN/DOLAN PURPOSES......... 13
ii
Page
C.
1.
This Court’s decisions have
not distinguished “legislative”
fees from fees and exactions
generally. .............................................. 13
2.
There is no constitutional or
practical basis for attempting
to distinguish between fees
that are “legislativelyestablished” and other fees. ................. 16
EXEMPTING “LEGISLATIVE”
FEES FROM NOLLAN/DOLAN
ELIMINATES OPPORTUNITIES
FOR MEANINGFUL STATE
COURT JUDICIAL REVIEW OF
SUCH FEES AND EXACTIONS. ............... 20
D. CERTIORARI SHOULD BE
GRANTED TO ADDRESS
SIGNIFICANT PUBLIC POLICY
AND EQUITY CONCERNS. ....................... 21
E.
THE COURT SHOULD GRANT
CERTIORARI TO RESOLVE
SHEETZ’S SPLIT WITH RECENT
CASES HOLDING THAT NOLLAN/
DOLAN APPLY UNIFORMLY TO
ALL DEVELOPMENT FEES AND
EXACTIONS. ............................................... 26
CONCLUSION........................................................... 28
iii
TABLE OF AUTHORITIES
Page(s)
FEDERAL CASES
Ballinger v. City of Oakland,
24 F.4th 1287 (9th Cir. 2022) ......................... 20, 27
Cal. Bldg. Indus. Ass’n v. City of San Jose,
577 U.S. 1179 (2016) ............................................ 26
Cedar Point Nursery v. Hassid,
141 S.Ct. 2063 (2021) ....................................passim
Dolan v. City of Tigard,
512 U.S. 374 (1994) .......................................passim
Heritage at Pompano Housing Partners, L.P.
v. City of Pompano Beach,
No. 20-61530-CIV-SMITH/VALLE,
2021 WL 8875658 (Dec. 15, 2021 S.D. Fla.) ........ 15
Horne v. Dep’t. Of Agric.,
376 U.S. 351 (2015) .............................................. 14
Knight v. Metropolitan Gov’t of Nashville
& Davidson County,
67 F.4th 816 (4th Cir. 2023) ................. 7, 11, 12, 27
Koontz v. St. Johns River Water Mgt. Dist.,
570 U.S. 595 (2013) .......................................passim
iv
Page(s)
Lingle v. Chevron U.S.A. Inc.,
544 U.S. 528 (2005) ........................................ 10, 27
Nollan v. Cal. Coastal Comm’n,
483 U.S. 825 (1987) .......................................passim
Pakdel v. City & County of San Francisco,
__ F.Supp.3d ___, No. 17-cv-03638-RS,
2022 WL 14813709 (N.D. Cal. Oct. 25, 2022) ...... 27
Pakdel v. City & County of San Francisco,
141 S.Ct. 2226 (2021) ........................................... 27
Perry v. Sindermann,
408 U.S. 593 (1972) .............................................. 10
Tyler v. Hennepin County,
___ U.S. ____, 2023 U.S. LEXIS 220
(May 25, 2023) ...................................................... 28
Village of Euclid v. Ambler Realty Co.,
272 U.S. 365 (1926) .............................................. 14
CALIFORNIA CASES
Arnel Dev. Co. v. City of Costa Mesa,
620 P.3d 565 (Cal.1980) ................................. 16, 19
Cal. Bldg. Indus. Ass’n v. Bay Area Air Quality
Mgmt. Dist.,
362 P.3d 792 (Cal. 2015) ........................................ 4
v
Page(s)
Cal. Bldg. Indus. Ass’n. v. City of San Jose,
351 P.3d 974 (Cal. 2015) ...................................... 16
Cal. Bldg. Indus. Ass’n v. Governing Bd.,
206 Cal.App.3d 212 (Cal. Ct. App. 1988) ............. 18
Ehrlich v. City of Culver City,
911 P.2d 429 (Cal. 1996) ............................... 13, 17
Lynch v. Cal. Coastal Com.,
396 P.3d 1085 (Cal. 2017) .................................... 21
O’Loane v. O’Rourke,
231 Cal.App.2d 774 (Cal. Ct. App. 1965) ............. 17
San Remo Hotel v. City & County of
San Francisco,
41 P.3d 87 (Cal. 2002) .......................................... 11
Sheetz v. County of El Dorado,
84 Cal.App.5th 394 (Cal. Ct. App. 2022) ......passim
OTHER STATE CASES
Anderson Creek Partners, L.P. v.
County of Harnett,
876 S.E.2d 476 (N.C. 2022) .................................. 27
Fassett v. City of Brookfield
975 N.W.2d 300 (Wis. Ct. App. 2022) .................. 27
vi
Page(s)
FEDERAL REGULATIONS
12 C.F.R. regulation 37.6............................................. 1
FEDERAL COURT RULES
Supreme Court Rules
rule 33.1 .................................................................. 1
rule 34 ..................................................................... 1
rule 37 ..................................................................... 1
rule 37.2 .................................................................. 1
CALIFORNIA STATUTES
California Code of Civil Procedure
section 1094.5 ....................................................... 21
California Government Code
section 65589.5(a) ................................................. 24
OTHER AUTHORITIES
Altshuler & Gomez-Ibanez, Regulation for
Revenue: The Political Economy of
Land Use Exactions, Brookings Institute/
Lincoln Institute of Land Policy (1993) ............... 23
Baker, “Much ado about Nollan/Dolan:
The Comparative Nature of the
Legislative/Adjudicative Distinction
in Exactions” 42 URBAN LAWYER 171 (2010) ....... 26
vii
CALIFORNIA LAND USE PRACTICE, Cal. Cont. Educ.
of the Bar, Chapter 18, Exactions: Dedications
and Development Impact Fees (2022) ................. 17
“California's High Housing Costs: Causes and
Consequences,” LEGISLATIVE ANALYST'S
OFFICE (March 2015) ............................................ 23
Fred P. Bosselman, “Dolan Works,” in TAKING
SIDES ON TAKINGS ISSUES: PUBLIC AND
PRIVATE PERSPECTIVES, (Thomas E. Roberts,
ed., 2002) ................................................................. 7
Goodin, “Dolan v. City of Tigard and the
Distinction Between Administrative and
Legislative Exactions: “A Distinction
Without a Constitutional Difference”
28 HAWAII L. REV. 139 (2005) ............................... 26
Haskins, “Closing the Dolan Deal: Bridging
the Legislative/Adjudicative Divide”
38 URBAN LAWYER 487 (2006) .............................. 26
Impact Fees and Housing Affordability A Guidebook for Practitioners,
U.S. HUD (June 2008) ......................................... 22
Inna Reznik, “The Distinction Between
Legislative & Adjudicative Decisions
in Dolan v. City of Tigard,”
75 N.Y.U. L. Rev. 242, 257 (2000) ........................ 15
viii
It All Adds Up The Cost of Housing Development
Fees in Seven California Cities,
TERNER CENTER FOR HOUSING INNOVATION
AT UC BERKELEY (March 2018) ...................... 10, 11
Residential Impact Fees in California,
TERNER CENTER FOR HOUSING INNOVATION
AT UC BERKELEY (August 2019) ..................... 23, 24
Timothy M. Mulvaney, The State of Exactions,
61 WM. & MARY L. REV. 169 (2019).................... 6
Vicki Been, “Impact Fees and Housing
Affordability,” Cityscape: A Journal
of Policy Development and Research,
Volume 8, Number 1 (2005) ................................. 22
1
The NATIONAL ASSOCIATION OF HOME
BUILDERS (“NAHB”) and the CALIFORNIA
BUILDING INDUSTRY ASSOCIATION (“CBIA”), as
amici curiae, respectfully submit this Brief in support
of the Petition for Writ of Certiorari filed by the
Petitioner, George Sheetz, pursuant to Supreme Court
Rules 33.1, 34, 37 and 37.2.1 CBIA previously
submitted an amicus brief to the California Supreme
Court in support of Mr. Sheetz’s petition for review
filed with that Court.
On behalf of their thousands of members devoted
to building and providing homes of all types across the
country, the NAHB and CBIA respectfully request
that this Court grant the Petition for Certiorari to
review and correct the decision of the California Court
of Appeal for the Third Appellate District, published at
Sheetz v. County of El Dorado, 84 Cal. App. 5th 394
(Cal. Ct. App. 2022) (“Sheetz”).
The appellate decision below is inconsistent with
this Court’s controlling authority, as well as an
increasing body of case law in other jurisdictions,
generally prohibiting “the government” from imposing
unconstitutional conditions as the price for approvals
or benefits, including development permits. The
decision further confuses and exacerbates the split of
authority among lower courts as to whether
development fees and other exactions that are vaguely
Rule 37.6 disclosure: This Brief has been authored in whole
by the undersigned counsel on behalf of NAHB and CBIA, and no
monetary contributions were made by counsel or any party (other
than amici CBIA and NAHB) to fund the preparation of the Brief.
1
2
(and misleadingly) described as “legislatively imposed”
are somehow “exempt” from otherwise prevailing
requirements to bear an essential nexus to and at least
be roughly-proportional to development impacts in
order to avoid being invalid unconstitutional
conditions or uncompensated takings.
The decision also has devastating economic
implications, at least in states like California that
believe this Court contemplated an exemption
shielding so-called legislative exactions from the
otherwise universal prohibition against governmental
imposition of unconstitutional conditions and
exactions. The decision would approve the imposition
of “the full cost” of county-wide road improvements
solely on applicants for new building permits, despite
its acknowledgement that the government admittedly
made no effort to allocate those costs between existing
needs or deficiencies and needs created by new
development, or to demonstrate any proportionality to
impacts caused by the applicants. The decision thereby
encourages unconstrained exactions on new
development, further adding to the crushing costs of
housing in California and other jurisdictions that
refuse to require governments to show any
proportionality between the amount of fees demanded
and the alleged impacts of new development.
NAHB and CBIA respectfully urge this Court to
grant certiorari to provide clarity and uniformity of
decision on the important constitutional issues clearly
and cleanly presented in this case.
3
IDENTITIES AND INTERESTS
OF THE AMICI CURIAE
1.
The National Association of
Homebuilders
The National Association of Home Builders
(NAHB) is a Washington, D.C. based trade association
whose mission is to enhance and promote housing
availability and the building industry. Chief among
NAHB’s goals is providing and expanding
opportunities for all people to have safe, decent, and
affordable housing. NAHB is a federation of more than
700 state and local associations. NAHB is comprised of
approximately 140,000 members consisting of home
builders,
remodelers,
suppliers,
and
other
professionals supporting the home building industry.
NAHB is a vigilant advocate in the nation’s courts. It
frequently participates as a party litigant and amicus
curiae to safeguard the constitutional and statutory
rights and economic interests of its members, and all
others interested in the availability and affordability
of housing nationwide.
2.
The California Building Industry
Association (“CBIA”)
CBIA is a California-based, statewide, non-profit
trade association of people and entities devoted to the
planning, construction, and provision of homes for the
people of California. CBIA is a judicially-recognized
advocate for housing availability throughout the state,
and elsewhere in the nation, “representing
4
homebuilders, architects, trade contractors, engineers,
designers, and other building industry professionals.”
Cal. Bldg. Indus. Ass’n v. Bay Area Air Quality Mgmt.
Dist., 362 P.3d 792, 795 (Cal. 2015). CBIA includes
more than 2,500 members, including a wide range of
people, organizations, housing advocacy groups, and
businesses dedicated to the planning and provision of
much-needed housing for Californians at all levels of
affordability and accessibility. Collectively, CBIA’s
members employ approximately 100,000 people, and
are responsible for providing approximately 80 percent
of all new homes built and sold annually in California.
3.
Amici have immediate and direct
interests in supporting certiorari
As regular and frequent applicants for
development approvals, the members of NAHB and
CBIA are constantly involved in the land use and
development processes which in recent years now
include ubiquitous demands for payment of a
multitude of development fees and exactions.2 While
such fees add to the burdens of producing housing,
NAHB, CBIA and their members have extensive
experience in working with governments to establish
reasonable and proportionate “fair share” fees to
mitigate impacts of development on public facilities
and
infrastructure.
Properly
justified
and
proportionate fees can allow for appropriate
internalization of development impacts, but without
Development fees are a form or sub-set of monetary exactions
and the terms may be used interchangeably in this Brief.
2
5
stifling the feasibility of pursuing development. Many
communities and jurisdictions have no problem in
assuring that their fees are reasonable and
proportional to impacts as required by Nollan/Dolan.
As accurately observed by this Court in Cedar
Point Nursery v. Hassid, 141 S.Ct. 2063 (2021): “[B]oth
the nexus and rough proportionality requirements of
the constitutional conditions framework should not be
difficult to satisfy.” (141 S.Ct. at 2079.)
The questions presented in this case are of critical
real-world importance in the realms of development
and housing construction, because some courts still
refuse to consistently apply Nollan/Dolan standards
to all development fees and exactions. Such
unwarranted deviations from this Court’s holdings
dramatically impact the feasibility and viability of all
kinds of development activity nationwide.
INTRODUCTION AND
SUMMARY OF ARGUMENTS
This case squarely presents an important question
involving fundamental constitutional issues —
whether fees and exactions imposed by “the
government” as conditions of a development permit are
exempt from the otherwise prevailing prohibition
against governmental imposition of unconstitutional
conditions simply if they may be characterized as
being “legislatively-established” exactions.
This question is widely recognized as “[o]ne of the
most pressing questions across the entire realm of
6
takings law . . . .” Timothy M. Mulvaney, The State of
Exactions, 61 WM. & MARY L. REV. 169, 194 (2019).
This Court has previously explained the broad
applicability of the unconstitutional conditions
doctrine in the context of development permitting in
its holdings in Nollan v. Cal. Coastal Comm’n, 483
U.S. 825 (1987) (“Nollan”), and Dolan v. City of Tigard,
512 U.S. 374 (1994) (“Dolan”) as follows:
In those cases, we held that a unit of
government may not condition the
approval of a land-use permit on the
owner’s relinquishment of a portion of his
property unless there is a “nexus” and
“rough proportionality” between the
government’s demand and the effects of
the proposed land use.
Koontz v. St. Johns River Water Mgt. Dist., 570 U.S.
595, 599 (2013) (“Koontz”).
The Court did not limit its holdings to “nonlegislative” governmental actions, nor did the Court
intimate an exemption might be warranted where the
government attempts to insulate its exaction from
meaningful judicial review by imposing the condition
by legislative act.
There is no principled basis for allowing some
lower courts, such as the California state courts, to
continue to exempt legislatively established fees and
exactions from the application of the unconstitutional
conditions doctrine in the economically-vital context of
land use and building permit approvals. “To
7
summarize, there is no logical reason why the form of
the exaction should dictate the test that determines
the fairness of it.” Fred P. Bosselman, “Dolan Works,”
in TAKING SIDES ON TAKINGS ISSUES PUBLIC AND
PRIVATE PERSPECTIVES, 345, 350 (Thomas. E. Roberts,
ed at 2002).
The
prohibition
against
unconstitutional
conditions is applied broadly against a wide range of
actions by “the government” – without distinguishing
between conditions imposed as a result of
administrative or legislative actions. Cedar Point
Nursery, supra, 141 S.Ct. at 2072 (2021) [“The
essential question is not . . . whether the government
action . . . comes garbed as regulation (or statute, or
ordinance, or miscellaneous decree.”).]
Indeed, the Sixth Circuit most recently published
a cogent analysis of this issue, in Knight v.
Metropolitan Gov’t of Nashville & Davidson County,
67 F.4th 816, 829 (4th Cir. 2023), meticulously
explaining why legislatively-enacted exactions based
on a local ordinance are not exempt from the
constitutional conditions requirements of Nollan/
Dolan:
We
now
hold
that
Nollan’s
unconstitutional-conditions test applies
just as much to legislatively compelled
permit conditions as it does to
administratively imposed ones. Nothing
in the text or original understanding of
the Takings Clause justifies Nashville’s
requested distinction. Its requested
8
distinction also conflicts both with the
Supreme
Court’s
unconstitutionalconditions precedents and with its
takings precedents.
Id.
This
Court’s
jurisprudence
prohibits
unconstitutional conditions in general, and has not
carved out an exception to that doctrine that would
allow “the government” in some states to impose
otherwise unconditional conditions – provided only
that they do so (1) in a land use permitting context,
and (2) base their exactions of rights and demands on
some “legislatively-established” authorization.
Nevertheless, that is how this Court’s
constitutional jurisprudence continues to be misread
and artificially-constrained. As asserted by the
appellate court below (in error or defiance?): “Under
California law, only certain development fees are
subject to the heightened scrutiny of the Nollan/Dolan
test.” (84 Cal.App.5th at 406.)
Such disregard of this Court’s holdings and
articulation of the prohibition against governmental
imposition of unconstitutional conditions in any form
or by any branch of the government should no longer
be indulged or tolerated.
The Court previously rejected similar attempts by
government actors in state courts to carve out
“exceptions” to the constitutional requirements of
Nollan and Dolan. In Koontz, the Court rejected
arguments that those requirements should not apply
9
to “monetary exactions,” or that they did not apply in
cases where the permit applicant refused to comply
with the government’s demands. 570 U.S. at 606–09,
613–18. The Court forthrightly reiterated the broad
scope of the Nollan/Dolan requirements, and rejected
the attempts of state courts to “effectively inter[]” the
constitutional protections articulated in “those
important decisions.” Id. at 599. This case vividly
illustrates the need for the Court to do so again.
The Court should grant certiorari to clarify
whether or not the broadly-applicable doctrine
prohibiting “the government” – generally – from
demanding unconstitutional conditions contains a
loophole allowing some states, like California, to
exempt their “legislatively established” development
fees and exactions from its otherwise sweeping
prohibitions.
WHY CERTIORARI SHOULD BE GRANTED
A. THE COURT SHOULD PROVIDE CLARITY
WHETHER NOLLAN AND DOLAN APPLY
CONSISTENTLY TO ALL DEVELOPMENT
FEES AND EXACTIONS OR WHETHER
THERE IS A CONSTITUTIONAL BASIS
FOR EXEMPTING “LEGISLATIVELYESTABLISHED” FEES FROM THOSE
REQUIREMENTS.
This Court has repeatedly explained that the
Nollan/Dolan standards are based on application of
the doctrine of unconstitutional conditions in the
10
context of land-use permitting.3 That doctrine
generally prohibits “the Government” – whether in its
legislative or adjudicatory or other embodiments –
from demanding the surrender of constitutional rights
as “the price” for receiving or enjoying discretionary
government-issued permits or benefits. See e.g., Dolan,
512 U.S. at 385.
States such as California offer no constitutionallybased explanation or excuse for providing an
“exception” or exemption from the doctrine based
simply on how, or by whom, “the Government” acts. By
contrast, this Court has consistently stated the
doctrine in more absolute terms: “We have said in a
variety of contexts that ‘the government may not deny
a benefit to a person because he exercises a
constitutional right.’” Koontz, supra, 570 U.S. at 604
(quoting Regan v. Taxation With Representation of
Wash., 461 U.S. 540, 545, (1983)) (emphasis added); see
also, Perry v. Sindermann, 408 U.S. 593, 597 (1972).
This Court has not declared any reservation, or
exemption,
from
the
prohibition
against
unconstitutional conditions in favor of exactions made
by the legislative branch of the government, nor in
favor of “generally applicable” ordinances.
An unconstitutional governmental demand or
condition is invalid, regardless how or by whom the
E.g., Nollan, 483 U.S. at 831–32; Dolan, 512 U.S. at 384;
Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 547 (2005); Koontz,
570 U.S. at 605; and Cedar Point Nursery, 141 S.Ct. at 2072.
3
11
government makes its demand. Cedar Point Nursery,
141 S.Ct. at 2072.
As pointed out in Knight v Metro Gov’t, supra:
Over some 160 years, the Court has
accepted
many
unconstitutionalcondition claims for many constitutional
provisions. . . . . During that time, the
Court has regularly found generally
applicable legislative conditions (not just
ad
hoc
administrative
ones)
unconstitutional when a legislature
provided a benefit only if the recipients
agreed to waive a constitutional right.
See, e.g., All. for Open Soc’y Int’l, 570 U.S.
at 208, 221 (1926). . . . Indeed, the
doctrine grew out of these types of
generally
applicable
legislative
conditions.
Knight, 67 F.4th at 832 (emphasis added).
In the context of land use exactions and
development fees, the justification most frequently
offered for making such a distinction is the belief in
some courts, such as California, that administrative or
“quasi-adjudicatory” entities are more likely than
“legislative bodies” to abuse the power to impose
exactions or to extort unjustified money or property
interests. See, San Remo Hotel v. City & County of San
Francisco, 41 P.3d 87, 104-105 (Cal. 2002). Such a
basis for distinction does not speak well of either type
of governmental body, and seems far from having any
12
evidentiary support, much less any support in logic,
precedent, or the Constitution.
To the contrary, it is widely recognized that fees
“are politically popular because they are charged to
developers rather than current residents.” Residential
Impact Fees in California, supra, TERNER CENTER FOR
HOUSING INNOVATION AT UC BERKELEY, at 21.
Demanding fees from “newcomers” can enable
governments, including elected legislative bodies, to
shift much of the cost of such improvements away from
all users of public infrastructure (e.g., the voting
general public) to a narrow segment of the public –
homebuilders and new homebuyers.
The Knight decision appropriately questioned this
purported justification:
This claim suffers from both legal and
practical problems. . . . Practically, an
“extortion” risk exists no matter the
branch of government responsible for the
condition. Town of Flower Mound [v.
Stafford Ests. Ltd. P’ship,] 135 S.W.3d
620, 641 (Tex. 2004).
67 F.4th at 835.
This Court should explain if this “less likely to
extort” justification for exempting legislatively
established fees from Nollan/Dolan has any
constitutional merit. Amici submit it does not.
13
B. THE COURT SHOULD DETERMINE IF
THERE IS ANY VALID BASIS UNDER
THE CONSTITUTION, OR UNDER
LAND USE LAW, FOR A DISTINCTION
BETWEEN DEVELOPMENT FEES
IMPOSED “LEGISLATIVELY” AND
THOSE IMPOSED “ADMINISTRATIVELY”
FOR NOLLAN/DOLAN PURPOSES.
1.
This Court’s decisions have not
distinguished “legislative” fees
from fees and exactions generally.
Those lower courts that perceive and apply a
purported distinction between “legislative” exactions
and “quasi-adjudicatory”
or “administrativelyimposed” exactions often attribute that distinction to a
bit of dictum in Dolan.4 In a footnote in the majority
opinion in Dolan — ostensibly responding to the
dissent’s criticism of “placing the burden on the city”
to justify the challenged exaction — a “distinction” was
made – but not the distinction asserted by the lower
court in Sheetz. 512 U.S. 374, 385, n.8. The Dolan
majority agreed, at footnote 8, that the dissent
At least since the fractured and ambivalent decision in
Ehrlich v City of Culver City, shortly after Dolan, California
courts have questioned the universal scope of the Nollan/Dolan
standards: “[I]t is not at all clear that the rationale … (and the
heightened standard of scrutiny) of Nollan and Dolan applies to
cases in which the exaction takes the form of a generally
applicable development fee or assessment.” 911 P.2d 429, 447
(Cal. 1996) (emphasis in original).
4
14
is correct in arguing that in evaluating
most
generally
applicable
zoning
regulations, the burden properly rests on
the party challenging the regulation to
prove that it constitutes an arbitrary
regulation of property rights. See, e. g.,
Village of Euclid v. Ambler Realty Co.,
272 U.S. 365, . . . (1926) Here, by contrast,
the city made an adjudicative decision to
condition petitioner’s application for a
building permit on an individual parcel.
In this situation, the burden properly
rests on the city. See Nollan, 483 U.S. at
836.”
Id. (emphasis added).
Thus, the “distinction” drawn in the Dolan
footnote actually contrasted “most generally
applicable zoning regulations” (as applied in Euclid)
against the imposition of conditions (having their basis
in a general plan policy) requiring the exaction of
property interests as the “price” of the project-specific
permit at issue in Dolan.
The relevant distinction made was thus between
regulation of property use and exaction of property by
the Government. Such a distinction between
governmental action that merely regulates property
and action aimed at exacting or acquiring property is
consistent with this Court’s recognition of “the settled
difference in our jurisprudence between appropriation
and regulation.” Horne v. Dep’t. Of Agric., 376 U.S.
351, 362 (2015).
15
The Dolan footnote did not purport to contrast two
types of “exactions” nor did it purport to distinguish
“generally applicable exactions” from ad hoc or ‘quasiadjudicatory’ exactions. Rather it distinguished the
judicial review applicable to exactions (those imposed
on Mrs. Dolan)5 against the more deferential standard
of review traditionally applicable to regulatory zoning
legislation [merely regulating the use of property,
rather than commanding the surrender of property or
constitutional rights to obtain a permit]. See Dolan,
512 U.S. at 385; see also, Inna Reznik, “The Distinction
Between Legislative & Adjudicative Decisions in Dolan
v. City of Tigard,” 75 N.Y.U. L. Rev. 242, 257 (2000).
Attempts to draw a purported “distinction” on this
basis may rest (at least in part) on a questionable
reading of the Dolan opinion and footnote, n.8, as
pointed out in Heritage at Pompano Housing Partners,
L.P. v. City of Pompano Beach, No. 20-61530-CIVSMITH/VALLE, 2021 WL 8875658, at *5 (Dec. 15,
2021 S.D. Fla.) [“The footnote [in Dolan] addresses
‘general zoning regulations,’ not all generally
applicable regulations.”] (emphasis in original).
The Court’s subsequent applications of the
unconstitutional conditions doctrine have also
involved conditions and demands derived from
It has been pointed out that Justice Souter, at least,
characterized the subject exactions in Dolan as being “legislative”
in character. See, 512 U.S. at 413–14 (J. Souter, dissenting.) As
the Justice noted, the Dolan exactions were imposed pursuant to
requirements in the city’s legislatively-enacted development code,
much the same as the roadway exaction imposed in Sheetz.
5
16
“legislative” or “generally applicable” actions. In
Koontz, the government sought to demand exactions
from the permit applicant under the authority of the
state Henderson Wetlands Resource Management Act.
570 U.S. at 601. In Cedar Point Nursery, , the condition
was based on a generally-applicable state regulation.
141 S.Ct. at 2069.
2.
There is no constitutional or practical
basis for attempting to distinguish
between fees that are “legislativelyestablished” and other fees.
The Dolan text, purporting to distinguish between
the imposition of exactions and regulatory zoning
legislation, does not support the efforts of some courts
to rely on it as authority to distinguish “legislative
exactions” from exactions generally. In most states,
including California, “zoning regulations” are distinct
from the type of local “legislation” that establishes or
imposes development fees or exactions.6 In California,
all zoning or rezoning is considered “legislative” in
nature. Arnel Dev. Co. v. City of Costa Mesa, 620 P.3d
Indeed, the California Supreme Court emphasized this
difference between the imposition of exactions and the operation
of ordinary “land use regulation” as the substantive basis for its
decision in Cal. Bldg. Indus. Ass’n. v. City of San Jose, 351 P.3d
974, 991 (Cal. 2015). Part of that opinion discussed a purported
“legislative/adjudicatory” distinction, but that was mere dictum,
since the Court’s decision was based on its conclusion that San
Jose’s particular affordable housing ordinance was not an
“exaction” of any kind – neither legislative nor administrative –
and thus Nollan/Dolan had no relevance in that decision.
6
17
565, 568 (Cal. 1980). Zoning regulates the “nature and
extent of the uses of land.” O’Loane v. O’Rourke, 231
Cal. App. 2d 774, 780 (Cal. Ct. App. 1965). Once
enacted, zoning ordinances apply continuously to all
similarly-situated properties and owners, whether or
not the property owner is seeking a governmental
permit. By contrast, fees are usually imposed in
response to an application for a development approval
of some type, in the form of one-time charges, and are
exacted only from those persons who may apply for
governmental approval of development. See generally,
CALIFORNIA LAND USE PRACTICE, Cal. Cont. Educ. of
the Bar, Chapter 18, Exactions: Dedications and
Development Impact Fees (2022).
The cases that exempt “certain fees” from
Nollan/Dolan are not consistent as to the basis for
their distinctions. The California Supreme Court
initially purported to exempt “a generally applicable
development fee or assessment.” Ehrlich, 911 P.2d at
447. The Sheetz court restated the scope of the
purported exemption from Nollan/Dolan:
The requirements of Nollan and Dolan,
however, do not extend to development
fees that are generally applicable to a
broad class of property owners through
legislative action.
84 Cal. App. 5th at 406–07.
However, that version of the purported distinction
raises another set of serious practical and legal
questions:
18
•
Aren’t all development fees or exactions
essentially based on some form of “legislative
action?”
•
Whether that “legislative action” is in the
form of a local ordinance, or statute, or even
in the form of a state constitution conferring
“police power” authority on a city or county
to impose fees — it is all “legislative action.”
•
In California, “development fees are an
exercise of the local police power granted to
cities and counties by article XI, section 7 of
the California Constitution.” Cal. Bldg.
Indus. Ass’n v. Governing Bd., 206 Cal. App.
3d 212, 234 (Cal. Ct. App. 1988).
•
A “California-style” exemption for fees
derived from some legislative action would
thus appear to “swallow the rule” prescribed
by Nollan/Dolan applicable to development
fees.
Adding a qualifier based on the “breadth” of the
class of impacted property owners does not provide any
better constitutional or practical basis for attempting
to make an exemption for certain fees.
•
How “broad” must that class of property
owners be, in order to be deemed “exempt”
from Nollan/Dolan? How many property
owners or parcels of property constitute “a
broad class” for this purpose?
19
•
How are courts, or local governments, to
know where to draw the line between a
“broad class” and a smaller class of property
owners?
This set of questions is particularly problematic in
a state like California, where all zoning action —
regardless of the number or size of the parcels involved
– is deemed to be “legislative” in nature. See, Arnel
Dev. Co., 620 P.3d at 566–67:
California precedent has settled the
principle
that
zoning
ordinances,
whatever the size of parcel affected, are
legislative acts. . . . . A decision that some
zoning ordinances, depending on the size
and number of parcels affected and
perhaps on other factors, are adjudicative
acts would unsettle well established rules
which govern the enactment of land use
restrictions, creating confusion which
would require years of litigation to
resolve.
•
If the basis of the distinction, as asserted in
Sheetz, is purportedly based on a difference
between fees “imposed . . . neither generally
nor ministerially, but on an individual and
discretionary basis” and fees imposed in
some other way, how does that square with
the fact that fees and exactions are typically
“imposed” in the course of a project-specific
permit application process – in which an
administrative agency is supposed to apply
20
existing ordinances and fee policies “on an
individualized” basis?
•
If, by contrast, the local planning agency
were to attempt to create new fee
requirements on a project, on an “individual
and discretionary basis” as suggested in
Sheetz, what legal authority could support
such low-level bureaucratic, un-legislated,
creation of new fees and exactions?
•
Would such ad hoc and individualized
imposition of fees without legislative
sanction run afoul of the 14th Amendment,
Equal Protection, and Due Process
guarantees?
C. EXEMPTING “LEGISLATIVE” FEES
FROM NOLLAN/DOLAN ELIMINATES
OPPORTUNITIES FOR MEANINGFUL
STATE COURT JUDICIAL REVIEW OF
SUCH FEES AND EXACTIONS.
Although the Ninth Circuit has recently
acknowledged that the purported distinction between
legislative exactions and quasi-adjudicatory exactions
no longer holds water Ballinger v. City of Oakland, 24
F.4th 1287, 1298–99 (9th Cir. 2022), the California
state courts continue to apply that distinction. As a
result, at least in California, there is no effective state
court review of fees if they are characterized as
“legislative,” as plainly shown in Sheetz.
At least 12% of America’s population remain
consigned to a state court regime that now differs
21
substantially from the local federal courts when
seeking judicial review of development fees and
exactions. California law requires that challenges to
development conditions and exactions must first be
brought in state court by way of writ of administrative
mandate under California Code of Civil Procedure
section 1094.5. See, Lynch v. Cal. Coastal Com., 396
P.3d 1085, 1089 (Cal. 2017); Hensler v. City of Glendale
(1994) 8 Cal.4th 1, 19. However, opportunities to
question the fairness of fees established by
“legislative” actions are limited, since Due Process
requirements for notice and right to an individualized
hearing are not generally applicable to such actions.
And, under the “rule” applied in Sheetz, permit
applicants in California seeking judicial review of
legislative fees in mandate proceedings will therefore
run up against the “rule” precluding a challenge based
on Dolan’s requirements, and be summarily dismissed.
“Catch 22.”
Property owners and developers will thus be left
with limited options for judicial relief and effective
Nollan/Dolan review – such as Petitioners in this
case.
D. CERTIORARI SHOULD BE GRANTED TO
ADDRESS SIGNIFICANT PUBLIC POLICY
AND EQUITY CONCERNS.
It is widely recognized that unjustified, and
disproportionate, development fees and exactions
significantly impair the availability and affordability
of housing. “Ensuring that impact fees do not charge
more than the proportionate share is fair and
22
equitable and protects affordable housing developers
from paying a disproportionate share.” Altshuler &
Gomez-Ibanez, Regulation for Revenue: The Political
Economy of Land Use Exactions, Brookings
Institute/Lincoln Institute of Land Policy (1993).7
Similar findings about the adverse consequences
of development fees on equity, housing affordability,
and other “serious drawbacks” if fees are not
proportionate to impacts were made by the U.S.
Department of Housing and Urban Development:
One of the central themes in structuring
and implementing impact fees of all
types is the concept of “proportionate
share,” which has been generally
accepted and dates back to at least the
1970’s…. Ensuring that impact fees do
not charge more than the proportionate
share is fair and equitable and protects
affordable housing from paying a
disproportionate share.
Impact Fees and Housing Affordability – A Guidebook
for Practitioners, U.S. HUD (June 2008), at ii
(emphasis added).
See also, Vicki Been, “Impact Fees and Housing
Affordability,” Cityscape: A Journal of Policy Development and
Research, Volume 8, Number 1, p. 148 (2005) [“Opponents of
impact fees argue that apart from the direct effects impact fees
may have on the price of housing, they have indirect exclusionary
effects as well.”].
7
23
The challenges of trying to provide housing that
approaches even a modest level of affordability are
widely recognized, especially in states like California.
See, e.g., “California’s High Housing Costs: Causes and
Consequences,” LEGISLATIVE ANALYST’S OFFICE (March
2015). Those challenges become even more severe if
courts refuse to apply the Nollan/Dolan requirements
to fees that are loosely characterized as “legislativelyestablished” and allow local governments to impose
unjustified fees that admittedly lack even “rough
proportionality” to the impacts of new development as
in this case.
Development fees and exactions – such as the
“traffic mitigation impact fees” in this case – are a
major factor contributing to the high cost of housing.
“Development fees—which cities levy to pay for
services needed to build new housing or to offset the
impacts of growth on the community—make up a
significant portion of the cost to build new housing in
California cities.” “It All Adds Up The Cost of Housing
Development Fees in Seven California Cities,” TERNER
CENTER FOR HOUSING INNOVATION AT UC BERKELEY, at
3 (March 2018). A recent study sponsored by NAHB
reported that 23.8% of the final cost of a new singlefamily home built for sale is attributable to regulations
imposed by governments at all levels. (Paul Emrath,
Ph.D., Government Regulation in the Price of a New
Home: 2021, NAT’L ASS’N OF HOME BUILDERS (May 5,
2021),
https://www.nahb.org/-/media/NAHB/newsand-economics/docs/housing-economics-plus/specialstudies/2021/special-study-government-regulation-inthe-price-of-a-new-home-may-2021.pdf.)
24
“[O]verly burdensome fee programs can limit
growth by impeding or disincentivizing new
residential development, facilitate exclusion, and
increase housing costs across the state.” Residential
Impact Fees in California, TERNER CENTER FOR
HOUSING INNOVATION AT UC BERKELEY, at 4 (August
2019). See also, E.g., Cal. Gov. Code § 65589.5(a) [“The
Legislature finds and declares . . . [t]he excessive cost
of the state’s housing supply is partially caused by
activities and policies of many local governments that
. . . require that high fees and exactions be paid by
producers of housing.”].
California, where the state courts refuse to apply
the Nollan/Dolan constitutional requirements to
“legislatively established” development fees, stands
out for extraordinarily high development fees. See,
“California’s High Housing Costs: Causes and
Consequences,” supra, at 13–19: “[D]evelopment fees—
charges levied on builders as a condition of
development—are higher in California than the rest of
the country.” An academic study in 2018 found at least
one city charging fees of $157,000 per single-family
home. “It All Adds Up The Cost of Housing
Development Fees in Seven California Cities,” TERNER
CENTER FOR HOUSING INNOVATION AT UC BERKELEY,
March 2018 at 3. The same study observed that, “[o]n
average, these fees continue to rise [in California],
while nationally fees have decreased.” Id.
The fee in the case below was ostensibly based on
a legislatively adopted fee schedule which was not
“generally applicable” in the usual sense of that phrase
– rather the schedule only applies to that small
25
segment of the County’s population who might seek
building permits. As the appellate court opinion in
Sheetz acknowledged:
The program requires that new
development pay the full cost of
constructing new roads and widening
existing roads without regard to the cost
specifically attributable to the particular
project on which the fee is imposed. In
assessing the fee, the County does not
make
any
“individualized
determinations” as to the nature and
extent of the traffic impacts caused by a
particular project on state and local
roads.
84 Cal. App. 5th at 402.
As a result of the deviant California “rule” that
fees deemed to be of legislative derivation are exempt
from the Nollan/Dolan standards, the County was
excused from any obligation to demonstrate that such
an amount was even “roughly proportional” to the
County’s costs of “mitigating” additional traffic (if any)
caused by Mr. Sheetz building a modest “single-family
manufactured home” on his residentially-zoned lot.
Mr. Sheetz was required to pay a “traffic impact
mitigation fee” of more than $23,000, and his attempt
to question the fee in court was summarily dismissed
without a chance to argue the merits.
This case presents the appropriate vehicle for this
Court to finally settle this important issue, and NAHB
and CBIA respectfully request, once again, that this
26
Court grant certiorari to clearly determine whether
“legislatively established” fees and exactions actually
do represent a legitimate “exception” to the
Nollan/Dolan constitutional standards. Cf., Cal. Bldg.
Indus. Ass’n v. City of San Jose, 577 U.S. 1179 (2016)
(cert. denied, on procedural grounds).
E.
THE COURT SHOULD GRANT
CERTIORARI TO RESOLVE
SHEETZ’S SPLIT WITH RECENT
CASES HOLDING THAT NOLLAN/
DOLAN APPLY UNIFORMLY TO
ALL DEVELOPMENT FEES AND
EXACTIONS.
As pointed out, a split in authority developed after
the Dolan decision, regarding the so-called legislative
fee exemption. Scholars and commentators have
bemoaned this split and the resulting confusion that
ensued. See, e.g., Goodin, “Dolan v. City of Tigard and
the Distinction Between Administrative and
Legislative Exactions: “A Distinction Without a
Constitutional Difference” 28 HAWAII L. REV. 139
(2005); Haskins, “Closing the Dolan Deal: Bridging the
Legislative/Adjudicative Divide” 38 URBAN LAWYER
487 (2006); Baker, “Much ado about Nollan/Dolan:
The Comparative Nature of the Legislative/
Adjudicative Distinction in Exactions” 42 URBAN
LAWYER 171 (2010).
There now seems to be a progressive deepening of
that split, as more recent cases have concluded that
Nollan and Dolan should be applied uniformly to all
development exactions, irrespective of the nature of
27
the source. This trend appears to be accelerating,
particularly following this Court’s decisions in Lingle,
Koontz, Cedar Point Nursery, and Pakdel v. City &
County of San Francisco, 141 S.Ct. 2226 (2021).
Examples of that recent trend include the brand
new Sixth Circuit decision in Knight. 67 F.4th at 829;
see also, the recent Ninth Circuit decision in Ballinger,
24 F.4th at 1299–1300: “[W]e agree with the Ballingers
that “[w]hat matters for purposes of Nollan and Dolan
is not who imposes an exaction, but what the exaction
does,” and the fact “[t]hat the payment requirement
comes from a [c]ity ordinance is irrelevant.” See also,
Pakdel v. City & County of San Francisco, where the
court denied the city’s motion to dismiss, where the
complaint adequately alleged that the lifetime lease
requirement was not “roughly proportionate” to the
impacts of landlord’s condominium conversion. Pakdel
v. City & County of San Francisco, No. 17-cv-03638RS, 2022 WL 14813709, at *8 (N.D. Cal. Oct. 25, 2022).
Recent state court decisions similarly reject the
idea of an “exemption” from Nollan/Dolan. See, e.g.,
Anderson Creek Partners, L.P. v. County of Harnett,
876 S.E.2d 476, 500 (N.C. 2022) (“[A]s 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 also,
Fassett v. City of Brookfield 975 N.W.2d 300, 308–09
(Wis. Ct. App. 2022) [Condition which required
subdivider to dedicate a through street, was a
28
legislative exaction which was nevertheless subject to
Nollan/Dolan scrutiny].
These more recent cases stand in stark contrast to
a number of state and federal court decisions, like
Sheetz, that have carved out an exemption from
Nollan/Dolan review for legislative imposed
exactions. (See, e.g., cases cited in the Petition for
Review.)
The Court should grant certiorari to consider
Sheetz in the context of these new decisions and
provide clarity and unity with respect to these
important issues.
CONCLUSION
The concept of “fair share” is commonly asserted
in defense of development fees and exactions. Indeed,
the concept of “fair share” implicitly underlies this
Court’s “takings” jurisprudence.
As this Court recently pointed out in Tyler v.
Hennepin County, ___ U.S. ___, 2023 U.S. LEXIS 220,
at *14 (May 25, 2023):
The Takings Clause “was designed to bar
Government from forcing some people
alone to bear public burdens which, in all
fairness and justice, should be borne by
the public as a whole.” Armstrong, 364
U.S., at 49. A taxpayer who loses her
$40,000 house to the State to fulfill a
$15,000 tax debt has made a far greater
contribution to the public fisc than she
29
owed. The taxpayer must render unto
Caesar what is Caesar’s, but no more.
Those principles would seem applicable in a
situation like this case. The County may be entitled to
demand that new development contribute a fair, and
proportionate, share to the costs of improved roads
made necessary by development, but no more.
Certiorari should be granted so that the Court
may address and resolve these critical, longsimmering, issues.
Dated: June 5, 2023
Respectfully Submitted,
/S/ David P. Lanferman
David P. Lanferman
Counsel of Record
Douglas J. Dennington
RUTAN & TUCKER, LLP
Counsel for Amici Curiae
California Building Industry
Association & National Association
of Home Builders
455 Market Street, Suite 1870
San Francisco, California 94105
650-263-7900
dlanferman@rutan.com
ddennington@rutan.com
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.