Amicus Curiae Brief — Drebick v. City of Olympia, Washington (No. 06-223)

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AOTION FILED @

EP 13 2006 No. 06-223

a eee ane err =m a

In The

Supreme Court of the Gnited States

JOHN DREBICK and JANE DOE DREBICK,

husband and wife, d/b/a DREBICK INVESTMENTS,

Petitioners,

CITY OF OLYMPIA, a Washington code City,

Respondent.

On Petition For A Writ Of Certiorari

To The Washington Supreme Court

MOTION FOR LEAVE TO FILE BRIEF AMICUS

CURIAE AND BRIEF AMICI CURIAE OF THE

MASTER BUILDERS ASSOCIATION OF PIERCE

COUNTY IN SUPPORT OF PETITIONERS JOHN

DREBICK AND JANE DOE DREBICK, HUSBAND

AND WIFE, D/B/A DREBICK INVESTMENTS

CAROLYN A. LAKE

Counsel of Record

CONOR MCCARTHY

GOODSTEIN LAW GRouP PLLC

On behalf of

The Master Builders Association

of Pierce County

1001 Pacific Avenue — Suite 400

Tacoma, WA 98402

253.779.4000 office

253.229.6727 cell

253.779.4411 fax

Counsel for Amicus Curiae

The Master Builders Association

of Pierce County

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

MOTION FOR LEAVE TO FILE

BRIEF AMICUS CURIAE

Pursuant to Supreme Court Rule 37.2(b), the Master

Builders Association of Pierce County (Washington State)

(hereinafter “MBA”) moves to file the attached brief in

support of the Petition for Writ of Certiorari. Consent has

been given by Petitioner and that consent will be lodged

with this Court. Respondent, however, has withheld

consent thus necessitating the filing of this motion. _

MBA seeks to supplement Petitioner-Drebick’s argu-

ments by illustrating that there is a wide split of authority

among the lower state and federal courts over the question

of whether legislatively imposed exactions and monetary

exactions are subject to the “essential nexus” and “roughly

proportional” standards enunciated by this Court in

Nollan v. California Coastal Commission, 483 U.S. 825

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

MBA also seeks to demonstrate that unfair and

disproportionate exactions can, and do, occur whether they

are imposed legislatively or adjudicatively or whether such

exactions include a dedication of land or are monetary in

nature.

The opinion below holds that the heightened scrutiny

set forth by this Court in Dolan is not applicable to legisla-

tively imposed monetary exactions. As a result, the lower

court’s ruling stands for the proposition that when mone-

tary conditions are imposed legislatively on property

owners, the conditions need not be roughly proportional to

the impact created by the proposed development. The

accompanying brief of amicus curiae suggests that this is a

serious conflict that should be resolved by this Court. For

these reasons, MBA respectfully requests permission to

file the attached brief amicus curiae.

DATED: September 13, 2006

Respectfully submitted, .

CAROLYN A. LAKE

Counsel of Record

CONOR MCCARTHY

GOODSTEIN LAw GRouP PLLC

On behalf of The Master

Builders Association of

Pierce County

1001 Pacific Avenue — Suite 400

Tacoma, WA 98402

253.779.4000 office

253.229.6727 cell

253.779.4411 fax

Counsel for Amicus Curiae

The Master Builders

Association of Pierce County

TABLE OF CONTENTS

Page

SPE OE FF CREE MN corsdescicncntercvevovienicorensetevernees i

I. INTERESTS OF AMICI CURIAE...................... 1

II. REASONS FOR GRANTING THE PETITION... 2

ide PAPAIN, ercthcitiinctibeismiiclcnabseibdoiiabutsices’ seaaittn 4

A. CERTIORARI SHOULD BE GRANTED

TO RESOLVE IMPORTANT ISSUES .

AS TO WHICH THERE IS A WELL-

ESTABLISHED CONFLICT AMONGST

STATE AND FEDERAL COURTS .............

1. State And Federal Courts Are Split As

To Whether Dolan Applies To Monetary

2. State And Federal Courts Are Split As

To Whether Dolan Applies To Legisla-

I oiaiccovetacincdescnbasddasuteisscpencnins

DOLAN APPLIES TO MONETARY EX-

Fs ET ha th vivian hessinenitennaithecliectiviiieavwiticsiennee

DOLAN APPLIES TO LEGISLATIVE

FF TE scheint ensectb inden donatnciocsiesvmtacstaidens

1. The Fifth Amendment Applies To Fees

Adopted By Legislative Action As Well

As Adjudicative Action .............cccccseseeeees

2. Concern For A Heightened Risk Of Ex-

tortion Requires Dolan’s Application to

Legislatively Adopted Fees.................06

3. Deference To Legislative Acts Does Not

Require Ignoring The Takings Clause....

eI asstveanipiadidasncciaa can desatianesons

TABLE OF AUTHORITIES

| Page

CASES

Agins v. Tiburon, 447 U.S. 255 (1980)......... eee eneneel 19

Altimus v. Oregon, 115 S. Ct. 44 (1994)... ceccccccceeeceseees 11

Arcadia Development Corp. v. City of Bloomington,

1996 Minn. App. LEXIS 930 (August 13, 1996)............ 6

Armstrong v. United States, 364 U.S. 40 (1960)................. 8

Art Piculell Group v. Clackamas County, 1996 Ore.

App. LEXIS 1107 (July 31, 1996).............csccccccssesesssosseres 6

Benchmark Land Co. v. City of Battle Ground, 146

Pe CD casi raccdidcotavasoniass tecbvinersteneemrnaientes 12,13

Bi-Metallic Co. v. Colorado, 239 U.S. 441 (1915)............. 16

Blue Jeans Equities West v. City and County of San

Francisco, 221 Cal.App.3d 1072 (1992) ...........sesscseereeees 4

Board Of Trustees Of Keene State College et al. v.

GE, SI Ar eae GE CAO oc konnacetnvetsparidssctiaensasenenciohins 8

California Building Industry Association v. Governing

Board of Newhall School District, 206 Cal.App.3d

PA Os Asictrskncccishcs teil acs tbakeiuteciasapasiizisieweesieits 17

Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226

RII iicccsssachas-scaicsts bacisiclusmadiv unis declan eacenmseianahsourinaastakenabaniieviess 8

City of Olympia v. Drebick, No. 29018-9-II, 2004

WL 102850 (Wash.App. Div. 2 Jan. 22, 2004).............. 14

City of Portsmouth v. Schlesinger, 57 F.3d 12 (1st

Re BIS id oiackcaiess ib seaseahaneieionarkemtmataeomemunon em 4,9

Clajon Production Corp. v. Petera, 70 F.3d 1566

CCN I is cnicdidarn cidintvedietidereiteantedlriemmepiieniodenenin 5

Commercial Builders v. City of Sacramento, 941

Fe Ee Ie Ge ROPE iin ota ncicncdccneantesriariocesetnndavinniens 5

ill

TABLE OF AUTHORITIES -— Continued

Page

College Station v. Turtle Rock, 680 S.W.2d 802 (Tex.

BREE SOS RPR CEE SE DER OPES tet BOERC BOR Sees OST APU OR LTE 4,7

Collis v. Bloomington, 246 N.W.2d 19 (1976)................. 4,7

Curtis v. Town of South Thomaston, 708 A.2d 657

I es 6

Dolan v. City of Tigard, 114 S.Ct. 2309, 129

Ii a a passim

Ehrlich v. City of Culver City, 512 U.S. 1231, 114

I I a calidad 8

Ehrlich v. City of Culver City, 911 P.2d 429 (Cal.

1996), cert. denied, 519 U.S. 929 (1996) ...... 4,5, 6, 15, 19

Garneau v. City of Seattle, 147 F.3d 802 (9th Cir.

UME Chica icsdislisucalicascubiatecovccsthekiuiedclietintsinamedtceiidaeueaanaune 5

Harris v. City of Wichita, 862 F.Supp. 287 (D. Kan.

ND av bcabdaa tes sods duiuoadsadcs ond wodaeteausiunaianadbadie evescbskaibunibdies 6

Home Builders Association of Central Arizona v.

City of Scottsdale, 902 P.2d 1347 (Ariz. 1995)......... 4, 6,8

Home Builders Association of Central Arizona uv.

City of Scottsdale, 930 P.2d 993 (Ariz. 1997)............... 5

Horn v. County of Ventura, 596 P.2d 1134 (1979)............. 16

Isla Verde Int'l Holdings, Inc. v. City of Camas, 146

Wash.2d 740, 49 P.3d 867 (2002) ..........eeeeceeeeeeee 9,12,13

J.C. Reeves Corp. v. Clackamas County, 887 P.2d

I BN cies cats ic bunts iat a lauseds sencedciideeninanciniesesienmncae 6, 11

James v. County of Kitsap, 152 Wash.2d 574, 115

I ga tek 9,10

Jenad, Inc. v. Scarsdale, 218 N.E.2d 673 (N.Y.

TABLE OF AUTHORITIES ~ Continued

Page

Jordan v, Village of Menomonee Falls, 137 N.W.2d

A LPAI Dac seknintnatininssthdiisneissechelechasacdainial ees uicten: 7

Krupp v. Breckenridge Sanitation District, 19 P.3d

Ue CE: a irccssnrsscnseiccnsscaseuachicindotiateincdeidecetmekakotnssasens 6

Loyola Marymount Univ. v. Los Angeles Unified

School District, 45 Cal.App.4th 1256 (1996) ................0. 6

Manocherian v. Lenox Hill Hospital, 643 N.E.2d

479 (N.Y. 1994), cert. denied, 115 S.Ct. 1961

GUINIEE Pos cissdesuiinlbvasiscertinhisiininian obinesiisucsddhcghe aamaiianaegdaiidinbandac puss 6, 7

McCarthy v. City of Leawood, 894 P.2d 836 (Kan.

IIE ss: vcishiccsceinuvaubnnctocschincceamatdosasawensaamaibuetedadatabastaaca’ 4

Mullane v. Central Hanover Trust Co., 339 U.S. 306

SD iasicnidessiedin csconcieniiaisesjvcieetesvaaghndiadeauaadiaiegeieniin 16

National Association of Home _ Builders uv.

Chesterfield County, 907 F.Supp. 166 (E.D. Va.

1995), aff’d, 1996 U.S. App. LEXIS 18838 (4th

Che Sale W6 SO s 4,6

Nixon v. United States, 506 U.S. 224 (1993) .......... ee 19

Nollan v. California Coastal Commission, 483 U.S.

SUNN PED sin iikaden dock dactcconeca sacs tunic abaaaiaaial 8, 10, 11, 15, 18

Northern Illinois Home Builders Association, Inc. v.

County of Du Page, 649 N.E.2d 384 (IH. 19985)........ 4,6,9

Parking Association of Georgia, Inc. v. City of

Petites, TIS Ce. TI GI) acs cvcccncnecntcceciincssnvssnces 6,7

Remmenga v. California Coastal Comm’n, 163

a ame BI CI ii vsitscrecnterccecsnsitsintietelasnbncveceinte 4

Rogers Machinery, Inc. v. Washington County, 45

P.3d 966 (Or. Ct. App. 2002), cert. denied, 538

SE; Bie Ce ikctiniiesecab ceeds ckccantapeengicianille

TABLE OF Al ‘ORITIES — Continued

TE sibcinces pit ccapustaneedsdatebiiies inchbiabomeniiiapeerionpentpovseeneanth 6, 11

San Remo Hotel L.P. v. City of San Francisco, 41

FT Cs MOD sk kins eahinieguigcinbebininervsddeecadeiaboretssvesivses 5

Southeast Cass Water Resource District ov.

Burlington Northern Railroad Co., 527 N.W.2d

884 (N.D. 1995).............. pasllgdnigcenanienkepnial Maastvanientedaisrinns 6

Stubblefield Construction Co. v. City of San

Bernardino, 32 Cal.App.4th 687 (1995), cert.

I Ble ils Radiat nisisscokndpenntiactnivsbeodscacistserenseceaies 17

Trimen Development Company v. King County, 877

ee Uy MOEN ichicteisniasctirbnrvaicbiioiecmmbateimenceseee’ 4,6,9

U.S. v. Winstar Corp., 1996 U.S. LEXIS 4266 (July

Fc datiistiedl vebplidcsincialinkatciidanocadpabacenaisuswieameneyeoud 18,19

Waters Landing Limited Partnership v. Montgomery

Cousty, G60 A. 26 FIZ CHG. 19S) oo ccicceccecsesecscorccersccatvevess 6

STATUTES

ee ee I caiacahstsksbi delientecasscasduasdsisassucdscopacienins 9,12,13

RULES

UN I II OB pagina cen scans ocnctesinceobenvecevedecootiiees 2

UNINC AUCIEE TOMI BOGE vesosicdcdccisniscesveccossedeacsntcscomoncuesanss 3

Supreme Court Rule 37(6)............ssssssscsssecccceeesers PERU EE 1

TABLE OF AUTHORITIES -— Continued

Page

CONSTITUTIONAL PROVISIONS

UB, Ce i csavapecsecnevecces 8,15

CEB, Ce, ei atiialeninsstinceescosesseoseoesevvesvesees 8

U.S. Constitution, Contract Clause. ............sccccccssesssscsees 19

OTHER AUTHORITY

“Governor Holds The Key To Affordable Housing,”

President’s Letter, BIAW’s Building Insight Pub-

Hceticets, A Se later btrdeiiehccersaccereseresoevereceseoess 18

I, INTERESTS OF AMICI CURIAE'’

The Master Builders Association of Pierce County is a ~

“not-for-profit” corporation organized under the laws of the

State of Washington. The Master Builders Association of

Pierce County (MBA) consists of nearly two thousand

home building professionals and related service providers.

The MBA promotes the interests of the home building

industry through membership involvement, legislative

action, networking and education while maintaining the

highest ethical standards.’

The MBA actively challenges impact fee abuse issues

such as the fee which is the subject of this case. For

example, on February 28, 2006 the City of Bonney Lake,

Washington within Pierce County voted to increase park

impact fees from $2000 per single family lot to $2893 per

lot. MBA provided testimony twice in opposition to the

increase.

The City of Puyallup, Washington within Pierce

County recently increased its park impact fees from $491

SF/$323 MF to $2300 for both Single Family and Multi-

family units. The City of Puyallup also adopted a road

impact fee at $3030 per Single Family unit. The MBA

opposed these huge increases.

In addition, the Master Builders Association of Pierce

County is one of fifteen local homebuilders associations

under the umbrella of the Building Industry Association

of Washington (BIAW) representing more than 12,254

, Pursuant to Supreme Court Rule 37(6), counsel of amicus

authored the brief in whole. Amicus solely funded the preparation and

filing of this brief.

* The Master Builders Association of Pierce County’s Vision State-

ment is

1. Be the leader and advocate of affordable housing.

2. Bea strong and financially viable association.

3. Provide tangible membership values.

Maintain a positive public image.

member companies who are threatened by onerous regula-

tions. BLAW works to reduce the scope of government and

expand free enterprise. BLAW submitted an amicus curiae

brief in this present case before the Court of Appeals and

the Washington State Supreme Court.’

The MBA Amici’s interests lie in countering local

governments’ funding needs with the needs of the new ©

home buyer for affordable shelter. Local jurisdictions in

Washington State continue to increase impact fees used to

fund facilities and services used by the public in general

but charged to an isolated segment of the population — the

development community.

Heightened scrutiny applied to such fees would

demonstrate to an apprehensive home buyer that the fee

paid directly mitigated the impact from the new home:

Additionally, a 10-20% miscalculation could result in

significant savings. According to the National Association

of Home Builders, even a $1,000 increase in the purchase

price of a home can force 21,000 potential buyers out of the

market. The Truth About Regulations and the Cost of

Housing (NAHB, 1995) p. 6

II. REASONS FOR GRANTING THE PETITION

The Court should accept certiorari for at least the

following reasons. First, pursuant to Supreme Court Rule

10.1(b), review is supported when a state court of last

resort has decided a federal question in a way that con-

flicts with another state court of last resort, or with a

United States court of appeals.

* The Building Industry Association of Washington Mission

Statement declares that “The Building Industry Association of Wash-

ington is the voice of the housing industry in the state of Washington.

The Association is dedicated to ensuring and enhancing the vitality of

the building industry for the benefit of its members and the housing

needs of the citizens.” To accomplish this purpose, the Association’s

primary focus is to interact with the Legislative, Regulatory, Judicial

and Executive Agencies of Washington’s government.

Second, Supreme Court Rule 10(c) provides for review

when a state court of last resort has decided an important

question of federal law which has not been, but should be,

settled by this Court, or has decided a federal question in a

way that conflicts with applicable decisions: of this Court.

Both grounds support review of this case.

Certiorari should be granted to clarify the well-

established conflict in various state and federal courts

regarding whether the standard articulated in Dolan v.

City of Tigard, 114 S. Ct. 2309, 129 L. Ed. 2d 304 (1994)

(hereinafter “Dolan”) applies to legislatively enacted

monetary exactions and whether public agencies possess a

compensable property interest in maintaining the per-

petuation of land-use designations.

Monetary exactions or fees should be held to the same

level of scrutiny as those involving dedications. If mone-

tary exactions receive less scrutiny, local governments can

impose onerous fees on one population segment (the

development community) for facilities or services which

serve the general community as a whole, and avoid the

requirement of establishing a nexus between the event

triggering the exaction and the resulting fee. The law does

not permit public agencies to do indirectly what it does not

permit them to do directly.

Additionally, there remains a heightened risk of

disproportionality and/or extortion for legislatively author-

ized fees. Legislative acts do not enjoy absolute deference

to the extent that constitutional protections be abandoned.

The Constitution applies equally to legislative as well as

adjudicative acts.

.- Nor is the political process adequate protection

against legislative abuse. When legislatively applied,

notice is not required or often provides to the targeted fee

payor, the payor may not yet be invested in the issue (as in

the case of fee imposed on future home buyers), and if

applied to an isolated segment, the balance of the voting

constituents likely will not object.

Il. ARGUMENT

A. CERTIORARI SHOULD BE GRANTED TO

RESOLVE IMPORTANT ISSUES AS TO

WHICH THERE IS A WELL-ESTABLISHED

CONFLICT AMONGST STATE AND FED-

ERAL COURTS

1. State And Federal Courts Are Split As

To Whether Dolan Applies To Monetary

Exactions As Well As Dedications.

There is a well-developed split on whether Dolan

extends heightened scrutiny solely to permit conditions

that require the dedication of real property and the con-

comitant loss of the right to exclude, or whether Dolan

applies to monetary exactions as well.

Courts that have applied, or approved of applying a

heightened scrutiny to development fees include state

cases such as Ehrlich v. City of Culver City, 911 P.2d 429

(1996) (hereinafter “Ehrlich”), Northern Illinois Home

Builders Association, Inc. v. County of Du Page, 649 N.E.2d

384 (Ill. 1995); Home Builders Association of Central

Arizona v, City of Scottsdale, 902 P.2d 1347 (Ariz. 1995);

Trimen Development Company v. King County, 877 P.2d

187 (Wash. 1994); College Station v. Turtle Rock, 680

S.W.2d 802 (Tex. 1984); Collis v. Bloomington, 246 N.W.2d

19 (1976); Jenad, Inc. v. Scarsdale, 218 N.E.2d 673 (N.Y.

1966), and Remmenga v. California Coastal Comm’n, 163

Cal.App.3d 623, 628 (1985).

At least two federal cases have suggested that Dolan

is relevant in assessing impact fees. City of Portsmouth v.

Schlesinger, 57 F.3d 12 (1st Cir. 1995) (relying in part on

Dolan to strike down an affordable housing impact fee);

National Association of Home Builders v. Chesterfield

County, 907 F.Supp. 166, 168 (E.D. Va. 1995), aff’d, at

1996 U.S. App. LEXIS 18838 (4th Cir. July 30, 1996).

Conversely, some state courts have either directly

limited Dolan’s applicability to dedications, or implied

such is true. McCarthy v. City of Leawood, 894 P.2d 836

(Kan. 1995); Blue Jeans Equities West v. City aud County

of San Francisco, 221 Cal.App.3d 1072 (1992). So too have

some federal courts. Clajon Production Corp. v. Petera, 70

F.3d 1566 (10th Cir. 1995); Commercial Builders v. City of

Sacramento, 941 F.2d 872 (9th Cir. 1991).

Finally, a number of states merely express confusion

over the issue. Garneau v. City of Seattle, 147 F.3d 802,

811 (9th Cir. 1998) (there is “considerable doubt” about the

applicability of the Dolan rough propor*ionality test to

“legislative, as opposed to administrative exactions.”);

Home Builders Association of Central Arizona v. City of

Scottsdale, 930 P.2d 993, 1000 (Ariz. 1997) (the question

“has not been settled”); Rogers Machinery, Inc. v. Washing-

ton County, 45 P.3d 966, 976 (Or. Ct. App. 2002), cert.

denied, 538 U.S. 906 (2003) (A “split of authority exists in

lower courts as to whether Dolan is limited to develop-

ment conditions imposed through adjudicatory decisions or

whether it extends to those imposed as a result of gener-

ally applicable legislation”).

2. State And Federal Courts Are Split As

To Whether Dolan Applies To Legisla-

tive Actions.

A number of state courts have seized on Justice

Rehnquist’s notation’ that the exaction in Dolan was

imposed on a building permit, issued as an “adjudicative”

act, to find that heightened scrutiny does not apply to

exactions imposed pursuant to legislatively-adopted

ordinances of general application. See San Remo Hotel L.P.

v. City of San Francisco, 41 P.3d 87, 105-06 (Cal. 2002)

(Court refusing to apply Nollan/Dolan’s standards to

legislative impact fee); e.g.; Homebuilders Association v.

City of Scottsdale, 930 P.2d 993, 1000 (Ariz. 1997) (Dolan’s

rough proportionality test does not apply to water service

fee enacted by ordinance and uniformly applied to all

properties); Ehrlich v. City of Culver City, 911 P.2d 429,

444 (Cal. 1996), cert. denied, 519 U.S. 929 (1996) (Dolan

* Dolan, supra, 114 S. Ct. at 2316, n.8.

inapplicable to fees imposed legislatively); Krupp v.

Breckenridge Sanitation District, 19 P.3d 687 (Colo. 2001)

(Dolan inapplicable to sanitation district fee imposed

legislatively); Rogers Machinery, 45 P.3d at 967, 982

(Dolan inapplicable to traffic impact fee assessed by

ordinance), Ehrlich, supra; Loyola Marymount Univ. v. Los

Angeles Unified School District, 45 Cal.App.4th 1256

(1996); Home Builders Association of Central Arizona uv.

City of Scottsdale, 902 P.2d 1347 (Ariz. 1995); Southeast

Cass Water Resource District v. Burlington Northern

Railroad Co., 527 N.W.2d 884 (N.D. 1995); Waters Landing

Limited Partnership v. Montgomery County, 650 A.2d 712

(Md. 1995); Parking Association of Georgia v. City of

Atlanta, 450 S.E.2d 200 (Ga. 1994); Arcadia Development

Corp. v. City of Bloomington, 1996 Minn. App. LEXIS 930

(August 13, 1996). So too has at least one federal court.

Harris v. City of Wichita, 862 F.Supp. 287 (D. Kan. 1994).

Other state courts have held that legislative exactions

are subject to Dolan’s heightened scrutiny. Curtis v. Town

of South Thomaston, 708 A.2d 657, 660 (Me. 1998) (Dolan

applied to fire protection ordinance requiring developers to

construct fire pond); Manocherian v. Lenox Hill Hospital,

643 N.E.2d 479 (N.Y. 1994), cert. denied, 514 U.S. 1109

(1995) (Nollan applied to statute requiring apartment

owners to renew certain leases with non-private hospital

employees); Art Piculell Group v. Clackamas County, 1996

Ore. App. LEXIS 1107 (July 31, 1996); J.C. Reeves Corp. v.

Clackamas County, 887 P.2d 360 (Or. 1994); Schultz v. City

of Grants Pass, 884 P.2d 569 (Or. 1994); Northern Illinois

Home Builders Association, Inc. v. County of Du Page, 649

N.E.2d 384 (Ill. 1995); -Trimen Development Company v.

King County, 877 P.2d 187 (Wash. 1994) (A county ordi-

nance requiring developers seeking to build housing either

dedicate land for public parks or pay a fee must meet

Dolan’s “rough proportionality” test). So too has at least

one federal court. National Association of Home Builders v.

Chesterfield County, 907 F.Supp. 166, 168 (E.D. Va. 1995)

(“(IJn order for any specific exaction implemented under a

zoning ordinance to pass constitutional muster ... ” it

must meet Dolan’s rough proportionality standard.), aff’d,

at 1996 U.S. App. LEXIS 18838 (4th Cir. July 30, 1996).

Manocherian v. Lenox Hill Hospital, 643 N.E.2d 479, 483

_(N.Y. 1994), cert. denied, 115 S. Ct. 1961, 1962 (1995).

One existing and one former member of this Court are

on record as supporting granting certiorari to address this

issue. In dissenting from the denial of a writ of certiorari

the Justices stated:

It is not clear why the existence of a taking

should turn on the type of governmental entity

responsible for the taking. A city council can take

property just as well as a planning commission

can. Moreover, the general applicability of the

ordinance should not be relevant in a takings

analysis.... The distinction between sweeping

legislative takings and particularized adminis-

trative takings appears to be a distraction with-

out a constitutional difference.

Parking Association of Georgia, Inc. v. City of Atlanta, 115

S. Ct. 2268 (1995) (Thomas, J., and O’Connor, J., dissent-

ing).

B. DOLAN APPLIES TO MONETARY EXAC-

TIONS

The Supreme Court’s decision in Dolan itself strongly

suggests that the rough proportionality standard is appli-

cable to monetary exactions. This is because several of the

cases relied upon by this Court for the rough proportional-

ity standard in Dolan involved takings challenges to fees.”

E.g., Jordan v. Village of Menomonee Falls, 137 N.W.2d

442 -(Wis. 1965); Collis v. Bloomington, 246 N.W.2d 19

(Minn. 1976); College Station v. Turtle Rock, 680 S.W.2d

* Justice Stevens recognized this point in his dissent, noting that

the cases cited by the majority “involve challenges t6 provisions .

requiring developers to dedicate either a percentage of the entire parcel

... Or an equivajent vajue in cash... to help finance the construction of

roads, utilities, schools, parks, and playgrounds.” Dolan at 129 L.Ed.2d

326 (Stevens, J., dissenting).

802 (1984); Jenad, Inc. v. Scarsdale, 218 N.E.2d 673 (N.Y.

1966).

In addition, this Court’s decision to vacate and re-

mand the Court of Appeal’s original decision in Ehrlich v.

City of Culver City, 512 U.S. 1231, 114 S. Ct. 2731 (1994)

was a clear signal that the principles set forth in Nollan v.

California Coastal Comm’n, 483 U.S. 825 (1987), and

Dolan apply to monetary exactions.® The Arizona Court of

Appeals took note of this significant action in Home

Builders Association of Central Arizona v. City of Scotts-

dale, 902 P.2d 1347, 1352 (1995), “we agree that the

Ehrlich remand implies that a monetary fee is subject

both to a takings analysis, and... to a Dolan analysis.”

The Constitution supports this position. The Takings

Clause of the Fifth Amendment of the United States Consti-

tution, made applicable to the States through the Fourteenth

Amendment, Chicago, B. & Q.R. Co. v. Chicago, 166 U.S.

226, 236 (1897), provides: “[Nlor shall private property be

taken for public use, without just compensation.” U.S.

Const. amend. V. The principal purpose of the Takings

Clause is “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.” Arm-

strong v. United States, 364 U.S. 40, 49 (1960).

There is scant justification for subjecting impact fees

to a lesser degree of scrutiny than dedication require-

ments. Monetary exactions are the functional equivalent

of dedications. Treating fees and dedications differently

creates a giant loophole in the Nollan/Dolan doctrine.

Allowing fees to be reviewed under a lesser degree of

scrutiny provides government the incentive and ability to

demand mitigation through fees exclusively. Nothing

prevents government from exacting a fee, exercising its

* “Whenever this Court grants certiorari and vacates a court of

appeals judgment in order to allow that court to reconsider its decision

in the light of an intervening decision of this Court, the Court is acting

on the merits.” Board Of Trustees Of Keene State College et al. v.

Sweeney, 439 U.S. 24, 25-26 (1978).

power of eminent domain, and using the fee revenue to

pay for the acquisition or improvement. From the property

owner’s perspective, the owner is no less diminished by a

monetary fee, than by a dedication requirement.

Post-Dolan cases recognize this proposition and are in

accord with it. In City of Portsmouth v. Schlesinger, 57 F.3d

12 (1st Cir. 1995), the U.S. Court of Appeals for the First

Circuit suggested that Dolan’s rough proportionality

standard applies to impact fees that were imposed on a

development project by the City of Portsmouth, New

Hampshire.

In Trimen Development Company v. King County, 877

P.2d 187, 192 (1994), the Washington Supreme Court

applied Dolan’s heightened scrutiny to a park impact fee,

holding that to be valid, an impact fee must be “required

to mitigate the direct impact of the development.” And in

Northern Illinois Home Builders Association, Inc. uv.

County of Du Page, 649 N.E.2d 384 (Ill. 1995), the Illinois

Supreme Court subjected a transportation impact fee to

Dolan’s heightened scrutiny.

Of interest, a very recent Post-Dolan Washington

Supreme Court case held that dedications and fees should

be evaluated similarly. In James v. County of Kitsap, 152

Wash.2d 574, 115 P.3d 286 (2005), the Washington Su-

preme Court relied on Jsla Verde, 146 Wash.2d at 761, 49

P.3d 867’, to hold that development conditions must be

tied to a specific, identified impact of a development on a

community, whether the condition is an open space

set aside or an impact fee. However, neither /sla Verde

" “For instance, in Isla Verde Int'l Holdings, Inc. v. City of Camas,

146 Wash.2d 740, 49 P.3d 867 (2002), we reviewed an action brought by

a developer under LUPA, challenging a perm’. .endition as invalid

because it was a tax, fee, or charge prohibitew “» RCW 82.02.020.

Although Isla Verde did not involve impact fees, but a permit condition

requiring a 30 percent open space set aside, we concluded this condition

was a “tax, fee, or charge” under RCW 82.02.020 and was invalid

because it did not fall within an exception to that provision.”

or James relies on Dolan; instead these cases were decided

on statutory grounds. Jd.

C. DOLAN APPLIES TO LEGISLATIVE AC-

TIONS

1. The Limitations Of The Fifth Amend-

ment Apply To Fees Adopted By A Legis-

lative Action As Well As An Adjudicative

Action.

The conditions in Dolan, like the City’s transportation

impact fee here, were imposed under the authority of an

ordinance of general application. The City of Tigard’s

Comprehensive Development Code required all property

owners in the Central Business District to comply with

certain dedication requirements for pedestrian/bicycle

pathways and greenway/drainage space. Dolan, supra, 129

L. Ed. 2d at 311-313. As Justice Souter recognized:

The majority characterizes this case as involving

an ‘adjudicative decision’ to impose permit condi-

tions ... , but the permit conditions were imposed

pursuant to Tigard’s Community Development

Plan.

Dolan, supra, 129 L. Ed. 2d at 334 (Souter, J., dissenting).

Thus, the nature of the exaction involved in Dolan

and in this case are identical on this point: each was

imposed on a specific project pursuant to an essentially

legislative determination applicable to all development

projects.

_ Indeed, Nollan v. California Coastal Commission, 483

U.S. 825 (1987) makes clear that the exaction imposed was

made pursuant to a legislative act, the California Coastal

Act of 1976: The Superior Court ... finding, in part to

avoid issues of constitutionality, “that the California

Coastal Act of 1976, Cal. Pub. Res. Code Ann. at 30000 et

seq. (West 1986), authorized the Commission to impose

public access conditions on coastal development permits

for the replacement of an existing single-family home with

a new one only where the proposed development would

have an adverse impact on public access to the sea.

Unfortunately, lower courts and public agencies have

misread the Dolan and the Nollan decision by seizing

upon the “adjudicative decision” language used by the

majority in Dolan, supra, 114 S.Ct. at 2316, n.8, as

limiting the application of Dolan and Nollan.

Subsequent to its decision in Dolan, the Supreme

Court has confirmed that Dolan applies to legislative acts.

In Altimus v. Oregon, 115 S.Ct. 44 (1994), this Court

vacated and remanded the case to the Court of Appeals of

Oregon “for further consideration in light of Dolan v. City

of Tigard.” Altimus involved a takings challenge to an

exaction imposed as a condition to a project requesting a

zoning change — a legislative act. (See footnote 5, supra.)

Post-Dolan cases have recognized that heightened

scrutiny is appropriate where an exaction is being applied

to a particular project, notwithstanding whether the

government approval being sought is nominally “legisla-

tive” or “adjudicative.” In J.C. Reeves Corp. v. Clackamas

County, 887 P.2d 360 (Or. 1994), the Court applied Dolan’s

rough proportionality standard to exactions imposed

pursuant to a county-wide zoning ordinance:

[T]he county relies on the fact that some of the

improvements are required by its zoning ordi-

nance. As we said in Schultz v. Grants Pass ...

however, “the character of the [condition] re-

mains the type that is subject to the analysis in

Dolan” ..., whether it is legislatively required or

a case-specific formulation. The nature, not the

source, of the imposition is what matters. Our

conclusion is not at odds with the Supreme

Court’s differentiation between adjudicative con-

ditions and particular properties and generally-

applicable legislative regulations. ... A condition

on the development of particular property is not

converted into something other than that by rea-

son of legislation that requires it to be imposed.

Id. at 365, n.1 (citation omitted). See also, Schultz v.

City of Grants Pass, 884 P.2d 569 (Or. 1994) (Dolan’s

heightened scrutiny standard applicable to city’s exaction,

notwithstanding the fact that the exaction was imposed

pursuant to city-wide ordinance of general application).

At least two post-Dolan Washington decisions are in

accord, although neither are decided on constitutional

basis. In July, 2002, the Washington Supreme Court

decided two pivotal cases that refine the authority of

municipalities to impose conditions requiring set-asides

and impact fees. These cases mandate that any dedication

or fee must be roughly proportional to the actual impacts

of the proposed project, and place the burden of demon-

strating proportionality on the local jurisdiction. See

Benchmark Land Co. v. City of Battle Ground, 146 Wn.2d

685 (2002); Isla Verde Int'l Holdings v. City of Camas, 146

Wn.2d 740 (2002).

The Washington Supreme Court case of Benchmark

emphasizes the long standing requirement that an essen-

tial nexus between the actual impacts caused by the

proposed development and conditions imposed on the

development. The related case of Isla Verde held that

dedication or payment of impact fees that are not reasona-

bly necessary as a direct result of the proposed develop-

ment violate RCW 82.02.020.

The Court mandates that any fees or dedications must

be attributable to specific impacts from the proposed

development. Plat conditions or other development extrac-

tions which are not factually supported as required in

these recent holdings, are incorrect as a matter of law.

In Benchmark, the City of Battle Ground conditioned

approval of a development permit, requiring the developer

to make improvements to a street adjoining the develop-

ment. The city’s required improvements were frontage

based on the city code standards, but were not tied to the

specific impacts of the project. The Court found that the

requirements were intended to remedy an existing defi-

ciency, and bore little relation to the proposed project. The

Court held that the conditions were not supported by

substantial evidence; because there was no showing that

“the required expenditure for street improvements was not

directly related to traffic generated by the development.”

Benchmark, 146 Wn.2d at 695. The holding clearly speci-

fies that any fees or dedications must be attributable to

specific impacts from the proposed development.

In Isla Verde, the Court also applied the proportional-

ity requirement to the specific statutory framework set

forth in RCW 82.02.020, to invalidate a 30 percent open

space set-aside condition required by the City of Camas.

Isla Verde, 146 Wn.2d at 752. The Court recognized that

RCW 82.02.020 does not only prohibit City-imposed taxes

on the development of real property, but also fees and

charges, including dedications as well. Jd. at 753, n.8. The

only exception is where the city is able to demonstrate that

the condition imposed is needed as direct result of the

project’s impact. Jd. at 759. The Court also stated that the

burden of proving the required relationship between the

condition and the impact of the development rested on the

city. Id. at 756.

Because the Court recognized that RCW 82.02.020

applies not only to taxes and fees, but also to requirements

and conditions such as open space set-asides, (Id. at 757),

the Court invalidated the City’s open space requirement,

holding that Camas failed to produce sufficient evidence

that “the 30 percent open space set aside is reasonably

necessary as a direct result of the proposed subdivision

or reasonably necessary to mitigate a direct impact that is

a consequence of the proposed subdivision.” Jd. at 759.

Finally, the Court emphasized that, not only must the

requirement be “reasonably necessary,” but that “develop-

ment conditions must be tied to a specific, identified

impact of a development ... as a direct result of the

proposed development or plat,” Jd. at 761.

The Court stressed that RCW 82.02.020 does not

permit conditions that satisfy a “reasonably necessary”

standard for all new development collectively, it specifi-

cally requires that a condition be “reasonably necessary as

a direct result of the proposed development or plat.” Jsla

Verde at 879. Emphasis added.

Thus in these post Dolan, pre-Drebick cases, the

Washington Supreme Court made it clear that cities and

counties cannot simply point to an adopted code provision

as authority to impose development extractions (in this

case, frontage improvements). Instead, the Supreme Court

held that-the jurisdiction is required to undergo an indi-

vidualized analysis for each project, and can only impose a

condition on development if it is shown that the condition

is needed to mitigate an impact actually caused by the

proposed project.

The Court of Appeals’ decision in the present case

followed this clear line of reasoning consistent with Nollan/

Dolan. City of Olympia v. Drebick, No. 29018-9-II, 2004

WL 102850 (Wash.App. Div. 2 Jan. 22, 2004), when it

invalidated the City of Olympia’s traffic impact fee. The

Court found that an impact fee formula which was based

on an averaging of traffic volumes did not relate to the

actual impacts of a proposed project. The Court of Appeals

correctly invalidated the City’s assessment, and found that

impact fees must relate to the actual impacts of the

development.

In invalidating Olympia’s development condition, the

Court clearly stated that (1) the government must identify

a “public” impact as opposed to a private one, (2) the

government must show that the proposed project will

create or exacerbate the impact, (3) the government must

show that the fee or exaction “tends to solve” or alleviate

the impact, and (4) that the proposed solution is “roughly

proportional” to the impact of the proposed project, 1.e.

that it will alleviate the impacts caused by the project

itself. .

Unfortunately, the Washington Supreme Court re-

versed.

This Court should accept review to correct this change

of course, and provide clarity on a nation-wide basis.

2. Concern For A Heightened Risk Of Ex-

tortion Requires Dolan’s Application to

Legislatively Adopted Fees.

The Washington Supreme Court sidestepped the

Nollan/Dolan test by its limited decision to an interpreta-

tion of the requirements of the local impact fee statutes

(App. at A-8-A-11; App. at G and H), and on its refusal to

apply the Nollan and Dolan standards to the exactions at

issue (App. A-11-A-12).

However, despite ducking the critical constitutional

issues, the Court’s scathing comments directed to dissent

sow the seeds for a significant withering of future applica-

tion of Nollan/Dolan in Washington state: “The dissent

does not explain that neither Nollan nor Dolan concerned

the imposition of impact fees but addressed instead the

authority of a local government to condition development

approved on a property owner’s dedication of a portion of

land for public use.” App. at A-11-A-12. The majority cites

Ehrlich v. City of Culver City, 911 P.2d 429, 444 (Cal.), cert.

denied, 519 U.S. 929 (1996), for the proposition that

Nollan and Dolan do not apply to legislatively prescribed

development fees. Jd. at A-12-A-13.

This Court should reinforce application of the consti-

tutional analysis of Nollan/Dolan by upholding the consti-

tutional construction of the local impact fee statutes, as

urged by the dissent. App. at A-33-A-37. Citing the Court

of Appeals decision, the dissent noted that “the most

important conclusion to be drawn from the legislative

history is the legislature’s deliberate use of the identical

terms the United States Supreme Court used to describe

the ‘nexus’ requirement of the Fifth Amendment: ‘reasona-

bly related to.’” App. at A-33. The majority, “defeats the

Nollan and the Washington State Legislature’s definition

lof ‘reasonably related’}.” App. at A-36.

The Washington Court’s rationale in part was baged

on deference owed to legislatively adopted fees, as opposed

to administrative conditions. However, preservation of this

Court’s constitutional protections against extortion-like

fees requires that legislative actions not be treated differ-

ently from exaction imposed administratively. The height-

ened risk of extortion exists no less for legislatively

adopted fees, and arguably presents a greater risk. _

Current residents, looking out for their own interests,

generally believe that it is better to shift favility costs to

their future and yet unknown neighbors, rather than pay

for such facilities themselves. The existing residents have

no quarrel with legislators who pass along a dispropor-

tionate share of facility costs to the upcoming but not yet

present community members. |

In contrast, the new home buyer has the least political

clout to remedy extortionate fees because he or she is an

empty chair at that political table, unaware, uninterested

or residing outside of the public agency’s jurisdiction at the

time of the fee’s adoption.

In addition, there is no requirement that a new or

future home buyer be given notice of a legislatively

adopted fee and therefore this class of affected parties is

the least able to become involved in the “political process.”

Elected officials and current residents, aware of these

facts, often argue in favor of the adoption of fees which pay

for public facilities not entirely, or not in the least, caused

by new development. Elected officials realize that since

the ultimate fee payor is not currently a constituent, has

no notice, and may not yet be interested in the issue until

* Where a rule of conduct applies to more than a few people it is

impracticable that every one should have a direct voice in its adoption.

The Constitution does not require all public acts to be done in town

meeting or an assembly of the whole. General statutes within the state

power are passed that affect the person or property of individuals,

sometimes to the point of ruin, without giving them a chance to be

heard. Bi-Metallic Co. v. Colorado, 239 U.S. 441, 445 (1915).

“{O)nly those governmental decisions which are adjudicative in

nature are subject to procedural due process principles. Legislative

action is not burdened by such requirements.” Horn v. County of

Ventura, 596 P.2d 1134, 1137 (1979); see also, Mullane v. Central

Hanover Trust Co., 339 U.S. 306, 313 (1950).

the new home threshold is crossed, he or she is unlikely to

express his or her displeasure with the fee by voting the

decision maker out of office.° As a-result, the risk of extor-

tion by legislation for it is just as high, if not higher than it

is for those which are individually imposed.

Further, a legislatively adopted fee may be adopted

years prior to its actual imposition and on an entire city or

county. Fees imposed on adjudicatory land use approvals

occur closer in time to the purchase of a new home and on

a geographically specific project and are therefore more

likely to provide notice to thé new home buyer.

Impact fees are fees tacked onto the cost of a newly

constructed house to pay for the occupants’ supposed

impact on the area’s roads, parks and schools. Depending

on the jurisdiction, impact fees can range from a few

thousand dollars to over $20,000. Not coincidentally,

jurisdictions charging impact fees typically boast the least

affordable housing markets.

... because impact fees are charged only on new

“homes, not on existing homes, they don’t ensure

those who have a new impact on a community ac-

tually pay to mitigate that impact. Here’s an ex-

ample: A family with six school age children could

move into Olympia from elsewhere, purchase an

existing “family” home and pay no impact fee,

even though they will be impacting the city’s

* See, e.g., California Building Industry Association v. Governing

Board of Newhall School District, 206 Cal.App.3d 212, 218 (1988) (“...

the exactions were imposed not on an electorate which, unsurprisingly,

voted overwhelmingly to approve them, but rather solely on the

developers of new residential projects.”); Stubblefield Construction Co.

v. City of San Bernardino, 32 Cal.App.4th 687, 711 (1995), cert. denied,

116 S. Ct. 300 (“It is not uncommon or unusual! for a legislator to oppose

a project and to use all means within his or her power to defeat it. After

all, a legislator is supposed to respond to the concerns of his or her

constituents ... Whether their concerns were proper or justified is not

the issue here. The point is that their elected representative decided to

oppose the project, and did so vigorously.” Emphasis added. ).

schools, roads, parks, etc. Meanwhile, an “empty-

nester” couple that sells that “family home” in

Olympia and purchases a newly constructed

“move-down home” up the street, will pay exorbi-

tant impact fees, even though they are having no

new impact (in fact — they’ve already paid for it!).

Hardly a fair and efficient way to pay for growth.

“Governor Holds The Key To Affordable Housing,” Presi-

dent’s Letter, BIAW’s Building Insight Publication, August

2006.

Legislatively adopted fees, no less than excessive

regulations and onerous procedures, limit the number of

homes that can be built, increase the cost of those that are

built, and reduce the affordability of all homes. The result,

sometimes intended, is to restrict those who can live in

some areas to only the wealthiest. The greatest impact

falls on those with limited incomes, such as young fami-

lies, first time home buyers, minorities, and others with

- limited incomes. These classes of persons in Washington

State deserve the constitutional protections that Nollan/

Dolan affords.

3. Deference To Legislative Acts Does Not

Require Ignoring The Takings Clause.

The separation of powers doctrine supports that

greater deference be paid to a public agency’s legislative,

as opposed to adjudicative, actions. Yet, nowhere does this

policy of greater deference require a reviewing Court to

ignore Constitutional protections.

In U.S. v. Winstar Corp., 1996 U.S. LEXIS 4266 (July

1, 1996) (hereinafter “Winstar”), this Court stated that

complete deference to a legislative assessment is not

appropriate when the state’s self-interest is at stake. Jd. at

100, n.41. The Court further noted that a stricter level of

scrutiny applies in such cases. Jd. The Court characterized

self-interest as an:

[I]Jnstance in which the government seeks to

shift the costs of meeting its legitimate public

responsibilities to private parties: [Citation omit-

ted.] The government may not ‘force some people

alone to bear public burdens which . . . should be

borne by the public as a whole.” Id.

The Court’s clarification was in response to the govern-

ment’s claim that the Sovereign Acts Doctrine applied and

therefore absolute deference must be accorded to the

Legislature’s public and generally applicable act."

Although Winstar applied the prohibitions of a differ-

ent provision of the U.S. Constitution, i.e., the Contract

Clause, this Court found that the deference generally

granted to legislative determinations is not applicable

where the interpretation or application of a Constitutional

provision is at issue. As this Court has stated, “whether

the action of [either the Legislative or Executive Branch]

exceeds whatever authority has been committed, is itself a

delicate exercise in constitutional interpretation, and is a

responsibility of this Court as ultimate interpreter of the

Constitution.” Nixon v. United States, 506 U.S. 224, 238

(1993).

* The Court also cited Dolan for this proposition noting that all

regulations have their costs. Winstar, supra, at 76-77. As this Court

noted, supra, the exactions in Dolan were based on legislative enact-

ments.

“ The government in Winstar argued that a standard almost

identical to the Agins v. Tiburon, 447 U.S. 255 (1980) test should be

applied to the public and general act of the legislature, i.e., whether the

act “advance[s] the general welfare.” Winstar Corp., supra, at 93-94.

The Ehrlich Court suggested that the test for legislative actions should

be whether they substantially advance a legitimate governmental

purpose. As this Court rejected the test proffered by the government in

Winstar, so should it reverse the California Court’s deferential standard

applied to legislatively enacted, generally applicable fees.

IV. CONCLUSION

Therefore, for the reasons stated above and in the

Brief for Petitioners, the MBA Amicus pray that this Court

grant certiorari and reverse the Washington Supreme

Court’s opinion by applying Dolan to monetary exactions

and by applying Dolan to legislative actions.

Respectfully submitted,

CAROLYN A. LAKE

Counsel of Record

CONOR MCCARTHY

GOODSTEIN LAW GROUP PLLC

On behalf of

The Master Builders Association

of Pierce County

1001 Pacific Avenue — Suite 400

Tacoma, WA 98402

253.779.4000 office

253.229.6727 cell

253.779.4411 fax

Counsel for Amicus Curiae

The Master Builders Association

of Pierce County

or pay money to public agencies as a condition to granting

land use, subdivision, and even non-discretionary

construction approvals. In this case, a city required a

developer — in fact requires all developers within its

jurisdiction — to pay a fee that was based not on the specific

impact of a particular development, but on the average

impact of all anticipated development in the city. This case

thus presents two issues of great importance te NAHB and

its members.

First, do the requirements of Nollan and Dolan apply to

impact fees that are imposed on property owners as a

condition of permit approval, where those fees have the

same economic impact on property owners as dedications

of land? This Court’s previous pronouncements place

impact fees with such effects squarely within the category

of “exactions,” a form of taking that constitutionally

requires just compensation. NAHB members need this

Court’s protection when impact fees threaten to become

“not a valid regulation of land use but ‘an out-and-out plan

of extortion’” (Nollan, 483 U.S. at 837), just as much as

they do when the government requires a dedication of land.

Second, may a local government avoid Dolan’s

requirement of “rough proportionality,” and its attendant

burden on the local government of making an

individualized determination, by passing a legislative

exaction on an area-wide basis? NAHB members need this

Court to rule that government may not use its permitting

power to force a// new developments to pay more th in their

fair share, any more than government may require one

development to pay more than its fair share.

The protection from over-reaching and excessive

governmental exactions embodied in Dolan is particularly

important in the context of affordable housing. By shifting

disproportionate costs of public services on to new housing,

exactions that do not comport with Dolan erect more

imposing barriers to affordability. These barriers

compound what is already a significant and serious social

problem plaguing this country.

The lower courts have reached inconsistent and

conflicting results when faced with these issues. Absent a

clear ruling from this Court, NAHB members in different

jurisdictions face inconsistent treatment under what is

supposed to be a uniform national Takings Clause. The

Takings Clause is intended to prevent what occurred in this

case and what home builders endure time and again: a local

government forcing one landowner to bear the entire

economic cost of providing a public good, when “in all

fairness and justice,” that cost “should be borne by the

public as a whole.” Armstrong v. United States, 364 U\S.

40, 49 (1960).

SUMMARY OF ARGUMENT

Exactions are a type of taking that can trigger the

payment of just compensation under the Fifth Amendment.

Impact fees are one category of exaction. In the exaction

context, the requirements of the Takings Clause assure

property owners that the government must make an

individualized determination of whether an impact fee is

“roughly proportional” to the impact of a proposed

development; and further guarantee that, when it is not, the

government will be required to pay back the excess.

Exactions have the same economic impact on property

owners whether they are imposed by legislation or

adjudication, and Dolan’s requirements of individualized

determination and “rough proportionality” should apply

regardless of how the exaction is imposed.

By imposing excessive costs on development when

impact fees or other exactions are levied without meeting

the requirements of Dolan, local governments discourage

the construction of affordable housing.

ARGUMENT

I. THE FIFTH AMENDMENT APPLIES EQUALLY

TO EXACTIONS THAT ARE IMPACT FEES AND

EXACTIONS THAT REQUIRE DEDICATIONS

OF LAND.

As explained in the petition for certiorari, some of the

courts that have refused to apply the WNollan-Dolan

requirements to impact fees have viewed such fees as

somehow categorically—-different from mandatory

dedications of land. However, no _ abstract

conceptualization or “critical leap” is necessary to equate

these economic burdens. Cf, McCarthy v. City of

Leawood, 894 P.2d 836, 845 (Kan. 1995). Practically

speaking, impact fees are simply one variety of exaction.

In the land use context they must meet the constitutional

requirements set forth in Nollan and Dolan to make sure

that land use regulations do not over-reach by requiring the

property owners who need a permit to bear economic costs

that should be borne by the public as a whole.

Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005)

summarized the kinds of takings that trigger the payment of

just compensation. First, the “paradigmatic taking... is a

direct government appropriation or physical invasion of

private property.” /d. at 537. Second, “government

regulation of private property may, in some instances, be so

onerous that its effect is tantamount to a direct

appropriation or ouster.” Jd. Lingle further clarified the

“theories” available for “a plaintiff seeking to challenge a

government regulation as an uncompensated taking” (/d. at

548) as encompassing regulations which: force a physical

occupation, e.g., Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419 (1982); deprive a property owner of all

economically viable use of the property, e.g., Lucas v.

South Carolina Coastal Council, 505 U.S. 1003 (1992); or

“go too far” so as to become the functional equivalent of a

traditional taking, e.g., Penn Central Transportation Co. v.

City of New York, 438 U.S. 104 (1978).

The final category of regulatory taking is “a land-use

exaction violating the standards set forth in Nollan and

Dolan.” Lingle, 544 U.S. at 548. Exactions are a special

application of the doctrine of “unconstitutional conditions,”

which provides that the government may not require a

person to give up a constitutional right — such as 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 has little or

no relationship to the property. Dolan, 512 U.S. at 385.

The lower courts have developed a _ detailed

understanding of exactions. They come in_ four

recognizable categories: “(1) mandatory dedications of land

for roads, schools or parks, as a condition to plat approval,

(2) fees-in-lieu of mandatory dedication, (3) water or

sewage connection fees, and (4) impact fees.” B.A.M.

Development, L.L.C. v. Salt Lake County, 128 P.3d 1161,

1169 (Utah 2006).

The key to Dolan’s application of the Takings Clause to

exactions in the land use context is that, in substance, it

prevents governments from over-charging new

development for the external, public costs it creates. Under

Dolan, the exaction must be roughly proportional to the

impact of the new development, as measured in an

individualized determination made by the permitting body.

If not proven to be roughly proportional, the Fifth

Amendment requires that compensation be paid for the

excess. In this regard, disproportionate impact fees clearly

fall within Dolan’s ambit just like other forms of

exactions.’

Under the proper application of Nollan and Dolan, the

“taking” only occurs where, and to the extent that, the

monetary exaction exceeds what may be charged to the

particular development under the rough proportionality test.

Where a monetary exaction goes beyond the impact of the

development, the local government is requiring the new

development to shoulder a burden that should be borne by

the public as a whole, and thus effects a taking. The

constitutionally-required just compensation is then a return

of that portion of the monetary fee constituting

overpayment. In this regard, takings analysis is more finely

tuned than substantive due process analysis when applied to

impact fees. The former requires that an excess be paid

back to the developer but allows the government to keep

the justifiable portion of the fee. The latter simply

invalidates the entire fee.

Even though this Court has made it clear that takings

claims involving land use exactions in the form of physical

dedications of property are evaluated under the Dolan

“rough proportionality” test, the lower courts appear to

2 Some argue that five justices in Eastern Enterprises v. Apfel,

524 U.S. 498 (1998) agreed that the Takings Clause did not

apply to the mere payment of money, thus resolving the

applicability of Dolan to impact fees. However, one of the five

was Justice Kennedy, who confined his objection to a monetary

obligation that was not imposed with respect to or on a particular

property. 524 U.S. at 540. Impact fees are, of course, imposed

with respect to development that occurs on a particular property,

and so Justice Kennedy’s opinion in Eastern Enterprises did not

resolve the issue.

believe that applying Dolan to impact fees and monetary

exactions “is a compiex question and is not completely

resolved.” Dudek v. Umatilla County, 69 P.3d 751, 757

(Ore Ct. App. 2003). Compare Ehrlich v. City of Culver

City, 12 Cal.4" 854, 911 P.2d 429 (1996), cert. denied, 519

U.S. 929 (1996) (at least those monetary land use exactions

that are imposed “on an individual and discretionary basis”

are subject to Dolan scrutiny) with Town of Flower Mound

v. Stafford Estates Limited Partnership, 135 $.W.3d 620

(Tex. 2004) (all monetary land use exactions are subject to

Dolan, whether imposed on an individual, discretionary

basis or area-wide) and Twin Lakes Dev. Corp. v. Town of

Monroe, | N.Y.3d 98, 105, 801 N.E.2d 821, 825 (2003),

cert. denied, 541 U.S. 974 (2004); Smith v. Town of

Mendon, 4 N.Y.3d 1, 12, 822 N.E.2d 1214, 1219 (2004)

(Dolan scrutiny applies to dedications of land and to fees-

in-lieu of land dedications).

This Court should clear the air. From a land owner’s

perspective, there is no practical distinction between

exactions requiring land dedications and _ exactions

requiring the payment of money. Each has an identifiable

economic impact on the builderor property owner. Each is

susceptible of the same kind of abuse by government. Each

can be easily remedied by application of the just

compensation requirement. (In fact, it may be easier to

“require just compensation for monetary exactions than for

exactions of real estate. When the latter cannot meet the

rough proportionality standard, a court must determine the

value of the excess land that was taken by the permitting

authority. This step is unnecessary when the taking is

accomplished by an excessive fee — all the court need do is

order a payment back of the over-charge.)

In the end, “[f]rom the property owner’s point of view,

it may matter little whether his land” is taken through

conditions that demand disproportionate 1d dedication or

excessive payment of impact fees. See San Diego Gas &

Elec. Co. v. City of San Diego, 450 U.S. 621, 652 (Brennan,

J., plurality dissent), adopted in First English Evangelical

Lutheran Church of Glendale v. Los Angeles County, 482

U.S. 304 (1987). “{T]he Constitution measures a takings of

property not by what a State says, or by what it intends, but

by what it does.” Hughes v. Washington, 389 U.S. 290,

298 (1967) (Stewart, J., concurring). This Court should

hold that all land use exactions, whether of land or of

money, are subject to Dolan.

Il. THIS COURT NEEDS TO CONFIRM AGAIN

THAT THE “ROUGH PROPORTIONALITY”

AND INDIVIDUALIZED DETERMINATION

REQUIREMENTS OF DOLAN APPLY EQUALLY

TO LEGISLATIVE EXACTIONS AND TO

ADMINISTRATIVE OR QUASI-JUDICIAL

EXACTIONS.

This Court should grant certiorari in this case and

reverse the Washington Supreme Court because that court

incorrectly focused on a false distinction between

legislative and adjudicative exactions. This Court has not

made such a distinction, but instead has previously applied

the Takings Clause to legislative actions, both in general

and in Dolan itself. Nevertheless, the lower courts are

confused, and this Court needs to set the record straight.

A. This Court Has Long Recognized the General

Principle that Legislation Can Effect a Taking.

This Court has frequently — and recently — held that a

legislative enactment can result in an unconstitutional

taking. For example, in Babbitt v. Youpee, 519 U.S. 234,

243 (1997) and Hodel v. Irving, 481 U.S. 704, 716-18

(1987), this Court twice held the escheat provision of the -

Indian Land Consolidation Act (25 U.S.C. § 2206)

unconstitutional. And, in Eastern Enterprises v. Apfel, 524

U.S. 498, 529-37 (1998), the plurality opinion held the

application of the Coal Industry Retiree Health Benefit Act

of 1922 (2 U.S.C. § 9701-9722) unconstitutional for

requiring millions of dollars in health care contributions

based on a predecessor company’s activities decades

earlier. Thus, the notion that government exactions are

somehow immune from takings analysis if they are

imposed by legislation has no basis as a general principle.

Most of this Court’s previous holdings in this regard,

however, did not involve exactions in the land use context.

Given a plethora of lower court decisions seeking to avoid

the mandate of Dolan, this Court should now make it clear

that exactions that are not roughly proportional to the

impact of a proposed development require just

compensation, regardless of how the exactions are imposed.

This simple conclusion makes sense. As stated before

by Justice Thomas, “It is not clear why the existence of a

taking should turn on the type of governmental entity

responsible for the taking. A city council can take property

just as well as a planning commission can....The

distinction between sweeping legislative takings and

particularized administrative takings appears to be a

distinction without a constitutional difference.” Parking

Ass'n of Georgia, Inc., 515 U.S. 1116, 1118 (1995)

(Thomas, J., dissenting).

B. Dolan Itself Involved an Exaction Imposed by

Legislation.

The Takings Clause requirement that exactions be

roughly proportional was decreed in a case that was itself

instigated by a legislative requirement instead of an ad hoc

administrative uetermination. At issue in Dolan were

dedications required pursuant to the Tigard, Oregon

Community Development Code (“CDC”). As this Court

explained in Dolan:

The CDC requires property owners in the area

zoned Central Business District to comply with a

15% open space and landscaping requirement, .. .

The CDC requires that new development facilitate [a

plan for a pedestrian/bicycle pathway] by dedicating

land for pedestrian pathways where provided for in

the pedestrian/bicycle pathway plan.”

512°U.S. at 377-78.° Thus, the predicate for the numerous

decisions which turn on whether the exaction is imposed by

legislative or administrative means is not justified by

reference to this Court’s original decision.

There is, of course, language in Dolan that may suggest

a distinction between legislative and administrative actions.

But it is a false distinction. The language appears in a

discussion of cases involving general land use restrictions:

First, [those - cases] involved _ essentially

legislative determinations classifying entire areas of

the city, whereas here the city made an adjudicative

decision to condition petitioner’s application for a

building permit on an individual parcel.

> Some analyses point to footnote 8 in Dolan, which states,

“Here, by contrast, the City made an adjudicative decision to

condition petitioner’s application for a building permit on an

individual parcel.” 512 U.S. at 391 (emphasis added). However,

Justice Souter, in his dissent, clarified the situation by pointing

out that footnote 8 misstated the genesis of the condition: “The

majority characterizes this case as involving an ‘adjudicative

decision’ to impose permit conditions [citations omitted], but the

permit conditions were imposed pursuant to Tigard’s

Community Development Code.” 512 U.S. at 413, n.*.

512 U.S. at 385. Those seeking to avoid the rough

proportionality requirement seize on the above term

“legislative determination.” But the contrast emphasized

by the Court was between classifications, on the one hand,

and conditions, on the other. While the requirement of

rough proportionality does not apply to the first (City of

Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S.

687, 703 (1999)), it does apply to the second, regardless of

whether the condition applies to all properties in an area by

legislative decree, or just one property by administrative

determination.

C. There is Great Confusion in the Lower Courts.

“The lower courts are in conflict over whether Dolan’s

test for property regulation should be applied in cases

where the alleged taking occurs through an Act of the

legislature.” Parking Ass’n of Georgia, Inc., 515 US.

1116, 1117 (1995) (Thomas, J., dissenting).

The problem is widespread and the consequent results

inconsistent. In addition to the cases cited by petitioners,

the Illinois Appellate Court held in Amoco Oil Co. v.

Village of Schaumburg, 277 Ill. App. 3d 926, 941-43, 661

N.E.2d 380, 390-91 (1 Dist. 1995), leave to appeal denied,

667 N.E.2d 1055 (Ill. 1996), cert. denied, 519 U.S. 976

(1996), that there is no reason to differentiate between

exactions imposed legislatively or by adjudication.

On the other hand, cases holding that exactions imposed

by legislation need not meet Dolan’s rough proportionality

test include Wisconsin Builders Ass'n v. Wisconsin Dep’t of

Transportation, 285 Wis.2d 473, 504, 702 N.W.2d 433,

448 (2005); Wonders v. Pima County, 89 P.3d 810, 816

(Ariz. Ct. App. 2004); Homebuilders Ass'n v. Tualatin Hills

Park & Recreation Dist., 62 P.3d 404, 409 (Ore. Ct. App.

2003); Home Builders Ass'n v. City of Napa, 108 Cal.

Rptr.2d 60, 65 (2001), cert. denied, 535 U.S. 954 (2002);

Arcadia Dev. Corp. v. City of Bloomington, 552 N.W.2d

281, 286 (Minn. Ct. App. 1996); and Harris v. Wichita, 862

F. Supp. 287, 294 (D. Kan. 1994).

The Supreme Court of Utah called it an “unruly judicial

chorus on this issue,” but that court found it unnecessary to

add its voice because the Utah legislature had stepped in to

resolve the issue. B.A.M. Development, L.L.C. v. Salt Lake

County, 128 P.3d 1161, 1171 (Utah 2006). Utah Code

Ann. § 17-27a-507 applies Dolan’s rough proportionality

test to all exactions, whether imposed legislatively or

administratively.’

A pending bill in Congress would resolve the issue by

applying the constitutional test equally to both legislative

and adjudicative exactions, as well as to required

dedications of both land and fees. H.R. 4772, The Private

Property Rights Implementation Act of 2006, 109th Cong.,

2d Sess. (2006).° While it passed the Judiciary Committee

by voice vote on July 12, 2006, there has not yet been

action on H.R. 4772 by the full House.

‘ The dissent in the Washington Supreme Court in this case

believed that the Washington state legislature had likewise

applied the Dolan rough proportionality test by statute, but the

majority held otherwise. City of Olympia v. Drebick, 156

Wash.2d 289, 303-04, 320, 126 P.3d 802, 808-09, 817 (2006).

> Section 5 of H.R. 4772 provides: “If the party injured seeks to

redress the deprivation of a property right or privilege under this

section that is secured by the Constitution by asserting a claim

that concerns -- (1) an approval to develop real property that is

subject to conditions or exactions, then the person acting under

color of State law is liable if any such condition or exaction,

whether legislative or adjudicatory in nature, including but not

limited to the payment of a monetary fee or a dedication of real

property from the injured party, is unconstitutional.”

One commentator reviewed 29 cases construing Dolan

and concluded that the lower courts are simply confused.

“The survey of the caselaw reveals that the lower courts’

application of the legislative/adjudicative distinction is

inconsistent.” Note, The Distinction between Legislative

and Adjudicative Decisions in Dolan v. City of Tigard, 75

N.Y.U. L. Rev. 242, 256 (2000). The conflict in the lower

courts makes the grant of certiorari all the more compelling

in this case. See Parking Ass’n of Georgia, Inc., 515 U.S.

1116, 1118 (1995) (Thomas, J., dissenting).

D. The Legislative/Administrative Distinction is

Beset by Practical Difficulties and Gives Rise

to Perverse Incentives.

This Court should clear up the post-Do/an confusion not

only because inconsistent lower courts are misapplying the

law but also because the distinction between exactions by

legislation and exactions by administrative determination

cannot be so easily drawn. It is another false distinction

that encourages municipalities to shift public costs away

from voters and on to those who have no voice in municipal

affairs. “The takings clause . . . protects against this

majoritarian tyranny . . . by insisting that the costs imposed

by government use or regulation of priva‘e property are

borne by all to whom the benefits inure.” James L.

Huffman, Dolan v. Tigard: Another Step in the Right

Direction, 25 Envtl. L. 143, 152 (1995).

As a practical matter, it is difficult to determine just

when a particular action should be characterized as

legislative or administrative, especially in the land use

context. “[(I]n reality, the discretionary powers of

municipal authorities exist along a continuum and seldom

fall into the neat categories of a fully predetermined

legislative exaction or a completely discretionary

administrative determination as to the appropriate

exaction.” Note, The Distinction between Legislative and

Adjudicative Decisions in Dolan v. City of Tigard, 75

N.Y.U. L. Rev. 242, 266 (2000). In Town of Flower

Mound v. Stafford Estates L.P., 135 §.W.2d 620, 641 (Tex.

2004), the Texas Supreme Court rejected the argument that

Dolan only applied to adjudicative decisions, and

commented, “Nor are we convinced that a workable

distinction can always be drawn between actions

denominated adjudicative and legislative.”

The Texas Supreme Court was correct. Courts struggle

with the application of such a distinction, particularly in the

land use context. Are special use approvals legislative or

quasi-judicial? The law seems to vary. See, e.g., Klaeren

v. Village of Lisle, 202 Ill.2d 164, 183, 781 N.E.2d 223, 234

(2002) (overruling prior cases and holding that special use

approvals are administrative or quasi-judicial). How about

variances? The courts differ. Compare Topanga Ass’n for

a Scenic Community v. County of Los Angeles, 11 Cal.3d

506, 517, 522 P.2d 12, 19 (1974) (grant of a variance is a

quasi-judicial, administrative act) with Hawthorne v.

Village of Olympia Fields, 204 I1!.2d 243, 253, 790 N.E.2d

832, 839 (2004) (action by village board on request for a

variance is legislative). The rezoning of a single parcel of

land? One line of cases holds it to be legislative (Arnel

Development Co. v. City of Costa Mesa, 620 P.2d 565, 567

(Cal. 1980)), while another finds it to be quasi-judicial (see

Harris v. County of Riverside, 904 F.2d 497 (9" Cir. 1990);

Nasierowski Bros. Investment Co. v. City of Sterling

Heights, 949 F.2d 890, 895-897 (6" Cir. 1991); City of

Louisville v. McDonald, 470 S.W.2d 173, 176-78 (Ky.

1971)).

The seemingly easy distinction applying Dolan’s rough

proportionality test to administrative or quasi-judicial

exactions but not to those imposed by legislative fiat is in

fact fraught with practical difficulties. It is also bad public

policy, because the distinction allows municipalities the

too-easy opportunity to simply push the costs attendant to

development on a_ small number of individuals.

Furthermore, in many cases of residential development the

payor is an out-of-town corporation and those residents

ultimately bearing the cost of the impact fee (through

higher home prices) are the buyers of the homes yet to be

built — two groups who lack the right to vote in municipal

elections.° Thus, the idea that the democratic process could

be a sufficient check on extortionate impact fees is not

supportable. See Town of Flower Mound, 135 S.W.3d at

640-41.

Immunizing legislatively imposed exactions from

Dolan’s rough proportionality requirement grants the

government carte blanche to require a developer to pay for

problems that the new development did not create.

Certiorari should be granted to correct any trend in the law

that is contrary to Dolan.

Ill. IMPROPER EXACTIONS HURT AFFORDABLE

HOUSING.

The confusion in the law is bad enough. Worse is the

consequence of continued confusion: more improper

exactions on homebuilders, and less affordable housing for

the public. This Court should grant certiorari now to stop

municipalities from continuing to impose what amounts to

a silent tax that limits the stock of affordable housing:

° As the late Sen. Russell B. Long, former chair of the Senate

Finance Committee, commented in the context of tax reform,

“Don’t tax you, don’t tax me, tax that fellow behind the tree.”

Fred R. Shapiro, The Oxford Dictionary of American Legal

Quotations, 401 (Oxford University Press 1993).

or pay money to public agencies as a condition to granting

land use, subdivision, and even non-discretionary

construction approvals. In this case, a city required a

developer — in fact requires all developers within its

jurisdiction — to pay a fee that was based not on the specific

impact of a particular development, but on the average

impact of all anticipated development in the city. This case

thus presents two issues of great importance to NAHB and

its members.

First, do the requirements of Nollan and Dolan apply to

impact fees that are imposed on property owners as a

condition of permit approval, where those fees have the

same economic impact on property owners as dedications

of land? This Court’s previous pronouncements place

impact fees with such effects squarely within the category

of “exactions,” a form of taking that constitutionally

requires just compensation. NAHB members need this

Court’s protection when impact fees threaten to become

“not a valid regulation of land use but ‘an out-and-out plan

of extortion’” (Nollan, 483 U.S. at 837), just as much as

they do when the government requires a dedication of land.

Second, may a local government avoid Dolan’s

requirement of “rough proportionality,” and its attendant

burden on the local government of making an

individualized determination, by passing a legislative

exaction on an area-wide basis? NAHB members need this

Court to rule that government may not use its permitting

power to force a// new developments to pay more than their

fair share, any more than government may require one

development to pay more than its fair share.

The protection from over-reaching and excessive

governmental exactions embodied in Dolan is particularly

important in the context of affordable housing. By shifting

disproportionate costs of public services on to new housing,

exactions that do not comport with Dolan erect more

imposing barriers to affordability. These _ barriers

compound what is already a significant and serious social

problem plaguing this country.

The lower courts have reached inconsistent and

conflicting results when faced with these issues. Absent a

clear ruling from this Court, NAHB members in different

_ jurisdictions face inconsistent treatment under what is

supposed to be a uniform national Takings Clause. The

Takings Clause is intended to prevent what occurred in this

case and what home builders endure time and again: a local

government forcing one landowner to bear the entire

economic cost of providing a public good, when “in all

fairness and justice,” that cost “should be borne by the

public as a whole.” Armstrong v. United States, 364 U.S.

40, 49 (1960).

SUMMARY OF ARGUMENT

Exactions are a type of taking that can trigger the

payment of just compensation under the Fifth Amendment.

Impact fees are one category of exaction. In the exaction

context, the requirements of the Takings Clause assure

property owners that the government must make an

individualized determination of whether an impact fee is

“roughly proportional” to the impact of a proposed

development; and further guarantee that, when it is not, the

government will be required to pay back the excess.

Exactions have the same economic impact on property

owners whether they are imposed by legislation or

adjudication, and Dolan’s requirements of individualized

determination and “rough proportionality” should apply

regardless of hew the exaction is imposed.

By imposing excessive costs on development when

impact fees or other exactions are levied without meeting

the requirements of Dolan, locatgevernments discourage

the construction of affordable housing.

ARGUMENT

I. THE FIFTH AMENDMENT APPLIES EQUALLY

TO EXACTIONS THAT ARE IMPACT FEES AND

EXACTIONS THAT REQUIRE DEDICATIONS

OF LAND.

As explained in the petition for certiorari, some of the

courts that have refused to apply the WNollan-Dolan

requirements to impact fees have viewed such fees as

somehow categorically different from mandatory

dedications of land. However, no _ abstract

conceptualization or “critical leap” is necessary to equate

these economic burdens. Cf, McCarthy v. City of

Leawood, 894 P.2d 836, 845 (Kan. 1995). Practically

speaking, impact fees are simply one variety of exaction.

In the land use context they must meet the constitutional

requirements set forth in Nollan and Dolan to make sure_

that land use regulations do not over-reach by requiring the

property owners who need a permit to bear economic costs

that should be borne by the public as a whole.

Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005)

summarized the kinds of takings that trigger the payment of

just compensation. First, the “paradigmatic taking... is a

direct government appropriation or physical invasion of

private property.” /d. at 537. Second, “government

regulation of private property may, in some instances, be so

onerous that its effect is tantamount to a direct

appropriation or ouster.” Jd. Lingle further clarified the

“theories” available for “a plaintiff seeking to challenge a

government regulation as an uncompensated taking” (/d. at

548) as encompassing regulations which: force a physical

occupation, e.g., Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419 (1982); deprive a property owner of all

economically viable use of the property, e.g., Lucas v.

South Carolina Coastal Council, 505 U.S. 1003 (1992); or

“go too far” so as to become the functional equivalent of a

traditional taking, e.g., Penn Central Transportation Co. v.

City of New York, 438 U.S. 104 (1978).

The final category of regulatory taking is “a land-use

exaction violating the standards set forth in Nollan and

Dolan.” Lingle, 544 U.S. at 548. Exactions are a special

application of the doctrine of “unconstitutional conditions,”

which provides that the government may not require a

person to give up a constitutional right — such as 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 has little or

no relationship to the property. Dolan, 512 U.S. at 385.

The lower courts have developed a _ detailed

understanding of exactions. They come in_ four

recognizable categories: “(1) mandatory dedications of land

for roads, schools or parks, as a condition to plat approval,

(2) fees-in-lieu of mandatory dedication, (3) water or

sewage connection fees, and (4) impact fees.” B.A.M.

Development, L.L.C. v. Salt Lake County, 128 P.3d 1161,

1169 (Utah 2006).

The key to Dolan’s application of the-Takings Clause to

exactions in the land use context is that, in substance, it

prevents governments from _ over-charging new

development for the external, public costs it creates. Under

Dolan, the exaction must be roughly proportional to the

impact of the new development, as measured in an

individualized determination made by the permitting body.

If not proven to be roughly proportional, the Fifth

Amendment requires that compensation be paid for the

excess. In this regard, disproportionate impact fees clearly

fall within Dolan’s ambit just like other forms of

exactions.”

Under the proper application of Nollan and Dolan, the

“taking” only occurs where, and to the extent that, the

monetary exaction exceeds what may be charged to the

particular development under the rough proportionality test.

Where a monetary exaction goes beyond the impact of the

development, the local government is requiring the new

development to shoulder a burden that should be borne by

the public as a whole, and thus effects a taking. The

constitutionally-required just compensation is then a return

of that portion of the monetary fee constituting

overpayment. In this regard, takings analysis is more finely

tuned than substantive due process analysis when applied to

impact fees. The former requires that an excess be paid

back to the developer but allows the government to keep

the justifiable portion of the fee. The latter simply

invalidates the entire fee.

Even though this Court has made it clear that takings

claims involving land use exactions in the form of physical

dedications of property are evaluated under the Dolan

“rough proportionality” test, the lower courts appear to

2 Some argue that five justices in Eastern Enterprises v. Apfel,

524 U.S. 498 (1998) agreed that the Takings Clause did not

apply to the mere payment of money, thus resolving the

applicability of Dolan to impact fees. However, one of the five

was Justice Kennedy, who confined his objection to a monetary

obligation that was not imposed with respect to or on a particular

property. 524 U.S. at 540. Impact fees are, of course, imposed

with respect to development that occurs on a particular property,

and so Justice Kennedy’s opinion in Eastern Enterprises did not

resolve the issue.

believe that applying Dolan to impact fees and monetary

exactions “is a complex question and is not completely

resolved.” Dudek v. Umatilla County, 69 P.3d 751, 757

(Ore Ct. App. 2003). Compare Ehrlich v. City of Culver

City, 12 Cal.4" 854, 911 P.2d 429 (1996), cert. denied, 519

U.S. 929 (1996) (at least those monetary land use exactions

that are imposed “on an individual and discretionary basis”

are subject to Dolan scrutiny) with Town of Flower Mound

v. Stafford Estates Limited Partnership, 135 S$.W.3d 620

(Tex. 2004) (all monetary land use exactions are subject to

Dolan, whether imposed on an individual, discretionary

basis or area-wide) and Twin Lakes Dev. Corp. v. Town of

Monroe, 1 N.Y.3d 98, 105, 801 N.E.2d 821, 825 (2003),

cert. denied, 541 U.S. 974 (2004); Smith v. Town of

Mendon, 4 N.Y.3d 1, 12, 822 N.E.2d 1214, 1219 (2004)

(Dolan scrutiny applies to dedications of land and to fees-

in-lieu of land dedications).

This Court should clear the air. From a land owner’s

perspective, there is no practical distinction between

exactions -requiring land dedications and _ exactions

requiring the payment of money. Each has an identifiable

economic impact on the builder or property owner. Each is

susceptible of the same kind of abuse by government. Each

can be easily remedied by application of the just

compensation requirement. (In fact, it may be easier to

“require just compensation for monetary exactions than for

exactions of real estate. When the latter cannot meet the

rough proportionality standard, a court must determine the

value of the excess land that was taken by the permitting

authority. This step is unnecessary when the taking is

accomplished by an excessive fee — all the court need do is

order a payment back of the over-charge.)

In the end, “[fjrom the property owner’s point of view,

it may matter little whether his land” is taken through

conditions that demand disproportionate land dedication or

excessive payment of impact fees. See San Diego Gas &

Elec. Co. v. City of San Diego, 450 U.S. 621, 652 (Brennan,

J., plurality dissent), adopted in First English Evangelical

Lutheran Church of Glendale v. Los Angeles County, 482

U.S. 304 (1987). “{T]he Constitution measures a takings of

property not by what a State says, or by what it intends, but

by what it does.” Hughes v. Washington, 389 U.S. 290,

298 (1967) (Stewart, J., concurring). This Court should

hold that all land use exactions, whether of land or of

money, are subject to Dolan.

Il. THIS COURT NEEDS TO. CONFIRM AGAIN

THAT THE “ROUGH PROPORTIONALITY”

AND INDIVIDUALIZED DETERMINATION

REQUIREMENTS OF DOLAN APPLY EQUALLY

TO LEGISLATIVE EXACTIONS AND TO

ADMINISTRATIVE OR QUASI-JUDICIAL

EXACTIONS.

This Court should grant certiorari in this case and

reverse the Washington Supreme Court because that court

incorrectly focused on a false distinction between

legislative and adjudicative exactions. This Court has not

made such a distinction, but instead has previously applied

the Takings Clause to legislative actions, both in general

and in Dolan itself. Nevertheless, the lower courts are

_confused, and this Court needs to set the record straight.

A. This Court Has Long Recognized the General

Principle that Legislation Can Effect a Taking.

This Court has frequently — and recently — held that a

legislative enactment can result in an unconstitutional

taking. For example, in Badbitt v. Youpee, 519 U.S. 234,

243 (1997) and Hodel v. Irving, 481 U.S. 704, 716-18

(1987), this Court twice held the escheat provision of the

Indian Land Consolidation Act (25 U.S.C. § 2206)

unconstitutional. And, in Eastern Enterprises v. Apfel, 524

U.S. 498, 529-37 (1998), the plurality opinion held the

application of the Coal Industry Retiree Health Benefit Act

of 1922 (2 U.S.C. § 9701-9722) unconstitutional for

requiring millions of dollars in health care contributions

based on a predecessor company’s activities decades

earlier. Thus, the notion that government exactions are

somehow immune from takings analysis if they are

imposed by legislation has no basis as a general principle.

Most of this Court’s previous holdings in this regard,

however, did not involve exactions in the land use context.

Given a plethora of lower court decisions seeking to avoid

the mandate of Dolan, this Court should now make it clear

that exactions that are not roughly proportional to the

impact of a proposed development require just

compensation, regardless of how the exactions are imposed.

This simple conclusion makes sense. As stated before

by Justice Thomas, “It is not clear why the existence of a

taking should turn on the type of governmental entity

responsible for the taking. A city council can take property

just as well as a planning commission can... .The

distinction between sweeping legislative takings and

particularized administrative takings appears to be a

distinction without a constitutional difference.” Parking

Ass’n of Georgia, Inc., 515 US. 1116, 1118 (1995)

(Thomas, J., dissenting).

B. Dolan Itself Involved an Exaction Imposed by

Legislation.

The Takings Clause requirement that exactions be

roughly proportional was decreed in a case that was itself

instigated by a legislative requirement instead of an ad hoc

administrative determination. At issue in Dolan were

dedications required pursuant to the Tigard, Oregon

Community Development Code (“CDC”). As this Court

explained in Dolan:

The CDC requires property owners in the area

zoned Central Business District to comply with a

15% open space and landscaping requirement, .. .

The CDC requires that new development facilitate [a

plan for a pedestrian/bicycle pathway] by dedicating

land for pedestrian pathways where provided for in

the pedestrian/bicycle pathway plan.”

512 U.S. at 377-78.° Thus, the predicate for the numerous

decisions which turn on whether the exaction is imposed by

legislative or administrative means is not justified by

reference to this Court’s original decision.

There is, of course, language in Dolan that may suggest

a distinction between legislative and administrative actions.

But it is a false distinction. The language appears in a

discussion of cases involving general land use restrictions:

First, [those cases] involved _ essentially

legislative determinations classifying entire areas of

the city, whereas here the city made an adjudicative

decision to condition petitioner’s application for a

building permit on an individual parcel.

> Some analyses point to footnote 8 in Dolan, which states,

“Here, by contrast, the City made an adjudicative decision to

condition petitioner’s application for a building permit on an

individual parcel.” 512 U.S. at 391 (emphasis added). However,

Justice Souter, in his dissent, clarified the situation by pointing

out that footnote 8 misstated the genesis of the condition: “The

majority characterizes this case as involving an ‘adjudicative

decision’ to impose permit conditions [citations omitted], but the

permit conditions were imposed pursuant to Tigard’s

Community: Development Code.” 512 U.S. at 413, n.*.

512 U.S. at 385. Those seeking to avoid the rough

proportionality requirement seize on the above term

“legislative determination.” But the contrast emphasized

by the Court was between classifications, on the one hand,

and conditions, on the other. While the requirement of

rough proportionality does not apply to the first (City of

Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S.

687, 703 (1999)), it does apply to the second, regardless of

whether the condition applies to all properties in an area by

legislative decree, or just one property by administrative

determination.

C. There is Great Confusion in the Lower Courts.

“The lower courts are in conflict over whether Dolan’s

test for property regulation should be applied in cases

where the alleged taking occurs through an Act of the

legislature.” Parking Ass’n of Georgia, Inc., 515 US.

1116, 1117 (1995) (Thomas, J., dissenting).

The problem is widespread and the consequent results

inconsistent. In addition to the cases cited by petitioners,

the Illinois Appellate Court held in Amoco Oil Co. v.

Village of Schaumburg, 277 Ill. App. 3d 926, 941-43, 661

N.E.2d 380, 390-91 (1* Dist. 1995), leave to appeal denied,

667 NN.E.2d 1055 (Ill. 1996), cert. denied, 519 U.S. 976

(1996), that there is no reason to differentiate between

exactions imposed legislatively or by adjudication.

On the other hand, cases holding that exactions imposed

by legislation need not meet Dolan’s rough proportionality

test include Wisconsin Builders Ass'n v. Wisconsin Dep’t of

Transportation, 285 Wis.2d 473, 504, 702 N.W.2d 433,

448 (2005); Wonders v. Pima County, 89 P.3d 810, 816

(Ariz. Ct. App. 2004); Homebuilders Ass’n v. Tualatin Hills

Park & Recreation Dist., 62 P.3d 404, 409 (Ore. Ct. App.

2003); Home Builders Ass’n v. City of Napa, 108 Cal.

Rptr.2d 60, 65 (2001), cert. denied, 535 U.S. 954 (2002);

Arcadia Dev. Corp. v. City of Bloomington, 552 N.W.2d

281, 286 (Minn. Ct. App. 1996); and Harris v. Wichita, 862

F. Supp. 287, 294 (D. Kan. 1994).

The Supreme Court of Utah called it an “unruly judicial

chorus on this issue,” but that court found it unnecessary to

add its voice because the Utah legislature had stepped in to

resolve the issue. B.A.M. Development, L.L.C. v. Salt Lake

County, 128 P.3d 1161, 1171 (Utah 2006). Utah Code

Ann. § 17-27a-507 applies Dolan’s rough proportionality

test to all exactions, whether imposed legislatively or

administratively.

A pending bill in Congress would resolve the issue by

applying the constitutional test equally to both legislative

and adjudicative exactions, as well as to required

dedications of both land and fees. H.R. 4772, The Private

Property Rights Implementation Act of 2006, 109th Cong.,

2d Sess. (2006).*° While it passed the Judiciary Committee

by voice vote on July 12, 2006, there has not yet been

action on H.R. 4772 by the full House.

* The dissent in the Washington Supreme Court in this case

believed that the Washington state legislature had likewise

applied the Defan rough proportionality test by statute, but the