Florida case favors property rights, illustrates power of state and federal courts

Coy Koontz Jr. has been fighting a legal battle since 1994 when his father sued the St. Johns River Water Management District over permitting conditions. After 18 years, the U.S. Supreme Court has sided with the elder Koontz.

What does today’s U.S. Supreme Court have to do with a Florida landowner who bought some undeveloped property in 1972? It’s a long story, but it ends with a win for property owners.

Coy Koontz Sr. bought some land east of Orlando in 1972, planning eventually to build a small commercial project on it. In 1994, he sought a permit from the St. Johns River Water Management District. The water management district responded with a set of conditions, which Koontz did not accept, saying that they violated his rights under the 5th Amendment. The district denied the permit, and Koontz sued. This was after he had already conceded extensive conservation easements to the district in exchange for the permit he sought and never received.

Over 18 years, the case slowly made its way through the Florida courts and to the U.S. Supreme Court. Finally, the high court on June 25 reversed a decision by the Florida Supreme Court in the case, Koontz v. St. Johns River Water Management District, that had favored the water management district. The federal court said that the water district had imposed “unconstitutional conditions” and “extortionate demands” on a property owner seeking a building permit. In a divided decision, the court ruled 5-4 in favor of Koontz.

Butch Calhoun, FFVA’s director of government relations, called it a “big win for property rights backers.” It assures landowners that government can’t use the land-use permitting process to “help themselves to the landowners’ hard-earned savings,” he said.

Dan Peterson, executive director for The Coalition for Property Rights said, “This is a very welcome decision, but there are still many other such ‘extortion’ cases in Florida where property owners could not wait out government demands.”

Coy Koontz Jr. and attorney Paul J. Beard II talk to reporters after the recent favorable Supreme Court decision.

FFVA and other agricultural organizations had filed a “friend of the court” brief in support of Koontz, saying that the Florida Supreme Court erred in its decision and urging the U.S. Supreme Court to require governmental entities to establish a rational relationship (known as a rational nexus test) between monetary requirements proposed as a condition to a requested permit and the harm caused by the activity for which the permit is requested.

So what does this mean for the Koontz family? The jury is still out, so to speak. “One of those lower courts awarded the Koontz family compensation, but the U.S. Supreme Court didn’t act on that. They sent that case back to the state courts to decide whether to affirm the compensation awarded to the family by the trial judge,” Calhoun said. “So they left it open as to whether they’d get compensated for their loss or not.”

Gary Hunter, an attorney who filed the brief on FFVA’s behalf, agrees. “Unfortunately, a result of the decision is that the Florida Supreme Court will likely remain involved in the outcome to apply Florida law, in view of the holding,” he said. “The water management district intends to argue that the Koontz family failed to exhaust its administrative remedies by not challenging the permit condition/denial, thus having no remedies left under Florida law.”

Nevertheless, Hunter said he expects local governments and state agencies, both in Florida and beyond, will be more careful in attaching conditions associated with permit approvals where the conditions are not directly related to the effects of the permitted activity.

Some news reports of the decision call it a blow for the environment and sustainable development. They agree with the Supreme Court’s minority opinion expressed by Justice Elena Kagan that it would “work a revolution in land-use law.” A New York Times opinion piece stated that the decision will result in “long-lasting harm to America’s communities.”  Its author, John D. Echeverria, said, “That’s because the ruling creates a perverse incentive for municipal governments to reject applications from developers rather than attempt to negotiate project designs that might advance both public and private goals – and it makes it hard for communities to get property owners to pay to mitigate any environmental damage they may cause.”

Hunter disagreed. “It is silly to suggest governments will be unwilling to negotiate permit conditions with applicants,” he said. “It is not in government’s best interest to do this as that is adverse to any meaningful economic development policy.”

Peterson added, “The sustainable development movement, with its burdensome restrictions and mitigations, has been a growing threat to private property rights for decades. But in the wake of the Koontz decision, I know of one mid-Florida county that has already rescinded some restrictions they had placed on an owner seeking to develop his property. CPR sincerely hopes reason rather than ideology will continue to triumph.”

The second part of the Florida Supreme Court’s earlier decision dismissed by the federal court was about fees and conditions that a community could impose on developers. The Florida court, citing earlier cases, said that if a government imposed a fee on the developer, it was fine as long as it did not actually involve taking property. The federal court struck that down, saying that forcing the landowner to pay a fee essentially meant the government had taken property.

Some argue that impact fees are used extensively across the nation to offset harm caused by proposed projects. They say the landowner needs to pay something in order to use that land for development, not the community.

“This is a ridiculous suggestion and the real travesty would be the contrary result,” said Hunter. “The Koontz holding says simply that if government imposes some ‘mitigating condition’ on a permit as an exaction, then that exaction must be connected to harm caused by the permitted activity, and no more. If it is in the public’s interest to prevent someone from doing something on their property, then by all means the public should compensate that owner for the value of their land (in its highest and best use) to allow the public to take that benefit from the owner. Case law has long supported this proposition,” he said.

Given these points, Hunter says this was a compelling decision that extended the thinking of the  earlier U.S. Supreme Court decisions.

“Further, this holding was a 5-4 decision, as are many of the recent decisions from this Supreme Court, emphasizing the importance of who is getting appointed and, of course, who is making the appointments,” Hunter said. “Though many like to believe otherwise, the federal and state court systems have great influence on directing public policy in the manner in which they apply the laws and constitutions.”

Read the entire U.S. Supreme Court decision here.

Read Pacific Legal Foundation’s case summary here.

Read FFVA and others’ Amicus Brief here.

- Photos  courtesy of Pacific Legal Foundation

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