Property Law Developments—Joseph William Singer

In Arkansas Game & Fish Comm’n v. United States, 133 S.Ct. 511 (2012), the Supreme Court unanimously overruled the Federal Circuit decision in Arkansas Game & Fish Comm’n v. United States, 637 F.3d 1366 (Fed. Cir. 2011), that had held that deviations by the Army Corps of Engineers from a flood management plan that resulted in temporary flooding of riverfront property did not constitute a taking of property without just compensation but might constitute a tort for which compensation could be sought. The Court held that the mere fact that the flooding was temporary did not immunize the government from a takings claim. Justice Ginsburg’s opinion reaffirmed the Court’s preference for “situation-specific factual inquires” in this area, emphasizing that, with only two narrow exceptions, “no magic formula enables a court to judge, in every case, whether a given government interference with property is a taking.” 133 S.Ct. at 518. Because permanent, government-induced flooding is very likely to constitute a taking, Pumpelly v. Green Bay Co., 80 U.S. 166 (1871), it is also possible that intermittent flooding may constitute a taking if it “interferes with private property,” taking into account whether the flooding was the intended or foreseeable result of government action, the owner’s reasonable, investment-backed expectations, the content of state property law, and the character of the land at issue.

In Koontz v. St. Johns River Water Management District, 133 S.Ct. 2586 (2013), the Supreme Court held that the Nollan/Dolan doctrine applied to monetary exactions as well as mandated dedication of property rights. The governmental body in Florida had proposed to allow an owner to dredge his property on the condition that several exactions were met. They included funding offsite mitigation projects on public lands. The Nollan/Dolan rule requires exactions to be substantially related to the reasons for the permit denial; the state cannot condition a land use permit on actions substantially unrelated to the reasons for the land use regulation. Nollan and Dolan both involved governmental proposals to relax regulatory limits on land development in exchange for the owner granting a public easement of access to portions of the owner’s property. In Koontz, the Supreme Court clarified that this rule of law constituted a particular application of the unconstitutional conditions doctrine and that the doctrine equally applied if the permit condition required monetary payments rather than forced dedication of an easement or land. Because the state law required those building on wetlands to offset the resulting environmental damage, the Koontz ruling requires the mitigation demands to be related to the reasons for the wetlands regulation (the “nexus” requirement) and that they be “roughly proportional” to the harm caused by the proposed development. The Court noted that some states have applied this test in the case of monetary exactions and that developing a workable test was not likely to be difficult.

The Court was divided, however, with four Justices dissenting in an opinion written by Justice Kagan.