Reading Dolan v. City of Tigard.

• Author: Funk, William
• Position: Colloquium on Dolan: The Takings Clause Doctrine of the Supreme Court and the Federal Circuit

1. The Stories of Dolan

   There are different ways to read the story of Dolan v. City of Tigard.(1) One is the plaintiff's story: the story of Mrs. Dolan, an elderly widow, who wishes to expand the family hardware store, but who is prevented from doing so by the city unless she agrees to give a portion of her land to the city to fulfill its master plan for a greenway (a park area) and bike path. According to the plaintiff, she is the victim of government extortion, forced to bear the burden of fulfilling a portion of the city's master plan at her private expense as a condition of making virtually any improvement to her property.

   Another story is the city's: the owner of one of the largest chains of hardware stores in the state wishes to double the size of the original store and pave most of the remaining unimproved land. This will cause substantially increased storm water runoff on the already overburdened Fanno Creek and additional automobile traffic in already overcrowded downtown Tigard. The city proposes to have the property owner set aside land adjoining the creek to kill two birds with one stone: to increase the water carrying capacity of Fanno Creek and to contain a bike path to reduce the traffic congestion. According to the city, the plaintiff simply wishes to maximize her private profit while imposing costs and burdens on the city and its residents.

   Which of these stories is true? There is no doubt that the City of Tigard had a master plan and that this master plan provided for a greenway and bike path along Fanno Creek. This master plan and its layout of the greenway and the bike path preceded by years Mrs. Dolan's plan and application to enlarge her hardware store. Moreover, it is true that most significant improvements to property abutting Fanno Creek automatically triggered the required dedication of land for the greenway and bike path as a condition for a building permit. In that sense, Mrs. Dolan's building permit application was merely a fortuitous event that triggered the waiting plan into execution--at Mrs. Dolan's expense. At the same time, there is no question that Mrs. Dolan's store expansion would increase the storm water runoff from her property into Fanno Creek by several orders of magnitude(2) and that Fanno Creek's storm water carrying capacity has been overwhelmed by development in downtown Tigard.(3) Similarly, Mrs. Dolan hopes to increase the traffic to her expanded store,(4) which would increase the traffic congestion in downtown Tigard (albeit marginally), an area that is already severely congested.(5) Indeed, it was increased density of development in downtown Tigard, with its associated frequent flooding of Fanno Creek and traffic congestion, that led the city to provide, among other things, for the greenway and bike path as partial antidotes to the problems of increased urbanization. Thus, in a very real sense, both stories are true. And that is one of the reasons why Dolan is such an interesting case. But is it significant? Does it change the law of takings?

   Mrs. Dolan argued that the city's condition was an uncompensated taking of private property, building upon the Supreme Court's decision in Nollan v. California Coastal Commission.(6) There, California had required beachfront property owners to grant an easement to the public along the beach in front of their property as a condition for development of their property. The Court found this unconstitutional unless the owners were compensated, because the government condition did not bear a sufficient relationship to the state's legitimate public interest in mitigating any burdens associated with the development of beachfront property.(7) What sort of relationship would be sufficient was left murky in Nollan, because California's condition "utterly fail[ed] to further the end advanced as the justification for the [condition]" and lacked any "essential nexus" between the means used and the end to be achieved.8 Accordingly, the Court said, it did not need to decide whether California's proposed test of a reasonable relationship was the proper means/end relationship.(9) Nevertheless, at other places, the Court referred to a requirement that the condition "substantially advance" the purpose sought to be achieved.(10) And much of the scholarly commentary after Nollan related to Nollan's supposed revival of a Lochnerian hard-look at a government determination of a relationship between a legitimate public purpose and the means chosen to further that purpose.(11) It was this hard-look that Mrs. Dolan sought from the courts, believing that any master plan, like Tigard's, that contained conditions on building permits not tied to the particular development requested, would, like the California Coastal Commission's strategy for obtaining public beach access, be doomed to defeat under Nollan. The Oregon courts, however, read Nollan as did other courts, to impose only a requirement that there be an "essential nexus" between the condition exacted and the purpose to be achieved,(12) and that nexus was found to be met in Dolan. 13 But then the Supreme Court granted certiorari.

   To Mrs. Dolan and her supporters, her case provided a test case of the conflict between government planning and individual property rights. Similarly, to the City of Tigard and the amici in its support, this case posed a threat to land use planning generally and the use of detailed master plans in particular. Potentially, the case could have major effects on land development and land use planning throughout the United States.

2. The Court Decision

   In a five-to-four decision, the Supreme Court flinched.(14) It clearly found Mrs. Dolan's story more credible in the circumstances of the case, but it was not willing to rule categorically in her favor, remanding the case for further hearings.(15)

   Chief Justice Rehnquist, writing for the majority, found that prevention of flooding and reduction of traffic congestion were both legitimate public purposes.(16) Additionally, the Court found that there was an "essential nexus" between these purposes and the city's conditions on Mrs. Dolan's building permit.(17) At this point, however, the Court said that it must determine whether "the degree of the exactions . . . bear[s] the required relationship to the projected impact of petitioner's . . . development."(18) In other words, while the city's condition related to the nature of the burdens caused by Mrs. Dolan's development, it was still necessary to determine whether the condition was properly tailored to the extent of the burden. This step, the Court said, was never reached in Nollan.(19) It might also be said that Nollan gave no hint that there would be a second step.

   Students of constitutional law know that categorizing the required relationship between government ends and means is probably the most important factor in providing individual protection against government action. For example, classifications based on race trigger "strict scrutiny," which means that the required relationship must be a "necessary" one, or, as sometimes expressed, very closely tailored, with little or no over- or underinclusion.(20) On the other hand, economic classifications--at least in the context of the Equal Protection Clause--garner only "rational basis" scrutiny, where any rational relationship will satisfy the required scrutiny.(21) At its most extreme, rational basis scrutiny requires the person challenging government action to prove the negative, that there is no possible rational basis, rather than requiring the government to prove there is a rational basis.(22)

   In determining how to characterize the required relationship between a government land use condition and the burdens caused by land development, the Court purported to look to state decisions for guidance. It rejected the equivalent of strict scrutiny, the "specifically and uniquely attributable" test,(23) allegedly used by Illinois. And it rejected the equivalent of the rational basis test, a "very generalized statement[ ] as to the necessary connection,"(24) attributed to Montana and New York. Rather the Court adopted "an intermediate position," which it termed the "rough proportionality" test.(25) The Court quoted the Nebraska Supreme Court's articulation of the test: "whether the requirement has some reasonable relationship or nexus to the use to which the property is being made or is merely being used as an excuse for taking property simply because at that particular moment the landowner is asking the city for some license or permit."(26) The Court's own explanation in the context of this case was limited to one sentence: "No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development."(27)

   Applying this new test to Tigard's conditions, the Court found the relationship lacking. With respect to flooding, the Court suggested that keeping the floodplain free of development would be appropriate, "[b]ut the city demanded more--. . . it also wanted petitioner's property along Fanno Creek for its Greenway system. The city never said why a public greenway, as opposed to a private one, was required in the interest of flood control."(28) With respect to the bike path, the Court made the following analysis:

   Dedications for streets, sidewalks, and other public ways are generally reasonable

   exactions to avoid excessive congestion from a proposed property use.

   But on the record before us, the city has not met its burden of demonstrating

   that the additional number of vehicle and bicycle trips generated by the petitioner's

   development reasonably relate to the city's requirement for a dedication

   of the pedestrian/bicycle pathway easement. The city simply found that

   the creation of the pathway "could offset some of the traffic demand . . . and

   lessen the increase in traffic...