THE STATE OF EXACTIONS.

• Author: Mulvaney, Timothy M.

TABLE OF CONTENTS INTRODUCTION 172 I. FOUNDATIONS: KOONTZ AND UNCONSTITUTIONAL CONDITIONS 175 A. A PRECIS ON KOONTZ 176 B. Exaction Takings Law in View 179 C. Summary 184 II. IN THE WAKE OF KOONTZ: POTENTIAL EXTENSIONS INSIDE THE 185 EXACTIONS CONTEXT A. Monetary Impositions 186 1. Issue 186 2. Movement Post-Koontz 190 3. Summary 192 B. Legislative Exactions 194 1. Issue 194 2. Movement Post-Koontz 196 3. Summary 205 C. "Concrete and Specific" Demands 206 1. Issue 206 2. Movement Post-Koontz 207 3. Summary 210 D. Remedies 210 1. Issue 210 2. Movement Post-Koontz 212 3. Summary 213 E. Summary: Potential Extensions Inside the Exaction Taking 213 Context III. IN THE WAKE OF KOONTZ: POTENTIAL EXTENSIONS OUTSIDE THE 214 EXACTIONS CONTEXT A. Issue 214 B. Movement Post-Koontz 215 C. Summary 217 CONCLUSION: THE STATE OF EXACTIONS 218 INTRODUCTION

In the conveniently rhyming cases of Nollan v. California Coastal Commission and Dolan v. City of Tigard more than two decades ago, the Supreme Court declared that in order to avoid having to pay takings compensation, the state, as the defendant, shoulders the burden of proving that certain conditions, or "exactions," attached to land use permits are qualitatively and quantitatively commensurate with the proposed development's impacts. (1) In its 2013 decision in Koontz v. St. Johns River Water Management District, the Court slightly expanded the range of circumstances to which this demanding standard applies. (2) Of potentially far more significance than this minor, affirmative doctrinal step, though, was the rhetoric on the state's role in allocating property interests that accompanied it.

In crafting a vision of regulators as strategic extortionists of private property interests, Koontz prompted many takings observers to predict that the case would provide momentum for a more significant expansion of such scrutiny in takings cases involving land use permit conditions moving forward, and perhaps even an extension into other regulatory contexts, as well. Some observers exalted at this possibility on the view that it would reflect long overdue protection of individuals' freedom to use their land without fear of the state extracting concessions or changing the rules mid-game. (3) Others, though, expressed deep concern that Koontz would set off a chain reaction of takings cases that routinely put a stringent burden on the state to defend adjustments to existing property allocations, even as social, economic, and moral perspectives on the values that property serves evolve over time. (4)

To get a status-check on these prospects five years on, this Article reflects the author's review of each of the nearly 130 cases to have cited Koontz through July of 2018. In the course thereof, the Article offers two contentions. First, on doctrinal grounds, it contends that Koontz's footprint is thus far rather light. (5) The decision has not prompted lower courts to extend the heightened scrutiny of Nollan and Dolan to a broad class of regulatory measures and, in those select instances where such scrutiny does apply, the lower courts have not crafted expansive remedies. (6) Second, on normative grounds, this Article asserts that the restraint evident in the lower court opinions that have wrestled with Koontz thus far is appealing in the sense that it acknowledges that property necessarily involves context-driven allocative choices by the state, and focuses--as best these courts can, given the constraints explicit in Nollan and Dolan--on whether those allocative choices are fair and just absent compensation. (7)

Part I outlines the problematic foundations of exaction takings law in an effort to delineate the confines within which the lower courts must operate in interpreting Koontz's bearing on a number of critical takings issues that are the central focus of the Parts that follow.

Part II unpacks the lower courts' choices on four specific issues to evaluate whether the projections made on these issues in Koontz's immediate wake have come to pass. These issues include whether courts would interpret broadly the class of monetary impositions that are subject to Nollan and Dolan scrutiny; (8) whether courts would extend Nollan and Dolan to permit conditions imposed not only through individualized administrative decisions but also to those imposed via broadly applicable legislation; (9) whether courts would interpret broadly the class of proposed conditions deemed "concrete and specific" enough to implicate Nollan and Dolan; (10) and whether courts would expand the remedies available to successful exaction takings claimants. (11)

Part III addresses the lower courts' course relating to a more ambitious projection that select scholars offered on a fifth issue in Koontz's immediate wake, namely that courts would extend Nollan and Dolan scrutiny outside the permit conditions context altogether and into government contracts and other more traditional realms of regulatory takings law.

Part IV concludes that the lower courts in most instances have not seen Koontz as a launching pad to curtail the state's broad authority to regulate land uses absent compensation. (12) Fortunately, the cases that have cited Koontz to date do little to interfere with the state's flexibility to draw on its suite of regulatory tools to ensure that property rights are not exercised in ways that harm either the legitimate property and personal rights of others, or the economic and social infrastructure that facilitates wide dispersal of the advantages of the property system.

1. FOUNDATIONS: KOONTZ AND UNCONSTITUTIONAL CONDITIONS

   The Fifth Amendment's Takings Clause provides that "private property [shall not] be taken for public use, without just compensation." (13) This limitation originally applied only to physical appropriations resulting from governmental conduct. (14) More recently, however, courts also have interpreted the Takings Clause to require that the state pay compensation when a regulatory decision reallocates property interests in a manner that is markedly unfair and unjust to an individual property owner absent such payment. (15) Among these cases are those in which claimants allege that conditions attached to land use development permits amount to unconstitutional exactions absent the payment of just compensation. The 2013 Supreme Court matter of Koontz v. St. Johns River Water Management District involved one such "exaction taking" claim. (16)

   Over the course of two Sections, this Part lays the groundwork for the doctrinal and normative claims that follow in the remainder of the Article. The first of these Sections provides an outline of the dispute in Koontz, as well as a synopsis of the Court's resolution thereof. The second Section offers a summary critique of exaction takings law and, specifically, the Koontz Court's situating this body of law within the unconstitutional conditions doctrine. The problematic foundations of exaction takings law described in this Part set the contours within which the lower courts must operate in interpreting Koontz's bearing on the outstanding takings issues--involving monetary impositions, exactions and other regulatory measures devised through legislation, the requisite concreteness and specificity of demands, and the available remedies--that are the central focus of the Article's remaining Parts.

   1. A Precis on Koontz

      In the early 1990s, Coy Koontz decided that he wanted to construct a commercial shopping center on an undeveloped 14.2-acre lot that he had purchased two decades prior. (17) Koontz needed to secure a discretionary permit from the regional Water Management District given that nearly all of his tract lay within a hydrologic basin protected under Florida environmental law. (18) Construction of the shopping center would require the destruction of 3.4 acres of protected wetlands and 0.3 acres of protected uplands. (19)

      In his application, Koontz offered to "mitigate" the wetland loss by preserving the remaining undeveloped portion of his property in its natural state through a conservation easement. (20) The District found Koontz's self-proposed mitigating condition inadequate, for Florida law is premised on avoiding net wetland loss. (21) While the District could have exercised its authority to deny Koontz's application outright at that point, it instead identified several possible conditions--including reducing the size of his development or funding offsite wetland improvements--that, if accepted by Koontz, could allow for the development to proceed. (22) Moreover, the District left the door open for Koontz to propose other conditions to offset the anticipated wetland loss. (23) Koontz, however, refused the District's proposals and chose not to offer any of his own. (24) The District, therefore, ultimately denied Koontz's development application. (25)

      Since the dawn of exactions in the 1930s on through the mid-1980s, many state courts had policed the imposition of these permit conditions via some iteration of a "reasonable relationship" test that accounted for both the burdens and benefits of the imposed exaction. (26) Even in those states employing an arguably more stringent "specifically and uniquely attributable" test, the courts regularly placed the burden of proof on the permit applicant. (27) However, to protect landowners from what it perceived as extortionist behavior by permitting entities to unfairly shift infrastructure and related costs onto individual landowners, the Supreme Court curtailed the exercise of this power starting with its 1987 decision in Nollan v. California Coastal Commission and buttressed by its 1994 decision in Dolan v. City of Tigard. (28) Under this new constitutional takings framework unique to exaction disputes, it is the government--as the defendant--who has the burden of proving that a challenged exaction, which would amount to a taking outside the permitting process, bears both an "essential nexus" to and...