Nollan-Dolan “Taking” Doctrine: Landmark Supreme Court Cases?

The Nollan "Nexus" Test 

You remember the Nollans. They were the Southern California couple who wanted to tear down their dilapidated beachfront bungalow and replace it with a new home occupying the same building footprint. The Coastal Commission said that, since the larger new house would block the public's "visual access" to the ocean (i.e., the public's ability to peep across the Nollans' property from Pacific Coast Highway), the Nollans would have to dedicate their entire beachfront easement. The California Courts found no problem with the Coastal Commission's action. 

The U.S. Supreme Court had just one little concern- the Fifth Amendment to the U.S. Constitution. You see, in addition to the right to remain silent, the 5th Amendment is the one 

that doesn't allow the taking of private property without just compensation. Without a rational nexus between the permit sought and the mitigation required, the mitigation is a taking. "Build a house, donate a beach," just didn't fly. As stated by the Court, "the absence of a nexus left the Coastal Commission in the position of simply trying to obtain an easement through gimmickry, which converted a valid regulation of land use into an out-and-out plan of extortion." 

Dolan's ''Rough Proportionality" Test 

Florence Dolan owns a plumbing store in the Portland suburb of Tigard, Oregon. Ms. Dolan sought to expand her 10,000 square foot store to 17,000 square feet, all on her existing 70,000 square foot commercially-zoned lot. The Tigard City Planning Commission had no problem approving a permit as long as Ms. Dolan would donate 7,000 square feet (10 percent of her land) to the City to increase the capacity of an adjacent creek, create a public "greenway," and build a bike path. The Commission's justitications were that the increased size of the store would create additional traffic and the need for enhanced flood control, which the imposed conditions would mitigate. The Tigard City Council imposed the same conditions.

Except for Ms. Dolan, it seems that no one in Oregon ever thought twice about the legality of the City's action. Oregon has a special land use court called the Land Use Board of Appeals (LUBA). The LUBA denied Dolan's appeal. The Oregon Court of Appeals affirmed the LUBA. The Oregon Supreme Court, finding no conflict between the City's actions and the constitutional requirements set forth in Nollan, upheld the decision. 

The United States Supreme Court put an end to Ms. Dolan's losing streak. The Court held that even where the essential nexus exists between promoting a legitimate government interest and the type of exaction being demanded, the actual conditions imposed must be in "rough proportionality" to the specific impacts of the proposed development.

The Court was disturbed that Ms. Dolan was required to donate land for a flood plain above and beyond the City of Tigard's standard code requirement that at least 15 percent of her property remain as open space which could satisfy any flood control needs. The Court asked why a public, as opposed to a private, greenway was required in the interest of flood control. Finally, the Court questioned the relationship between the larger store and an expanded bike path system. Perhaps Chief Justice Rhenquist just hasn't seen too many people hauling away their newly purchased plumbing supplies on bicycles. 

City Has Burden of Proof 

Potentially as important as the substantive decision itself, the Supreme Court in Dolan clarified a long-disputed procedural point ­ that the government has the burden of proof to demonstrate that the condition imposed meets the required Nollan-Dolan constitutional tests. A government agency's conclusionary of non-existent findings will no longer be presumed valid. Under Dolan, the Courts must now first look at the evidence provided by the government agency to justify their specific action. If that evidence can't meet the constitutional test, the regulation is invalid. Only if the government agency presents enough evidence does the burden then shift to the property owner to disprove that the Nollan-Dolan requirements have been met.

Placing the burden of proof on the government in land use exaction cases really does nothing more than recognize that an illegal land use exaction is just as much of a constitutional violation as a violation of free speech or your right to a fair trial. As the Supreme Court said: "We see no reason why the Takings Clause of the Fifth Amendment, as much a part of the Bill of Rights as the First Amendment or Fourth Amendment, should be regulated to the status of a poor relation." Remember, the Constitution exists to limit the power of government. 

Practical Applications 

Most government attorneys will probably advise their clients that the Dolan case is no cause for alarm. In California, many will advise that CEQA documentation, development fee nexus studies and traffic engineering reports, already the standard operating procedure in most jurisdictions, will more than satisfy any Nollan-Dolan requirement. Still, it doesn't take Clarence Thomas to figure out which way the judicial winds are blowing. 

The Supreme Court has sent another clear warning that individual exactions which go too far will not pass constitutional muster. In Tigard, Oregon, requiring everyone along the creek to provide a set amount of open space may be okay, but singling out an individual property owner to provide more than her neighbors' has been held unconstitutional. In Los Angeles, when projects are assessed, a set per trip fee for transportation improvements, asking individual developers to provide street widening, signalization and streetscape in addition to paying the fee may be illegal as well. 

You will also notice that all of the requested mitigations found to be illegal in Dolan were improvements to take place on Ms. Dolan's own property. If some on-site improvements can’t pass the new rough proportionality test, then all off-site improvements are clearly called into question. It may be relatively easy to show how the new traffic trips created by a project impose an impact on an intersection half a mile away. However, it may not be possible to prove that a condition requiring the installation of new turn lanes and a video ATSAC system is roughly proportional to the impact created by the handful of trips the project actually sends into the already congested intersection. 

The Key Is Fairness 

What really draws the Court's ire in these cases is the growing sense of randomness in the application of land use regulations. One landowner is singled out to provide certain public benefits, while her next door neighbor is not. Zoning laws which restrict the uses of properties into rationally configured zones are fine. Zoning laws that require property-by-property discretionary approvals, resulting in different requirements, conditions, exactions and fees for every neighbor on the block, push the Court to apply constitutional principles. 

Of course, all of this has happened because the public doesn't want to pay for what it used to pay for. Substitute the words "King of England" for "the public" in the above sentence and you will have the reason why we even have a Takings Clause in the Fifth Amendment in the first place. With no one willing to impose the higher taxes, or do without the level of public benefits to which we have grown accustomed, we will likely be arguing about rational nexus, rough proportionality and the burden of proof for many years to come.