An Offer You Can’t Refuse? Property Rights Front and Center Before U.S. Supreme Court

Nov 29, 2012

As a property owner applying for a development permit, what do you do when the government makes you an offer you can't refuse? That’s the dilemma Coy Koontz, Sr. faced when he applied for a permit to develop 3.7 acres of his property in Orange County, Florida – only to be told by the St. Johns River Water Management District (a government entity) that it would only grant his permit if he agreed to pay for costly improvements to 50 acres of completely unrelated, government-owned property, miles away from his proposed development.

Mr. Koontz sued the water management district in an “inverse condemnation” action, arguing that the government had violated the U.S. Constitution’s “Takings Clause,” which provides that if the government takes private property, it must justly compensate the private property owners for it. Although he won twice in Florida courts, the Florida Supreme Court ultimately ruled against Mr. Koontz, saying that no “taking” had occurred.

Mr. Koontz appealed that ruling to the U.S. Supreme Court, which has agreed to decide whether there’s a “money loophole” in the Takings Clause – that is, does the Takings Clause only protect property owners from the government taking their land without justly compensating them, or does it also protect property owners from shakedowns, like this one, where the government demands cash or labor as a condition for using their property? And can a government impose permit conditions that are unrelated to the reasonable regulation of the use of property? Today, the U.S. Chamber’s law firm, the National Chamber Litigation Center, filed a brief with the U.S. Supreme Court arguing that the Takings Clause protects property owners from such unconstitutional demands, whether they be for cash, labor, or an interest in “real property.” The case is Koontz v. St. Johns River Water Management District.

Mr. Koontz’s case is just one of a number of property rights cases the U.S. Supreme Court is considering this term, which kicked off in October with another property rights case, Arkansas Game & Fish Commission v. U.S.  Last week, we blogged about the “raisin case” before the Court, where the “offer you can’t refuse” involved requiring farmers to fork over almost half their raisins to the federal government (in exchange for little or nothing) as the price of admission to be “allowed” to sell the rest of their raisins in interstate commerce.

The St. John’s Water Management District made an offer it thought Mr. Koontz couldn’t refuse. Now it’s up to the Supreme Court to make sure Mr. Koontz and others like him have the full force of the Takings Clause on their side when “offers” like this one are made.

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