Thursday, November 1, 2012

A Prime Example of Why the U.S. Supreme Court Needs to Throw Out Florida's Misguided Exactions Ruling

You might ask why the U.S. Supreme Court should overturn Koontz v. St Johns River Water Management District, No. 11-1447 (cert. granted Oct. 5, 2012). Look no further than amicus briefs in Florida courts citing to that case's misguided public policy reasoning. Koontz is the exactions case recently accepted by the U.S. Supreme Court that will decide (1) whether  the Nollan-Dolan exactions test applies to exactions other than real property, such as where a permit applicant is required to pay for work; and (2) whether the Nollan-Dolan exactions test applies where a permit is denied because an applicant rejects an exaction.

In Pacetta, LLC v. Ponce Inlet, Case. No. 2010-31696-CICI (Fla. 7th Cir. Apr. 20, 2012), the question was not about an exaction, but about inverse condemnation and a Bert Harris Act claim. The trial court described a shocking Florida takings tale of government abuse and political corruption. The Florida Chapter of the American Planning Association (FAPA) and the Florida League of Cities have filed an amicus brief in the case on appeal. The amici make a number of arguments that should concern property owners. For example, the amici argue that the public's statutory right to participate in the planning process is disenfranchised by the trial court's protection of the landowners' constitutional property rights. Then, the amici ask the court to assume that landowers will be better off if they have to continuously negotiate their projects, using Koontz:
Finally, the lower court's decision that the discussions between Pacetta and the Town's officials created an equitable estoppel has a pernicious and counterproductive result for the relations between local governments and developers. A prudent developer will consult with the local government when preparing a land development proposal, especially if the existing comprehensive plan and land development regulations do not allow the development as a matter of right. A local government, especially its planning and management staff, ordinarily will expect to advise an potential applicant of the regulatory constraints and will advise the potential applicant about perceived improvements to the potential development. The negotiations continue even after an application is filed, especially if the required Town action on the application is a legislative decision, as here, and not a quasi-judicial decision. Jennings v. Dade County, 589 So. 2d 1337, 1340 (Fla. 3d DCA 1991) (lobbyist's ex-parte communications in a quasi-judicial variance proceeding can violate due process). The discussions and negotiations can result in a better result for both the developer and the local government. As recognized in St. Johns River Water Management District v. Koontz, 77 So.3d 1220, 1231 (Fla. 2011), penalizing the local government for such discussions with the threat of financial consequences if the negotiations fail by the time of the final decision injures both sides:
"... agencies will opt to simply deny permits outright without discussion or negotiation rather than risk the crushing costs of litigation. Property owners will have no opportunity to amend their applications or discuss mitigation options because the regulatory entity will be unwilling to subject itself to potential liability. Land development in certain areas of Florida would come to a standstill. We decline to approve a rule of law that would place Florida land-use regulation in such an unduly restrictive position."
The course of the proceedings between the Pacetta entities, the Town staff and individual officials were not actions that Pacetta can reasonably claim to rely upon for purposes of equitable estoppel. Rather, they were the preliminary, non-binding discussions between the parties that were not legislative, final action. 
The amici might be right about the equitable estoppel issue. I've not reviewed the case record. But it seems especially misguided to say that somehow the landowners should have continued working with a local government that was doing everything in its power to thwart the landowners' efforts. In Koontz, the Florida Supreme Court gave no logical or case law justifications for how property owners would be worse off if governments were allowed to extort property, money, and labor from landowners. The Florida Supreme Court even said that the landowners were better off allowing the practice--though ignoring the fact that the case before it was not about the negotiation process, it was about the permit's denial following negotiations. If there were ever a reason for the U.S. Supreme Court to overturn Koontz, the amici's use of that case to support the government in Ponce Inlet is a great one.

In full disclosure, I'm a member of FAPA and actively involved in it. I spoke at its annual conference this summer on agricultural law and policy in Florida. When I was in my graduate planning program, it honored me as "Student Planner of the Year." Nevertheless, briefs advocating in support of such egregious governmental action, and showing such disregard for individual property rights, make me wonder whether I should continue to support the organization.