On April 12, 2024, the United States Supreme Court decided Sheetz v. El Dorado County, No. 22-1074, holding that the Takings Clause “does not distinguish between legislative and administrative permit conditions,” but instead “prohibits legislatures and agencies alike from imposing unconstitutional conditions on land-use permits.” 

El Dorado County’s legislative body required developers to pay a traffic impact fee as a condition of receiving a building permit. George Sheetz, who wished to build a home in the County, had to pay a substantial fee to obtain his permit. Sheetz paid the fee under protest and sought relief in state court, claiming that the fee constituted an unlawful “exaction” of money in violation of the Takings Clause. 

The trial court rejected Sheetz’s claim, and the California Court of Appeal affirmed, relying on California Supreme Court precedent to conclude that the Nollan/Dolan test applies only to permit conditions imposed “on an individual and discretionary basis.” The Court of Appeal reasoned that the Nollan/Dolan test does not apply to fees imposed on “a broad class of property owners through legislative action.” The California Supreme Court denied review, and the U.S. Supreme Court granted certiorari to decide “whether the Takings Clause recognizes a distinction between legislative and administrative conditions in land-use permits.”

The Supreme Court reversed, holding that the Nollan/Dolan test applies regardless of which branch of government imposed the permit condition. It explained that its conclusion was supported by the text of the Takings Clause (which focuses on the prohibited act, not the identity of the actor who performs it), the nation’s history (which showed no special exemption for legislatively imposed exactions), the Court’s physical-takings cases (which apply a per se rule requiring payment of just compensation to takings effected by legislation and administrative action alike), and its regulatory-takings jurisprudence (which likewise do not distinguish between legislative and agency action). 

Justice Barrett delivered the opinion of the unanimous Court. Justice Sotomayor, joined by Justice Jackson, filed a concurring opinion. Justice Gorsuch filed a separate concurring opinion. And Justice Kavanaugh, joined by Justice Kagan and Justice Jackson, also filed a concurring opinion.

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