The U.S. Supreme Court’s Latest Attempt to Differentiate a Fair Quid Pro Quo in the Developer’s Permitting Process From an Unconstitutional Taking

by Snell & Wilmer

The U.S. Supreme Court has issued an important decision in an attempt to add clarity and help government land use planners understand the difference between reasonable requests and unreasonable demands rising to the level of unconstitutional takings in the permitting process.  Koontz v. St. Johns River Water Management District, 2013 WL 3184628 (June 25, 2013).

When does a fair quid pro quo, a legitimate exercise of police power in the permitting process, go too far and lapse into an unconstitutional taking without just compensation through the government’s unconstitutional conditions in the permitting process?  In Koontz, the Supreme Court ruled that the seminal cases of Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994), requiring both an “essential nexus” and “rough proportionality” between the governmental permitting authority’s demands and the effects of the developer’s proposed land use, must be satisfied to avoid an unconstitutional taking even when (1) the governmental permitting authority denies the permit and (2) the governmental demand is for money rather than real property.  

Key Realities Inherent in the Permitting Process

Two key realities of the permitting process have been cemented in the case law and are useful for context.  “The first is that land-use permit applicants are especially vulnerable to the type of coercion that the unconstitutional conditions doctrine prohibits because the government often has broad discretion to deny a permit that is worth far more than property it would like to take.  By conditioning a building permit on the owner’s deeding over a public right-of-way, for example, the government can pressure an owner into voluntarily giving up property for which the Fifth Amendment would otherwise require just compensation.”  Koontz, 2013 WL 3184628 *7.  “A second reality of the permitting process is that many proposed land uses threaten to impose costs on the public that dedications of property can offset….Insisting that landowners internalize the negative externalities of their conduct is a hallmark of responsible land-use policy, and [the Court has] long sustained such regulations against constitutional attack.”  Id.

Nollan’s “Essential Nexus” Test

In Nollan, the property owners wanted to raze their one-story 521-square-foot beach home and replace it with a two-story 1,674-square-foot residence with a two-car garage.  The California Coastal Commission was concerned about impairing the public’s visual access to the beach from the road, a psychological barrier impairing physical access, and, as a result, the Commission conditioned its grant of a coastal development permit on the Nollans’ dedication of land for a public easement providing “lateral access” along the coastline on the beach side of the home.  The U.S. Supreme Court held that “requiring [an] uncompensated conveyance of the easement” would be a taking yet would be constitutional in the permitting process if there were an “essential nexus” between a legitimate state interest and the condition imposed by the governmental.  Id., 483 U.S. at 834-35 and 837.  However, the Court ultimately ruled that there was no nexus between the asserted interest in protecting visual access to the ocean from the road and the demand for an easement requiring public access along a private beachfront.  Id.  Noting that California remains free to pursue its public purpose of ensuring access, the U.S. Supreme Court told California that it would need to use its power of eminent domain to pursue the easement and “pay for it.”

Dolan’s “Rough Proportionality” Test

Seven years later, in Dolan, the U.S. Supreme Court imposed the “rough proportionality” test, adding to the “essential nexus” test of Nollan.  The City of Trigard, on the edge of Portland, Oregon, reviewed petitioner Dolan’s permit application, seeking to nearly double her plumbing and supply store to 17,600 square feet and convert a gravel parking lot to a 39-space paved parking lot on her 1.67-acre parcel.  Acknowledging the statutory requirement of “15% open space and landscaping,” the City’s adopted plan for a pedestrian/bicycle pathway, and the City’s established drainage plan to reduce flood risks, the U.S. Supreme Court ruled that the City Planning Commission went too far in granting the permit application while requiring that petitioner dedicate, collectively, 7,000 square feet (approximately 10%) of the property for storm drainage improvement and a 15-foot wide pedestrian/bicycle pathway.  While ruling that there was indeed an “essential nexus” between legitimate state interests and the permit conditions imposed by the City,  Id., 512 U.S. at 387, the Court then analyzed “whether the degree of exactions demanded by the city’s permit conditions bears the required relationship to the projected impact of petitioner’s proposed development,” coined the “rough proportionality” test by the Court.  Id. at 388 and 391.  Recognizing that “no precise, mathematical calculation is required…[the Court held that] the city must make some sort of individualized determination that the required dedication is related in nature and extent to the impact of the proposed development.” Id. at 391; see also 396 (“city must…quantify its findings”).  Applying the “rough proportionality” test, the Court concluded that the City failed to meet its burden to show why it could preclude building in the floodplain and also take property for its greenway system, never explained why a public greenway, as opposed to a private one, was required in the interest of flood control, and never made any finding that the pedestrian/bicycle pathway would offset additional traffic and congestion, only that it “could offset” it.   Id. at 393-95 and 391 n. 8 (permitting authority bears burden of justifying ad hoc adjudicative exactions tied to individual parcels).

The Koontz Decision Extends Nollan and Dolan to Both Permit Denials and Demands for Money Instead of Real Property

Last month in Koontz, the Supreme Court reaffirmed its commitment to the “essential nexus” and “rough proportionality” tests in Nollan and Dolan and held those tests applicable even when money, not real property, is demanded by permitting authorities and even when a permit is not granted but denied, reversing the Florida Supreme Court.  Koontz, 2013 WL 3184628 *16.  Petitioner Dolan applied for a permit to develop 3.7 acres of his 14.9-acre parcel of land consistent with Florida’s state laws aimed at protecting its water resources and wetlands, offering to foreclose any future development of the other roughly 11.2 acres by a conservation easement to the permitting authority, the St. Johns River Water Management District (“District”).  The District told Koontz it would grant the permit only if he either (1) developed only one acre and granted the District a conservation easement on the other 13.9 acres (among other conditions); or (2) agreed to hire contractors to replace culverts on one parcel or fill in ditches on another parcel to enhance some 50 acres of District-owned wetlands several miles away. 

On the issue of whether denial of the permit is a viable distinction, the U.S. Supreme Court ruled that the “principles that undergird our decisions in Nollan and Dolan do not change depending on whether the government approves a permit on the condition that the applicant turn over the property or denies a permit because the applicant refuses to do so.”  Id. at 8 (emphasis in original).  Denials of government benefits may also be impermissible under the unconstitutional conditions doctrine which “forbids burdening the Constitution’s enumerated rights by coercively withholding benefits from those who exercise them.”  Id.  The Court noted that “[a] contrary rule would…enable the government to evade the limitations of Nollan and Dolan simply by phrasing its demands for property as conditions precedent to permit approval” – rejecting any distinction between unconstitutionally impermissible conditions, whether framed as a condition precedent (“denied until” the property is relinquished) or subsequent (“approved if” the property is relinquished).  Id.

On the issue of whether demanding money, rather than real property, is a viable distinction, the U.S. Supreme Court answered in the negative, ruling that the monetary demand “burdened petitioner’s ownership of a specific parcel of land,” and held that “the direct link between the government’s demand and a specific parcel of real property…implicates the central concern of Nollan and Dolan…that the government may use its substantial power and discretion in land-use permitting to pursue governmental ends that lack an essential nexus and rough proportionality to the effects of the proposed new use of the specific property….”  Id. at *12. 

Relevant Arizona Decisions

The Arizona decisions to date which address Nollan or Dolan in any material way have all rejected their applicability.  See Home Builders Ass’n of Central Arizona v. City of Scottsdale, 183 Ariz. 243, 248, 902 P.2d 1347, 1352 (1997) (Dolan held distinguishable as it involved the City of Trigard’s adjudicative decision to impose a condition tailored to the particular circumstances of an individual case as opposed to the generally applicable legislative decision by the City of Scottsdale); Dos Picos Land Limited Partnership v. Pima County, 255 Ariz. 458, 462-63, 240 P.3d 853, 857-58 (App. 2010) (permit to build road on property denied; court held Nollan inapplicable given the absence of any taking whatsoever or any governmental demand or condition that the private property be opened for public use); GST Tucson Lightwave, Inc. v. City of Tucson, 190 Ariz. 478, 949 P.2d 971 (App. 1997) (Nollan and Dolan held inapplicable to Tucson City Code provisions precluding conditional responses to RFP’s and requiring surrender of certain long distance provider licenses when applying for alternative licenses since the case involved the use of public property for private profit, not dedication of private property for public use as in Nollan and Dolan, did not involve revocation or suspension of Lightwave’s license, and no party presented any authority “addressing whether and/or how the Takings Clause applies when the protected property right at issue is a franchise or license issued by a municipality to use public rights-of-way”).


After many years of decision-making, there is still substantial controversy about when these tests apply, what they mean, and how they should be applied.  The outcome of each case will turn on a careful review of (1) the legitimate governmental interests identified; (2) the fact-specific conditions of the permitting authorities; and (3) the application of the “essential nexus” and “rough proportionality” tests by governmental permitting authorities and/or the courts.  Take no comfort in the U.S. Supreme Court’s own acknowledgement that its “cases have not elaborated on the standards for determining what constitutes a ‘legitimate state interest,’” Nollan, 483 U.S. at 834, expect uncertainty to triumph over certainty in future administrative and judicial decisions, and know that the creativity of the key players, their attention to detail in the administrative and judicial review process, and their willingness to engage in good faith discussions and compromise, will drive the process, the cost control efforts, and the results. 

While we would all like to see more certainty and predictability in the process and results, governmental permitting authorities are now laboring under more of the Court-allocated burdens, and, here in Arizona, under A.R.S. §12-348, there is also a risk of an award of attorneys’ fees and costs (including expert witness fees) to developers who prevail on the merits in the litigation of these cases.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Snell & Wilmer | Attorney Advertising

Written by:

Snell & Wilmer

Snell & Wilmer on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.