It is rare for the Supreme Court to decide cases involving the Constitution’s Takings Clause, and, indeed, not uncommon for the Court to go years without considering the Clause at all; so, when the Court issues two decisions involving the Takings Clause in less than a week, attention must be paid. Perhaps even more astounding, in an era where the public is conditioned to think the Court’s decisions are always highly contentious and the Court sharply divided, both of these recent decisions were unanimously decided.

What You Need to Know:

• U.S. Supreme Court unanimously decides two Takings cases in favor of property owners.
• Under Sheetz v. El Dorado County, all impact fees (and other requirements alleged to be takings) whether legislative or administrative in nature, are subject to review for violating the Takings Clause. Impact fees, no matter how determined, will need to meet the “rough proportionality” standard.
• In Devillier v. Texas, the Court recognized that under Texas state law, inverse condemnation claims under state law could include Takings Clause claims, and hinted that if state law did not provide a basis for bringing a Takings Clause claim, then a direct action in federal court would probably be available.
• Both cases reinforce the Court’s commitment to property rights and indicate that the Court is not going to leave property owners alleging Takings Clause claims without a remedy. 
• The cases also reinforce the strength of constitutional property rights in the face of aggressive governmental legislation or regulation.

In Sheetz v. County of El Dorado, California, a landowner sought to construct a modest, prefabricated home in El Dorado County, California. Pursuant to a legislatively created schedule of impact fees, the owner was charged $23,420 for traffic impacts as a condition of receiving a building permit. There was no effort made to justify the fee as representing a rough estimate of the impact caused by the single home. The landowner paid the fee under protest and then brought an action in state court, arguing that the fee was excessive and amounted to an unconstitutional taking under prior Supreme Court precedent. The California state courts, however, dismissed the claim, indicating that because the fee schedule had been established legislatively, and not administratively, the Supreme Court precedents did not apply.

The Supreme Court held, 9-0, that the Takings Clause did not distinguish between takings occurring through the legislative or administrative processes and remanded the matter for further proceedings.

In Devillier v. Texas, landowners sued the State of Texas after it erected flood control barriers along U.S. Interstate Highway 10 which prevented flooding of the highway, but caused flooding on the landowners’ properties. The landowners brought inverse condemnation claims against the state in state court under the Texas Constitution and the Takings Clause of the U.S. Constitution. The state removed the case to federal court and then moved to dismiss the federal claim, arguing there was no right to sue the state directly under the Takings Clause. The District Court rejected the claim, but the Court of Appeals reversed, holding that the Takings Clause, as applied to states under the Fourteenth Amendment, did not provide a direct cause of action against states.

The Supreme Court held, in another 9-0 decision, that because Texas state law did permit an inverse condemnation cause of action grounded in the Takings Clause, it need not decide whether the Constitution granted a direct cause of action against states. The Court vacated the Court of Appeals decision and remanded for further proceedings.

What do these two cases tell us? In an age of perceived political divisiveness, the Court’s unanimous decisions should be read as telling us two things. First, the decisions tell us the Court continues to recognize the importance of the Takings Clause. 

Second, the Court is going to make sure that landowners with takings claims do have an opportunity to be heard. In this regard, note that had the Court ruled the other way in either case, the landowners would have been left with no remedy under the Takings Clause. Thus, it is apparent that the Court is determined to make sure that landowners do have an effective remedy when a Takings Clause violation is alleged. The Court’s unanimity in this regard is particularly powerful in making this message clear. 

Having made these two observations, though, one wonders, in the long run, just how important these cases will be. It’s no accident that both these decisions were unanimous. The notion that one does not have a takings claim if the policy or issue arises from legislation (as compared to administrative action) seems almost, if not outright, silly in hindsight. As to the Texas case, the Court’s opinion strongly indicates that, had a state-based cause of action that allowed the Takings Clause claims to be brought did not exist, the Court would very likely have granted a direct right under the Constitution to bring a claim – otherwise, the protections created by the clause would be meaningless, as they could not be enforced.

The Sheetz case may cause some to take a closer look at the amount of various impact fees and may cause more challenges to such fees to be brought, but the rule has always been that there must be a “rough proportionality” between impact fees charged and the impacts they address. In this regard, the Sheetz case did not make new law – it merely made clear that impact fees (and other potential takings claims) are subject to challenge no matter how created (legislatively or administratively).