SCOTUS's Decision in Sheetz v. Cnty. of El Dorado, is a Big Deal for Landowners and Planners

On April 12, 2024, SCOTUS issued the subject decision holding that the Nollan/Dolan exaction tests apply to legislatively imposed conditions. The test already applies to administrative land-use permit conditions. This is a new world for legislative bodies in counties and cities, which often use legislative exactions without being held to the?Nollan/Dolan standards.

The Nollan/Dolan test requires:

1. Permit conditions must have an “essential nexus” to the government’s land-use interest, ensuring that the government is acting to further its stated purpose, not leveraging its permitting monopoly to exact private property without paying for it; and
2. Permit conditions must have “rough proportionality” to the development’s impact on the land-use interest and may not require a landowner to give up (or pay) more than is necessary to mitigate harms resulting from new development.

In this particular case, Sheetz paid a legislatively imposed traffic impact fee under protest so a permit could be obtained for his project.?The fee amount was not based on the costs of traffic impacts specifically attributable to Sheetz’s particular project. He was assessed according to a rate schedule that took into account the type of development and its location within the county. He argued that the county was required?to make an individualized determination that the fee imposed on him was necessary to offset traffic congestion attributable to his project under Nollan/Dolan.

The courts below ruled against Sheetz, arguing that Nollan/Dolan applies only to permit conditions imposed on an ad hoc basis by administrators and not to a fee like this one imposed on a class of property owners by board-enacted legislation. SCOTUS disagreed and held in Sheetz's favor.

Read the opinion at https://www.supremecourt.gov/opinions/23pdf/22-1074_bqmd.pdf.