U.S. Supreme Court's Sheetz Decision Expands Takings Clause to Legislative Land Use Conditions

By James I. Anderson, Esq.

In brief

The United States Supreme Court issued its decision in Sheetz v. County of El Dorado (Sheetz) on April 14, 2024. The Court ruled that the constitutional Takings Clause applies equally to legislative takings affecting groups of projects and administrative takings targeting individual projects. This decision specifically concerns land use contexts where permit conditions are applied to classes of projects. The Court remanded the case to the California courts for further proceedings consistent with this ruling.

In detail

Sheetz involves a plaintiff who applied for a building permit to construct a prefabricated house on a rural parcel in El Dorado County. The County, under its General Plan, required traffic mitigation fees for certain types of projects. These fees are assessed based on the project type rather than on an individual basis. The County charged the plaintiff $23,420 in traffic mitigation fees. The plaintiff paid the fee under protest and subsequently sued the County, alleging a regulatory taking under the precedents established by Nollan and Dolan. These cases require an “essential nexus” and “rough proportionality” between government demands and the impact of the proposed land use.

Both the El Dorado County Superior Court and the California Court of Appeals, following state law precedent, determined that takings claims under Nollan and Dolan applied only to discretionary permit conditions imposed on individual projects, not to legislatively enacted conditions applied to a class or group. Since the traffic mitigation fee was imposed by legislation and not by individual discretion, it was deemed not to constitute a taking. The plaintiff then appealed to the U.S. Supreme Court after the California Supreme Court denied certiorari.

In a unanimous decision, the U.S. Supreme Court found that the Takings Clause applies equally to legislative takings affecting groups of projects as it does to administrative takings targeting individual projects. The Court clarified that there is no constitutional, historical, or precedential basis to differentiate between these scenarios. Thus, the Takings Clause prohibits both legislatures and administrators from imposing unconstitutional conditions (pursuant to Nollan and Dolan) on land use permits.

What’s next?

The Supreme Court did not rule on whether the specific traffic mitigation fee in question constituted a taking under Nollan and Dolan. Instead, the Court remanded the case to the California Court of Appeals for further consideration of these issues. The appellate court will need to determine whether the fee meets the criteria for a taking.

As a result of this decision, many jurisdictions in California will need to review and potentially revise land use permit conditions and fees applied to classes of projects to ensure they comply with the Takings Clause. This may lead to significant changes in how land use conditions are developed and implemented going forward.