The Sixth Circuit Court of Appeals Holds Legislative Requirements Subject to Nexus-And-Proportionality Requirements

The Sixth Circuit Court of Appeals Holds Legislative Requirements Subject to Nexus-And-Proportionality Requirements

This post was written by Robert Thomas, Esq. and originally appeared on the InverseCondemnation Blog and reposted with permission. See, https://www.inversecondemnation.com/inversecondemnation/2023/05/ca6-legislative-conditions-are-subject-to-nexus-and-proportionality-requirements.html

6th Circuit Court of Appeals in Knight v. Metro. Nashville Government, No. 21-6179 (May 10, 2023) states that the requirements imposed on any development — and not just administrative requirements imposed on an ad hoc basis — must comply with the Nollan-Dolan-Koontz standards of closeness and gross proportionality.

The Sixth Circuit has added to growing divisions in the lower courts over whether the legislatively imposed conditions on all-encompassing developments are, as some courts have characterized, mere land-use regulations subject only to Euclid’s rationale basis review, or limited by the NDK ‘ condition. The Supreme Court has been faced with lower court disagreements, but has so far not stepped in and resolved the matter.

The Sixth Circuit experienced no such hesitation when considering the Nashville bylaws that required granting building permits to owners who agreed to lay down an amenity on their land and build a sidewalk on top of the amenity, or otherwise provide cash to the city:

In particular, the parties here disagree on the “test” we should use to judge whether the sidewalk regulations do the taking. The landlord plaintiffs asked us to apply the “unconstitutional conditions” test adopted by the Supreme Court to assess building permit requirements in Nollan v. California Coastal Commission, 483 US 825 (1987). Nashville responded that the Court had applied the Nollan test only to ad hoc administrative provisions that zoning officials imposed on certain permit applicants—not generally accepted legislative provisions that city council imposed on all permit applicants. For legislative conditions, said Nashville, we should turn to the honorable “balance” test that the Court adopted to assess zoning restrictions at Penn Central Transportation Co. v. New York City, 438 US 104 (1978).

We sided with the landlord plaintiff. There is nothing in the relevant constitutional texts, history, or precedents to support a Nashville distinction between administrative and legislative conditions. Nollan’s test must therefore apply to both types, including those imposed by pavement regulations. Because the district court reached the opposite conclusion, we reversed awarding the summary decision to Nashville and returned proceedings consistent with this opinion.

slip op. at 2.

The court concluded that the Takings Clause was a limitation of legislative powers, not just executive powers. See slip op. at 20.

The court noted:

“The government does not always directly intervene in constitutional rights. Sometimes it indirectly annoys them by offering benefits that are not obligatory provided that one of the parties waives the rights.” slip op. at 10.

“But what rule separates the constitutional conditions from the unconstitutional conditions for these discretionary benefits? One generic rule is clear: If the Constitution allows the government to directly coerce a private party to take action under penalty of criminal penalties, the government can indirectly coerce that action as a condition for obtaining benefits.” Identifier.

“Courts instead have to look to specific constitutional rights to identify specific rules. Identifier. at 913. This fact brought Nollan to the fore. It creates a special ‘framework of unconstitutional conditions’ for “execution” in the context of taking. slip op. on 10-11.

“At first glance, Nashville’s enforcement of the sidewalk code looks like a clear case for Nollan’s unconstitutional conditions test.” slip op. at 14.

“Does it matter that the sidewalk ordinance allows Knight and Mayes to pay a fee instead of building the sidewalk? No longer. Because these “ordinary” replacement costs are similar to “other types of land use extortion,” Koontz argues, they trigger Nollan’s test. slip op. at 16.

“This case requires us to answer that question. We now argue that Nollan’s test of unconstitutional conditions applies to legislatively imposed consent conditions as well as to administratively imposed conditions. There is nothing in the text or original understanding of the Withdrawal Clause to justify the difference Nashville is asking for. The requested difference also contradicts the precedent of the unconstitutional conditions of the Supreme Court and the precedent of taking it.” slip op. at 18.

The court held that the “text and history” of the withdrawal clause forced the result, a slip op. at 18-22, as did “Supreme Court precedent.” slip op. at 22-72.

After determining that the Nashville ordinance met the nexus and proportionality requirements, the court concluded that the city waived arguments that the ordinance met the test: “Nashville has waived any argument that could meet this test of unconstitutional conditions. Knight and Mayes spent their summary pages arguing that the town could not fulfill Nollan’s and Dolan’s elements. … But Nashville didn’t even try to respond, opting to rely exclusively on its claims that the Penn Central test was implemented. slip op. at 28.

Finally, courts think about damages, and is it just compensation (here’s your replacement money, the property owner), or fair damages in the form of a declarative decision or court order? See slip op. at 28. But the court did not settle the question and handed him over to the district court in custody.

Knight v. Metro. Nashville Government, No. 21-6179 (6th Circle, May 10, 2023)

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