This past week the U.S. Supreme Court issued an opinion in Koontz v. St. John’s Water District, a case lauded by property rights advocates as a “landmark ruling” and claimed by the permitting/planning communities to be an unreasonable shackle on legitimate governmental powers. It is neither.

What were the [true] facts?

The facts read differently in the respective majority/minority opinions. I’ll merge the facts from each and offer some interpretative analysis to fill in some gaps.

Coy Koontz bought 14.9 acres in Florida in 1972. A power line and drainage ditch created a naturally divided 3.7 acre northern tract and 10.2 acre southern tract. Permitting laws (which are not challenged here) allowed the water district to impose “such reasonable conditions” as are necessary to protect the district’s water resources.

The southern tract appears from the facts to be bona fide wetlands, containing up to a foot of water at many times of the year. The northern tract, as Alito described it, was “largely classified as wetlands by the state” but he also cited some quick “facts” suggesting it was either misclassified or the classification wasn’t relevant to him. It was clear that Mr. Koontz needed to add fill so that he could build upon it.

When Mr. Koontz requested a permit, he offered to build a dry pond to catch runoff and to place the southern 10.2 acres into a conservation easement. The District found that offer to be insufficient for mitigation and, according to Justice Alito’s fact summary, told him that he could either (1) reduce the amount of impervious surface (a phrase not found in the opinion but which I’m assuming is what was meant) to one acre, place the holding pond under the building, and dedicate the remaining 2.7 to a conservation easement, or (2) continue the plan as submitted on 3.7 acres but make costly improvements to wetlands miles away as mitigation.

In her dissent, Justice Kagan delved deeper into the testimony and facts from the trial court rather than relying upon, as Alito did, a vague and convenient fact summary. It’s only in reading the dissent that you learn the District did not make an either/or “demand” or act in a bullying fashion that the planner/permitting world is capable of doing. Rather, according to Koontz himself, the District mentioned several possibilities for mitigation “only in broad strokes.” Koontz refused to discuss alternatives and it was he, not the government, who took a “my way or the highway” approach.

In short, Koontz was not the victim property rights advocates might make him to be, and the District was not acting in an arbitrary, oppressive or unreasonable manner. Nonetheless, I support the majority’s holding and find the result to be both correct and little more than the application of existing law under new facts rather than a significant extension of the law.

    The Holding

The holding itself is simply described. The twin rhyming cases of Nollan and Dolan apply equally when the government makes an unreasonable demand for the expenditure of money in exchange for a governmental benefit, and it makes no difference whether the permit was approved or denied for a citizen to have a legal claim. (The second point acceded to in the minority opinion).

Justice Alito opened his opinion by describing Nollan and Dolan as cases that “provide an important protection against the misuse of the power of land-use regulation,” thus setting the stage for a discussion of the abuse of governmental power. He proceeded to describe Nollan/Dolan as protections against governmental employees making what he repeatedly termed “extortionate demands” on private citizens.

Alito correctly and clearly noted that Nollan and Dolan affirmed the government’s right to require that a development project mitigate its impact on the community. However, the mitigation required must have some reasonable connection (nexus) to the impact, and the mitigation must be roughly proportional to the impact.

He astutely observed, though, that governmental employees with broad and discretionary power either to withhold a permit or a needed recommendation to an elected body can be like bullies on the playground (my phrase, not his), making “extortionate demands” on private citizens who had unequal power at the bargaining table. Whether you’re a bully demanding a quarter from a smaller child to allow him to use the swing set or a planner/regulator demanding a king’s ransom for a simple permit, the principle is the same. This unequal power enables the government “to pressure an owner into voluntarily giving up property for which the Fifth Amendment would otherwise require just compensation.”

“Extortionate demands.” You will see this phrase again many times. However, it only captures the majority’s sentiment. It does not describe the holding.

    Case Commentary

• I have competed in this rodeo many times and in many places (and in three states) on the federal, state and local levels. The abuse of governmental power exists on a sliding scale in many corners and crevices. Power is an intoxicant. Some people need regular doses, and the parade of developers and citizens coming to the planner/regulator on bended knee creates both an expectation and a rich opportunity for that daily or weekly dose of power. Sometimes the “extortionate demand” is palpable and delivered with a whiff of arrogance or, worse, a tone of indifference. Other times it’s subtle and expressed through a passive aggressive refusal to return calls or to acknowledge ordinance provisions that the planner/regulator knows exist. Nollan, Dolan and now Koontz are necessary to protect citizens under appropriate circumstances. To liberally paraphrase Justice Potter Stewart, “The abuse of governmental power is hard to define, but I know it when I see it.”

• The playground bullies of the planner/regulator world are the exception, not the rule. In 28 years I’ve handled matters in over 150 towns and counties and found most state and local regulators to be solid civil servants who are not paid their worth. Most of them are willing to listen, offer good advice and seek workable solutions with developers. Several outstanding planners/public servants come quickly to mind, such as Guy Cornman (Davidson County), Hal Johnson (Randolph County), Bob Harkrader (Burlington), Leslie Bell (Brunswick County), Jonathan Marshall (Cabarrus County), Chris Murphy (Winston-Salem and one of my blog readers), Ron Satterfield (Wilmington) and Les Eger (Guilford County). And no, I do not have zoning matters pending in any of their jurisdictions.

• I’m disappointed that Koontz didn’t present better facts and a more sympathetic petitioner. There are enough extreme cases where the powerless citizen must deal with unreasonable exactions that it would have been preferable to have had a true victim and bona fide extortionate demands. However, inasmuch as it took 19 years of circuitous wrangling to get from permit request to Supreme Court ruling, it’s hard to complain.

• If I had been one of the justices I would have found that until the government actually presented Koontz with a take-it-or-leave-it demand and the demand failed Nollan/Dolan, he had no standing. All we have here is the beginning of a conversation with the District, and therefore a case not ripe for adjudication. To that extent I agree with Justice Kagan.

• I have enjoyed watching the hand-wringing from the American Planning Association and angst-y comments from planners on the NC Planners’ Listserv who feel as though they’ve been stripped of power and rank. To my knowledge, I’ve never met Patrick Young, Asst. Director of Planning in Durham, but kudos to him for bucking the knee-jerk trend and commenting that, while the opinion might place more scrutiny on planners’ efforts to mitigate projects, the decision “could actually result in better planning” despite the perception of Koontz as an intimidating presence.

• As often as I represent the developer/builder’s interests, even I could not assert with a straight face that dedicating a conservation easement for land under a foot of water much of the year amounts to “mitigation.” The most development possible under federal and state laws for Mr. Koontz’s southern tract is a raised platform for fishing or duck and deer blinds for hunting.

My crystal ball, as cloudy as it sometimes can be, predicts that we’ll have increased litigation under the Nollan/Dolan/Koontz nexus/proportionality standards – not because Koontz lowered the threshold and made governments more vulnerable but because it calls increased attention to abuses that really do occur. Communication Skills 101 and Personal Relations Skills 102 will go a long way towards, in the words of Mr. Young, “better planning,” and even further towards avoiding lawsuits.

For email alerts on new posts, click the “sign me up” button above.

Scroll down to read recent posts. Click on topics of interest in the right hand
column for other posts.

Email this postTweet this postLike this postShare this post on LinkedIn
Tom Terrell

Terrell_TomMr. Terrell is widely regarded as one of North Carolina’s leading land use attorneys, representing both private and governmental entities in matters related to real estate development. His practice “footprint” covers the state from the mountain counties to the coast and occasionally includes…

Terrell_TomMr. Terrell is widely regarded as one of North Carolina’s leading land use attorneys, representing both private and governmental entities in matters related to real estate development. His practice “footprint” covers the state from the mountain counties to the coast and occasionally includes parts of Virginia and South Carolina. His many clients are involved in commercial and residential real estate, solid waste hauling and disposal, telecommunications, quarries/asphalt and miscellaneous litigation related to permit denials, vested rights and rezonings.

He has published numerous articles and speaks regularly to legal, governmental and business groups on a variety of issues related to land use and zoning.

Mr. Terrell has served as a leader in numerous civic and legal endeavors, including Chairman of the Board of Trustees of the N.C. State Health Plan, Chairman of the Board of Trustees of Winston-Salem State University, and service on the Board of Directors of the UNC-CH General Alumni Association, Board of Directors of the High Point Chamber of Commerce, Board of Visitors of Guilford College and Board of Center Associates of the Center for Creative Leadership, and as a founding member of the N.C. Bar Association Zoning, Planning and Land Use Section.

More information can be found at

Mr. Terrell can be contacted at