Breaking news - Supreme Court rules legislative bodies cannot "take" private property by way of untethered "fees" (Sheetz v. County of El Dorado)

United States Supreme Court:  legislative bodies cannot "take" property by way of unlimited "fees" 

A recent Supreme Court opinion illustrates how lower courts often get it completely wrong, despite apparently clear precedent, and as this case shows, this is particularly likely to occur when courts get swept along with a judicial trend.  Such an unfortunate trend is interpreting the Fifth Amendment's bar against taking property without just compensation so narrowly as to permit the government to do virtually whatever it wants to a landowner's property, no matter logic or the law. 

In Sheetz v. County of El Dorado, No. 22–1074 (April 12, 2024), a unanimous Supreme Court found California courts had it entirely wrong when they found (the term "rubber stamp" comes to mind) an outrageous "fee" a landowner must pay to build a home -- having no relationship to the services provided or the cost of the project to local government -- did not implicate the bar against the "taking" of private property. The practical effect of ignoring the full effect of the Firth Amendment is that "fees" enacted by a legislative body have no upward limit and may take five, ten, or more percent of the value of the property, and a property owner may not even bring a Fifth Amendment claim.

The opinion authored by Justice Barett found these courts had misapplied prior precedent.  As the syllabus to the opinion sets forth, the issue was whether a California county could impose a $23,420 "traffic impact fee" upon an ordinary residential landowner unlucky enough to own a lot in El Dorado County and who wished to build a home:

As a condition of receiving a residential building permit, petitioner George Sheetz was required by the County of El Dorado to pay a $23,420 traffic impact fee. The fee was part of a “General Plan” enacted by the County’s Board of Supervisors to address increasing demand for public services spurred by new development. The fee amount was not based on the costs of traffic impacts specifically attributable to Sheetz’s particular project, but rather was assessed according to a rate schedule that took into account the type of development and its location within the County. Sheetz paid the fee under protest and obtained the permit. He later sought relief in state court, claiming that conditioning the building permit on the payment of a traffic impact fee constituted an unlawful “exaction” of money in violation of the Takings Clause. In Sheetz’s view, the Court’s decisions in Nollan v. California Coastal Comm’n, 483 U. S. 825, and Dolan v. City of Tigard, 512 U. S. 374, required the County to make an individualized determination that the fee imposed on him was necessary to offset traffic congestion attributable to his project. The courts below ruled against Sheetz based on their view that Nollan and Dolan apply only to permit conditions imposed on an ad hoc basis by administrators, not to a fee like this one imposed on a class of property owners by Board-enacted legislation. 84 Cal. App. 5th 394, 402, 300 Cal. Rptr. 3d 308, 312.

In other words, the trial court, the Third Appellate District of California, and the California Supreme Court (which denied review) did not give full effect to precedent such as Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987), and Dolan v. City of Tigard, 512 U. S. 374 (1994) indicating a fee with no nexus to the effect of the actual development is a "taking."  As Justice Barret wrote:

The California Court of Appeal rejected that argument because the traffic impact fee was imposed by legislation, and, according to the court, Nollan and Dolan apply only to permit conditions imposed on an ad hoc basis by administrators. That is incorrect. The Takings Clause does not distinguish between legislative and administrative permit conditions. (Sheetz., p. 14.)

Justice Barret and the remaining eight justices all agreed the fact a fee was imposed by a legislative body, rather than being imposed by a regulatory power, did not insulate said fee from scrutiny.  Simply put, the Bill of Rights applies equally to the executive and legislative branches of government.  

Therefore, the majority opinion explained the proper test for considering whether a "fee" is a taking:

Our decisions in Nollan and Dolan address this potential abuse of the permitting process. There, we set out a two-part test modeled on the unconstitutional conditions doctrine. See Perry v. Sindermann, 408 U. S. 593, 597 (1972) (government “may not deny a benefit to a person on a basis that infringes his constitutionally protected interests”). First, permit conditions must have an “essential nexus” to the government’s land-use interest. Nollan, 483 U. S., at 837. The nexus requirement ensures that the government is acting to further its stated purpose, not leveraging its permitting monopoly to exact private property without paying for it. See id., at 841. Second, permit conditions must have “‘rough proportionality’” to the development’s impact on the land-use interest. Dolan, 512 U. S., at 391. A permit condition that requires a landowner to give up more than is necessary to mitigate harms resulting from new development has the same potential for abuse as a condition that is unrelated to that purpose. See id., at 393. This test ap- plies regardless of whether the condition requires the land- owner to relinquish property or requires her to pay a “monetary exactio[n]” instead of relinquishing the property. Koontz, 570 U. S., at 612–615. (Id., p. 6.)

Analysis

The degree to which the lower courts "got it wrong" is stunning, and, in particular, the narrow reading of Nollan/Dolan is quite troubling.  As to the failure of the California Supreme Court to show any interest in preventing local government from unlawfully taking private property, the fact it declined to review an appellate opinion finding one of the protections of the Bill of Rights does not apply simply because it was the legislature that violated a citizen’s rights speaks for itself.

Though the opinion was unanimous, it leaves open the question of whether a particular fee is permissible, to wit, whether a particular fee meets constitutional muster, i.e, whether it has an  "“‘essential nexus’” to the government’s land-use interest and has “‘rough proportionality’” to a property’s impact on that interest." (Concurrence by J. Gorsuch, p. 1.)

Of course, if a legislature or similar body may impose an unlimited "fee" upon someone wishing to build a single home, under the rubric that limitations on such fees do not apply to legislative enactments, then the Fifth Amendment "takings clause" has no effect as long as the law classifies the taking as a legislatively-mandated "fee."

As noted in his concurrence, Justice Gorsuch is of the opinion whether a fee is a "taking" does not depend upon whether it is imposed upon a single property or a class of properties as the same constitutional rules apply to the rights of the "many" as they do to the "few."  Justice Gorsuch notes the majority opinion leaves this question for another day:

The Court notes but does not address a separate question: whether the Nollan/Dolan test operates differently when an alleged taking affects a “class of properties” rather than “a particular development.” (Id.)

Indeed, the concurrence of Justice Kavanaugh, to which Justices Kagan and Jackson joined, recognizes this issue has not been resolved.  However, Justice Kavanaugh takes the view the Sheetz opinion does not prohibit local government from tailoring land-use fees based upon the effect of an entire development in toto rather than requiring that the fee have a nexus to the effect of a single property owner.

Finally, the role of the Pacifica Legal Foundation must be noted. As did the Cato Institute, Pacifica filed an amicus curiae brief.  If it were not for the efforts of his own counsel and these "friends of the court, Mr. Sheetz might still be stuck paying a nearly $24,000 "traffic fee" to build what the Supreme Court termed "a modest prefabricated house" for his wife and grandson.

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Towing legally- parked cars for unpaid tickets violates 4th Amendment (Coalition v. SF)

 

Warrantless tows of parked vehicles for past parking violations constitute an unlawful seizure of private property

As do other municipalities, the City and County of San Fransisco tows vehicles that are lawfully-parked at present for past violations of parking rules and resulting unpaid parking fines.  The unstated subtext, of course, is that there may be persons residing in these lawfully-parked vehicles as such vehicles may also be used for purposes of sleeping.  At the same time, such vehicles are often considered abandoned as they be left in a particular spot for several days. 

The Coalition for the Homeless (“Coalition”) sued the City and County of San Francisco, law enforcement, and the local transit authority (“San Francisco”).  The Coalition the towing, and thus seizure and search, of a vehicle violates the Fourth Amendment, which bars warrantless searches unless there are “exigent circumstances” and/or other recognized exceptions to the requirement a warrant is needed.  

The California Court of Appeal for the First District agreed. (Coalition on Homelessness v. City and County of San Fransisco (July 21, 2023) A164180.)  Despite broad-ranging issues involving civil liberties, due process, and the enforcement of parking rules, the appellate court stated the issue succinctly and therefore held a Fourth Amendment analysis was dispositive:

The principal issue on appeal is whether the challenged warrantless tows are permissible under the vehicular community caretaking exception to the Fourth Amendment’s warrant requirement. We conclude respondents have not shown that legally parked cars with unpaid parking tickets that present no threat to “public safety and the efficient movement of vehicular traffic” may be towed under that exception. In particular, we reject respondents’ argument that their interest in deterring parking violations and nonpayment of parking fines justifies warrantless tows under the vehicular community caretaking exception. Such deterrence does not justify warrantless tows of lawfully registered and lawfully parked vehicles. (Id., p. 2; footnote and citation omitted.)

As discussed below, the appellate court also rejected the argument that towing the entire vehicle for unpaid parking tickets was justified as a “forfeiture” of private property.

The supposed “community caretaking” exception to the requirement that a warrant issue before a search and/or seizure does not apply to towing legally-parked vehicles

The First District began by discussing the statute upon which San Francisco relied for the authority to tow vehicles.  Vehicle Code section 22651 permits towing of vehicles where there is notice of multiple parking violations and there is no response within 21 days. Despite this statute, the Coalition filed a Petition for Writ of Mandate and Injunctive and Declaratory Relief.  San Francisco admitted it did not obtain a warrant before towing lawfully-parked vehicles, but argued that under section 22651 no warrant was required.  The trial court found no warrant was required pursuant to the so-called “community caretaking” exception to the Fourth Amendment and the Hon. Ethan P. Schulman of the San Francisco Superior Court therefore entered judgment for San Francisco.  Plaintiff appealed.

California has adopted Federal law as to the scope of the Fourth Amendment, and the Coalition court explained it was readily-apparent that towing a car is a “seizure” as defined by said amendment.  It also held the government has the burden of showing a particular seizure falls under one of the “few” and “specifically established” exceptions to the warrant requirement:

“ ‘A seizure conducted without a warrant is per se unreasonable under the Fourth Amendment—subject only to a few specifically established and well delineated exceptions. The burden is on the Government to persuade the . . . court that a seizure comes under one of a few specifically established exceptions to the warrant requirement.’ ” (Miranda, supra, 429 F.3d at p. 862; see also City of Los Angeles v. Patel (2015) 576 U.S. 409, 419; Ovieda, supra, 7 Cal.5th at p. 1041 [“ ‘The burden is on the People to establish an exception applies.’ ”].)  (Id., p. 7.)

The appellate court found that San Francisco did not meet this burden, as it did not make any showing that a legally parked car was a public safety or health threat.  This is a crucial fact as the “community caretaking” exception has only been applied where there is such a present threat.  In point of fact, Coalition analyzed the scope and history of relevant precedent and found that, in reality, there was no “community caretaking” exception to the requirement that a warrant issue; rather, there is only a “vehicular community caretaking” exception, and such applies only where, at the time of the seizure, the vehicle is parked illegally. (Id., p 11-12; original emphasis.)  Therefore, this exception must serve an “immediate public need.” (Id.)

Coalition flatly rejected the argument that such “need” includes deterring future and hypothetical violations of parking regulations by making it possible to seize a legally-parked vehicle as a result of prior parking violations which have not yet been remedied:

We do not doubt that the threat of impoundment may encourage compliance with parking laws, by owners at all income levels. However, respondents cite no authority that such deterrence is a sufficient basis for a warrantless tow of a legally parked car under the vehicular community caretaker exception. To the contrary, the Miranda [v. City of Cornelius (9th Cir. 2005) 429 F.3d 858, at 865] court expressly rejected a deterrence rationale as justification for impoundment of a vehicle that was not “actually ‘impeding traffic or threatening public safety and convenience’ on the streets.” (Id., p. 18; other citations omitted but original emphasis.)

Not surprisingly, San Francisco argued the failure to tow legally-parked vehicles would mean that parking citations could be ignored with “impunity.”  But Coalition explained there in fact other remedies to collect these monies other than towing a legally-parked vehicle.  For example, where there has actually been an adjudicative process as to unpaid fines, the resulting default judgment may result in towing and impoundment of a vehicle even if legally parked. (Id., p. 26.)  Further, Coalition stressed its holding did not apply where, for example, there was an immediate need for a tow, the vehicle was unregistered, or the vehicle was otherwise illegally parked. (Id., p. 20.)

Finally, the First District rejected the claim that towing a legally-parked vehicle in order to collect unpaid parking violations was akin to a “forfeiture” of private property, i.e., a supposed “progressive forfeiture” based upon the fact the vehicle may, at some point, be legally sold in order to pay unpaid parking tickets.  Cases implying a vehicle may be sold after impoundment as a “forfeiture” were not analogous because here the vehicles were not subject to forfeiture at the time of towing and therefore would only be forfeited at a later date if the amounts owed were not paid.

The appellate court’s public policy analysis was less than robust

Other than responding to the arguments set forth in the briefs, the appellate court did not utilize this opportunity to fully discuss the public policy implications of its ruling vis a vis the towing policy.  On the one hand, one may argue that Fourth Amendment protections should not depend on how courts interpret ever-shifting public policy considerations. 

But it cannot be said that exceptions to the Fourth Amendment are not based, at least in part, upon rationales that involve public policy.  For example, the well-recognized “exigent circumstances” exception is rooted in concerns for public safety and the harm to public safety from the delay occasioned by obtaining a warrant, and therefore the application of this exception cannot be divorced from public policy.  

There is no doubt that the public policy issues involved in towing a vehicle which is presumably worth several times the amount of unpaid parking tickets have many dimensions.  For example, to the extent someone lives in the vehicle, such persons may now have nowhere to sleep.  

Further, the primary beneficiary of the towing policy may often be the towing company itself when one considers the increasingly large fees charged to tow and impound vehicles.  At the same time, general knowledge that warrantless tows of legally-parked vehicle are forbidden does nothing to encourage payment of parking tickets.  Further, the due process which a default judgment affords a vehicle owner prior to the vehicle being impounded benefits the owner but not necessarily the municipality.  The rejoinder is that the Fourth Amendment is not designed for the purpose of making law enforcement more efficient but in order to protect private citizens from governmental intrusion, and therefore applies even where its effect is quite the opposite.