The United States Supreme Court decisions in Nollan and Dolanprovide landowners with a useful tool for seeking compensation when government agencies use their land use authority to exact valuable property rights and other concessions from owners as a condition to approving their developments. However, a recent California Court of Appeal case serves as a useful reminder of the limitations of Nollan/Dolan.

Background

In Powell v. County of Humboldt (Jan. 16, 2014, Case No. A137238), the Court of Appeal was asked to decide the constitutionality of a Humboldt County General Plan provision obligating landowners seeking a building permit – even a minor permit – to grant an airspace easement over their properties "to ensure that any improvement is compatible with the safe operation of [a nearby] airport." Powell involved a landowner who had purchased a mobile home that had been improved with a porch and other minor modifications by the seller, without first obtaining the requisite permits from the County. After the owner acquired the property, the County demanded that the owner obtain an "after-the-fact" building permit for the improvements. Before issuing the permit, however, the County insisted the owner grant the County an "overflight" easement above the property, as provided in the General Plan.

The owner refused and instead brought an action in the Superior Court for a declaration that the airspace easement requirement was an unconstitutional exaction, claiming there was no nexus between a building permit for a porch and other pedestrian improvements and airspace hundreds of feet above the property. The trial court granted the County's motion for summary judgment, ruling that theNollan/Dolan test did not apply under the circumstances.

Nollan/Dolan

Taken together, Nollan/Dolan stand for the proposition that the government cannot condition discretionary approvals on the exaction of property rights unless there is an "essential nexus" between the exaction and the asserted public purpose that would be advanced by denying the approval. In addition, the dedication must be "roughly proportional" in nature and extent to the impact of the proposed development, meaning that, even if the government can require some dedication, the amount of the dedication is limited by the impacts of the approval being sought.

Powell Ruling

On appeal, and after a thorough review of the United States Supreme Court's takings jurisprudence, including the recent Koontzdecision, the Court of Appeal agreed with the trial court. The Court reasoned that the Nollan/Dolan limitations are predicated on the notion that the dedication sought must, if unilaterally appropriated by the government outside the context of a land use decision, constitute an independent taking requiring compensation. In other words, if the owner had never applied for a permit, and if the government simply started using the airspace above the owner's property, the use would have to amount to a compensable taking; otherwise, the additional scrutiny under Nollan/Dolan is not triggered, and the dedication passes constitutional muster.

In the Powell case, because California law provides that property owners do not own the airspace 500 feet above their properties in rural areas (or 1,000 feet in congested areas), and because other cases have established that the mere use of airspace even belowthose altitudes constitutes a taking only if certain additional requirements are met (which the Court found were not applicable), Humboldt County could require the airspace easement regardlessof whether there was any nexus or proportionality between the easement and the minor building permit sought. The landowners simply could not meet their burden in the summary judgment proceedings of establishing that the practical effect of the easement constituted a taking.

Implications

There are some important qualifications in the Powell decision – such as the County's concession that the owner could seek compensation in the future, if, for example, use of the airspace easement ripened into a compensable taking due to noise and other issues – but the overall lesson in Powell seems to be that the limitations in Nollan/Dolan are themselves limited, in that the exaction sought must be independently compensable for the limitations to apply.