The US Supreme Court’s forthcoming decision in Koontz v. St. Johns River Water Management District promises to be one of the most important property rights rulings in many years. In addition to affecting a wide range of real estate development projects that are subject to local, state or federal permit requirements, the decision may also affect negotiations with government regulatory authorities outside the real estate context.

Previous decisions of the Court have established a doctrine of “unconstitutional exactions,” which requires payment of just compensation when a land use authority unreasonably conditions a development permit on the developer’s dedication of some other, unrelated property to public use (like a remote bike path or conservation easement).

In Koontz, the conditions imposed by the state agency were so onerous that the developer refused them, and as a result, was denied a development permit. The threshold question before the Court is whether the unconstitutional exactions doctrine applies to such a permit denial, and more generally, whether these facts constituted a taking of Koontz’s property.

A “no” answer could sanction excessively hard bargaining by government agencies, whereas a “yes” answer could inhibit regulators from imposing conditions that are reasonable in fact, but nevertheless invite takings claims and the attendant burden and expense of litigation. Most broadly,Koontz involves the bounds that federal, state and local agencies must observe when negotiating with developers or other regulated entities.

Following the decision, Kerri Barsh, co-chair of GT’s National Environmental practice, and Jerry Stouck, shareholder in GT’s Litigation practice, will be hosting a webinar with Paul Beard, III of the Pacific Legal Foundation, who argued on behalf of Koontz in the U.S. Supreme Court, to discuss the implications of the ruling.