On June 25, the Supreme Court, in an opinion by Justice Alito, reversed the Florida Supreme Court’s holding in Koontz v. St. Johns River Water Management District. The case may have long-term ramifications for the protection of cultural resources and for cultural resources management (CRM) firms.
What is CRM?
CRM is the business of managing archaeological, architectural, and historical sites, and evaluating them for compliance with environmental and historic preservation laws. It is a $1 billion industry that employs some 10,000 people and plays a critical role in facilitating the development of our nation’s infrastructure.
Because the Supreme Court’s holding in Koontz impacts local governments’ ability to encourage developers and builders to protect cultural resources, CRM firms – often contracted by those companies to survey for archaeological, architectural, and historical sites during development projects – may be adversely impacted by the decision.
Background of the Case
Coy Koontz owned land in the Florida wetlands and wanted to develop a portion of it. As part of his development proposal, he offered to grant a conservation easement to the St. Johns River Water Management District. The District rejected his proposal, however, and said his permit would be denied unless he gave the District a larger easement, or paid money to hire contractors to make improvements to other land owned by the District.
Koontz declined both options and sued, arguing that under two prior Supreme Court decisions (Nollan v. California Coastal Commission and Dolan v. City of Tigard), the District’s demands did not have the requisite “nexus” and “rough proportionality” to the effect his proposal would have on land use. The Florida Supreme Court held that Nollan and Dolan did not apply in Koontz’s case because (1) those cases dealt with permits that were granted, while in this case the permit was denied; and (2) this case did not involve a taking of a property interest, such as a piece of land, but only a demand for money (to pay the contractors).
The Supreme Court’s Decision
The Supreme Court reversed on both points. On the first — that the requirements of “nexus” and “rough proportionality” apply only to cases where permits are granted — all nine justices joined in the reversal, holding that the applicability of Nollan and Dolan does not depend on whether a permit is granted or denied. Justice Alito explained, “The principles that undergird our decisions in Nollan and Dolan do not change depending on whether the government approves a permit on the condition that the applicant turn over property or denies a permit because the applicant refuses to do so.”
Only 5 justices, however, joined in the Court’s second holding: that “so-called ‘monetary exactions’ must satisfy the nexus and rough proportionality requirements of Nollan and Dolan.” Under this holding, almost every requirement that property owners pay money — such as permit charges and use fees — arguably could be subject to those standards.
The Court limited its holding by explaining that the “fulcrum this case turns on is the direct link between the government’s demand and a specific parcel of real property.[]” That is, in Koontz, the District’s demand for money (payment for contractors) and Koontz’s parcel of property were directly linked, thus “implicat[ing] the central concern of Nollan and Dolan: the risk that the government may use its substantial power and discretion in land-use permitting to pursue governmental ends that lack an essential nexus and rough proportionality to the effects of the proposed new use of the specific property at issue, thereby diminishing without justification the value of the property.” In other words, because of the direct link between the District’s demand for money and Koontz’s parcel, the District’s demand was, in essence, a government effort to take the property.
Potential Implications for the CRM Field
Monetary exactions can be an effective tool for mitigating impacts to cultural resources. Like the wetlands scenario discussed in Koontz, payments, contributions to existing funds and NGOs, and other financial arrangements can be used to prevent or guide development on culturally sensitive land, or to support preservation or archaeological activities. Reaching agreements with builders and developers to fund preservation and archaeological activities may now be at risk, as local governments will hesitate to propose these approaches for fear of initiating litigation. This is precisely what occurred in Koontz: rather than deny Koontz his permits outright, the District proposed some alternative solutions, and got sued for its efforts.
Moreover, because all monetary exactions now must satisfy the nexus and rough proportionality requirements of Nollan and Dolan, fees and other payments used to support preservation or archaeological activities will be more closely scrutinized.
(The Court’s majority and dissenting opinions are available here.)
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If you have any questions about the Koontz case or the CRM industry, please contact us.