Today, the Supreme Court of the United States agreed to hear the case of Sheetz v. El Dorado County! Back in June, Mountain States along with our friends at the Texas Public Policy Foundation, the NFIB Small Business Legal Center, the Manhattan Institute, and the Southeastern Legal Foundation filed an amici curiae brief urging the Supreme Court to do exactly that. We are one step closer to justice for George Sheetz because of the Supreme Court’s decision, influenced in part by our efforts in June.
George’s Battle
George Sheetz is doing legal battle with the County of El Dorado, California in a case that centers on the Fifth Amendment to the US Constitution. In that part of the Bill of Rights is a specific provision called the “Takings Clause,” which prohibits governments from taking private property for public use without just compensation. Many people are familiar with the concept of “eminent domain,” where the government can require you to sell your property to the government so that the government can use the property for things such as public highways. If there is a public use for land, the public must pay private citizens a fair value.
However, the Takings Clause is much more than that. This important part of our supreme law forbids government entities—like a county in California—from shunting the costs of some expensive government project onto specific and unwilling individuals.
Normally, when a government wants to finance a project, it has to raise taxes or incur debt. But often, the government’s constituents do not want to pay for those projects, and the government decision-makers worry that they will be thrown out of office. Facing those prospects, many local governments have craftily devised ways to raise money without such politically undesirable solutions. What they do is force “exactions” onto prospective land developers—such as George—as a condition of receiving a required government building permit. As an example, if a company wants to construct an office building on the west side of town, the city might force an exaction and require the company to for completely unrelated construction of a playground on the east side of town. In any other context, we’d call this kind of practice “extortion.”
Government Runaround
The Supreme Court thought it put an end to this practice thirty years ago when it held that any such exaction must be significantly related to off-setting the harm that construction that the prospective land developer might actually cause. That is, if a new parking garage is paved over a grassy lot, the owner of garage must pay for the expansion of nearby stormwater runoff infrastructure, as the now-missing soil can no longer absorb the rain.
That would be sensible, but local governments have spent the last three decades working around and exploiting a perceived loophole in the Supreme Court’s decisions. They argue the Supreme Court only banned the practice of exaction when it was an administrative agency—that is, the regulators—violating people’s rights, not when it’s done by lawmakers like a city council or county commission.
One Step Closer
George Sheetz is dealing with that flawed argument today. He wants to build a single-family residence on his property in Placerville, California. The County of El Dorado, however, attempted to charge him a whopping $23,420 under the pretext of a “traffic impact mitigation fee.” Supposedly, his new home with his one car would so dramatically affect traffic the one or two times per day he leaves the house that the county thought it appropriate to charge him over twenty grand for it.
The Supreme Court agreeing to hear George’s case is a testament to how important the right to property is. When local governments can extract money from their citizens in unfair manners and in violation of the Constitution, we risk a subversion of the rule of law. It is time to end exactions, especially when they amount to no more than extortion, and restore the right to property for George and every American at all levels of government.
