Supreme Court hears challenge to county impact fee in Sheets v. County of El Dorado

The Supreme Court on Tuesday wrestled with whether legislatively adopted development impact fees are categorically immune from the Court’s heightened unconstitutional‑conditions test in Nolan and Dolan.

Petitioner’s counsel, Mr. Beard, told the justices that the County of El Dorado conditioned a building permit on payment of roughly $23,000 and called the choice ‘‘an impossible choice, the taking of over $23,000 or the ability to use his land.’’ He argued that when a monetary demand is tied to a particular landowner’s permit, the government is effectively leveraging the permit and that the Court’s precedents require heightened review to ensure exactions are genuinely mitigation rather than a way to raise revenue from a few property owners.

The county, through counsel Miss McGrath, urged the Court to treat programmatic impact fees as the longstanding line of special assessments, taxes and user fees that the Court has not treated as takings. ‘‘This court has always held that those fees, which are indistinguishable from the fee at issue, are not takings,’’ she told the justices, arguing that forcing parcel‑by‑parcel constitutional review would disrupt local governments’ ability to fund capital projects.

Justices pressed both sides on doctrinal lines and practical consequences. Several justices asked whether money ever counts as a protectable property interest absent appropriation of a specific parcel, and whether Koontz’s logic — treating an in‑lieu monetary demand as equivalent to taking a property interest when it operates on a particular parcel — controls. Others raised workability concerns: if Nolan/Dolan required individualized findings for every permit, would impact‑fee programs used nationwide be administratively crippled?

Counsel for Sheets replied that the test is manageable where legislative schedules are ‘‘sufficiently granular’’ to reflect expected impacts for defined categories (for example, single‑family homes of particular square‑footage bands) and that governments could preserve predictability while still bearing the burden of showing an essential nexus and rough proportionality when challenged. The county argued the same policy goals can be met by state law limits, special‑assessment analogies, and general due‑process reasonableness review without importing a takings framework to routine impact fees.

Several justices framed the dispute as two threshold questions: (1) is there a taking at all in the circumstances presented; and (2) if so, must Nolan/Dolan operate the same way against generally applicable legislation as it does against ad‑hoc permit conditions. Justice Elena Kagan summarized the split as whether the case is about a taking or about how Nolan/Dolan applies to general schemes, and said the two sides largely agreed on the contours of the dispute even as they disagreed on answers.

Petitioner closed in rebuttal by stressing that the county’s imposition lacked individualized administrative proceedings and that Nolan/Dolan provides property owners a distinct protection against having the costs of public improvements shifted onto a narrow class of permit applicants.

The case was submitted. A decision will resolve whether legislatures may shield programmatic impact fees from the heightened unconstitutional‑conditions inquiry or whether such fees — even if enacted broadly — remain subject to the Court’s takings jurisprudence when they operate on a particular parcel.