California retiree George Sheetz has spent more than seven years locked in a long-running legal dispute with his local county over exorbitant permitting fees. But on April 12, Sheetz took his case to the U.S. Supreme Court — and won.
The unanimous decision was a big win for Sheetz as a plaintiff. But it’s an even bigger victory for the countless property owners who confront abusive permitting fees when seeking to develop their own property, and for those of us who care about government accountability.
The ordeal began in 2016, when Sheetz bought a rural property in El Dorado County, in northeast California, on which he planned to build a retirement home where he would live with his wife and grandson. But that simple plan became more complicated when county officials demanded Sheetz pay a “traffic impact fee” of $23,420 in exchange for the permit needed to develop his property.
The rationale for that demand: in 2004, the El Dorado County Board of Supervisors had enacted a countywide plan to address future road construction and improvement needs. That plan came with a big price tag — more than $800 million — and to raise the needed funds, the county jacked up permitting fees on property owners and developers—particularly those seeking to build new homes.
It’s hard to imagine how Sheetz’s development, a modest manufactured home sited on a rural property, was going to lead to a noticeable increase in traffic congestion on county roads. But having already invested a great deal of time, money and energy into his retirement property, Sheetz paid the fee under protest, so he could continue developing his land.
In the meantime, he challenged the county’s permitting scheme in state court, arguing that the disproportionate fees violated his constitutional rights under the Fifth Amendment, which protects private property owners against takings by the government without just compensation. Under this argument, the county’s impact fees might be thought of as extortion, since the onerous fees are a condition of getting the building permit to use the property.
Typically, such administrative fees are held to reasonable limits, thanks to earlier judicial precedent. Previous Supreme Court decisions including Nollan v. California Coastal Commission and Koontz v. St. Johns River Water Management District, both brought and won by Pacif Legal Foundation, established that local governments can impose impact fees on new development, but the permitting conditions must be proportional to the actual anticipated impacts of the development.
To get around those inconvenient court rulings, local governments often impose the fees through legislation, rather than through the bureaucratic process, to give the fees a veneer of accountability. And California courts agreed that extortionate fees are exempt from constitutional protection if it’s the legislature that’s doing the taking.
Denied justice at the state level, Sheetz ultimately pursued his case to the highest court in the land, where the justices issued a unanimous decision in his favor. As Justice Amy Coney Barrett wrote in the decision, there “is no basis for affording property rights less protection in the hands of legislators than administrators. The Takings Clause applies equally to both — which means that it prohibits legislatures and agencies alike from imposing unconstitutional conditions on land-use permits.” Which is to say, property rights don’t receive less protection depending on which branch of government violates them.
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The Supreme Court decision doesn’t put a definitive end to Sheetz’s case — but it does allow him to go back to state court for a new hearing. And it does send a clear message to local governments that they can’t treat property owners like an ATM, and that abusive fee demands will be subject to intense legal scrutiny. Other jurisdictions would be well advised to review their permitting requirements closely to ensure they’re complying with the Supreme Court’s decision and the Constitution.
In a local news interview after the court’s April 12 decision, Sheetz was humble about his day in court: “I’m the little guy, and to get that far is amazing and it shows you that every once in a while, the small guy can win one,” he said. That win isn’t his alone — it’s also a significant victory for all the “little guy” property owners who are facing extortionate fee demands from local government officials.
Brian Hodges is a senior attorney at Pacific Legal Foundation, a public interest law firm that defends Americans’ liberty against government overreach and abuse. Paul Beard is a partner at Pierson Ferdinand.