Pay $150,000 to exercise property rights?

By Bob Unruh

The U.S. Supreme Court today was asked to rein in the “shakedown” of a property owner by a governmental body in Florida, where a water district demanded he pay up to $150,000 to be allowed to develop several acres of a parcel his father bought decades ago.

The case was argued by the Pacific Legal Foundation on behalf of the Koontz family of Florida.

The non-profit group is asking the Supreme Court “to make it clear that the Constitution forbids any kind of shakedown in the permitting process: money grabs (such as the Koontz family was hit with) are just as unconstitutional as land grabs.”

Paul J. Beard II, the principal attorney with the foundation, said the case is historic because of the impact it could have on local government agencies that make demands of citizens and property owners in order for them to exercise their rights.

“This historic case asks whether government can shake down property owners,” he said. “We argue, emphatically, that it cannot. The Fifth Amendment prohibits land use regulators from turning the permit process into an extortion machine. Government can’t coerce property owners into paying unjustified amounts of money, or giving up fundamental rights, or agreeing to other unrelated conditions, as the price of a land use permit.”

In a statement, Beard said the decision should make clear that government “cannot abuse its land use permitting powers by shaking people down. It can’t arm-twist a homeowner or other landowner who is seeking a land use permit. Government can’t arm-twist that person into giving up land or money or rights, when the government’s demand has no connection to the person’s property or the land use proposal that is being considered.”

Brian Hodges, an attorney with the foundation who was at a hearing today with Beard, said it is obvious the issue touched a nerve.

“There were justices who were clearly supporting the Koontz claim that the district’s demands violated the takings clause [of the U.S. Constitution],” he said.

He said it appeared most agreed that it was a taking of one kind, but there appeared to be disagreement over exactly what standard should apply in the case.

He confirmed the justices were “not very receptive to the government’s argument that a demand for money is not a taking.”

A decision isn’t expected for weeks.

The dispute centers on the permits a Florida landowner needed to develop a small part of a 14-acre parcel and the conditions set by the local water district. The land was bought originally by the late Coy A. Koontz Sr. in the St. Johns River Water Management District in Orange County, Fla. He bought the 14.9-acre parcel in 1972, and the government later applied a “Riparian Habitat Protection Zone” designation to the land.

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But when the family wanted to develop 3.7 acres of the land for commercial use, as it lies at the intersection of two highways, the district said he could do that only if they agreed to make an estimated $150,000 in cash payments for “costly improvements” to unconnected water district property miles away.

The record shows that the development permits were denied solely because the owner “refused to spend any additional funds to finance restoration and enhancement of district property miles away from, and unrelated to, his proposed development.”

The family already had agreed to donate the 11 acres where no development was planned.

The Koontz family won the court battle, now handled by Coy and his wife, Linda, at the district court and appellate court level, but those rulings were reversed by the Florida Supreme Court, whose decision now is under review in Washington.

Beard explained the government “shakedown” not only threatened them “with the confiscation of an outrageous sum of money, but also deprived them of the legitimate use of their own private property.”

“We have stressed to the Supreme Court that what happened to the Koontzes is a classic case of unconstitutional regulatory abuse, and it should not happen to any property owner, anywhere. In fact, the Supreme Court has already said this, clearly, 26 years ago, in the Pacific Legal Foundation case of Nollan vs. California Coastal Commission. That famous case said that the Fifth Amendment doesn’t permit land use regulators to engage in extortion against property owners. The government cannot use the permitting process to extract conditions and concessions from the property owner that are not related to the impact of the land use proposal,” he said.

“The Constitution prohibits government shakedowns against property owners who are seeking permits to use their land, and that prohibition doesn’t come with an asterisk. It applies to all shakedowns. It applies just as much when the coercion takes the form of an opportunistic demand for money or other unjustified concessions, as when the extortion is in the form of a land grab.”

Coy Koontz Jr. explains the dispute in a video:

Ultimately, the family had to sell the property on which they were paying taxes but were denied permission to use. But the fight continued because of the principle, PLF said.

Coy Koontz Jr. explained the priorities his father held before he died in 2000.

“The youngest of eight children, my dad, Coy Koontz [Sr.], was born in a holler in the mountains of West Virginia to a poor family. Life was a struggle and Coy left school in the 10th grade to work to help support the family,” he said. “During WWII, he enlisted in the Army and served in Papua, New Guinea. He married during the war and came home to a wife and son. He worked various jobs as his family grew to four children, three daughters and a son.”

It was in the 1960s when he moved to the Orlando area and borrowed $10,000 to buy land and develop a small subdivision.

“Coy was a self-made man, with little formal education, who succeeded in spite of adversity. He was colorful, full of tall tales, dumb like a fox, and believed in the legal system. He didn’t think it was possible to ‘have the state steal his property,’ – his words,” Coy Koontz Jr. said.

“My family and I have pursued this case in order to defend our property rights, but not just our rights – everyone’s property rights, all across the country,” he said. “What the St. John’s River Water Management District did to my family was to issue a demand that amounted to stealing property, for lack of a better term.”

He recalled earlier in the court fight: “After one of the hearings in the case, outside of the courtroom, one of the government’s witnesses was asked why the district hadn’t just purchased the property outright. The witness stated, ‘Why would we buy the property when we can get it for free?'”

Pacific Legal also won a major property-rights battle just last year over the government’s arbitrary imposition of requirements on a landowner.

In that case, Mike and Chantell Sackett of Priest Lake, Idaho, bought a piece of land in a residential subdivision that was about two-thirds of an acre, purchased the appropriate building permits and started work on their dream home.

Then the federal Environmental Protection Agency arrived, ordered them to restore the land to its pristine condition, protect it for years and then go through a ruinously expensive application process to request permission to use their own land. Further, the EPA, backed by the 9th U.S. Circuit Court of Appeals, told the couple they could not even challenge the decision unless they went through the expensive process.

The Supreme Court overturned the appeals court, ruling the EPA must provide a process through which a challenge to its decision can be addressed in a meaningful way.

Pacific Legal called the decision a “precedent-setting victory for the rights of all property owners.”

The EPA previously had threatened the couple with fines of up to $75,000 per day for failing to follow the agency’s “compliance” plan through which federal officials not only effectively seized control of the land but also the couple, by demanding their paperwork and other detailed information.

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