Sheetz v. County of El Dorado (2022) 84 Cal.App.5th 394.
Abbott & Kindermann recently secured major wins at both the trial court and appellate level on behalf of the County of El Dorado (“County”) in a lawsuit that raised statutory and constitutional challenges to legislatively imposed and generally applied development fees.
The County imposed a $23,420 traffic impact mitigation fee (“TIM fee” or “fee”) as a condition of issuing George Sheetz a building permit for the construction of a single-family residence on his property in Placerville, California. Sheetz filed an action challenging the fee on various grounds, inter alia, that the TIM fee is invalid under the Mitigation Fee Act (“MFA”) (Gov. Code, § 66000 et seq.) and the takings clause of the United States Constitution, namely the special application of the “unconstitutional conditions doctrine” in the context of land use exactions established in Nollan v. California Coastal Comm’n (1987) 483 U.S. 825 (Nollan) and Dolan v. City of Tigard (1994) 512 U.S. 374 (Dolan). The trial court rejected both of Sheetz’ arguments, sustained the County’s demurrer without leave to amend, and denied his verified petition for writ of mandate. The trial court held that the heightened scrutiny in Nollan/Dolan did not apply to the TIM fees, and that the County complied with the MFA requirements in Government Code section 66001, subdivision (a), when the County Board of Supervisors adopted the TIM fees. The Court of Appeal affirmed.
As to the constitutional takings claim, the Court of Appeal held that the heightened scrutiny under Nollan/Dolan did not apply to the TIM fee. The court explained that under California law, the requirements of the Nollan/Dolan test apply to development fees imposed as a condition of permit approval where such fees are imposed neither generally nor ministerially, but on an individual and discretionary basis: “The requirements of Nollan and Dolan, however, do not extend to development fees that are generally applicable to a broad class of property owners through legislative action.” As our Supreme Court has explained, “legislatively prescribed monetary fees’ — as distinguished from a monetary condition imposed on an individual permit application on an ad hoc basis — ‘that are imposed as a condition of development are not subject to the Nollan/Dolan test’.” (Citing California Building Industry Assn. v. City of San Jose (2015) 61 Cal.4th 435, 459–460, fn. 11.) “[W]hile the Nollan/Dolan test applies to monetary land use exactions, which are imposed ad hoc on an individual and discretionary basis, it does not apply to generally applicable development impact fees imposed through legislative action.” “[T]he heightened scrutiny of the Nollan/Dolan test does not apply to legislatively mandated development impact fees that, as here, generally apply to a broad class of permit applicants.” The Court of Appeal concluded that the trial court properly determined that the TIM fee is not subject to the heightened scrutiny of the Nollan/Dolan test because the fee was not an “ad hoc exaction” imposed on a property owner on an individual and discretionary basis, but rather was a development impact fee imposed pursuant to a legislatively authorized fee program that generally applies to all new development projects within the County. The fee was calculated using a formula that considers various factors. Therefore, the validity of the fee and the program that authorized it was only subject to the deferential “reasonable relationship” test embodied in the Mitigation Fee Act and the California Constitution.
As to the MFA claim, the Court of Appeal held that the County satisfied the “reasonable relationship” test in section 66001(a) for legislative enactment of the TIM fees. Specifically, the County met its initial burden of demonstrating that it used a valid method for imposing the TIM fee, one that established a reasonable relationship between the fee charged and the burden posed by Sheetz’s development of a single-family residence in a specific geographic zone. The County considered the relevant factors and demonstrated a rational connection between those factors and the fee imposed. Also, the court concluded that Sheetz failed to show that the record before the County clearly did not support the County’s determinations regarding the reasonableness of the relationship between the fee and his development project.
Sheetz then filed a petition for review with the California Supreme Court as to the Nollan/Dolan claim. That petition was denied on February 1, 2023.
Glen Hansen is Senior Counsel at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.