572 F.Supp.3d 428
M.D. Tenn.2021Background
- Metro Ordinance BL2019-1659 (Metro Code § 17.20.120) requires new single- and two-family homes in designated zones to build a sidewalk on the property frontage or pay an annually calculated "in-lieu" fee; fee is formulaic and capped at 3% of total construction value.
- The in-lieu fee funds a pedestrian benefit program and Metro also requires dedication of right-of-way/easements for future sidewalks.
- Plaintiffs James Knight and Jason Mayes own lots in the ordinance zone. Knight refused the sidewalk condition (permit expired after BZA denial); Mayes paid the fee (~$8,883), built his house, and unsuccessfully sought refund.
- Plaintiffs sued claiming the sidewalk condition and in-lieu fee are unconstitutional exactions in violation of the Fifth Amendment Takings Clause; Mayes also asserted unjust enrichment under state law for the paid fee.
- The court evaluated which takings framework applies (Nollan/Dolan/Koontz versus Penn Central), applied Penn Central, and granted Metro summary judgment, denying plaintiffs relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicable takings standard | Nollan/Dolan (essential nexus and rough proportionality) should govern because Metro conditioned permits on dedication/fees | Ordinance is a generally applicable legislative regulation; Nollan/Dolan inapplicable; Penn Central governs (Metro also rejects rational-basis for takings claim) | Court: rational-basis not appropriate; Nollan/Dolan/Koontz do not apply to generally applicable legislative exactions; Penn Central balancing test applies |
| Whether application of the Ordinance effected a taking | Conditioning permits on funding sidewalks (or paying fee) is an uncompensated exaction/taking | The fee is formulaic, capped at 3%, modest relative to project costs, benefits public, and does not frustrate investment-backed expectations; no taking under Penn Central | Court: No taking — Penn Central factors favor Metro (minimal economic impact, no significant interference with investment-backed expectations, character of regulation supports public program) |
| Mayes claim for unjust enrichment (restitution of paid fee) | Fee payment was an unconstitutional exaction, so Metro must return money | No taking occurred; unjust enrichment claim fails | Court: Mayes unjust enrichment claim fails; summary judgment for Metro |
Key Cases Cited
- Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987) (established essential nexus requirement for land-use exactions)
- Dolan v. City of Tigard, 512 U.S. 374 (1994) (added rough proportionality requirement to exaction review)
- Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595 (2013) (extended Nollan/Dolan to monetary exactions and permit denials)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978) (established multi-factor balancing test for regulatory takings)
- Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005) (clarified takings framework and rejected the Agins "substantially advance" test)
- Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992) (per se taking where regulation deprives land of all economically beneficial use)
- Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) (per se physical-invasion takings rule)
- F.P. Dev., LLC v. Charter Twp. of Canton, 16 F.4th 198 (6th Cir. 2021) (discussed application of Koontz and noted open question whether Nollan/Dolan apply to legislative exactions)
- McClung v. City of Sumner, 548 F.3d 1219 (9th Cir. 2008) (held generally applicable legislative development conditions are analyzed under Penn Central rather than Nollan/Dolan)
- City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687 (1999) (noting rough proportionality test is confined to exaction context)