Regulatory Taking - Evolution of Modern Regulatory Takings Law - Nollan and Dolan

Nollan and Dolan

In Nollan v. California Coastal Commission, 483 U.S. 825 the Court reviewed a regulation under which the California Coastal Commission demanded a lateral public easement across the Nollans' beachfront lot in exchange for a permit to demolish an existing bungalow and replace it with a three-bedroom house. The public easement was designed to connect two public beaches that were separated by the Nollan's property. The Coastal Commission had asserted that the public easement condition was imposed to promote the legitimate state interest of diminishing the "blockage of the view of the ocean" caused by construction of the larger house. The Court observed that requiring a dedication of private property in exchange for va building permit was "out and out extortion" unless it could be shown that the private development imposed a burden on public facilities or resources, and the dedication would mitigate such impact. This became known as the "essential nexus" between a legitimate state interest and the permit condition.

Then, in Dolan v. City of Tigard, 512 U.S. 374 (1994) the Court evaluated further the degree of the connection required. In that case, the City of Tigard, Oregon required any business owner seeking to expand substantially onto property adjacent to a floodplain, to create a public greenway and bike path from private land in order to prevent flooding and traffic congestion. The Supreme Court ruled that the City’s requirement would be a taking if the City did not show that there was a reasonable relationship between the creation of the greenway and bike path and the impact of the development, and that the exaction was roughly proportional to the impact. "Without question, had the city simply required petitioner to dedicate a strip of land along Fanno Creek for public use, rather than conditioning the grant of her permit to redevelop her property on such a dedication, a taking would have occurred,” the Court held. “ Such public access would deprive petitioner of the right to exclude others, "one of the most essential sticks in the bundle of rights that are commonly characterized as property."

Following remand, the Dolan case settled with the city paying Ms. Dolan several hundred thousand dollars.