In the case of Sheetz v. County of El Dorado, the United States Supreme Court reviewed a challenge by George Sheetz of a traffic impact mitigation fee imposed by the County of El Dorado. This fee was required as a condition for Sheetz to obtain a permit for constructing a small prefabricated single-family home in Placerville, California. Sheetz argued that the fee constituted an unconstitutional taking under the Fifth Amendment of the U.S. Constitution, and that a legal challenge to the fee should be reviewed under the heightened scrutiny standards established in Nollan v. Cal. Coastal Comm’n and Dolan v. City of Tigard.
Sheetz’s challenge faced setbacks in state court, largely due to the application of precedent set by the California Supreme Court in San Remo Hotel v. San Francisco. This precedent limited the Nollan/Dolan heightened scrutiny test to fees and conditions imposed by government officials on an individual discretionary basis (i.e., ad hoc conditions applied to individual projects). Therefore, fees and conditions imposed legislatively (e.g., standard fees/conditions imposed by ordinance), like the traffic impact fee in Sheetz’s case, avoided the heightened scrutiny that looks at the condition’s “nexus” and “proportionality” to the project.
In a pivotal and unanimous decision, the U.S. Supreme Court rejected California’s interpretation set forth in San Remo. It ruled that the Nollan/Dolan heightened scrutiny test applies to both legislative and administrative fees and conditions related to land use permits. Consequently, Sheetz’s challenge will return to the state courts for review under the Fifth Amendment, this time to be reviewed under the heightened scrutiny described in Nollan/Dolan.
For a comprehensive exploration of this case and its implications, we invite you to view a webinar hosted by JMBM partners Matthew Hinks and Daniel Freedman. The webinar examines the case, the relevant precedents, and offers insights into how Sheetz v. County of El Dorado may impact California law moving forward.