On October 13, 2021, the United States Court of Appeals for the Sixth Circuit decided a new exactions/unconstitutional conditions case providing additional guidance to local governments on the obstacles for imposing broad permit conditions. The case concerned an ordinance enacted by the Township of Canton requiring property owners seeking permission to remove certain types of trees to obtain a permit for the removal, and to mitigate the tree removal by either planting more trees or paying into a tree fund. The ordinance had a clear, general public benefit of protecting natural resources. After all, who doesn’t like trees?
The developer, F.P. Development LLC, purchased property within the Township after the ordinance had been enacted. The property was bisected by a county drainage ditch that had become clogged with fallen trees and other debris. The county was advised of the clogged ditch but refused to clear it. The developer then proceeded to hire a tree company to clear the ditch and remove an additional 159 trees from the property without a permit. The Township discovered the unpermitted removal and advised the developer that in order to comply with the ordinance, it either had to plant 187 new trees or pay $47,898 to the Township’s tree fund. The developer instead sued in federal court claiming that the ordinance imposed an unconstitutional condition (among other things).
The litigants agreed that the ordinance had an essential nexus to a legitimate public purpose (one of the two elements in an unconstitutional conditions claim). Thus, the only remaining issue was whether the condition (that the developer replant 187 trees or pay $47,898 to the tree fund) is roughly proportionate to the impacts of the developer’s removal of 145 trees. The Township had the burden of proving rough proportionality, but the Sixth Circuit ruled that it failed to meet that burden. The court noted that the Township failed to meet its burden because, rather than proving rough proportionality, the Township assumed the validity of its ordinance. The court emphasized that in most cases, “the government generally satisfies the nexus and rough proportionality test with ease” by introducing just some evidence demonstrating the proportionality of the condition. In other words, the bar is low — just meet it.
The message from this case is important and clear: governments cannot assume the validity of their methodology in unconstitutional conditions cases. They must take the burden of proving rough proportionality seriously, even though the relationship of the permit condition to the development impacts seems intuitive. In this case – they want to allow property owners to remove trees, but you obligate them to replace the trees or pay for the trees’ respective monetary value. That seems fair, right? Sure, but you still have to prove it!
Particularly with ordinances of general applicability, such as the one at issue in the case, where an ordinance has a set formula that applies to everyone across the board, governments often overlook the issue of proving rough proportionality because the ordinance does not require an individualized determination when it is being applied. It seems, therefore, counterintuitive to have to prove such an individualized determination in a lawsuit. However, to meet the burden in unconstitutional conditions cases, governments must take on this task regardless of whether the ordinance, itself, requires it. Ideally, the methodology developed when drafting the ordinance will be backed up by the same type of evidence that will prove rough proportionality, although, this is rarely the case.
 F.P. Dev., LLC v. Charter Twp. of Canton, Michigan, 16 F.4th 198 (6th Cir. 2021)
Notably, the Sixth Circuit hinted that there may be an argument that the unconstitutional conditions test does not even apply to the Township’s ordinance, but the litigants did not raise it. The court seems to be alluding to the fact that the ordinance is a law that is generally applicable to everyone, across the board, in the same way. In contrast, the U.S. Supreme Court in Dolan indicated that the unconstitutional conditions doctrine applies only when there is an individualized determination that is imposed on a case-by-case basis at the discretion of government staff. Dolan v. City of Tigard, 512 U.S. 374, 391 n. 8 (1994).
There are several important take-aways from the Sixth Circuit’s decision:
- When enacting laws of general applicability, governments should bear in mind that they may be subject to an unconstitutional condition challenge, so they should be prepared to meet the rough proportionality standard. In other words, in coming up with the general formula that will apply to everyone, justify that formula with evidence that the conditions will be roughly proportionate to the impacts from the development.
- If a government is being sued based on a permit condition that was imposed by a law that applies equally to everyone, the government should assert that as a defense to an unconstitutional conditions claim. While some property owners argue that this is not well-settled law, there is authority for the proposition in Dolan.
- Even if a government can assert the law’s uniform application as a defense, it should attempt to meet its burden of showing rough proportionality through expert testimony.