In the Matter of Paul Smith and
Janet Smith,
Appellants,
v.
Town of Mendon, Planning Board of
Town of Mendon, and Richard
Burgwardt, in his official
capacity as Chairman of Town of
Mendon Planning Board,
Respondents.
2004 NY Int. 164
This appeal calls on us to determine whether a
municipality commits an unconstitutional taking when it
conditions site plan approval on the landowner's acceptance of a
development restriction consistent with the municipality's pre-
I.
Paul and Janet Smith own a 9.7 acre lot in the Town of Mendon. Situated along Honeyoe Creek, a protected waterway, the lot includes several environmentally sensitive parcels, falls within the creek's 100-year floodplain boundary and is located within 500 feet of a protected agricultural district. It also contains a woodlot and steep sloping areas susceptible to erosion. Several portions of the property sit within areas classified as environmental protection overlay districts ("EPODs"), pursuant to section 200-23 of the Town Code.
Four separate EPODs limit the Smiths' use of their property. The first, a "Steep Slope" EPOD, bars the construction of new buildings or structures, the clearing of any land area, the installation of sewage disposal systems, the discharge of storm water and the placement of storm water runoff systems, and filling, cutting or excavation operations within the designated district. Property owners may acquire development permits for projects within a Steep Slope EPOD if they can show that their proposed activities will not destabilize the soil, cause erosion or unnecessarily destroy ground cover. They must further demonstrate that there is no reasonable alternative for the proposed activity.
The other three EPODs apply to sensitive lands
In December 2001, the Smiths applied to the Town Planning Board for site plan approval to construct a single- family home on the non-EPOD portion of their property. Following various proceedings, the Planning Board issued a final site plan approval in July 2002. The Board concluded that the Smiths' proposal was not likely to result in any adverse environmental impacts as long as no development occurred within the EPOD portions of the site. It conditioned final site plan approval on the Smiths' filing a conservation restriction on any development within the mapped EPODs and amending the final site plan map accordingly. Such action, the Planning Board stated, would "put subsequent buyers on notice that the property contains restraints which may limit development within these environmentally sensitive areas." The Board also determined that the restriction would provide the most meaningful and responsible means of protecting the EPODs.
The conservation restriction sought by the Town closely
tracked the limitations set by the EPOD regulations. Under the
restriction, which would run with the land and bind subsequent
The restriction also required the Smiths to maintain the "Restricted Areas" in accordance with the terms of their grant and permitted the Town, upon 30 days' written notice, to enter the property to safeguard the environmentally sensitive parcels. The Smiths, their successors and their assigns, however, retained their rights to "full use and quiet enjoyment" of the EPODs. Critically, they retained the right to exclude others from the entirety of their ten-acre parcel.
The terms of the proposed "Grant of Conservation
Restriction" mirrored the pre-existing EPOD regulations,
differing in only a few respects. First, the conservation
restriction encumbered the servient property in perpetuity,
whereas the Town could amend its EPOD ordinance. Under both the
EPOD system and the conservation restriction, however, the Smiths
could seek permission from the Town to conduct a proscribed
activity in the environmentally sensitive parcels. Second, the
conservation restriction afforded the Town greater enforcement
power. Under the EPOD regime, the Town could only issue
Rejecting the proposed conservation restriction, the Smiths commenced this hybrid declaratory judgment/article 78 proceeding, asserting that the restriction worked an unconstitutional taking.[1] The Town moved for an order dismissing or granting summary judgment against the Smiths' claims. Applying Dolan v City of Tigard (512 US 374 [1994]), Supreme Court concluded that, although the conservation restriction was an "exaction," it did not effect an unconstitutional taking. The Smiths appealed.
The Appellate Division affirmed. The court determined
that Supreme Court erred in characterizing the conservation
restriction as an exaction. It then held that, because the
proposed conservation restriction bore a reasonable relationship
to the Town's objective of preserving the environmentally
sensitive EPODs, there was no taking entitling the Smiths to
compensation ( see 4 AD3d 859 [4th Dept 2004]). The Smiths appeal
II.
The Fifth Amendment to the United States Constitution provides "nor shall private property be taken for public use, without just compensation."[2]
Historically, takings jurisprudence involved instances in which the government encroached upon or occupied real property for public use ( see Palazzolo v Rhode Island, 533 US 606, 617 [2001] [discussing the evolution of takings jurisprudence]; see also Loretto v Teleprompter Manhattan CATV Corp. 458 US 419 [1982]). Beginning with Pennsylvania Coal Co. v Mahon (260 US 393 [1922]), the Supreme Court recognized that, even if the government does not seize or occupy a property, a governmental regulation can work a taking if it "goes too far" ( id. at 415).
In the years following Mahon, the Supreme Court offered
"some, but not too specific guidance to courts confronted with
deciding whether a particular government action goes too far and
effects a regulatory taking" ( Palazzolo, 533 US at 617). The
first and perhaps most critical factor in the Court's takings
analyses became whether the regulation deprived landowners of
If the contested regulation falls short of eliminating
all economically viable uses of the encumbered property, the
Court looks to several factors to determine whether a taking
occurred, including "the regulation's economic effect on the
landowner, the extent to which the regulation interferes with
reasonable investment-backed expectations, and the character of
the government action" ( Palazzolo, 533 US at 617; see also Penn
Central Transp Co v New York City, 438 US 104 [1978]). In a
different formulation of this third factor, the Supreme Court
held in Agins v City of Tiburon (447 US 255, 260 [1980]) that the
"application of a general zoning law to particular property
effects a taking if the ordinance does not substantially advance
legitimate state interests" ( see also Bonnie Briar Syndicate v
Town of Mamaroneck, , 94 NY2d 96 [1999]).[3]
Styling the conservation restriction an exaction, the Smiths argue that we should not review the Town's action under the Penn Central/ Agins standard. We disagree. Exactions are defined as "land-use decisions conditioning approval of development on the dedication of property to public use" ( City of Monterey v Del Monte Dunes at Monterey, Ltd., 526 US 687, 702 [1999] [emphasis added]). In a narrow, readily distinguishable class of cases, the Court has held such conditions unconstitutional.
In Nollan v California Coastal Comm'n (483 US 825
[1987]), the Court considered whether conditioning a development
permit on the property owners' transfer to the public of an
easement across their beachfront violated the Takings Clause.
The Court deemed the condition unconstitutional because it lacked
an "essential nexus" ( id. at 837) with the stated purpose of the
underlying land-use restriction -- "protecting the public's
ability to see the beach, assisting the public in overcoming the
'psychological barrier' to using the beach created by a developed
shorefront, and preventing congestion on the public beaches" ( id.
at 835). Nevertheless, the Court noted that the government could
have conditioned the grant of a development permit on
In Dolan v City of Tigard (512 US 374 [1994]), the Supreme Court added a second layer to the "essential nexus" test -- "rough proportionality." In Dolan, the municipality conditioned approval of a building permit on the landowner's dedication of, first, a portion of her property lying within a 100-year floodplain for improvements to a storm drainage system and, second, a strip of land adjacent to the floodplain for use as a pedestrian and bicycle path. The Court concluded that an essential nexus existed between these development conditions and a legitimate governmental purpose, but nevertheless determined that the municipality's proposed exactions were impermissible under a "rough proportionality" standard ( id. at 391).
A showing of rough proportionality, the Court ruled,
requires a municipality to "make some sort of individualized
determination that the required dedication is related both in
nature and extent to the impact of the proposed development"
( id.). A "precise mathematical calculation" is not required.
The exactions at issue were not roughly proportional, the Dolan
Court reasoned, because the municipality had failed to meet its
burden of showing the impact of the proposed construction on its
With City of Monterey v Del Monte Dunes at Monterey, Ltd. (526 US 687, 702 [1999]), the Court placed a key limitation on Dolan, indicating that the "rough proportionality" test did not apply beyond the special context of exactions. The Court added that the test was not "designed to address, and is not readily applicable to" a case in which the "landowner's challenge is based not on excessive exactions but on denial of development" ( id. at 703).
III.
The Attorney General has submitted an amicus brief
arguing for affirmance, cogently pointing out that the present
There is no such dedication of "property" here. In
practice, the Court has identified exactions in only two real
property cases, Nollan and Dolan, both of which involved the
transfer of the most important "stick" in the proverbial bundle
of property rights, the right to exclude others.[5]
In Twin Lakes
The Smiths argue that by its conservation restriction
the Town is requiring them to surrender the right to seek a
variance under the particular procedures of the EPOD regime. On
the record before us, we are not persuaded that this can properly
be characterized as the relinquishment of a property right. If
it is a property right, however, it is trifling compared to the
rights to exclude or alienate.[6]
Under the "Grant of Conservation
The difference between the Smiths' rights under the
EPOD ordinance and the conservation restriction is, under the
circumstances of this case, subtle: section 200-23 of the Mendon
Town Code affords the Planning Board wide discretion in granting
development permits within EPODs; by contrast, under the
proposed conservation restriction, the Board would have
essentially unfettered discretion to grant or deny such permits.
The right to seek a variance from a planning board that enjoys
broad, as opposed to unmitigated, discretion may be among the
more modest and fragile twigs in the bundle of property rights,
if it is a property right at all. To be sure, conditioning a
development permit on its surrender should not trigger the same
constitutional scrutiny as the regulatory extortion of sticks far
more integral to the bundle, such as the right to exclude third
persons (a right the Smiths fully retain).[7]
IV.
Because the Town's development condition is not an exaction, we review it according to the standard enunciated by the Court in Agins v City of Tiburon (447 US 255 [1980]; see also Penn Central Transp Co v New York City, 438 US 104 [1978]), as opposed to Dolan's rough proportionality test. Examined in this light, the conservation restriction does not effect an unconstitutional taking.
First, the restriction would not appreciably diminish
the value of the Smiths' property, let alone deny them
economically viable use of it -- as demanded by Agins (447 US at
260; see also Lucas v South Carolina Coastal Council, 505 US 1003
[1992] [holding that a deprivation of "all" economically viable
uses of a property works a taking]). In exchange for their
acceptance of the restriction, the Smiths would garner a permit
to construct a single-family home on their property.[8]
A single
Second, the conservation
restriction substantially advances a legitimate government
purpose -- environmental preservation. As we indicated in Bonnie
Briar Syndicate, Inc. v. Town of Mamaroneck (94 2 96, 108
[1999]), a regulatory action need only be reasonably related to a
legitimate governmental purpose to satisfy the "substantially
advance" standard ( see also City of Monterey v Del Monte Dunes at
In dissent, Judge Graffeo argues that the conservation
restriction effects a taking under Agins because, in her view, it
advances the Town's interests only marginally, if at all. We
disagree. Ensuring perpetual protection for open spaces -- along
with the resources and habitats they shelter -- from the
vicissitudes of workaday land-use battles is hardly an
inconsequential governmental interest. At the very least, the
Accordingly, the order of the Appellate Division should
be affirmed, with costs.
Today the majority decides that the Fifth Amendment
takings analysis of Nollan v California Coastal Commission (483 US 825 [1987]) and Dolan v City of Tigard (512 US 374 1994])
does not apply to a permit condition compelling dedication of a
conservation easement. Because these decisions do not admit of
this result, I respectfully dissent.
- 2 -
No. 177I.
The eminent domain provision of the United States Constitution, the Takings Clause of the Fifth Amendment, provides that "private property [shall not] be taken for public use without just compensation." The Fourteenth Amendment makes this constitutional guarantee applicable to the states ( see Penn Central Transp. Co. v New York City, 438 US 104, 122 1978], citing Chicago, B. & Q. R. Co. v Chicago, 166 US 226, 239 [1897]).
In Pennsylvania Coal Co. v Mahon (260 US 393 1922]), Justice Holmes acknowledged the difficulty of distinguishing a proper exercise of police power from a compensable taking: "Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law" ( id. at 413); and "the general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking" ( id. at 415). Thus was born the concept at the heart of this appeal -- the regulatory takings doctrine -- which recognizes that government's exercise of the police power to regulate private property, when it goes "too far," so impairs property interests that the Fifth Amendment mandates just compensation notwithstanding the absence of outright appropriation.
When revisiting regulatory takings some fifty years
"[T]his Court, quite simply, has been unable to develop
any 'set formula' for determining when 'justice and
fairness' require that economic injuries caused by
public action be compensated by the government, rather
than remain disproportionately concentrated on a few
persons. Indeed, we have frequently observed that
whether a particular restriction will be rendered
invalid by the government's failure to pay for any
losses proximately caused by it depends largely 'upon
the particular circumstances [in that] case'" ( Penn
Central, 438 US at 124 citations omitted]).
He listed three factors bearing with "particular significance" on "these essentially ad hoc, factual inquiries": the regulation's economic impact on the claimant; the extent to which the regulation interferes with the claimant's "distinct, investment- backed expectations;" and the character of the governmental action ( id.). In short, the Court devised a balancing test.
Two years later when considering a facial challenge to
a municipal zoning ordinance, however, the Court in Agins v City
of Tiburon (447 US 255 [1980]) condensed and reformulated the
Penn Central factors into something akin to a test: "the
application of a general zoning law to particular property
effects a taking if the ordinance does not substantially advance
legitimate state interests [i.e., the character of the
governmental action], or denies an owner economically viable use
of his land [i.e., the regulation's economic impact on the
claimant and the extent of interference with distinct,
In Loretto v Teleprompter Manhattan CATV Corp. (458 US 419 [1982]), the landlord purchased an apartment building in which the prior owner had allowed a cable company to install a cable on the building and to furnish cable television services to the building's tenants, as mandated by State law. The landlord filed a class action alleging that the installation -- which, at most, occupied only one and one-half cubic feet of the landlord's property -- was a trespass and a taking without just compensation. The Court held that even this minuscule physical invasion required compensation regardless of an adequate public purpose ( see also Kaiser Aetna v United States, 444 US 164 1979] [government's imposition of navigational servitude upon a private marina is a physical invasion for which just compensation must be paid]). Thus, a regulation effecting an actual permanent physical occupation of or intrusion on an owner's land or building constitutes a per se regulatory taking.
In Lucas v South Carolina Coastal Council (505 US 1003
[1992]), the Court considered the effect of a coastal protection
statute that barred a landowner from building any permanent
In addition to the per se rules for physical takings and total takings, the Court also devised a non-per se rule for analyzing whether a taking has occurred in those situations where the government seeks to require a concession or "exaction" as a condition for approval of a land-use permit. This is the so- called Nollan/Dolan rule, which, in my view, so plainly calls for reversal in this case.
The landowners in Nollan planned to demolish a
dilapidated bungalow on their beachfront property and replace it
with a three-bedroom house. They sought the required
discretionary permit from the California Coastal Commission,
which granted it subject to the Nollans' dedication of an
easement running across their property laterally to the shore.
This easement would provide a beachfront passageway connecting
the two public beaches flanking the Nollans' property. The
Commission justified the easement on the grounds that the
Nollans' larger house would obstruct the public's visual access
Justice Scalia observed at the outset that "[h]ad California simply required the Nollans to make an easement across their beachfront available to the public on a permanent basis in order to increase public access to the beach, rather than conditioning their permit to rebuild their house on their agreeing to do so, we have no doubt there would have been a taking" (483 US at 831). The Court held that while a permit condition that substantially advances a legitimate state interest is constitutionally permissible,[9] this particular condition violated the Takings Clause because there was no essential nexus" between the easement and the harm created by the proposed development.
This point is well-illustrated by Justice Scalia's description of the kind of easement that would have been sufficiently closely linked to the loss of visual access caused by the house's construction to pass muster under the "essential nexus" test:
"Moreover (and here we come closer to the facts of the present [ Nollan] case), the condition would be
constitutional even if it consisted of the requirement that the Nollans provide a viewing spot on [the Nollans'] property for passersby with whose sighting of the ocean their new house would interfere. Although such a requirement, constituting a permanent grant of continuous access to the property, would have to be considered a taking if it were not attached to a development permit, the Commission's assumed power to forbid construction of the house in order to protect the public's view of the beach must surely include the power to condition construction upon some concession by the owner, even a concession of property rights, that serves the same end. If a prohibition designed to accomplish that purpose would be a legitimate exercise of the police power rather than a taking, it would be strange to conclude that providing the owner an alternative to that prohibition which accomplishes the same purpose is not" ( id. at 836-837).
In Dolan, the Court addressed how much of an exaction the government could require without running afoul of the Takings Clause, an issue it did not reach in Nollan because there the "essential nexus" was lacking. The property owner in Dolan sought to raze and rebuild her plumbing and electrical supply store. When she applied for site development review, the city required her as a condition of approval to dedicate a portion of her property to the city for a greenway and expanded storm drain channel and for a pedestrian/bicycle pathway to be built at her expense.
The Court first determined that flood prevention along
the creek and the reduction of traffic in the business district
"qualify as the type of legitimate public purposes [the Court
has] upheld" (512 US at 387 [citing Agins]). Then the Court
determined that there was an "essential nexus" between the
II.
The "development restriction" (majority op at 2) at
issue in this case is a conservation easement within the meaning
of the Environmental Conservation Law ( See ECL §§ 49-0301-0311).
Both the Town of Mendon and amicus State of New York concede as
Nor is it relevant (or even certain) that this
particular conservation easement may be worth little. The Town
is compelling the Smiths to convey an interest in real property
that the Town would otherwise have to pay for, or which the
Smiths might choose to donate for whatever tax advantages they
would enjoy as a result.[10]
And of course, the arguably trivial
The majority takes the view that a permit condition is
not an "exaction" unless it infringes on the property owner's
right to exclude others and/or mandates public access.[11]
Black's
Law Dictionary defines an "exaction" as "1. The act of demanding
more money than is due; extortion. 2. A fee, reward, or other
Monterey concerned a developer seeking to build an oceanfront multi-unit residential complex in an area zoned for this use. The developer repeatedly scaled back and revised its plans over the course of several years at the instance of local authorities. When the city planning commission and the city council ultimately rejected the site plan, the developer brought a section 1983 action in federal district court, alleging, among other things, that the permit denial was an unconstitutional taking. A jury delivered a general verdict for the developer on its takings claim and awarded damages of $1.45 million. The Ninth Circuit determined that the developer's inverse condemnation claim was triable to a jury and upheld the verdict.
The city's petition for certiorari presented multiple
questions to the Supreme Court, including whether the Ninth
Circuit erred in assuming that the rough-proportionality standard
of Nollan/Dolan applied. On this question, all the justices
Nonetheless, the majority views the quoted language
from Monterey as having limited the Nollan/Dolan rule to those
land dedications that entail public access or otherwise restrict
the landowner's right to exclude.[12]
First, of course, the phrase
Second, the language in Monterey on which the majority so heavily relies is more properly read as merely an acknowledgment of the nature of the exactions at issue in Nollan and Dolan rather than a limitation of the Court's Nollan/Dolan analysis to exactions that are land dedications. Certainly there was no discussion in either Nollan or Dolan to indicate that the Court viewed its exaction analysis as so limited. If the Court had only intended for Nollan/Dolan to create an exception from the per se Loretto rule for those physical takings that are permit conditions, it could have and surely would have said this directly.
Further, before today we have never read Nollan/Dolan
so narrowly ( see e.g. Manocherian v Lenox Hill Hosp., , 84 NY2d 385
[1994] [pre- Monterey case applying Nollan/Dolan to assess the
validity of a statute imposing occupancy restrictions on
apartment building owners]), or viewed it as subsequently limited
by Monterey to infringement of a property owner's right to
exclude. The majority explains our decision just last year in
Twin Lakes Dev. Corp. v Town of Monroe (1 3 98 [2003]) as
III.
As I understand the Supreme Court's takings
jurisprudence -- through which I took a Cook's Tour at the
beginning of this dissent -- we are called upon first to decide
whether a claimed regulatory taking falls within either of the
categorical or per se rules (the Loretto rule for physical
takings and the Lucas rule for total takings) or is a permit
condition ( Nollan/Dolan). For those claimed takings outside the
The reason proffered by the Town to justify the
easement is the "desire[] that certain portions of the [Smiths']
property remain in their natural state in order to preserve such
environmentally significant areas." In my view, this is a
legitimate Town interest that the conservation easement would
promote. As was the case in Nollan, however, there is no
"essential nexus" between this exaction and the harm created by
the proposed development. The "proposed development" here was
merely the construction of a single-family house on land not
within an EPOD, and there is no suggestion in the record that it
would create any significant environmental harm. On this appeal,
the Town argues merely that there is a "clear essential nexus
between requiring a conservation restriction and the legitimate
town interest of protecting environmentally sensitive areas in
Quoting the Attorney General, the majority correctly
points out that conservation easements have proven to be a very
popular and flexible tool for preserving land and protecting our
State's environment.[15]
I have found nothing to suggest, however,
We do not need to decide whether heightened scrutiny under Dolan v City of Tigard (512 US 374 [1994]) applies to the facts of this case because I believe the Town of Mendon's action effected a taking even under the standard articulated in Agins v City of Tiburon (447 US 255 [1980]). Additionally, because the condition imposed by the Town was not necessary to mitigate any demonstrable effects of the site plan proposal, I conclude the Town's determination was arbitrary and capricious. I therefore respectfully dissent.
Paul and Janet Smith are the owners of 9.7 acres of
undeveloped land that was part of a larger parcel owned by Paul's
family for over 50 years. Portions of their land lie within four
of the Town of Mendon's environmental protection overlay
districts (EPODs) under Town Code § 200-23. The Town Code's EPOD
regulations place severe restrictions on activities that may
occur in EPODs, and development in EPODs is prohibited unless the
landowner first applies for and obtains a special development
permit from the Town. The Smiths sought approval to build a
single-family home on their parcel. Although construction of the
Smiths' proposed home would not encroach on any of these EPODs,
the Town granted approval of the site plan only on condition that
The issue before us is whether the Town's imposition of
the development restriction as a condition to granting site plan
approval effects a regulatory taking under the Fifth and
Fourteenth Amendments to the United States Constitution. Under
Agins, a regulatory action may effect a taking where it "does not
substantially advance legitimate state interests" ( Agins, 447 US
at 260). Put another way, "a use restriction on real property
may constitute a 'taking' if not reasonably necessary to the
effectuation of a substantial public purpose" ( Penn Cent. Transp.
Co. v City of New York, 438 US 104, 127 [1978]). Although it has
been intimated that the regulatory action need only bear a
reasonable relationship to a legitimate governmental purpose ( see
City of Monterey v Del Monte Dunes at Monterey, Ltd., 526 US 687,
701, 721 [1999]), the United States Supreme Court has rejected
the notion that the "substantially advance" standard simply means
that "the State could rationally have decided that the measure
adopted might achieve the State's objective" ( Nollan v California
Coastal Commn., 483 US 825, 834 n3 [1987] [citations and internal
The Town proffers three reasons why the restriction substantially promotes its valid goal of preserving the environment. I cannot conclude that the reasons offered by the Town substantially or even reasonably further legitimate governmental interests not already protected by the existing EPOD regulations.
First, the Town claims that the conservation restriction, which is to be filed similar to a deed, "is intended to put subsequent buyers on notice that the property contains constraints which may limit development within these environmentally sensitive areas of the site." Pursuant to the Town's EPOD regulations, however, the locations of all EPOD sites within the Town are delineated on an official set of maps on file with the Town. Subsequent purchasers are therefore already on constructive notice that the Smiths' property contains EPODs and is subject to the limitations currently in place pursuant to the Town Code, which the proposed conservation restriction largely follows. Hence, the restriction does not in any meaningful way advance a necessary public notice purpose.
Second, the Town asserts that the conservation
Finally, the Town contends that the restriction will inhibit activity on the EPODs in perpetuity, whereas the EPOD ordinance could change at any time. This is true, but it does not provide a legitimate basis for imposition of the restriction. If the Town decides to repeal its EPOD ordinance with respect to one or more of the EPODs situated on the Smiths' land, presumably it would do so because it no longer considers the designation of environmental restrictions on that type of property to be necessary or in the public interest. If restrictions were no longer in the public interest, the Town would have no valid basis for continuing them in perpetuity. Yet, under this scenario, portions of the Smiths' property would still be encumbered by the conservation restriction while other EPOD-burdened parcels would be released from the restrictions on development -- a result that would be neither reasonable nor fair.
In the end, it is the Town's generally applicable EPOD ordinance itself -- whose provisions the development restriction tracks -- that substantially promotes the Town's valid interest in protecting the environment. If this case involved a claim that the Town Code's EPOD regulations effected a taking of property, clearly such a challenge would fail under Agins because the restrictions contained in those rules substantially promote environmental interests. But the added layer of regulation sought to be imposed by the Town through the ad-hoc imposition of a conservation restriction as a condition to site plan approval does not further additional legitimate environmental concerns in a meaningful way and is simply overkill. To hold otherwise effectively permits municipalities to single out particular EPOD- affected landowners for double regulation. In sum, I conclude that the Town's imposition of the conservation restriction without just compensation amounted to an unconstitutional taking.
Even if the conservation restriction does not effect a
taking as the majority holds, I would still rule in favor of the
Smiths because the Town's determination to demand such a
condition in exchange for site plan approval was, contrary to the
conclusion of the courts below, arbitrary and capricious.
Although a municipality may place conditions on the approval of
site plans, such authority is not limitless. Under
Town Law § 274-a(4), conditions and restrictions must be
"reasonable" and "directly related to and incidental to a
Here, pursuant to the State Environmental Quality
Review Act, the Town issued a negative declaration, finding that
the Smiths' proposed site project would not result in any
significant adverse environmental impacts so long as the
development did not occur in any of the EPODs. The Town does not
dispute that the Smiths' proposed single-family dwelling would
not have an effect on any of the EPODs, and the Smiths have
maintained that they intend to comply with the requirements of
the Town's EPOD ordinance. The Town's stated basis for imposing
the conservation restriction was "to mitigate any potentially
For the reasons stated, I would reverse the order of the Appellate Division and grant the petition with respect to the Smiths' second and third causes of action.
Footnotes
1 In addition, the Smiths also sought a judgment declaring that the conservation restriction was, as a matter of law, a conservation easement under ECL § 49-0303 (1). They also alleged that the Board's decision to condition final site plan approval on their acceptance of the conservation restriction was arbitrary and capricious, and sought attorneys' fees pursuant to Town Law § 282. That section permits a court to award costs to a person or persons aggrieved by a planning board decision if it "shall appear to the court" that the board "acted with gross negligence or in bad faith or with malice in making the decision appealed from."
2 The Takings Clause of the Fifth Amendment is applicable to the states through the Fourteenth Amendment ( see Chicago, B. & Q.R. Co. v City of Chicago, 166 US 226 [1897]).
3 In spite of their differing language, the Supreme Court has employed the Agins test and Penn Central standard, which the Court invoked in Palazzolo, interchangeably ( see e.g. Lucas v South Carolina Coastal Council, 505 US 1003, 1024 1992]; Keystone Bituminous Coal Ass'n v DeBenedictis, 480 US 470, 485 [1987]).
4 Because the Town's conservation restriction cannot be classified as an exaction, we need not address the question whether it was roughly proportional to the impact of the development proposed by the Smiths.
5 Judge Read suggests that the conservation restriction here somehow encumbers the right to exclude because it permits Town inspectors to enter the property on thirty day's written notice or in the event of an emergency threatening the public's health, safety or welfare ( see Read, J. dissenting op at 14). On the facts of this case, we fail to see how the Town's right to enter the Smiths' land under a sharply circumscribed set of circumstances to enforce a set of valid regulations impairs the right to exclude or represents a departure from the Town's ordinary exercise of its police powers.
6 Although the conservation restriction may, as Judge Read suggests, require the dedication of a possessory interest ( see Read, J., dissenting op. at 8-9), "property" is constituted by many possessory interests, some of which (e.g., the rights to exclude and alienate) are more central to commonly held understandings of property than others. The Supreme Court's exactions jurisprudence tracks this conception of property. In Nollan and Dolan, the Supreme Court applied the idea of "exaction" only to the required dedications of a core possessory interest, the right to exclude. As the Attorney General observes, "[b]oth cases hinged on the owners' loss of perhaps the most important 'stick' in the ownership bundle: the ability to restrict access" (Attorney General's Brief at 12-13). Notably, the Supreme Court has never extended its exactions analysis to the dedication of less substantial possessory interests, such as those at issue here. Thus, the Appellate Division correctly determined that the conservation restriction is not an exaction within Nollan and Dolan, and we are unwilling to expand the holdings of those cases to the case before us.
7 Judge Read mistakenly argues that there is something extraordinary or improper about the Town's exercise of its police powers here. We disagree. The case before us today concerns only a marginal use restriction superimposed over a wholly legitimate, pre-existing EPOD ordinance. There is nothing here that implicates the Fifth Amendment's concern with "forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole" ( Armstrong v United States, 364 US 40, 49 [1960]).
8 We note that the Supreme Court has been reluctant to engage in spatial "conceptual severance" in determining whether a regulation or government action deprives a property owner of all economically viable uses of the property ( District Intown Properties Ltd P'Ship v District of Columbia, 198 F3d 874, 887 [DC Cir 1999]). Hence, we look to the effect of the government action on the value of the property as a whole, rather than to its effect on discrete segments of the property ( see Penn Central Transp. Co. v New York City, 438 US 104, 130-131 1978] ["'Taking' jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. In deciding whether a particular governmental action has effected a taking, this Court focuses rather both on the character of the action and on the nature and extent of the interference with rights in the parcel as a whole"]; see also Keystone Bituminous Coal Ass'n v DeBenedictis, 480 US 470, 497 [1987]). Here, the conservation restriction, while reinforcing the preexisting devaluation of a portion of the Smiths' property, does not begin to deny them all economically viable uses of the entire parcel.
9 The Court "assume[d] without deciding" that the purposes proffered by the Commission to justify the exaction -- "protecting the public's ability to see the beach, assisting the public in overcoming the 'psychological barrier' to using the beach created by a developed shorefront, and preventing congestion on the public beaches" -- were legitimate state interests (483 US at 835).
10 Section 170(h) of the Internal Revenue Code provides for a charitable deduction for a qualifying conservation easement. The easement must be contributed to a public body or qualified non- profit organization exclusively for conservation purposes to be protected in perpetuity (26 CFR § 1.170A-14[a],[b][2],[c]). Depending upon the nature of the easement's conservation purposes, public access may be mandated, or it may be partially or wholly restricted ( see. e.g. 26 CFR § 1.170A-14[d][2][ii] [public access required for conservation easement for recreation and education];[d][3][iii][restrictions on public access to protected environmental systems]; [d][4][ii][B)[visual rather than physical access sufficient to satisfy requirement of scenic enjoyment of open space by general public]). Section 2031(c) of the Internal Revenue Code grants substantial estate tax benefits to a qualifying conservation easement. In addition, the restrictions placed on property by a conservation easement may reduce market value so as, in turn, to reduce assessed value and therefore real property taxes. As one commentator has noted, however, "local assessors are often reluctant to reduce assessments" on account of conservation easements and "[i]n many instances the cost of pursuing legal remedies may exceed the potential benefit of the tax reduction" (9 Ginsberg and Weinberg, Environmental Law and Regulation in New York § 12.6, at 1081-1082 [West's NY Prac Series 2001]).
11 In essence, the majority has adopted the positions advocated by amicus State of New York and the Town. The State argues that an exaction is limited to a physical taking or a physical invasion. Likewise, the Town argues that an easement is not an exaction unless it provides for the general public's or the Town's physical use or occupation of the property. In a related vein, both the State and the Town emphasize that the conservation easement here is a negative easement that prohibits the landowner from doing something otherwise lawful on his estate. Of course, to the extent that the easement mirrors the Town's EPOD regulations, the easement only prohibits the Smiths from doing that which the law now already bans. The Town takes the position that a negative easement may never be an exaction while an affirmative easement, which grants the easement holder the right to use the servient estate, may be.
12 The language's author, Justice Kennedy, does not appear to agree with this interpretation of what he wrote. In Lambert v City and Co. of San Francisco (529 US 1045 [2000]), he and Justice Thomas joined Justice Scalia's dissent from a denial of certiorari to consider whether Nollan/Dolan applies to the denial of a permit because an exaction is not met. In this case, the exaction was a replacement fee for conversion of apartments. Justice Scalia summarized the holdings in Nollan/Dolan as follows, making no reference whatsoever to public access: These decisions "held that a burden imposed as a condition of permit approval must be related to the public harm that would justify denying the permit, and must be roughly proportional to what is needed to eliminate that harm" (529 US at 1046). Further, in Ehrlich v City of Culvatr City (512 US 1231 [1994]), handed down three days after Dolan, the Court by a 5-4 margin vacated the judgment and remanded for further consideration in light of Dolan. In Ehrlich, the owner of a sports complex required the City's approval to construct a condominium on the site to replace the sports complex. The City conditioned approval upon the property owner/developer's payment of a recreational fee and a fee in lieu of participating in the City's "art in public places" program. Upon remand, the California Supreme Court specifically "reject[ed] the city's contention that the heightened takings clause standard formulated by the court in Nollan and Dolan applies only to cases in which the local land use authority requires the developer to dedicate real property to public use as a condition of permit approval" (12 Cal 4th 854, 859 [1996], cert denied 519 US 929 [1996]).
13 As the eminent constitutional scholar Cass Sunstein has succinctly explained: "For a long period, the public use requirement [of the Takings Clause] was understood to mean that if property was to be taken, it was necessary that it be used by the public. That the new use was in some sense beneficial to the public was insufficient. Eventually, however, it became clear that this test was unduly mechanical, for a wide range of uses by government served the public at large, even if the public did not actually have access to the property. The Mill Acts, which permitted riparian owners to erect and maintain mills on neighboring property, provide an example. After the courts upheld those acts, exceptions were built into the general rule until the general rule itself was abandoned" (Sunstein, Naked Preferences and the Constitution, 84 Colum L Rev 1689, 1724 [1984]).
14 In this respect, I undertake the analysis in a reverse order than does Judge Graffeo except, of course, to the extent that the first question under Nollan/Dolan is whether the permit seeks to promote a legitimate state purpose, which derives from Agins.
15 There are, however, those who view the merits of conservation easements more skeptically ( see e.g. Mahoney, Perpetual Restrictions on Land and the Problem of the Future, 88 Va L Rev 739 [2002]).
16 Moneys have been expended from the 1986 bond act, the New York State Open Space Plan and the environmental protection fund to purchase conservation easements ( see Bathrick, The 25th Anniversary of the New York Department of Environmental Conservation: Past and Future Challenges and Directions: RESOURCE MANAGEMENT: LANDS AND FORESTS, 7 Alb L J Sci & Tech 159, 167 [1996]).