Sheetz v. El Dorado County
The Supreme Court ruled unanimously that the Constitution's limits on government demands tied to building permits apply equally to fees set by law and fees set by individual government officials — a county cannot escape constitutional scrutiny simply because its fee was enacted by a legislature rather than imposed by a planning official.
The decision resolves a split among state courts, but explicitly leaves open a closely related practical question: whether a fee applied uniformly across a whole category of development projects must be calculated as precisely as a fee targeting one specific property.
How it got here: A California trial court ruled against Sheetz; the California Court of Appeal affirmed on the ground that the constitutional test for permit conditions applies only to administrators; the California Supreme Court denied review; the U.S. Supreme Court agreed to hear the case to resolve a split among state courts.
The Case in Depth
What happened
George Sheetz, a California homeowner, applied for a permit to build a small prefabricated home on his land in El Dorado County. The county required him to pay a $23,420 traffic impact fee set by a county-wide rate schedule — not calculated based on the specific traffic impact of his project. Sheetz paid under protest, obtained the permit, and then sued, arguing the fee was an unconstitutional demand on his property rights under the Fifth Amendment.
The question before the Court
Must a county apply the same constitutional limits on what it can demand as a condition of a building permit whether the fee was set by a legislature or decided case-by-case by an administrator?
The Court's answer
Yes — the constitutional test for whether a building-permit condition is an unlawful demand on property owners applies equally whether the fee is set by a legislature or by an administrator. The Court ruled unanimously that nothing in the Constitution's text, the nation's legal history, or prior Supreme Court decisions supports giving legislative permit conditions a free pass from the test established in Nollan and Dolan, which requires permit conditions to have a genuine connection to the government's land-use interests and to be roughly proportional to the project's impact.
The case was sent back to California courts to evaluate the traffic impact fee under the correct standard. The Court declined to decide a closely related question — whether a fee applied uniformly to a whole category of development needs to be calibrated as precisely as a fee targeting one specific parcel — leaving that issue to be resolved on remand.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Property owners challenging government-imposed development fees now have a clear path to argue that even legislatively set fees violate constitutional limits. Local governments that rely on broad fee schedules to fund roads and infrastructure face closer legal scrutiny. However, the Court's explicit silence on whether formula-based fee schedules require parcel-by-parcel tailoring means the full practical effect on standard impact-fee programs awaits further litigation.
What changes now
The case returns to California courts, which must now evaluate the county's $23,420 traffic impact fee under the Nollan/Dolan constitutional standard — asking whether the fee has a genuine connection to the county's traffic concerns and is roughly proportional to Sheetz's project's impact. The courts will also decide whether Sheetz's other arguments were properly preserved, and will confront the unresolved question of whether uniform fee schedules must be tailored as specifically as fees targeting individual properties.
What this does not decide
The Court explicitly did not decide whether a permit fee applied uniformly to a class of development projects must be calibrated as precisely as a fee targeting one specific parcel. Governments' common practice of using standardized impact-fee schedules based on development type and location may or may not satisfy constitutional requirements — that question awaits a future case.
Concurrences and dissents
Concurrence — Justice Sotomayor
Justice Sotomayor joined the majority's narrow holding but wrote to flag a threshold question the Court left open: the Nollan/Dolan test applies only when the condition at issue would itself be a compensable taking if imposed directly outside the permitting context. That predicate question — whether Sheetz's traffic impact fee would be a taking if the county simply demanded it without linking it to a permit — was never addressed by the California Court of Appeal and remains unresolved on remand.
Concurrence — Justice Gorsuch
Justice Gorsuch agreed with the majority and wrote separately to argue that the same Nollan/Dolan test applies regardless of whether a permit condition targets a single property or a broad class of properties — an issue the majority declined to address. He pointed to Nollan and Dolan themselves, where the government's demands arose from comprehensive programs affecting many properties, yet the Court still required individualized analysis. He concluded that a government does not cure a constitutional violation by multiplying it across many property owners.
Concurrence — Justice Kavanaugh
Justice Kavanaugh joined the majority but wrote to make explicit what the decision does not say: neither today's ruling nor any prior Supreme Court decision has addressed or prohibited the widespread government practice of imposing permit fees on new developments through reasonable formulas or schedules that assess the impact of categories of development rather than individual parcels. He urged that this common practice not be read as called into doubt by today's decision.
How the Court got there
The legal reasoning, step by step
- The Court began with the Nollan/Dolan test — a two-part framework from earlier Supreme Court decisions designed to stop governments from abusing the permitting process. The test requires that permit conditions have an 'essential nexus' to the government's legitimate land-use interest and 'rough proportionality' to the development's actual impact on that interest. It applies whether the condition demands the landowner give up land or pay a fee.
- Looking at constitutional text first, the Court noted that the Fifth Amendment's Takings Clause speaks in the passive voice — it prohibits a certain act (taking property without just compensation) and says nothing about which branch of government commits that act. The Fourteenth Amendment, which applies the Takings Clause to states, similarly constrains the 'State' as a whole, not any particular branch.
- Historical practice pointed the same direction. Legislation was actually the primary way governments exercised their power to take land from colonial times through the founding era — and those legislative takings consistently required compensation. Early constitutional commentators understood the Takings Clause to bind the legislature specifically. Far from justifying special deference, this history shows legislatures were a prime target of the Clause.
- The Court's own prior decisions in physical-takings cases, regulatory-takings cases, and the unconstitutional-conditions doctrine all apply the same rules to legislative and administrative acts without distinguishing between them. Creating a legislative exemption from Nollan/Dolan would make property rights a 'poor relation' to other constitutional rights — like free speech or free exercise of religion — where the unconstitutional-conditions doctrine already applies to legislation without any exemption.
- By the time of oral argument, both Sheetz and the county agreed that the California Court of Appeal's rule — exempting legislatively imposed permit conditions from Nollan/Dolan scrutiny — was wrong. The Court vacated the lower court's ruling and sent the case back, directing state courts to address the fee under the correct constitutional standard and to resolve remaining open questions (including the class-of-properties tailoring issue) in the first instance.
Doctrinal impact
Cases affected by this decision
Reaffirms Nollan v. California Coastal Comm'n (483 U.S. 825)
The essential-nexus requirement for permit conditions applies to legislative permit conditions, not only administrative ones.
Reaffirms Dolan v. City of Tigard (512 U.S. 374)
The rough-proportionality requirement for permit conditions applies equally regardless of whether a legislature or an administrator imposed them.
Reaffirms Koontz v. St. Johns River Water Management Dist. (570 U.S. 595)
Monetary permit fees are subject to the same Nollan/Dolan constitutional test as conditions requiring a transfer of land.