Supreme Court Strengthens Rights of Property Owners : Development: Ruling limits government power to demand land in exchange for building permits.

The Supreme Court, strengthening the property rights of developers and homeowners, put new limits Friday on the power of public officials to seek a share of land in exchange for granting a building permit.

Allowing officials to blithely demand that a property owner give up part of his land for such purposes as building a bike path, preserving a wetland or creating “open space” violates the Fifth Amendment’s guarantee that “private property (shall not) be taken for public use without just compensation,” said Chief Justice William H. Rehnquist, speaking for a 5-4 majority.

“We see no reason why the takings clause of the Fifth Amendment, as much a part of the Bill of Rights as the First Amendment or Fourth Amendment, should be relegated to the status of a poor relation,” he said.

The ruling is the third since 1987 in which the justices have tilted the law toward protection of property rights. It marks a setback for environmentalists and public officials, especially in California, where developers have been pressured to set aside land for the public, whether to walk on the beaches, hike in the mountains or enjoy city parks.

Typically, officials tell developers that, before they can build a new high-rise office tower or suburban housing tract, they must give up some land for parks, schools or jogging paths. California Fish and Game officials have sought to protect wildlife, for example, by requiring developers to set aside two acres of their land in exchange for building on one acre.

In Friday’s opinion, the high court did not outlaw these “exactions,” but instead made it harder for public officials to justify their demands. Rehnquist said officials bear the burden of proving that the exactions are needed to make up for the impact of expanded development.

The ruling did not provide firm guidelines for determining when officials have gone too far. But even if there is “no precise mathematical calculation” for such decisions, Rehnquist said, officials must at minimum make “an individualized determination” to show that taking the land is necessary.

“This will keep them (officials) honest,” said James Burling, an attorney for the Pacific Legal Foundation in Sacramento, which defends property rights. “It says the government cannot get whatever it wants.”

Other legal experts said the ruling will have its greatest impact behind the scenes.

“Municipal land-use regulation has become a bargaining process between the developer and the city. And this decision gives a little more leverage to the developer,” said Washington University law professor Richard J. Lazarus, who represented the city of Tigard, Ore., in the case decided Friday. “The city can’t just make unilateral demands.”

Seven years ago, the high court ruled that the California Coastal Commission had gone too far when it demanded that James and Marilyn Nollan allow the public to walk on their beachfront in Ventura in exchange for getting a building permit to enlarge their house.

At the time, Justice Antonin Scalia labeled the commission’s demand “an out-and-out plan of extortion.” However, his opinion in Nollan vs. California failed to explain precisely when public officials cross the line and violate the Constitution.

The latest case began in 1989 when Florence Dolan announced plans to nearly double the size of her A-Boy Plumbing supply store on Main Street in Tigard, outside of Portland.

City officials, concerned about possible flooding and increased traffic in the downtown area, demanded that she give up a piece of property as “a greenway” along a creek behind her store. They also sought an extra 15-foot strip to extend a bike and walking path. These exactions amounted to about 10% of Dolan’s property.

She refused the city’s demand and filed a lawsuit. Oregon state courts sided with the city and ruled that its demands were reasonable.

The high court disagreed. City officials failed to show there was an “essential nexus” between the extra burden caused by Dolan’s expanded store and the benefits of the exactions.

The ruling (Dolan vs. Tigard, 93-518) won praise from property rights advocates. This was “a clear and simple case of government-sponsored extortion,” said Nancie Marzulla, counsel for Defenders of Property Rights, a Washington legal group. If the city wants land for a bike path, it should pay for it, she said.

In a strong dissent that he read from the bench, Justice John Paul Stevens said the ruling encourages “the federal judiciary (to) micromanage” delicate disputes involving the potential risks of floods, earthquakes, traffic congestion and environmental harms.

In his view, “the public interest in averting (such harms) must outweigh the private interest of the commercial entrepreneur,” said Stevens, whose dissent was joined by Justices Harry A. Blackmun and Ruth Bader Ginsburg. Justice David H. Souter dissented separately.

Also Friday, the court:

* Cheered big business by ruling that state judges must review the size of punitive damage verdicts (Honda vs. Oberg, 93-644). Judicial review is “a safeguard against excessive awards,” the court said on a 7-2 vote.

Oregon is the only state where judges have no authority to review the size of punitive verdicts. The high court reversed a $5-million punitive verdict against Honda and said that the company is entitled to have that verdict reviewed for being arbitrary and excessive.

* Ruled that police officers do not have to stop questioning a suspect if he makes an uncertain request to speak to a lawyer (Davis vs. U.S., 92-1949).

On a 5-4 vote, the justices upheld the murder conviction of a sailor who, during a long interrogation, commented: “Maybe I should talk to a lawyer.” If he had asked for a lawyer, the questioning would have stopped.