512 U.S. 374 (1994), argued 23 Mar. 1994, decided 24 June 1994 by vote of 5 to 4; Rehnquist for the Court, Stevens and Souter dissenting. As the political and ideological agenda of the high court has shifted to the right in the past decade, so too has its interest in the rights of landowners. In the 1987 case of Nollan v. California Coastal Commission, the justices held that municipalities had to show some relationship between the conditions they set to issue a building permit and the projected impact of a proposed development. In Nollan the issue did not arise directly, but it did in Dolan, and the results were beneficial for property owners.
Florence Dolan owned an electrical and plumbing supply store in the central business district of Tigard, Oregon, a suburb of Portland. Business was good; Dolan proposed to double the size of her store on land that she already owned and to pave over what was a gravel parking lot. The Tigard city planning commission agreed to the expansion, but with two requirements. First, she must give the city property lying within the Fanno Creek flood plain for the purpose of improving drainage and minimizing flooding that might result from rain running off the impervious asphalt rather than percolating through the gravel. Second, the commission required that she give the city an additional strip of land adjacent to the flood plain for use as a pedestrian and bicycle path to relieve congestion in the central business district created by the store's expansion.
Dolan objected to both requirements. She concluded that the proposed changes were unrelated to her store expansion and that, as a result, they constituted an uncompensated taking of property under the Fifth Amendment. The Land Use Appeals Board, a trial court, and the Oregon Supreme Court all found in favor of the city.
The United States Supreme Court's decision reflected a powerful division among the justices over the nature and scope of land-use planning. The justices did not disturb the underlying concept of zoning and the right of municipalities to regulate land use, but they did substantially alter the terms of the relationship between landowners and government when land-use questions arose.
Chief Justice William Rehnquist, writing for the majority, invoked the Fifth Amendment, noting that its Takings Clause was “as much a part of the Bill of Rights as the First Amendment or Fourth Amendment,” and should not “be relegated to the status of poor relation” (p. 392). According to Rehnquist, a city could not require a public easement as a condition of permission to build or expand unless it was prepared to show what he termed a “rough proportionality” between the requirement and the particular harm posed by the development (p. 391). While the majority agreed that the city was properly within its power to worry about flooding on Fanno Creek and the impact of additional traffic on the central business district, it had not shown with sufficient precision what the consequences were.
In making such decisions, then, Rehnquist imposed a second test, the demonstration of a necessary connection—a reasonable relationship—between what was proposed as a land-use requirement and the impact of the development project. In this instance, Rehnquist said, the burden belonged not on the landowner but on the government to demonstrate that relationship. The chief justice took particular aim at the requirement by the city that the pedestrian and bike path be “public,” since such a requirement meant not only that Dolan lost the use of her property but that she could not regulate individuals who came onto it. Such actions, the majority concluded, amounted to a taking of private property that was not properly compensated as required by the Fifth Amendment. Effectively, the majority decided, as it had earlier in Nollan, that government had to prove that any condition imposed on development must “substantially advance” a legitimate government objective. Local governments, moreover, in making that case, had to frame it on an individualized rather than a general basis.