El Dorado County in California established a Traffic Impact Mitigation fee program. Under the program, the builders of new developments are required to help pay for the cost of building and widening roads, via a flat fee for certain residential developments and a variable fee based on square footage for others. The amount of the fee does not depend on the new development’s specific impact on the roads.

In 2016, George Sheetz applied for a permit to construct a single-family home on his plot of land, and the County agreed to issue the building permit on the condition that he pay the fee. Sheetz challenged the Program arguing, among other things, that it was unconstitutional under the Constitution’s Takings Clause. The California state courts that heard the case rejected this challenge.

CAC filed an amicus brief at the Supreme Court arguing that the Court should affirm the lower court’s decision because the traffic impact mitigation fee is not a taking under either the original understanding of the Takings Clause or the Supreme Court’s Takings Clause precedents.

The Program at issue here did not violate the Takings Clause for the simple reason that the fee is not a taking. All the County was doing was requiring Petitioner to pay a fee to help improve roads that might be negatively affected by his development. The Takings Clause does not prohibit—and the Supreme Court has never understood it to prohibit—governments from charging those sorts of fees.

The Takings Clause provides that “private property [shall not] be taken for public use, without just compensation.” Consistent with its text, the Clause was originally understood to apply only to the direct appropriation of private property. At the time of the Founding, colonial and state constitutions prohibited only the direct appropriation of property, and governmental regulations that affected the value of property were commonplace. James Madison, the drafter of the Takings Clause, himself introduced legislation prohibiting landowners from building a mill or dam unless a court inquest first concluded that potential negative consequences to the region could be prevented, mitigated, or repaid in damages. Under Madison’s proposal, colonial landowners were required to pay fees before developing their properties—much like the fees Sheetz was required to pay to the County—even when doing so effectively destroyed the value of a mill site.

For decades, the Clause was applied consistently with this understanding. And even as the Supreme Court has expanded somewhat the scope of the Takings Clause, it has been careful to limit the Clause’s application to governmental actions that could reasonably be considered equivalent to direct appropriations that were within the scope of the Clause’s original meaning, or that were efforts to evade the Clause’s application to such appropriations.

This, while the Supreme Court has held that the Takings Clause imposes some limits in the permitting context, in doing so, it has consistently emphasized the Clause’s focus on the direct appropriation of property. And it has consistently made clear that the primary concern of cases applying the Clause in the permitting context is guarding against governmental efforts to evade the Takings Clause’s restrictions on the direct appropriation of property. Where a fine or fee does not raise that concern, it raises no Takings Clause issue under the Supreme Court’s precedents.

In short, expanding the Takings Clause to prohibit the type of fee at issue here would be at odds with both the Court’s precedents and the text and history of the Clause.

In April 2024, the Court issued a narrow ruling in favor of Sheetz. While the Court rejected the California Court of Appeal’s conclusion that the Takings Clause distinguishes between legislative and administrative takings, the Court did not rule on whether the traffic impact fee at issue is a taking at all. Instead, it sent that question back to the California Court of Appeal to decide in the first instance.