SEQ CHAPTER \h \r 1

provision of [42 U.S.C. § § 1981 or 1981a], the court, in its discretion, may include expert fees as part of the attorney's fee.").

n5 71 S.W.3d 18 (Tex. App.--Fort Worth 2002).

The three principal questions now before us are whether Stafford could wait until after making the improvements to sue, whether the Town's condition on Stafford's development amounted to a compensable taking, and whether [*4] Stafford is entitled to recover fees under federal civil rights laws. We agree with the court of appeals that Stafford is entitled under the Texas Constitution to adequate compensation for the taking of its property but is not entitled to recover under federal civil rights laws. We thus affirm the judgment of the court of appeals.

The Town of Flower Mound is a fast-growing suburban municipality (1990 pop. 15,527; 2000 pop. 50,702) in between Dallas, Fort Worth, and Denton. The Town's Stafford Estates subdivision consists of some 247 homes on 90 acres bounded on the north by McKamy Creek Road and on the west by Simmons Road. Both roads are in the Town's right-of-way and are not part of the subdivision.

Over a period from 1994 to 1997, the Town approved the development of Stafford Estates in three roughly equal phases. Phases II and III abutted Simmons Road, which was at the time a two-lane asphalt road designated by the Town as a "rural collector roadway". Section 4.04(o) of the Town's Land Development Code provided that for all subdivisions and industrial areas, "abutting substandard local and collector streets shall be constructed or reconstructed as necessary by the developer [*5] to bring them up to minimum standards, and all right-of-way . . . dedicated to the Town, with no cost participation from the Town." n6 One such minimum standard, prescribed by section 4.04(b) of the Code, was that "all builders/developers shall be required to construct concrete streets according to the Engineering Standards Manual." n7 Based on these provisions, the Town conditioned its approval of the plats for Phases II and III on Stafford's rebuilding Simmons Road with concrete instead of asphalt.

n6 FLOWER MOUND, TEX., CODE ch. 12, § 4.04(o) (1994) (now codified as CODE § 90-316(1) (2002)).

n7 Id. § 4.04(b) (now codified as CODE § 90-302 (2002)).

Stafford objected to this condition and requested an exception under section 4.04(a) of the Code, which stated:

The Town Council may grant an exception to the street design standards [*6] as contained in this section, provided that the Council finds and determines that such standards work a hardship on the basis of utility relocation costs, right-of-way acquisition costs, and other related factors. n8

Stafford argued that it should not be required to pay more than half the cost of rebuilding Simmons Road with concrete. The asphalt surface was not in disrepair, and the Town had made no attempt to determine whether the required improvements were roughly proportional to the impact of the subdivision on Simmons Road in particular or on the Town's roadway system as a whole. Although the Town had exercised its discretion to grant exceptions to other developers on a project-by-project basis, Stafford's request was denied.

n8 Id. § 4.04(a) (now codified as CODE § 90-301 (2002)).

After objecting to the condition on its development at every administrative level in the Town, all to no avail, Stafford rebuilt Simmons Road with concrete as the Town had required at a cost of $ 484,303.79, transferred [*7] the improvements to the Town, and then demanded reimbursement for what it asserted was the Town's proportionate share of the expense. When the Town still refused to pay any part of the cost, Stafford sued, alleging that by conditioning development of Stafford Estates on improving Simmons Road, the Town had taken Stafford's property without compensation in violation of the state and federal constitutions and federal law.

By agreement, the takings issue was submitted to the district court on stipulated facts, although after the court announced its ruling, it allowed the Town to submit some testimony by way of a bill of exception, n9 which the court appears to have considered in overruling the Town's request for reconsideration of its ruling. Stafford argued that the applicable standard under state and federal law for determining whether there was a taking in these circumstances was that announced by the United States Supreme Court in Nollan v. California Coastal Commission n10 and Dolan v. City of Tigard. n11 The Town argued that Nollan and Dolan were inapplicable and that even by their standard the condition on Stafford's development was not a taking. The court agreed [*8] with Stafford and determined that the condition --

. "did not substantially advance a legitimate state interest attributable to the impact of the development of Stafford Estates";

. "was not roughly proportional to any services provided by the Town to Stafford Estates or a burden placed on the Town by Stafford Estates";

. was "in substantial excess of the special benefits accruing" to Stafford by the improvement of Simmons Road; and

. "constituted a taking of property for public use without just or adequate compensation in violation of Article I, § 17 of the Texas Constitution, the Fifth Amendment to the U.S. Constitution and 42 U.S.C. § 1983."

The court then heard evidence on damages, as well as on costs recoverable by federal statute. The Town stipulated that Stafford's expenses incurred in rebuilding Simmons Road with concrete were reasonable and necessary. The court awarded Stafford damages of only $ 425,426 without explaining the reduction of $ 58,877.79, or about 12.2%, from the actual cost. The court also awarded Stafford $ 20,000 expert witness fees, $ 175,000 attorney fees through judgment, $ 42,500 attorney [*9] fees post-judgment contingent on various appeals, and pre- and post-judgment interest.

n9 See TEX. R. APP. P. 33.2.

n10 483 U.S. 825, 97 L. Ed. 2d 677, 107 S. Ct. 3141 (1987).

n11 512 U.S. 374, 129 L. Ed. 2d 304, 114 S. Ct. 2309 (1994).

Both parties appealed, Stafford complaining only that it was entitled to recover all of its construction costs. n12 At the outset, the court of appeals rejected the Town's argument that Stafford's action was barred because it did not sue before rebuilding Simmons Road and obtaining approval of its development plan, concluding that no statute or rule required Stafford to sue earlier than it did. n13 Turning to the takings issue, the court read Nollan and Dolan to set [*10] forth a two-part test (set out below) for determining whether a compensable taking has occurred whenever "the government conditions the granting of permit approval, plat approval, or some other type of governmental approval on an exaction from the approval-seeking landowner." n14 "Generally," the court said, "any requirement that a developer provide or do something as a condition to receiving municipal approval is an exaction." n15 The court rejected the Town's argument that the Nollan/Dolan test applies only when the government exaction is the dedication of an interest in property, not when permit approval is conditioned on an expenditure of money. n16 The court determined that the Supreme Court had not so limited the test and reasoned that non-dedicatory exactions pose no less danger that the government may threaten withholding of approval in order to extract from an applicant some benefit or concession it could not otherwise require. n17 The court did not reach the Town's argument that the Nollan/Dolan test applies only when the government acts on an ad hoc, adjudicative basis, as when making individual permitting decisions, as opposed to a general, legislative, policy basis, [*11] as when adopting ordinances and codes. n18 Even if the Town were correct, the court concluded, the Town's denial of Stafford's request for an exception when it had granted exceptions to other developers showed that its decision was a discretionary one based on individual circumstances rather than a ministerial enforcement of its code based on general policy considerations. n19

n12 71 S.W.3d 18, 44 n.21.

n13 Id. at 28.

n14 Id. at 30 (footnote omitted).

n15 Id. n.7.

[*12]

n16 Id. at 31-34.

n17 Id.

n18 Id. at 34-36.

n19 Id.

The court of appeals thus concluded that the Nollan/Dolan test applied to Stafford's federal takings claim and should also apply to its state takings claim since the parties did not argue that federal and state law are or should be different in this regard. n20 That "two-pronged" test for determining that an exaction is not a taking, the court said, is "that an essential nexus exist between the exaction and a legitimate state [*13] interest and that the exaction be roughly proportional to the public consequences of the requested land use." n21 The burden of proof, the court added, was on the Town to prove that the condition imposed on Stafford met the test. n22

n20 Id. at 37-38.

n21 Id. at 31.

n22 Id. at 38.

As to the "essential nexus" prong, the court concluded that the existence of an essential nexus between the exaction -- the condition that Simmons Road be rebuilt -- and the interests claimed by the Town -- traffic safety and road durability -- was demonstrated as long as the exaction did not "utterly fail" to advance those interests. n23 The court held that the Town had easily [*14] met this lax burden. n24

n23 Id. at 39-40.

n24 Id.

As to the "roughly proportional" prong, the court determined that the relevant comparison was between the cost of the Simmons Road improvements and the impact of the subdivision on that roadway rather than on the Town's entire roadway system. n25 The court noted that "Stafford's traffic study evidence showed that the Subdivision would produce about 750 vehicle trips per day, or about 18% of the total average traffic on the improved portion of Simmons Road", n26 and that "the Town did not put on any evidence to show how much additional roadway traffic the Subdivision would create." n27 The Town argued that the development's true impact was far broader and was reflected in the road impact fees the Town was allowed by statute and ordinance to assess and collect to pay for capital improvements [*15] to its roadway system. n28 The amount of those fees was determined by apportioning the total cost of such improvements among all new developments, whatever their nature, but by ordinance the Town discounted the fee for residential developments from $ 3,560 to $ 1,140 per dwelling. The Town argued that the amount of the discount -- for Stafford, from $ 879,234 to $ 281,580, or nearly $ 600,000 -- reflected the impact on traffic that was not compensated by impact fees and was "roughly proportional to the amount of money Stafford had paid to construct the Simmons Road improvements." n29 The court rejected this argument for two reasons. First, Simmons Road was not included in the Town's capital improvements plan and thus could not be improved using impact fees. n30 The court "failed to grasp how requiring a developer to improve an existing road that is not on a city's capital improvements plan is in any way related to the impact a development will have on roads that are on the city's capital improvements plan." n31 More importantly, the court concluded, the Town simply could not explain how a subdivision's impact on adjacent roadways could be measured by what the Town could have [*16] charged for citywide road improvements but chose not to. n32 Thus, the court held:

On this record, the Town has not met its burden of demonstrating that the additional traffic generated by the Subdivision bears a sufficient relationship to the requirement that Stafford demolish a nearly new, two-lane asphalt road that was not in disrepair and replace it with a two-lane concrete road. Undoubtedly, the additional traffic (750 trips per day) generated by the Subdivision will increase wear and tear and create additional safety concerns on the Town's roads and Simmons and McKamy Creek Roads in particular. But the Town has not explained why demolishing the asphalt road and replacing it with a cement road, as opposed to improving the asphalt road, was required because of the Subdivision's impact. To the contrary, the Town's experts admitted that all of the Town's safety objectives could have been accomplished just as effectively by simply improving the asphalt road. The Town likewise has not explained how the Subdivision's impact created a specific need for a more durable surfacing of Simmons Road. Consequently, the Simmons Road improvement condition requiring Stafford to demolish a portion [*17] of Simmons Road, to repave it with concrete, and to bear 100% of the costs, fails the second, rough proportionality prong of the Dolan test.

* * *

In summary, the Town's requirement that Stafford tear up a nearly new two-lane asphalt road -- that could be improved with asphalt to address the Town's legitimate safety concerns -- and replace it with a two-lane concrete road bears little or no relationship to the proposed impact of the Subdivision on the Town's roadway system, specifically Simmons Road. While the Town's interest in the durability of its roads is a legitimate interest, the demolish-and-replace-with-concrete aspect of the Simmons Road improvements condition simply bears no relationship to the public consequences generated by the Subdivision and is not roughly proportional to the traffic impact of the Subdivision on Simmons Road. Accordingly, this condition to plat approval does not meet the Dolan test's rough-proportionality requirement and instead effected a taking without adequate compensation under article I, section 17 of the Texas Constitution. n33

n25 Id. at 40-41.

[*18]

n26 Id. at 41.

n27 Id.

n28 See TEX. LOC. GOV'T CODE § § 395.001-.082; FLOWER MOUND, TEX., CODE § § 42-71 to 42-80 (2002).

n29 71 S.W.3d at 42.

n30 See TEX. LOC. GOV'T CODE § § 395.012-.013.

n31 71 S.W.3d at 42-43.

[*19]

n32 Id. at 42-43.

n33 Id. at 43-44.

On the issue of damages, the court concluded that the proper measure under the circumstances was the cost of the exaction -- Stafford's expense in rebuilding Simmons Road -- less the cost of roadway improvements necessitated by the subdivision that the Town could properly have required Stafford to make, less the value of any special benefits n34 of the improvements to the subdivision. n35 The court assigned the burden of proof to Stafford on the first two elements of this equation and to the Town on the value of any special benefits. n36 The parties stipulated the reasonable and necessary expense of rebuilding Simmons Road. In determining the cost of improvements due to the subdivision's impact, the court stated that "no precise mathematical formula is necessary", and [*20] concluded that by awarding Stafford only about 87.8% of its actual expenses the district court properly took into account the cost of improvements Stafford was properly required to make. n37 The Town, the court concluded, had failed to prove any special benefits to the subdivision from improvements beyond those required to accommodate the increased traffic. n38 Accordingly, the court upheld the damages awarded by the district court. n39

n34 See Haynes v. City of Abilene, 659 S.W.2d 638, 641-642, 27 Tex. Sup. Ct. J. 79 (Tex. 1983) ("The term 'special benefit' connotes an enhancement more localized than a general improvement in community welfare, but not necessarily unique to a given piece of property. A special benefit is one going beyond the general benefit supposed to diffuse itself from the improvement through the municipality.").

n35 71 S.W.3d at 44-46.

[*21]

n36 Id. at 45 n.22, 46.

n37 Id. at 46.

n38 Id. at 46-47.

n39 Id. at 47.

Finally, the court reversed the award of expert witness fees and attorney fees to Stafford. The court reasoned that "because Stafford is afforded just compensation based on its state-law takings claim, its federal claims under the Fifth Amendment and section 1983 will never mature." n40 Thus, the court concluded, "Stafford has [*22] not suffered a federal constitutional injury. Consequently, Stafford cannot prosecute its section 1983 takings claim or be a prevailing party under section 1988." n41

We granted both parties' petitions for review. n42

n40 Id. at 49.

n41 Id. at 51.

n42 , 2002 Tex. LEXIS 209 (Dec. 12, 2002). We have received a number of amicus briefs. Amici curiae in support of the Town: Texas Municipal League; Texas City Attorneys Association; International Municipal Lawyers Association; Cities of Aledo, Azle, Bridgeport, Corinth, Everman, Fort Worth, Granbury, Haltom City, Irving, Keller, Kennedale, Ovilla, Plano, Red Oak, River Oaks; Town of Sunnyvale. Amici curiae in support of Stafford: Pacific Legal Foundation; National Association of Home Builders; Texas Association of Builders, Inc.

[*23]

We first consider the Town's argument that this action is barred because Stafford did not sue until after it had rebuilt Simmons Road and obtained final approval of its development plan. It is in the public interest, the Town contends, for the government to have the opportunity to withdraw a condition of approval that is found to constitute a taking and thereby avoid the expense to taxpayers of money damages. That opportunity is lost if suit may be brought after the condition has been satisfied and the landowner's only remedy is a damage award. Moreover, the Town adds, it is simply unfair for an applicant to accept the benefits of an approved plan of development and later challenge the conditions of that approval. The Town urges that we "adopt a standard that requires developers to first seek to strike down conditions that they believe are unconstitutional before accepting the conditions and irreparably changing the status quo". The Town does not address the obvious concern that such a standard would pressure landowners to accept the government's conditions rather than suffer the delay in a development plan that litigation would necessitate. The Town concedes that no statute, [*24] rule, or Texas case supports its argument but nonetheless insists that post-approval actions like Stafford's must be barred as a matter of public policy as courts in other states have done.

Generally, "the State's public policy is reflected in its statutes." n43 On the subject of whether an action like this one must be brought before the challenged condition is satisfied, Texas statutes are silent, although they speak at length and in detail to other matters regarding local regulation of property development. n44 There is nothing in this statutory framework to suggest that the time for bringing an action like this one is constrained by anything other than the applicable statute of limitations, which the Town does not argue would bar the present action.

n43 Texas Commerce Bank, N.A. v. Grizzle, 96 S.W.3d 240, 250, 46 Tex. Sup. Ct. J. 318 (Tex. 2002); accord Churchill Forge, Inc. v. Brown, 61 S.W.3d 368, 373, 45 Tex. Sup. Ct. J. 116 (Tex. 2001); Lawrence v. CDB Servs., Inc., 44 S.W.3d 544, 553, 44 Tex. Sup. Ct. J. 554 (Tex. 2001) ("'Public policy, some courts have said, is a term of vague and uncertain meaning, which it pertains to the law-making power to define, and courts are apt to encroach upon the domain of that branch of the government if they characterize a transaction as invalid because it is contrary to public policy, unless the transaction contravenes some positive statute or some well-established rule of law.'") (citation omitted).

[*25]

n44 See e.g. TEX.LOC.GOV'T CODE § § 211.001-.021 (relating to municipal zoning authority); id. § § 212.001-.903 (relating to municipal regulation of subdivisions and property development); id. § § 231.001-.231 (relating to county zoning authority); id. § § 232.001-.107 (relating to county regulation of subdivisions).

The Town argues instead that courts in other jurisdictions have required as a matter of good policy that a suit challenging a condition of land development be brought before the condition is satisfied. This appears to have been the case in California, n45 but the California Legislature has since codified procedures for challenging development exactions, dedications, and other conditions imposed on a development project. n46 The statute allows a landowner to tender the cost of compliance with the condition, give notice of protest, continue with development, and then sue. n47 If successful, the landowner is entitled to a refund. n48 Thus, the California statute, [*26] unlike caselaw which preceded it, attempts to accommodate not only the government's interest in avoiding damages but also developers' interest in avoiding delay.

n45 See County of Imperial v. McDougal, 19 Cal. 3d 505, 564 P.2d 14, 18, 138 Cal. Rptr. 472 (Cal. 1977)) ("A number of cases have held that a landowner or his successor in title is barred from challenging a condition imposed upon the granting of a special permit if he has acquiesced therein by either specifically agreeing to the condition or failing to challenge its validity, and accepted the benefits afforded by the permit."), appeal dismissed for lack of a substantial federal question by 434 U.S. 944, 54 L. Ed. 2d 306, 98 S. Ct. 469 (1977)); Salton Bay Marina, Inc. v. Imperial Irrigation Dist., 172 Cal. App. 3d 914, 218 Cal.Rptr. 839, 854 (Cal. App. 1985) ("Generally, a landowner who accepts and complies with the conditions of a building permit cannot later sue the issuing public entity for inverse condemnation for the cost of compliance. Instead, the property owner is generally limited to having the condition invalidated by a proceeding for writ of mandate.") (citations omitted); Pfeiffer v. City of La Mesa, 69 Cal. App. 3d 74, 137 Cal.Rptr. 804, 806 (Cal. App. 1977) ("It is fundamental that a landowner who accepts a building permit and complies with its conditions waives the right to assert the invalidity of the conditions and sue the issuing public entity for the costs of complying with them.").

[*27]

n46 CAL. GOV'T CODE § 66020 (1997); see Hensler v. City of Glendale, 8 Cal. 4th 1, 32 Cal. Rptr. 2d 244, 876 P.2d 1043, 1055 n.9 (Cal. 1994)( § 66020 created a "limited exception" under which a residential housing developer may challenge a permit condition while proceeding with development).

n47 CAL. GOV'T CODE § 66020 (1997).

n48 Id.

The Town cites two other cases that are somewhat supportive of its argument, one decided by the Minnesota Court of Appeals, n49 and the other by the Washington Court of Appeals, n50 although, as the court of appeals noted in this case, both cases pointed to statutes in their respective [*28] states. n51 The Town also cited a case from the Connecticut Appellate Court, but that case involved an appeal from a zoning commission's denial of subdivision and special use permits on facts too different to be instructive here. n52 Stafford argues that an Eighth Circuit case is to the contrary. n53 We do not find any of these cases compelling. None contains a discussion of the problems that delay presents to the government and landowners alike, which the California statute attempts to balance. We are not convinced that we should attempt to craft such procedures by decision.

n49 Crystal Green v. City of Crystal, 421 N.W.2d 393 (Minn. App. 1988) (citing MINN. STAT. § 462.361, providing that a "person aggrieved by an ordinance, rule, regulation, decision or order of a governing body" may seek review by "appropriate remedy" in court).

n50 Trimen Dev. Co. v. King County, 65 Wn. App. 692, 829 P.2d 226 (Wash. App. 1992) (holding that claims for refund of park development fees were barred by the 30-day limitation period for challenging a plat), aff'd on other grounds, 124 Wn.2d 261, 877 P.2d 187 (Wash. 1994) (holding that the three-year statute of limitations for money unlawfully received applied, and that the fees were lawfully imposed and voluntarily paid).

[*29]

n51 71 S.W.3d at 27.

n52 Weatherly v. Town Plan & Zoning Comm'n, 23 Conn. App. 115, 579 A.2d 94, 97 (Conn. App. Ct. 1990) ("One who seeks to avail himself of the benefits of a zoning regulation is precluded from raising the question of that regulation's constitutionality, or of that regulation's validity, in the same proceeding.").

n53 Christopher Lake Dev. Co. v. St. Louis County, 35 F.3d 1269 (8th Cir. 1994).

The Town does not attempt to characterize its argument as waiver or estoppel. Certainly, as the parties stipulated, Stafford objected to the condition at every opportunity, and the Town was well aware of Stafford's [*30] position. As for the Town's argument that allowing Stafford to sue is unfair, if the Town had been truly concerned about the prospect of paying Stafford damages, it could have offered to allow Stafford to defer rebuilding Simmons Road and escrow the cost pending a judicial determination of the validity of the condition, thereby assuring a fund for payment if the Town won that would be returned to Stafford if it won. n54 In sum, we find the Town's arguments unconvincing. No limitation barring Stafford's suit exists, and we decline the invitation to create one.

n54 See City of College Station v. Turtle Rock Corp., 680 S.W.2d 802, 804, 28 Tex. Sup. Ct. J. 104 (Tex. 1984) (stating that parties agreed to escrow charge imposed in lieu of parkland dedication pending completion of court challenge to exaction).

III

We come now to the parties' takings arguments. Earlier this Term in Sheffield Development Co. v. City of Glenn Heights, we observed that "physical possession is, categorically, a taking for which compensation [*31] is constitutionally mandated, but a restriction in the permissible uses of property or a diminution in its value, resulting from regulatory action within the government's police power, may or may not be a compensable taking." n55 We acknowledged, as has the United States Supreme Court, that "cases attempting to decide when a regulation becomes a taking are among the most litigated and perplexing in current law." n56

n55 2004 Tex. LEXIS 195 at *25, 47 Tex. Sup. Ct. J. 327, ___ S.W.3d ___, ___ (2004) (citations omitted).

n56 2004 Tex. LEXIS 195 at *25 (quoting Eastern Enters. v. Apfel, 524 U.S. 498, 541, 141 L. Ed. 2d 451, 118 S. Ct. 2131 (1998)).

To determine whether government regulation of property, in the words of Justice Oliver Wendell Holmes, "goes too far [so as to] be recognized as a taking," n57 the Supreme Court has employed different analytical structures depending on the nature and effect [*32] of the regulation involved. n58 Nollan and Dolan involved exactions imposed by the government as a condition of its approval of land development. Stafford's takings claims are based solely on these two decisions and not, for example, on the "unreasonable regulatory interference" analysis employed by the Supreme Court in Penn Central Transportation Co. v. City of New York n59 and by this Court in Sheffield. Stafford and the Town agree that if by the standard of Nollan and Dolan the Town's actions constituted a compensable taking under the Fifth Amendment, they likewise constituted a compensable taking under the Texas Constitution. Although, as we observed in Sheffield, "it could be argued that the differences in the wording of the two [constitutional] provisions are significant," n60 since neither party makes that argument here, we assume that the application of both provisions is identical in these circumstances. n61 We therefore consider only whether the Nollan/Dolan standard applies in the circumstances of this case, and if so, whether by that standard a compensable taking occurred.

n57 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 67 L. Ed. 322, 43 S. Ct. 158 (1922).

[*33]

n58 Sheffield, 2004 Tex. LEXIS 195, ___ S.W.3d at ___-___.

n59 438 U.S. 104, 57 L. Ed. 2d 631, 98 S. Ct. 2646 (1978).

n60 Sheffield, 2004 Tex. LEXIS 195 at *18, ___ S.W.3d at ___.

n61 See also 2004 Tex. LEXIS 195 at ___; City of Austin v. Travis County Landfill Co., 73 S.W.3d 234, 238-239, 45 Tex. Sup. Ct. J. 511 (Tex.), cert. denied, 537 U.S. 950, 154 L. Ed. 2d 295, 123 S. Ct. 392 (2002); Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 932, 41 Tex. Sup. Ct. J. 517 (Tex. 1998), cert. denied 526 U.S. 1144, 143 L. Ed. 2d 1030, 119 S. Ct. 2018 (1999).

The Town argues that the Nollan/Dolan [*34] standard does not apply unless the government exacts a dedication of a property interest or imposes conditions on development on an ad hoc basis. We begin by summarizing Nollan and Dolan, as we understand them, and then consider the Town's arguments.

The Nollans owned a beachfront lot bordering on the Pacific Ocean. n62 There were a number of other such lots along the coast, and a little over a quarter mile away in both directions was a public beach. A seawall separated the beach portion of the property from the rest of the lot. The Nollans applied to the California Coastal Commission for a permit that would allow them to demolish a small bungalow on their lot and replace it with a three-bedroom home characteristic of the neighborhood. The Commission granted the permit subject to the Nollans' creation of an easement allowing public access to the area between the ocean and the seawall. The Commission reasoned that --

the new house would increase blockage of the view of the ocean, thus contributing to the development of "a 'wall' of residential structures" that would prevent the public "psychologically . . . from realizing a stretch of coastline exists nearby [*35] that they have every right to visit." The new house would also increase private use of the shorefront. These effects of construction of the house, along with other area development, would cumulatively "burden the public's ability to traverse to and along the shorefront." n63

The Commission had imposed the same requirement on every other similarly situated lot in the area -- 43 of them -- since obtaining the authority to do so. n64

n62 Nollan v. California Coastal Comm'n, 483 U.S. 825, 827-829, 97 L. Ed. 2d 677, 107 S. Ct. 3141 (1987).

n63 Id. at 828-829 (citations omitted) (alteration in original).

n64 Id. at 829.

The Supreme [*36] Court held that the requirement imposed by the Commission constituted a taking, reasoning as follows. "Land-use regulation does not effect a taking if it 'substantially advances legitimate state interests'". n65 Assuming, as the Commission argued, that it had legitimate interests in "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", n66 regulation that substantially advanced those interests would not be a taking unless it "drastically" interfered with the Nollans' use of their property. n67 This would be true whether the regulatory action was the refusal to issue a permit or the issuance of a conditional permit. "[A] permit condition that serves the same legitimate police-power purpose as a refusal to issue the permit should not be found to be a taking if the refusal to issue the permit would not constitute a taking." n68 But in either instance, "substantial advancement" requires an "essential nexus" between the restriction and the interests to be served. n69 "Unless the permit condition serves the same governmental [*37] purpose as the development ban, the building restriction is not a valid regulation of land use but 'an out-and-out plan of extortion.'" n70 The Commission could not explain how requiring the Nollans to allow the public access to the back of their property would help people in front to see past the Nollans' bigger home to the beach beyond, or how allowing more access to the beach would reduce congestion. n71 The public, who according to the Commission could not be expected to see the beach from the street in front of the Nollans' property, would not even know there was something there to have access to. Perhaps in view of this logical problem with its position, or perhaps in the spirit of candor, the Commission also stated that it believed "that the public interest will be served by a continuous strip of publicly accessible beach along the coast." n72 "The Commission may well be right that it is a good idea," the Supreme Court concluded, "but if it wants an easement across the Nollans' property, it must pay for it." n73

n65 Id. at 834 (alteration in original) (quoting Agins v. City of Tiburon, 447 U.S. 255, 260, 65 L. Ed. 2d 106, 100 S. Ct. 2138 (1980)).

[*38]

n66 Id. at 835.

n67 Id. at 835-836 (citing Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 57 L. Ed. 2d 631, 98 S. Ct. 2646 (1978)).

n68 Id. at 836.

n69 Id. at 837.

n70 Id. (citation omitted).

n71 Id. at 838-840.

n72 Id. at 841.

[*39]

n73 Id. at 841-842.

Having found that the exaction imposed by the Commission was simply unrelated to the public interests it claimed to be advancing, the Supreme Court in Nollan did not consider the degree of connection required between an exaction that did advance public interests and the projected impact of the development for there not to be a taking. This half of the analysis the Supreme Court supplied in Dolan v. City of Tigard. n74

n74 512 U.S. 374, 129 L. Ed. 2d 304, 114 S. Ct. 2309 (1994).

Dolan applied to the City of Tigard for a permit allowing her to expand her plumbing and electric supply store and pave the parking lot. n75 In accordance with its Community Development Code, adopted as required by state statute, n76 the City conditioned its approval of the improvements on Dolan's dedication of a portion of her property [*40] in the flood plain for use as a public greenway, and another portion for use as a bicycle and pedestrian path. The City explained that the greenway was necessary to help control the anticipated additional storm water runoff due to the impervious surface of the new parking lot, and the bike path was necessary to help alleviate traffic congestion. Dolan requested a variance from the Code requirements, which the City refused.

n75 Id. at 379.

n76 Id. at 377.

Dolan did not "quarrel with the city's authority to exact some forms of dedication as a condition for the grant of a building permit, but challenged the showing made by the city to justify [the] exactions" it imposed. n77 To determine whether the exactions constituted a taking, the Supreme Court first looked to see "whether the 'essential nexus' exists [*41] between the 'legitimate state interest' and the permit condition exacted by the city" as required by Nollan. n78 The Court explained that in Nollan,

the absence of a nexus left the Coastal Commission in the position of simply trying to obtain an easement through gimmickry, which converted a valid regulation of land use into "'an out-and-out plan of extortion.'"

No such gimmicks are associated with the permit conditions imposed by the city in this case. n79

The connections between a greenway dedication and flood control, and between a bicycle path and traffic control, were "obvious". n80

n77 Id. at 386.

n78 Id.

n79 Id. at 387 (citation omitted).

[*42]

n80 Id. at 387-388.

The harder part of the takings analysis in Dolan was "whether the degree of the exactions demanded by the city's permit conditions [bore] the required relationship to the projected impact of petitioner's proposed development." n81 To determine what relationship the Fifth Amendment requires, the Court looked to "representative" state court takings decisions, "since state courts have been dealing with this question a good deal longer than we have". n82

In some States, very generalized statements as to the necessary connection between the required dedication and the proposed development seem to suffice. We think this standard is too lax to adequately protect petitioner's right to just compensation if her property is taken for a public purpose.

Other state courts require a very exacting correspondence, described as the "specific and uniquely attributable" test . . . . We do not think the Federal Constitution requires such exacting scrutiny, given the nature of the interests [*43] involved.

A number of state courts have taken an intermediate position, requiring the municipality to show a "reasonable relationship" between the required dedication and the impact of the proposed development.

* * *

We think the "reasonable relationship" test adopted by a majority of the state courts is closer to the federal constitutional norm than either of those previously discussed. But we do not adopt it as such, partly because the term "reasonable relationship" seems confusingly similar to the term "rational basis" which describes the minimal level of scrutiny under the Equal Protection Clause of the Fourteenth Amendment. We think a term such as "rough proportionality" best encapsulates what we hold to be the requirement of the Fifth Amendment. No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development. n83

The Supreme Court counted Texas among the majority of states in the intermediate position, n84 citing our 1984 decision in City of College Station v. Turtle Rock Corp. n85

n81 Id. at 388.

[*44]

n82 Id. at 389.

n83 Id. at 389-391 (alteration in original) (footnotes and citations omitted).

n84 Id. at 391.

n85 680 S.W.2d 802, 807, 28 Tex. Sup. Ct. J. 104 (Tex. 1984).

The conditions imposed on Dolan's development of her property did not meet this "rough proportionality" test. The City had required Dolan to dedicate a public greenway, thereby requiring her to surrender the right to exclude others from part of her property, "'one of the most essential [*45] sticks in the bundle of rights that are commonly characterized as property'", n86 but had "never said why a public greenway, as opposed to a private one, was required in the interest of flood control." n87 The Supreme Court concluded:

It is difficult to see why recreational visitors trampling along petitioner's floodplain easement are sufficiently related to the city's legitimate interest in reducing flooding problems . . . and the city has not attempted to make any individualized determination to support this part of its request. n88

With respect to the bike path, the Supreme Court concluded that the City's justifications for the requirement were "conclusory": n89

on the record before us, the city has not met its burden of demonstrating that the additional number of vehicle and bicycle trips generated by petitioner's development reasonably relate to the city's requirement for a dedication of the pedestrian/bicycle pathway easement. The city simply found that the creation of the pathway "could offset some of the traffic demand . . . and lessen the increase in traffic congestion." n90

Each of the City's exactions was too severe, given the projected impact of [*46] Dolan's development on the City's legitimate interests. In sum:

The city's goals of reducing flooding hazards and traffic congestion, and providing for public greenways, are laudable, but there are outer limits to how this may be done. "A strong public desire to improve the public condition [will not] warrant achieving the desire by a shorter cut than the constitutional way of paying for the change." n91

n86 Dolan, 512 U.S. at 393 (citation omitted).

n87 Id.

n88 Id.

N89 Id. at 395-396.

[*47]

n90 Id. at 395 (footnote omitted) (ellipses in original).

n91 Id. at 396 (quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416, 67 L. Ed. 322, 43 S. Ct. 158 (1922)).

We restate the rule of Nollan and Dolan generally as follows: conditioning government approval of a development of property on some exaction is a compensable taking unless the condition (1) bears an essential nexus to the substantial advancement of some legitimate government interest and (2) is roughly proportional to the projected impact of the proposed development.

The Town argues that for several reasons the Nollan/Dolan rule should not apply unless the exaction imposed is the dedication of a property interest, as happened in both those cases. The Nollans were required to dedicate a public easement across their [*48] property, and Dolan was required to dedicate a public greenway and bicycle path.

First, the Town argues that the Supreme Court would not itself apply the rule of Nollan and Dolan outside the context of possessory dedications. The Town points to language in Dolan where, in distinguishing between "land use planning [that] has been sustained against constitutional challenge" n92 and the City of Tigard's actions, the Court observed that "the conditions imposed [on Dolan] were not simply a limitation on the use [she] might make of her own parcel, but a requirement that she deed portions of the property to the city." n93 In drawing this distinction between Dolan and use-restriction cases, the Supreme Court did not, we think, intend to suggest that all regulatory takings cases must fall into one category or the other. The requirement that a developer improve an abutting street at its own expense is in no sense a use restriction; it is much closer to a required dedication of property -- that being the money to pay for the required improvement. We do not read Dolan even to hint that exactions should be analyzed differently than dedications in determining whether there [*49] has been a taking.

n92 Id. at 384.

n93 Id. at 385.

The Town also cites the Supreme Court's discussion of the applicability of Dolan in City of Monterey v. Del Monte Dunes at Monterey, Ltd. n94 In that case, Del Monte Dunes applied to the City of Monterey for permission to develop 37.6 acres of oceanfront property for residential purposes. "After five years, five formal decisions [by the City], and 19 different site plans, Del Monte Dunes decided the city would not permit development of the property under any circumstances." n95 Del Monte Dunes sued, alleging in part that the City's actions constituted a regulatory taking. n96

N94 526 U.S. 687, 143 L. Ed. 2d 882, 119 S. Ct. 1624 (1999).

[*50]

n95 Id. at 698 (citations omitted).

n96 Id.

Although the City had required that parts of the property be dedicated to public use, n97 Del Monte Dunes did not complain of these requirements but challenged the City's denial of any development at all. The court of appeals had stated that the City's denial of development was required to be "roughly proportional" to its legitimate interests, borrowing from the second prong of the Dolan test, n98 and while the statement was immaterial to the court of appeals' decision, n99 the Supreme Court took pains to disavow it:

Although in a general sense concerns for proportionality animate the Takings Clause, see Armstrong v. United States, 364 U.S. 40, 49, 4 L. Ed. 2d 1554, 80 S. Ct. 1563 (1960) ("The Fifth Amendment's guarantee . . . was designed to bar Government from forcing [*51] some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole"), we have not extended the rough-proportionality test of Dolan beyond the special context of exactions -- land-use decisions conditioning approval of development on the dedication of property to public use. See Dolan, supra, at 385, 114 S. Ct. 2309; Nollan v. California Coastal Comm'n, 483 U.S. 825, 841, 97 L. Ed. 2d 677, 107 S. Ct. 3141 (1987). The rule applied in Dolan considers whether dedications demanded as conditions of development are proportional to the development's anticipated impacts. It was not designed to address, and is not readily applicable to, the much different questions arising where, as here, the landowner's challenge is based not on excessive exactions but on denial of development. We believe, accordingly, that the rough-proportionality test of Dolan is inapposite to a case such as this one. n100

The Town argues that this passage clearly shows the Supreme Court's intent to limit the Nollan/Dolan rule to dedication cases, but we do not read it that way. The passage does no more than elaborate on the same [*52] distinction drawn in Dolan between conditions limiting the use of property and those requiring a dedication of property. In neither Dolan nor Del Monte Dunes did the Supreme Court have reason to differentiate between dedicatory and non-dedicatory exactions. Nor does either case suggest that conditioning development of property on improvements to abutting roadways is somehow more like a restriction on the use of the property rather than a dedication of property. n101

n97 Id. at 696-697.

n98 Id. at 702.

n99 Id. at 703.

n100 Id. at 702-703.

[*53]

n101 See also Lambert v. City and County of San Francisco, 529 U.S. 1045, 1047-1049, 146 L. Ed. 2d 360, 120 S. Ct. 1549 (2000) (Scalia, J., joined by Kennedy and Thomas, JJ., dissenting from the denial of certiorari) (involving the denial of a permit to convert residential hotel rooms to tourist rooms because of the owner's failure to pay $ 600,000 to replace the residential rooms, and stating that "when there is uncontested evidence of a demand for money or other property -- and still assuming that denial of a permit because of failure to meet such a demand constitutes a taking -- it should be up to the permitting authority to establish either (1) that the demand met the requirements of Nollan and Dolan, or (2) that denial would have ensued even if the demand had been met") (emphasis added), opinion below reported at 57 Cal. App. 4th 1172, 67 Cal.Rptr.2d 562, 568-569 (Cal. Ct. App. 1997).

The Town argues that Dolan expressly claims for its basis --

the well-settled doctrine of "unconstitutional [*54] conditions," [by which] the government may not require a person to give up a constitutional right -- here the right to receive just compensation when property is taken for a public use -- in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property. n102

This doctrine, the Town contends, cannot be used to find a taking when the thing given up in exchange for a discretionary benefit is simply money, for which the owner has no constitutional right of recompense. Assuming that the doctrine of unconstitutional conditions is limited as the Town argues, a position on which we express no opinion, the Town's argument does not limit the application of Dolan because the doctrine was not the only foundation on which it rested and was not even mentioned in Nollan. Nollan was grounded entirely in the Supreme Court's takings jurisprudence. Thus, even if the doctrine would not apply to a non-dedicatory exaction, as the Town argues, the rule of Dolan is not thereby made inapplicable.

n102 Dolan v. City of Tigard, 512 U.S. 374, 385, 129 L. Ed. 2d 304, 114 S. Ct. 2309 (1994).

[*55]

The Town asserts that most courts have refused to apply the Dolan rule to non-dedicatory takings. Whether the Town is correct with respect to all courts of record we cannot tell for sure, but the Town does not appear to be correct about courts of last resort. The Supreme Court of Arizona did not apply Dolan in determining the validity of water resource fees charged to all new developments to help defray the city's expense of acquiring new sources of water, n103 and the Supreme Court of Colorado likewise refused to apply Dolan in a similar context involving plant impact fees charged to improve water quality in the community. n104 The Supreme Court of South Carolina did not apply Dolan in analyzing whether the application of zoning ordinances to the rebuilding of a private pier constituted a taking, n105 and stated in dicta that Dolan applied only to physical exactions. n106 But the Supreme Court of Illinois n107 and the Supreme Court of Ohio n108 have applied Dolan in assessing the validity of fees charged for the impact of new developments on traffic, and the Supreme Court of Washington cited Dolan in upholding the validity, under a state statute, of fees [*56] paid under an ordinance conditioning development approval on payment of a fee in lieu of providing open space. n109 Most importantly, the Supreme Court of California in Ehrlich v. City of Culver City, a case very similar to the one before us, expressly rejected limiting the Dolan rule to property dedications. n110 Ehrlich, having found it impossible to operate his private sports facility at a profit, applied for a zoning change from recreational use to allow the facility to be replaced by condominiums. n111 The city conditioned approval on payment of $ 280,000 in lieu of construction of four public tennis courts. n112 The court concluded that this was the context in which Dolan "quintessentially" applied n113 and held that imposition of the charge was a taking. n114 Although the court splintered on various issues, it was unanimous on the application of Dolan. n115

n103 Home Builders Ass'n v. City of Scottsdale, 187 Ariz. 479, 930 P.2d 993, 1000 (Ariz.), cert. denied, 521 U.S. 1120, 138 L. Ed. 2d 1015, 117 S. Ct. 2512 (1997).

[*57]

n104 Krupp v. Breckenridge Sanitation Dist., 19 P.3d 687, 696-698 (Colo. 2001).

n105 Sea Cabins on the Ocean IV Homeowners Ass'n, Inc. v. City of North Myrtle Beach, 345 S.C. 418, 548 S.E.2d 595, 603-604 (S.C. 2001).

n106 Id. at 603 n.5.

n107 Northern Ill. Home Builders Ass'n v. County of DuPage, 165 Ill. 2d 25, 649 N.E.2d 384, 388-389, 208 Ill. Dec. 328 (Ill. 1995).

n108 Home Builders Ass'n v. City of Beavercreek, 89 Ohio St. 3d 121, 2000 Ohio 115, 729 N.E.2d 349, 354-356 (Ohio 2000).

[*58]

n109 Trimen Dev. Co. v. King County, 124 Wn.2d 261, 877 P.2d 187, 189-190 (Wash. 1994) (county's park development fees were lawful under statute if the fees were imposed pursuant to a voluntary agreement, and were reasonably necessary as a direct result of the proposed development or required to mitigate the direct impact of the development").

n110 Ehrlich v. City of Culver City, 12 Cal. 4th 854, 50 Cal. Rptr. 2d 242, 911 P.2d 429, 438-439 (Cal.), cert. denied, 519 U.S. 929, 136 L. Ed. 2d 218, 117 S. Ct. 299 (1996).

n111 Id. at 433-434.

n112 Id. at 434-435.

[*59]

n113 Id. at 438.

n114 Id. at 433; accord San Remo Hotel v. City and County of San Francisco, 27 Cal. 4th 643, 117 Cal. Rptr. 2d 269, 41 P.3d 87, 102-103 (Cal. 2002).

n115 Ehrlich, 911 P.2d at 432 (plurality op. by Arabian, J., joined by Lucas, C.J., and George, J.); id. at 451 (Mosk, J., concurring) (Dolan "is generally not applicable to development fees; the present case is thus more the exception than the rule" ); id. at 462 (Kennard, J., concurring and dissenting, joined by Baxter, J., in concurring), ("I agree with the majority that Nollan-Dolan's 'essential nexus' and 'rough proportionality' requirements apply to monetary exactions that, like the mitigation fee involved here, are imposed on a specific parcel of property as a condition of obtaining a development permit"); id. at 468 (Werdegar, J., concurring and dissenting); see San Remo Hotel, 41 P.3d at 102 ("Though the members of this court disagreed on various parts of the analysis [in Ehrlich], we unanimously held that this ad hoc monetary exaction was subject to Nollan/Dolan scrutiny." ).

[*60]

The procedural history of Ehrlich is worth noting. The California Court of Appeal originally held, before Dolan was decided, that there had been no taking, and on petition for certiorari, after Dolan issed, the United States Supreme Court vacated the court of appeal's judgment and remanded the case to that court for reconsideration in light of Dolan. n116 On remand, the court of appeal reached the same conclusion it had before, but the Supreme Court of California reversed, holding on the basis of Dolan that there had been a taking. n117 This time the United States Supreme Court denied certiorari. n118

n116 512 U.S. 1231, 129 L. Ed. 2d 854, 114 S. Ct. 2731 (1994) (vacating and remanding Ehrlich v. City of Culver City, 15 Cal. App. 4th 1737, 19 Cal.Rptr.2d 468 (Cal. Ct. App. 1993)).

n117 911 P.2d at 433.

n118 519 U.S. 929, 136 L. Ed. 2d 218, 117 S. Ct. 299 (1996).

[*61]

The Town argues that a non-dedicatory exaction like a fee or charge is not the kind of possessory intrusion that has historically been specially protected by constitutional takings provisions, and that if such an exaction is a taking at all, it can only be because it is unreasonable as determined by the kinds of factors identified by the Supreme Court in Penn Central Transportation Co. v. City of New York n119 and by this Court in Sheffield. n120 But Nollan and Dolan themselves depart somewhat from the historic focus of takings protections on possessory intrusions. The issue is not, as the Town puts it, whether such departures should exist, but given that dedicatory exactions are to be examined more strictly than other kinds of land use regulations, whether non-dedicatory exactions must likewise be scrutinized.

n119 438 U.S. 104, 57 L. Ed. 2d 631, 98 S. Ct. 2646 (1978).

n120 2004 Tex. LEXIS 195, ___ S.W.3d ___ (2004).

[*62]

The Town argues that no practical difference exists between approval on condition and denial for want of the condition, and if the former is going to be judged by the Dolan standard and the latter by the more lenient Penn Central factors, the government will choose simply to deny permission to develop at all, thereby hampering development even further than Stafford complains of here. One premise of the argument is undoubtedly true -- there is no practical difference between the two government actions. But the other is not. When the practical effect is exaction, conditional approval and denial are both measured by the Dolan taking standard. As the Supreme Court explained in Nollan:

The Commission argues that a permit condition that serves the same legitimate police-power purpose as a refusal to issue the permit should not be found to be a taking if the refusal to issue the permit would not constitute a taking. We agree. Thus, if the Commission attached to the permit some condition that would have protected the public's ability to see the beach notwithstanding construction of the new house -- for example, a height limitation, a width restriction, or a ban on fences [*63] -- so long as the Commission could have exercised its police power (as we have assumed it could) to forbid construction of the house altogether, imposition of the condition would also be constitutional. Moreover (and here we come closer to the facts of the present case), the condition would be constitutional even if it consisted of the requirement that the Nollans provide a viewing spot on their 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 [*64] not. n121

The government cannot sidestep constitutional protections merely by rephrasing its decision from "only if" to "not unless". The constitutional guaranty against a pleading requirement, and compliance with it [is] more than an exercise in cleverness and imagination." n122

uncompensated takings is "more than

n121 Nollan v. Cal. Coastal Comm'n, 483 U.S. 825, 836-837, 97 L. Ed. 2d 677, 107 S. Ct. 3141 (1987).

n122 Id. at 841.

The Town argues that if non-dedicatory exactions are subject to the Dolan standard, "Texas cities will be forced to run a fierce constitutional gauntlet that will significantly erode the practical ability of cities to regulate land development to promote the public interest and protect community rights." But we are unable to see any reason why limiting a government exaction from a [*65] developer to something roughly proportional to the impact of the development -- in other words, prohibiting "'an out-and-out plan of extortion'" n123 -- will bring down the government. Pressed to defend this assertion at oral argument, counsel for the Town argued that the real problem with the "rough proportionality" standard is not the standard itself; after all, the government can hardly argue that it is entitled to exact more from developers than is reasonably due to the impact of development. The real problem, the Town argues, is that the validity of an exaction in an individual case is not presumed but must be shown by the government. We are unable to see why this burden is unduly onerous. Rather, we think the burden is essential to protect against the government's unfairly leveraging its police power over land-use regulation to extract from landowners concessions and benefits to which it is not entitled. To repeat Dolan: "No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development." n124

n123 Id. at 837 (citation omitted).

[*66]

n124 Dolan v. City of Tigard, 512 U.S. 374, 391, 129 L. Ed. 2d 304, 114 S. Ct. 2309 (1994).

Finally, the Town argues that if the Dolan standard applies to non-dedicatory exactions, then it must "apply to all development requirements, including that houses be built of brick rather than of wood, and of a certain size on a certain sized lot, since these are all conditions placed on the ability to develop land." Clearly, the cited examples of routine regulatory requirements do not come close to the exaction imposed by the Town in this case. There may be other requirements that do. Determining when a regulation becomes a taking has not lent itself to bright line-drawing. But we are satisfied that the distinction between exactions and other types of regulatory requirements is meaningful and necessary.

We agree with the Supreme Court of California's decision in Ehrlich. For purposes of determining whether an exaction as a condition of government approval of development is a compensable taking, we see no [*67] important distinction between a dedication of property to the public and a requirement that property already owned by the public be improved. The Dolan standard should apply to both.

The Town also argues that the Nollan/Dolan rule should not apply unless an exaction is imposed on an ad hoc, individualized basis. Like its argument that the rule should not apply to non-dedicatory exactions, this argument, too, is based on a distinction drawn in Dolan itself between "land use planning [that] has been sustained against constitutional challenge" n125 and the City of Tigard's actions. The former, the Supreme Court explained, "involved essentially legislative determinations classifying entire areas of the city, whereas here the city made an adjudicative decision to condition petitioner's application for a building permit on an individual parcel." n126 In Nollan the Court had stated:

our cases describe the condition for abridgement of property rights through the police power as a "substantial advancing" of a legitimate state interest. We are inclined to be particularly careful about the adjective where the actual conveyance of property is made a condition [*68] to the lifting of a land-use restriction, since in that context there is heightened risk that the purpose is avoidance of the compensation requirement, rather than the stated police-power objective. n127

n125 Id. at 384.

n126 Id. at 385.

n127 Nollan, 483 U.S. at 841.

The Town argues that most courts have limited the Dolan standard to such "adjudicative" decisions, and as far as we can tell, all courts of last resort to address the issue have done so. n128 The Supreme Court of California in San Remo Hotel v. City and County of San Francisco has provided the only justification for the limitation -- political [*69] reality:

While legislatively mandated fees do present some danger of improper leveraging, such generally applicable legislation is subject to the ordinary restraints of the democratic political process. A city council that charged extortionate fees for all property development, unjustifiable by mitigation needs, would likely face widespread and well-financed opposition at the next election. Ad hoc individual monetary exactions deserve special judicial scrutiny mainly because, affecting fewer citizens and evading systematic assessment, they are more likely to escape such political controls. n129

We are not convinced. While we recognize that an ad hoc decision is more likely to constitute a taking than general legislation, we think it entirely possible that the government could "gang up" on particular groups to force extractions that a majority of constituents would not only tolerate but applaud, so long as burdens they would otherwise bear were shifted to others.

n128 See Home Builders Ass'n v. City of Scottsdale, 187 Ariz. 479, 930 P.2d 993, 1000(Ariz.), cert. denied, 521 U.S. 1120, 138 L. Ed. 2d 1015, 117 S. Ct. 2512 (1997); Ehrlich v. City of Culver City, 12 Cal. 4th 854, 50 Cal. Rptr. 2d 242, 911 P.2d 429, 439 (Cal. 1996), cert. denied 519 U.S. 929, 136 L. Ed. 2d 218, 117 S. Ct. 299 (1996); San Remo Hotel v. City and County of San Francisco, 27 Cal. 4th 643, 117 Cal. Rptr. 2d 269, 41 P.3d 87, 105 (Cal. 2002); Krupp v. Breckenridge Sanitation Dist., 19 P.3d 687, 695 (Colo. 2001) ("Application of the Nollan/Dolan test has been limited to the narrow set of cases where a permitting authority, through a specific, discretionary adjudicative determination, conditions continued development on the exaction of private property for public use."); Parking Ass'n of Ga., Inc. v. City of Atlanta, 264 Ga. 764, 450 S.E.2d 200, 203 n.3 (Ga. 1994) (Dolan test did not apply to city's legislative determination), cert. denied, 515 U.S. 1116, 1117-1118, 132 L. Ed. 2d 273, 115 S. Ct. 2268 (1995) (Thomas, J., joined by O'Connor, J., dissenting from the denial of certiorari, noting conflict in lower courts on whether test from Dolan or Agins applied when a taking is alleged based on a legislative act); Southeast Cass Water Res. Dist. v. City of Burlington, 527 N.W.2d 884, 896 (N.D. 1995) (stating that Nollan and Dolan do not "change the constitutional analysis for legislated police-power regulation").

[*70]

n129 San Remo Hotel, 41 P.3d at 105.

Nor are we convinced that a workable distinction can always be drawn between actions denominated adjudicative and legislative. Of course, when the government singles out a landowner by imposing essentially unprecedented conditions on its application to develop property, the distinction is clear. But that is not what happened in either Dolan or Nollan. The conditions on Dolan's enlargement of her store were all imposed pursuant to specific provisions of the City of Tigard's Community Development Code that was itself adopted pursuant to state law. n130 The condition on the Nollans' development had been imposed on every other similarly situated lot in the neighborhood after the California Coastal Commission acquired the authority to do so. n131 The Supreme Court observed in Nollan:

If the Nollans were being singled out to bear the burden of California's attempt to remedy these problems [claimed by the Commission to warrant the exaction imposed], [*71] although they had not contributed to it more than other coastal landowners, the State's action, even if otherwise valid, might violate either the incorporated Takings Clause or the Equal Protection Clause. One of the principal purposes of the Takings Clause is "to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." But that is not the basis of the Nollans' challenge here. n132

Although the exactions in Nollan and Dolan were imposed taking into account individual circumstances, they were by no means unique or exceptional in the community.

n130 Dolan, 512 U.S. at 377-379.

n131 Nollan, 483 U.S. at 829.

n132 Id. at 835 n.4 (citations omitted).

[*72]

We think that the Town's argument, and the few courts that have accepted it, make too much of the Supreme Court's distinction in Dolan. By the same token, we need not risk error in the opposite direction by undertaking to decide here in the abstract whether the Dolan standard should apply to all "legislative" exactions -- whatever that really means -- imposed as a condition of development. It is enough to say that we can find no meaningful distinction between the condition imposed on Stafford and the conditions imposed on Dolan and the Nollans. All were based on general authority taking into account individual circumstances. Dolan's request for a variance was denied. n133 The Town was authorized to grant, and did grant, exceptions to the general requirement that roads abutting subdivisions be improved to specified standards. Stafford applied for an exception and was refused, but the Town nevertheless considered whether an exception was appropriate.

n133 Dolan, 512 U.S. at 380-381.