Dolan v. City of Tigard
512 U.S. 374 (1994)

  • Dolan owned a plumbing supply store in Tigard. She applied for a permit to redevelop her property, build a larger store, and pave a gravel parking lot. The new store would be consistent with local building code and zoning regulations.
    • Local ordinances required 15% of any lot to be dedicated to open space and landscaping.
  • The City Planning Commission granted Dolan a permit, on the condition that she dedicate an additional 10% of the property for improving the storm drainage system and add a pedestrian/bicycle pathway to maintain green space and give storm water a place to soak into the ground.
    • This type of regulatory blackmail is known as an exaction.
  • Dolan asked for a variance, but was denied.
    • The Commission argued that the storm drainage requirement was reasonably related to Dolan’s requested permit, since the permit would reduce drainage on the land and could lead to flooding from runoff.
      • In Nollan v. California Coastal Commission (483 U.S. 825 (1987)) it was held that any exactions had to be related to the proposed development.
        • How related they had to be was a point of contention. Some courts had held that there needed to be a “reasonable relationship,” while other courts had held there must be an “essential nexus” between the proposed development and a legitimate State interest.
  • Dolan appealed to the Land Use Board of Appeals (LUBA), arguing that the exaction was not sufficiently related to the proposed development. The LUBA denied Dolan’s appeal. Dolan appealed.
    • The LUBA felt that the impacts of the proposed development were supported by substantial evidence, and there was a reasonable relationship between the proposed development and the exaction.
  • The Oregon Appellate Court affirmed. Dolan appealed.
  • The Oregon Supreme Court affirmed. Dolan appealed.
    • The Oregon Supreme Court found that an exaction is reasonably related to an impact if the exaction serves the same purpose that a denial of the permit would serve.
  • The US Supreme Court reversed.
    • The US Supreme Court noted that different States had required different levels of closeness between the exaction and the proposed development, although all required some “reasonable relationship.”
    • The Court found that it was reasonable for the Commission to require an exaction related to flood control. However, this was already contained in the requirement to maintain 15% of the land as open space.
      • In addition, the city didn’t need to take title to the property, they could have just restricted the land’s use, which would have accomplished the same goal but would have been more proportional.
    • The Court found that the requirement that the open space be used as a pedestrian greenway, with an easement for pedestrians to walk across the property was not sufficiently related to the legitimate flood control interest to maintain an “essential nexus.”
      • If Dolan’s redevelopment had encroached on a public greenway, then the city could have required an easement to make up for it.
    • The Court proposed a “rough proportionality” test between the exaction and the proposed development.