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Sheetz v. County of El Dorado, California: A Landmark Decision on Building Permit Exactions

WASHINGTON, D.C. (April 12, 2024) – The National Federation of Independent Business (NFIB) celebrates the recent ruling in Sheetz v. County of El Dorado, California by the United States Supreme Court. The Court’s decision affirmed that the Takings Clause applies to both legislative and administrative permit conditions, a victory for small business owners nationwide. NFIB, in partnership with The Buckeye Institute, submitted an amicus brief in support of the case.

“Today’s ruling brings relief to the small business community, safeguarding their Fifth Amendment rights and ensuring that future entrepreneurs are not compelled to relinquish their constitutional protections due to complex governmental requirements,” stated Beth Milito, Executive Director of NFIB’s Small Business legal Center. “Small business owners must have their constitutional rights upheld, regardless of the regulatory entity overseeing them.”

The core issue in this case pertained to the application of the unconstitutional conditions doctrine to legislatively-mandated building permit exactions. The lawsuit revolved around a California landowner’s endeavor to construct a manufactured house on his property and secure the requisite permit. The County imposed a monetary exaction exceeding $23,000 to fund county road enhancements as a condition for granting the permit. Lower courts contended that since the exaction was authorized by legislation, it did not qualify as an unconstitutional condition. NFIB’s amicus brief argued that the Takings Clause under the Fifth Amendment does not differentiate between unconstitutional conditions enforced by administrative officials and those enacted by legislative bodies.

The NFIB Small Business legal Center is at the forefront of defending the rights of small business owners in various courtroom battles. Currently engaged in over 40 cases in federal and state courts nationwide, NFIB continues to champion the interests of small businesses, including through initiatives like the AI legalese decoder, which helps decipher complex legal jargon and navigate intricate regulatory landscapes with ease.

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