In this month’s Supreme Court roundup, we take a look at the arguments in Koontz v. St. Johns River Water Management District and Standard Fire Insurance Co. v. Knowles, both of which the court heard in January.
In Koontz, the key question at hand is, when do a permitting authority’s demands for offsite environmental mitigation constitute a taking? It is commonplace that when a proposed development project is perceived to cause environmental harm, a permit will be issued only if the landowner agrees to “mitigate” the harm. In Nollan v. California Coastal Comm’n (1987) and Dolan v. City of Tigard (1994), the Supreme Court addressed permit conditions generally, holding that they do not constitute unconstitutional government takings provided the conditions have an “essential nexus” to the development project and are “roughly proportional” to the harm it causes. In Koontz, the Supreme Court will address whether the takings analysis set forth in Nollan and Dolan applies to a permitting authority’s demands for offsite mitigation in the form of payments for government environmental projects.
The issue, in short, is whether a named plaintiff may avoid removal to federal court of a putative class action that would otherwise satisfy CAFA’s $5 million amount-in-controversy requirement, by stipulating that he or she does not seek to recover more than $5 million. If this tactic were permissible, plaintiffs lawyers could easily avoid removal of class actions to federal court. That is contrary to the intent of CAFA, which Congress enacted chiefly in response to abusive class actions filed in state courts that are hostile to out-of-state defendants.