Eminent Domain Report

In 2024, the Supreme Court upended decades of California precedent when it held that legislatively enacted development impact fees must satisfy the “essential nexus” and “rough proportionality” tests established in Nollan v. California Coastal Commission and Dolan v. City of Tigard, respectively. However, the Supreme Court did not decide whether the legislatively enacted fee program challenged by Sheetz actually failed to comply with Nollan / Dolan. Instead, it remanded that issue back to the California courts so that they could address the issue in the first instance.

In 2025, on remand, the California Court of Appeal again rejected the constitutional challenge by Sheetz, finding in a published opinion that the legislatively enacted fees established by the County of El Dorado satisfied Nollan / Dolan scrutiny. (For a summary of that decision, see our July 30, 2025 blog post.) Sheetz filed a petition for review with the California Supreme Court, but the California Supreme Court denied the petition. But the California Supreme Court, on its own motion, did depublish the Court of Appeal’s decision.

In early 2026, Sheetz filed a petition for writ of certiorari with the U.S. Supreme Court. This would be Sheetz’s second trip to the U.S. Supreme Court. While not necessarily unheard of, it is certainly uncommon for the U.S. Supreme Court to hear the same case so soon after issuing a landmark ruling. But it only takes four Justices to vote in favor of a petition for the petition to be granted. And when the California Supreme Court issued its decision in 2024, there were multiple concurrences. In particular, Justice Gorsuch and Justice Kavanaugh each wrote a concurring opinion that proposed starkly different standards for analyzing whether legislatively enacted development impact fees meet the “rough proportionality” test. Further, Justice Kagan and Justice Jackson signed on to Justice Kavanaugh’s concurrence. The petition was also supported by a number of significant groups, including, but not limited to, the National Association of Realtors, the California Association of Realtors and the Citizen Action Defense Fund. Thus, there seemed to be a possibility, albeit remote, for four Justices to vote in favor of the petition.

However, after considering the petition at its June 11, 2026 conference, the U.S. Supreme Court docket notes that the petition was denied. This means that Sheetz’s petition did not garner the necessary four votes. It also means that Sheetz’s challenge to El Dorado County’s development impact fee is now at an end. But with both the California Supreme Court and U.S. Supreme Court declining to provide further guidance as to how legislatively enacted development impact fees should be analyzed, one can reasonably expect future challenges. And, I would not be surprised if in a few years we see this challenge heard by the California Supreme Court or U.S. Supreme Court.