Eminent Domain Report

In 2024, in what was heralded as a big win for developers in California, the U.S. Supreme Court upended decades of California precedent and held that legislatively enacted development impact fees must satisfy the “essential nexus” and “rough proportionality” tests established in Nollan v. California Coastal Commission (1987) 483 U.S. 825 and Dolan v. City of Tigard (1994) 512 U.S. 374. Sheetz v. County of El Dorado (2024) 601 U.S. 267. But the Supreme Court did not decide whether the legislatively enacted fee program at issue in Sheetz actually failed to comply with ...

On June 24, 2025, the California Court of Appeal heard argument in Sheetz v. County of El Dorado. You may recall that the California Court of Appeal previously held that legislatively enacted development impact fees are exempt from Nollan/Dolan scrutiny, consistent with what was at the time longstanding California Supreme Court precedent. In 2024, however, the U.S. Supreme Court held that legislatively imposed exactions are not exempt from the essential nexus test established in Nollan v. California Coastal Commission (1987) 483 U.S. 825 or the rough proportionality test in ...

On April 12, 2024, in Sheetz v. County of El Dorado, the U.S. Supreme Court unanimously overruled more than two decades of California precedent, holding that legislatively established development impact fee programs must have an essential nexus and a rough proportionality to the impacts from the proposed development project on which they are being applied. The full ramifications of this ruling are still yet to be decided, however, as the Supreme Court left open the possibility of applying the nexus/proportionality tests in a more deferential manner when the development impact ...