Government Should Not Be Able to Pass Laws that Shake Down Developers
Washington, DC (October
19, 2015) – The National Federation of Independent Business Small Business
Legal Center filed a brief with the U.S. Supreme Court calling for the
protection of private property rights from extortionate government schemes. The
Legal Center is asking the Court to take the case of California Building Industry Association v. San Jose, which asks whether
a city may constitutionally force developers to sell certain housing units at
below market rates.
“Years ago, the Supreme Court ruled that attempts to force
landowners to do the bidding of the government amounted to an ‘out-and-out plan
of extortion,’” said Karen Harned,
Executive Director of the NFIB Small Business Legal Foundation. “Here we
have the city of San Jose trying to use its power to bully landowners. Clearly,
the constitution protects private property and the right of landowners to exercise
their right to use and sell their property at market rate. The court should
stop San Jose and other cities with similar schemes.”
NFIB and the plaintiffs cite the 1987 Nollan v. California Coastal Commission, which held government may
not require a landowner to dedicate property as a condition of a permit
approval. In that case, the justices ruled against the California Coastal
Commission for trying to force landowners to set aside a portion of their land
for public use. Today, plaintiffs in California are challenging San Jose’s
rules forcing developers to set aside a number of units at below market rates
because this likewise forces landowners to dedicate property to a public use.
The city offers no compensation for these developers.
The NFIB is extremely concerned with government attempts to
claim private property. In the last Supreme Court term, the Small Business
Legal Center supported the plaintiffs in Horne
v. Department of Agriculture. In that case, the court ruled that the
government could not confiscate a farmer’s raisins without compensation.
“This court has a record of standing up for private property
and we expect the justices to recognize the danger posed by San Jose’s scheme,”
said Harned. “There is no limit to what government could require of small
businesses in the name of the public good.”