Sheetz v. County of El Dorado, California
(Cal. Ct. App., July 29, 2025, No. C093682)
Sheetz v. County of El Dorado returned to the California Court of Appeal’s Third District following its remand from the U.S. Supreme Court, which held that the heightened judicial scrutiny established in the Nollan and Dolan cases applies to legislatively-enacted permit conditions.[1] In the decision summarized here, the appellate court reconsidered the validity of the County of El Dorado’s traffic impact mitigation fee, ultimately affirming the fee once again and concluding that it satisfied both the “essential nexus” and “rough proportionality” standards required under federal law.
Background
The County required Sheetz to pay a $23,420 traffic impact mitigation fee as a condition of obtaining a building permit for the construction of a single-family home on a residential parcel. Under the County’s General Plan, land use developers must pay traffic impact mitigation fees as a condition of receiving a building permit. The fees, set by a rate schedule based on development type and location, fund road improvements. Sheetz paid the fee under protest, and then filed suit alleging it constituted an unlawful taking without just compensation in violation of the U.S. Constitution’s Fifth Amendment.
In 2024, Sheetz’s case reached the U.S. Supreme Court, which held that the heightened scrutiny of Nollan/Dolan applies to legislatively-imposed permit conditions, not only administrative exactions. The firm’s summary of that decision is available here. In that decision, the U.S. Supreme Court did not determine whether the County’s fee satisfied that scrutiny and instead remanded the case back to the appellate court for further proceedings.
Analysis
As a threshold matter, the court first considered whether the traffic impact mitigation fee would constitute a compensable taking if imposed outside the permitting process. Under Nollan/Dolan, the heightened scrutiny standard applies in the land use regulation context only when the government could not lawfully require the condition outright, making this determination a prerequisite to further analysis. Citing Koontz,[2] the court noted that government demands for money linked to a specific property are treated the same as demands for land. Because the fee was directly tied to Sheetz’s parcel and imposed as a condition of getting his building permit, the court found it to be a monetary exaction subject to Nollan/Dolan requirements.
The court next turned to Nollan’s “essential nexus” requirement, which asks whether there is a logical connection between the government’s legitimate interest and the permit condition. The court found that reducing traffic congestion is a legitimate public interest, and requiring Sheetz to pay a traffic impact mitigation fee directly relates to offsetting the traffic his new home would generate. Because the County’s fee is imposed on all new developments to fund roadway improvements needed due to growth, it advances the same purpose the County could have pursued by denying the permit outright.
As to the Dolan test, that requires a showing of “rough proportionality” between the permit condition and the impact of the proposed development. This means the government must make “some sort of individualized determination” that the condition is reasonably related in extent to the project’s anticipated effects. The court found the County satisfied this requirement as the traffic impact mitigation fee was calculated under a countywide rate schedule based on development type and location, and supported by traffic studies quantifying the impacts of each category of development and the costs of necessary roadway improvements. Because the fee for Sheetz’s single-family home represented his project’s proportionate share of the traffic burden from new development, the court concluded it met the “rough proportionality” standard.
Conclusion
Whether this outcome – continued affirmation of the County’s traffic impact mitigation fee – is what the U.S. Supreme Court anticipated with its 2024 decision and remand is debatable. What is clear is the California Court of Appeal’s frustration with that 2024 decision; indeed, look no further than the references to the U.S. Supreme Court as having “invalidated settled California law” and issued a decision “contrary to settled California law.”
Further, amidst this ongoing tug-of-war between California and the federal government (including their judicial branches) is California’s continued housing crisis. And regardless of the constitutional standards at play, it seems fair to ask whether the County’s traffic impact mitigation fee, particularly in relation to what was described as Sheetz’s “modest prefabricated house,” serves to perpetuate that crisis.
[1] See Nollan v. Cal. Coastal Commission (1987) 483 U.S. 825; Dolan v. City of Tigard (1994) 512 U.S. 374.
[2] See Koontz v. St. Johns River Water Management District (2013) 570 U.S. 595.
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