A federal appeals court has ruled Medford can not require KOGAP Enterprises to extend a road across its property and pay half of a bridge to develop its former sawmill site.
The 9th U.S. Circuit Court of Appeals decision overturned a previous ruling by a district court last year.
Medford argued the infrastructure was needed because the project would increase traffic. But the judge said the cost to KOGAP, which the company estimated at around $700,000, was too high for the development’s potential public impact.
The ruling relies on the Nollan-Dolan test, which requires land-use regulations to be proportional in cost to a development’s impact. The win is the first of its kind in the 9th Circuit, said Austin Waisanen, an attorney with the Pacific Legal Foundation representing KOGAP.
“Other communities and local governments in the 9th Circuit will certainly look to this decision,” Waisanen said. “The reason why this is an important area of law and why courts closely scrutinize the government's actions in these cases is because Americans have a right to receive just compensation when the government takes property from them.”
“The government cannot use the permit process to pressure private businesses or individuals to subsidize public infrastructure,” said Brian Hodges with Pacific Legal Foundation in a statement.
In his opinion, Judge Mark Clarke said the city showed its development requirement had a direct connection to public interests.
“But the City failed to provide evidence at the summary judgment stage that it had measured the alleged traffic distribution impacts of the new proposal,” Clarke wrote.
Medford’s attorney did not immediately respond to a request for comment.
The ruling means Medford must either fund the infrastructure for KOGAP’s project or drop the requirement. The city may still be liable for damages to KOGAP for the unconstitutional demand, Waisanen said.
KOGAP plans to turn its former sawmill site into a 150-lot residential and commercial subdivision.
