Sixth Circuit Rules That Tree Ordinance Is a Taking

The Township of Canton, Michigan, like many local governments, requires property owners who remove trees of a certain size to either replace those trees or pay into a fund for the planting of new trees. The Sixth Circuit recently ruled that this requirement imposed an unconstitutional exaction, which is a kind of regulatory taking. This case could have far-ranging effects both on the application of tree ordinances and the imposition of permitting conditions generally.

In the case, the property owner removed more than 100 trees that had fallen and clogged a drainage ditch. The owner did not obtain a permit for the removal, which would not have been issued unless the owner agreed to replace the removed trees or pay into the Township's fund. The Township issued a notice of violation of its tree ordinance, and required the owner to either replace the trees or pay $47,898 to plant trees elsewhere. The owner filed a lawsuit in federal district court alleging that the Township's tree ordinance was a per se physical taking and an exaction. The Sixth Circuit held that the requirement to replace trees was an exaction as applied to the owner. Because it found that there was an exaction, the court did not rule on the owner's per se physical taking claim.

As the Sixth Circuit explained, the exaction doctrine "protects the Fifth Amendment right to just compensation when the government demands property in exchange for land-use permits." (internal quotations omitted). Governments may impose conditions on the issuance of permits that "mitigate the impacts of the proposed development," but there must be "an essential nexus and rough proportionality" between the conditions imposed and the impacts mitigated. 

The court found that as applied, the tree ordinance was not roughly proportional because the Township "failed to carry its burden to show that it made the required individualized determination." The Sixth Circuit found that the Township "assume[d] that its mitigation requirements are appropriate" without providing any evidence. It did not, "for example, [show] that [the owner's] tree removal effects a certain level of environmental degradation on the surrounding area." 

The court's ruling leads to several questions. For example, do townships need to make an individualized determination for each application of their tree ordinance to avoid an exaction? Even if most applications of tree ordinances are not exactions, do the ordinances still amount to a per se physical taking?

The Ballard Spahr Eminent Domain and Land Use teams will continue to monitor how this case affects takings claims and the ways in which permit conditions are imposed. If you have any questions about exactions or the imposition of conditions on a local permit, we are happy to help. 

The case is F.P. Development, LLC v. Charter Township of Canton, 2021 FED App. 2040P, ____ F.4th ____ (6th Cir. Oct. 13, 2021), and a copy of the opinion can be found here.