Legal Report, April 2019

General Counsel, Jennifer G. Ashton

1.         Hillcrest Prop., LLP v. Pasco Cnty., 915 F.3d 1292, 2019 U.S. App. LEXIS 4356, 27 Fla. L. Weekly Fed. C 1688 (11th Cir. 2019). Land Use, and Substantive Due Process Rights.
Hillcrest Property, LLP (“Hillcrest”) owns 16.5 acres of undeveloped, commercial land in Pasco County (“County”). In December 2006, Hillcrest applied to develop the property with an 83,000 sq. ft. retail shopping center and three commercial spaces. In February 2007, the County notified them that pursuant to Ordinance 11-15, it would require the dedication of 50 feet for the future development of State Road 52 ("Road"). In May 2007, the County further advised that a proposed shift in the Road by the Florida Department of Transportation would require dedication of an additional 90 feet, for a total of 140 feet. The County was to compensate Hillcrest for the additional 90 feet. In July 2007, Hillcrest submitted a different proposed site plan that had no improvement inside the 140-foot area. Hillcrest reserved its rights to object to the dedication of any land without compensation. The County approved the preliminary site plan that August. In June 2008, after having denied several construction plans for the site, the County approved a construction plan but conditioned approval upon reaching an agreement on the dedication. Hillcrest and the County continued to disagree on the dedication and the compensation amount. In January 2010, the County told Hillcrest that it would not compensate Hillcrest for the amount that it wanted for the dedication.

In 2010, Hillcrest filed suit in federal court alleging violations of state and federal law, which included a takings claim and a substantive due process claim. The crux of Hillcrest's substantive-due-process claim was that the County required the dedication "without . . . having first made an individualized determination that the exaction was reasonably related both in nature and extent to the traffic impacts of the proposed development," "without . . . having clearly demonstrated a reasonable connection or rational nexus between the need to 4-lane [the Road] and the traffic generated by the development and between the exaction and the benefits accruing to the development,".
At the end of 2017, the District Court granted summary judgment for Hillcrest.  The County appealed.  The 11th Circuit Court of Appeals addressed whether a litigant has a substantive-due-process claim under the Due Process Clause of the Fourteenth Amendment when the alleged conduct is the unlawful application of a land-use ordinance. The Court answered with a resounding "no", reinforcing its previous holding in McKinney v. Pate, 20 F.3d 1550 (11th Cir. 1994). Here, the Court again held that executive action never gives rise to a substantive-due-process claim unless it infringes on a fundamental right. Hillcrest does not allege denial of any fundamental right. Fundamental rights in the constitutional sense do not include "state-created rights.” Land use rights, as property rights generally, are state-created rights and therefore not fundamental rights which give rise to a substantive due-process claim.

2.         AGO 2019-04 (March 27, 2019). Local business tax; E-Verify.
The Florida Attorney General (“AG”) addressed whether a county may enact an ordinance conditioning the issuance and renewal of a business tax receipt on compliance with the federal E-Verify program.  E-Verify is a voluntary federal program originally authorized by the Illegal Immigrant Reform and Immigrant Responsibility Act of 1996, and administered by the Department of Homeland Security, Social Security Administration, and United States Citizenship and Immigration Services. The AG noted that local governments do not have the inherent power to tax, but derive such power from the state by enacted law. When a statute authorizes a tax, it may be levied, assessed, and collected only in the express manner provided. The Legislature has specified the conditions under which a county may levy and collect a business tax. Those conditions do not include compliance with the E-Verify program. There is no provision within Chapter 205, F.S. that authorizes a county to require compliance with the E-Verify program before it will issue a business tax receipt to a business that has paid the tax. The Legislature has the “exclusive prerogative” to regulate the levy and collection of the local business tax via chapter 205, and that local governments are prohibited from modifying existing regulation. Therefore, the AG concluded that a county may not enact an ordinance requiring persons to comply with E-Verify as a condition of obtaining a business tax receipt.