Key Takeaways
- Gunster represented a developer that sued a Florida municipality for its refusal to issue a building permit unless the developer gave up land without compensation—a demand that violated the Fifth Amendment.
- A federal jury awarded the developer more than $400,000 in project delay damages under the Civil Rights Act.
- This precedent-setting case establishes that developers who refuse unlawful permitting demands can now recover consequential damages and hold governments financially accountable for their overreach.
The Case
A Gunster trial team obtained a federal jury verdict awarding a single-family homebuilder, Megladon, more than $400,000 in project delay damages. The Village of Pinecrest had refused to issue a building permit unless Megladon gave in to the Village's demand that Megladon “dedicate” land to the Village without compensation in violation of the Fifth Amendment, and that refusal delayed Megladon’s project by several years.
The Verdict
The developer chose to stand on its constitutional rights, and the Village penalized that decision by withholding a permit and then moving a straightforward state court challenge to federal court to increase the time and expense of the developer’s legal challenge. That’s when Gunster shareholder and veteran property rights litigator Amy Brigham Boulris recommended countering the Village’s tactics with a claim for project delay damages under the federal Civil Rights Act. In a collaborative effort between Gunster’s Real Estate and Business Litigation practices, Boulris teamed with seasoned high-stakes litigator Timothy J. McGinn to co-present the case. Together, they defended the rights of Gunster’s developer client, which will now keep all its land, build its project as originally proposed, and receive compensation for the economic impacts of the delay caused by the Village’s unconstitutional coercive tactics.
The Legal Strategy
Governments have long exploited the economic pressure of project delay with little accountability for the true costs to landowners. When challenged, they have typically argued—as the Village did here—that they had no monetary liability or that liability was limited to the isolated value of the land or money originally sought, as might be the case in a regulatory takings claim. Team Gunster successfully advocated that the true nature of these disputes are "keepings" cases in which a citizen is punished for refusing to submit to unlawful government coercion by having essential permits withheld and that the government is liable for the financial consequences of that coercive punishment, not merely the value of the land it failed to pry away from the property owner. Because the Civil Rights Act exists to deter constitutional violations, Gunster chose it as the legal vehicle for this paradigm shift, arguing that landowners whose Fifth Amendment rights are violated deserve the same economic damages available to any other civil rights plaintiff. Both a federal judge and jury agreed.
The Implications—What This Means for Developers
The case has significant implications for property owners and developers across the country because of its precedent-setting rulings on the legal remedies for unconstitutional conditioning of land development permits. While several Supreme Court decisions had condemned excessive permitting exactions as a form of extortion, the legal remedies for landowners who refuse to yield to this type of extortion were not as well established. In the absence of clear financial consequences, many governments have been undeterred by the Supreme Court’s rulings and have continued to pursue improper exactions. Gunster set out to get a permit for a client but ended up pressing the test case sorely needed to level the playing field in permit negotiations. This precedent should discourage overreach, as regulators now face potential civil rights liability for demanding exactions unrelated or disproportionate to actual project impacts. But when a landowner's "right to keep" must be vindicated, Gunster is committed to standing in defense of their civil rights.
Amy Brigham Boulris is a veteran property rights litigator nationally recognized for her exclusive representation of landowners in eminent domain, takings, development exactions, Harris Act, and civil rights contexts. She is AV Preeminent rated by Martindale-Hubbell in Civil Rights Law, a member of the American Law Institute, an honorary member of the Owners Counsel of America, and a member of the Board of Trustees of the Pacific Legal Foundation.
Timothy J. McGinn is a seasoned high-stakes litigator with experience across a number of complex civil practice areas. He has represented clients in courtrooms across the country—from Florida to Alaska.
