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Shipman & Goodwin's Land Use Team Prevails in Minnesota Case

February 8, 2009

Shipman & Goodwin attorneys Tim Hollister and Brooke Havard, representing Rochester, Minnesota developer Franklin Kottschade and the National Association of Home Builders, scored a victory today in the Minnesota Court of Appeals on an important procedural issue in federal takings law. In summary, in 2000, Mr. Kottschade applied to the City of Rochester for approval of a 126 unit residential condominium. The City approved the application but imposed nine conditions, including that Kottschade dedicate a portion of his land to the public to support the widening of a regional highway, and that he pay a so-called "impact fee" for the road upgrade based on his property's frontage on the highway, rather than the traffic impact of his proposal, which did not require any upgrade to the existing road. The combined impact of the land dedication and the impact fee made it impossible for Kottaschade to proceed with the development, and he sued in federal court for an unconstitutional taking. In 2003 the federal court dismissed the case, holding that he should have filed in state court. From 2003 - 2006, Kottschade continued to contest the City's and State's road widening plan, and then in December 2006 refiled his taking claim in state court. The City then claimed that his state court claim was barred by the six year statute of limitations, because the limitation period started to run when the City first imposed the conditions in July 2000, not when Kottschade's application for a variance of those conditions was denied in January 2001. The city also claimed that, while Kottschade was pursuing his case in federal court during 2001-03, his year-2000 conditional permit had expired. A Minnesota trial court in 2007 agreed with the City, dismissing Kottschade's claim. Today, the Minnesota Court of Appeals reversed, holding that Kottschade's refiling in state court in 2006 was timely, and that his permit never expired because the City had never issued him an approval he could build. The Court of Appeals remanded to the trial court for a trial on the merits of Kottschade's federal Fifth Amendment Takings Clause claim that the 2000 permit conditions were unconstitutional.

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