Shapell Industries v. Governing Board of Milpitas Unified School District

This case involved a challenge by Shapell to school facilities fee ordinances enacted by Milpitas? school district as allowed by Government Code §§ 53080, 65995 and the amount of refund due, if any, under Government Code § 66020. Shapell won at trial in Santa Clara County Superior Court in 1989 on the grounds that both the residential and commercial/industrial fee ordinances were entirely invalid, based on flaws in the analysis of the district?s fee justification study. The trial court also held that the refund statute entitled them to recover all of the fees paid.

The 6th District Court of Appeal reversed the judgment, upheld 90% of the residential fees and all of the commercial/industrial fees imposed. The Court found flaws in the district?s fee justification study, but also held the study contained sufficient evidence to justify imposing 90% of the residential fees actually imposed. The Court also held, based on the legislative history of Government Code § 66020(e), that the developer only recovers the portion of the fee that exceeds the amount the district can properly impose.