Claim filed as Civil Rights violation warrants jury determination of "fact-bound" issues

City of Monterey v. Del Monte Dunes at Monterey, Ltd., 119 S.Ct. 1624 (1999).
 

John A. Duff, J.D., LL.M.
 

On May 24, the United States Supreme Court ruled that, under certain circumstances, a jury may determine that a governmental rejection of a land use application may constitute a 'taking' of private property.1 The decision marks the first time the Supreme Court has endorsed the propriety of having a jury determine such an issue. In a case hinging on the Fifth Amendment's 'takings clause,' and the Seventh Amendment's right to a jury trial, the Court ruled that a takings claim filed in the form of a civil rights violation could warrant the use of a jury in determining the "fact-bound" elements of the case.
 

Background

In 1981, Del Monte Dunes, Ltd., applied for a permit to construct 344 residential units on a 37.6 acre parcel of ocean-front property it owned in Monterey, California. The property was residentially zoned for up to 29 housing units per acre. The permit application, as a result, requested authorization to develop the property at approximately one-third of its zoned capacity. The city rejected the application, noting that a development proposal for fewer units would be looked upon favorably. Each time Del Monte reduced its development proposal, the city denied it, citing land use concerns and indicating that a less ambitious proposal might merit approval.

After numerous revisions and denials, Del Monte's final application proposed 190 residential units and dedicated more than half of the property to open space, public beach access, and conservation of declining buckwheat habitat in the area. The final plan was assessed favorably by the city's architectural review committee and the planning commission's professional staff. The commission nonetheless rejected the staff recommendation and denied the development plan. The city council upheld the commission's application denial noting general findings regarding inadequacy of access and concerns about harm to the environment. Del Monte determined that development of the area would not be permitted by the city under any circumstances and filed suit against the city for a regulatory taking under the Fifth Amendment and a denial of its Due Process and Equal Protection rights secured by the Civil Rights Act of 1964 (42 U.S.C. § 1983).
 

Trial by Jury

Del Monte contended that by continually rejecting its permit applications and by refusing to pay compensation for its economic losses, the city's actions amounted to constitutional due process and equal protection violations under § 1983 and, as such, warranted a jury determination. The trial court read § 1983 in conjunction with the U.S. Constitution's Seventh Amendment jury trial provision and ruled that Del Monte had a right to a jury trial regarding factual determinations in the case. The district court instructed the jury on the standard of determining whether a 'regulatory taking' had occurred noting that the jury should find in favor of Del Monte Dunes, if it were found "either that Del Monte Dunes had been denied all economically viable use of its property or that 'the city's decision to reject the plaintiff's 190 unit development proposal did not substantially advance a legitimate public purpose.'"2 The jury found in favor of Del Monte on the takings claim as well as the Equal Protection and Due Process claims.
 

The City's Appeal

The city appealed the decision to the Ninth Circuit Court of Appeals. In affirming the district court's decision, the Ninth Circuit supported its reasoning by citing the Supreme Court's use of a "rough proportionality" test from a 1994 'takings' case. In Dolan v. Tigard, the Supreme Court ruled that in determining the extent to which a government authority might require exactions - dedications of private land for public use - in exchange for allowing a particular type of development, the government must show that the exactions sought are roughly proportional to furthering a legitimate public purpose.3

In affirming the trial court's decision, the Ninth Circuit held that the district court had properly allowed a jury determination, and that regarding the 'takings' test, "[e]ven if the City [of Monterey] had a legitimate interest in denying Del Monte's development application, its action must be "roughly proportional" to furthering that interest."4 The City of Monterey appealed the decision to the United States Supreme Court.
 

High Court Rules

In reviewing the Del Monte case, the Supreme Court addressed the city's argument that a jury determination was improper because the claim for compensation was based on a regulatory taking rather than a denial of civil rights and that takings claims are ordinarily determined by a judge. A majority of the Court reasoned that while § 1983 does not automatically confer a right to a jury trial, and takings claims historically did not warrant a jury trial, the Del Monte question "was essentially fact-bound in nature" and therefore properly submitted to the jury..5
 

Application of 'Rough Proportionality' test

While the Supreme Court affirmed the Ninth Circuit's jury determination ruling with a 6-3 majority, the justices were unanimous in addressing the Ninth Circuit's improper reliance on the "rough proportionality" standard espoused in Dolan. While the Ninth Circuit noted that it would be appropriate to apply the "rough proportionality" test, the Supreme Court ruled that the application of that standard was not pertinent in the Del Monte case because the city did not require exactions in exchange for the permit issuance. "We have not extended the rough-proportionality test of Dolan beyond the special context of exactions - land use decisions conditioning approval of development on the dedication of property to public use," ruled the Court.6
 

Conclusion

In its most recent takings case, the Supreme Court has put lower courts on notice that the door widened in takings analysis by the rough proportionality test espoused in Dolan was not opened for all takings cases as a general rule. The Court's explicit and unanimous ruling on that aspect of the case highlights the boundaries within which regulatory takings cases will be adjudicated in the future.
 

ENDNOTES

1. A brief history of Fifth Amendment 'takings' law as it has developed regarding coastal property appears on this page, see Taking Note.

2. City of Monterey v. Del Monte Dunes at Monterey, Ltd., 119 S.Ct. 1624, 1634 (1999) (quoting trial court's jury instructions).

3. Dolan v. Tigard, 512 U.S. 374 (1994).

4. Del Monte Dunes at Monterey, Ltd., v. City of Monterey, 95 F.3d 1422, 1430 (quoting Dolan v. City of Tigard, 512 U.S. at 391).

5. City of Monterey, 119 S.Ct. at 1644 (citing Ninth Circuit's reasoning on the matter, 95 F.3d at 1340).

6. Id. at 1635.
 
 

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