Petitioners Brief — Monterey v. Del Monte Dunes at Monterey, Ltd.

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No. 97-1235

OFFICE OF THE CLERK

In The SUPREME COURT, U.S.

Supreme Court of the Unitéd-States'- -

October Term, 1997

CITY OF MONTEREY,

Petitioner,

DEL MONTE DUNES AT MONTEREY, LTD. AND

MONTEREY-DEL MONTE DUNES CORPORATION,

Respondents.

On Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

BRIEF FOR THE PETITIONER

RicHarp E.V. Harris

Georce A. YUHAs*

CATHERINE A. ROGERS

Orrick, HERRINGTON

& Surcurre LLP

Old Federal Reserve Bank

Building

400 Sansome Street

San Francisco, California 94111

Telephone: (415) 392-1122

Counsel for Petitioner

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

Whether, in a regulatory takings action challenging a

local land use decision, 42 U.S.C. § 1983 requires that

all inverse condemnation liability issues be deter-

mined by the court rather than by a jury.

Whether liability for a regulatory taking can be based

upon a standard that allows a jury or court to reweigh

evidence concerning the reasonableness of the public

entity’s land use decision.

Whether the rough proportionality standard estab-

lished by this Court in Dolan v. City of Tigard, 512 U.S.

374 (1994), in the context of property exactions was

properly applied by the Ninth Circuit to an inverse

condemnation claim based upon a regulatory denial.

TABLE OF CONTENTS

Page

Es cc rkdcedved Vucdnedewesscocvececs 1

i Ces ae kbs Hosa Ken sbe veciesbeeesees 1

CONSTITUTIONAL PROVISIONS, STATUTES AND

REGULATIONS INVOLVED .............6600005: 1

ee a el cdewabe cowcccesetecs 2

Be BU IE BUN. gc ccc ewes ceccccocesccceyen 4

2. The 1984 Conditional Site Plan Approval....... 5

3. The City’s 1986 Denial of the Proposed Develop-

PEE SNMRSMe Dhow Eee hep ebereverecdewaccosccccees 7

4. The Allocation of Decision-Making Responsibility

Cheb an bbeh bSo> Cede weers td cterecedacesese 10

5. The Ninth Circuit’s Reasonableness and Rough

Proportionality Standard of Liability ........... 12

SUMMARY OF ARGUMENT..............06000008. 13

eed. CCC haeh ine andeeedacdcccecs 16

I. THERE IS NO RIGHT TO JURY DETERMINA-

TION OF INVERSE CONDEMNATION LIA-

PE shred bibs Velvteegouseseseecerese 17

A. Section 1983 Does Not Alter the Longstand-

ne Practice That Claims Based Upon the

Fifth Amendment Are Not Actions Triable

by Jury at Common Law ................. 19

1. Section 1983 Neither Broadens Nor Nar-

rows the Seventh Amendment Right to

Jury Trial Applicable to the Underlying

Federal Claim That Gives Rise to a Sec-

a oweneeete

TABLE OF CONTENTS -—- Continued

Page

2. Inverse Condemnation Claims Are

Analogous to Eminent Domain Proceed-

ings, Which Were Not Triable by Jury at

CS GOP cc nectsectneeeidedveus' 21

3. The Ninth Circuit's Analysis Miscon-

ceives the Constitutional Origins and

Nature of Regulatory Takings Claims.. 25

B. The Nature of The Liability Issues That Must

Be Resolved in a Regulatory Takings Case Pro-

vides a Separate Reason Why Those Issues Are

Not Properly Decided by a Jury............ 26

1. Courts, and Not Juries, Must Decide the

Predominantly Legal Issue of Whether a

Local Regulation or Land Use Decision

Substantially Advances a Legitimate

PUES SONNOED os ckcscciccscocesesceses 27

2. The “Economically Viable Use” Test of

Inverse Condemnation Liability Is Prop-

erly Decided by the Court Rather Than

GD FIs 0c 0 00 ce ees besces snenseces see 32

THE NINTH CIRCUIT’S DECISION THAT A

TRIER OF FACT CAN DETERMINE INVERSE

CONDEMNATION LIABILITY BY REWEIGH-

ING CONFLICTING EVIDENCE

FUNDAMENTALLY ALTERS THE ROLE OF

THE CONSTITUTION IN THE REVIEW OF

LOCAL LAND USE POLICIES AND DECI-

PEE v 6a Seacwantcccescsbectedhebecendevesess 37

THE NINTH CIRCUIT'S DECISION CONSTI-

TUTES AN ERRONEOUS AND UNWAR-

RANTED EXPANSION OF THE ROUGH

PROPORTIONALITY TEST ADOPTFD BY THIS

COURT IN DOLAN V. CITY OF TIGARD...... 43

CEU ISS oh bien s dele cbovdseddictedetcawedsace 50

TABLE OF AUTHORITIES

Page

Feperat Cases

Agins v. City of Tiburon, 447 U.S. 255 (1980)

poscedscéanashéuanseeeseheranes 17, 25, 28, 30, 37, 38

Albright v. Oliver, 510 U.S. 266 (1994) ............4.. 20

Amburgey v. Cassady, 507 F.2d 728 (6th Cir. 1974) .... 21

Armour & Co., Inc. v. Inver Grove Heights, 2 F.3d 276

Re 0 Pr er eee 33

Atlas Roofing Co. v. Occupational Safety Comm'n,

GED WB. GER GARG eo cv ccddecchendbcdeceacuvsvunanye 22

Bateson v. Geisse, 857 F.2d 1300 (9th Cir. 1988)....... 30

Bauman v. Ross, 167 U.S. 548 (1897) ................. 22

Beatty v. United States, 203 F. 620 (4th Cir. 1913),

writ of error dismissed and cert. denied, 232 US.

GED GE o hh oine cecanécngnaen ast Wtedd<edevneece nde 25

Bickerstaff Clay Products v. Harris County, Georgia,

GD TO BERS CRO Ge Beis occ ccc cccccccevcceses 30

Burt v. Abel, 585 F.2d 613 (4th Cir. 1978)............ 21

Chicago B & Q R. Co. v. Chicago, 166 U.S. 226 (1897) .... 23

Clajon Production Corp. v. Petera, 70 F.3d 1566 (10th

COR GOED cccdiccndicsncocedsc cababebebebabdsdebs 28, 45

Concrete Pipe Prods. of Cal., Inc. v. Construction

Laborers Pension Trust for S. Cal., 508 U.S. 602

GRIST «cin s cuvdbentecVedecduvdewesscah hades quatene 35

Connelly v. Pension Benefit Guaranty Corp., 475 U.S.

SED GOOD wane vi danke CiGSs ce ncawepassi luvin cesee. 33

Corn v. City of Lauderdale Lakes, 95 F.3d 1066 (11th

Cir.), cert. denied, 118 S.Ct. 441 (1996)............. 33

TABLE OF AUTHORITIES - Continued

Page

Curtis v. Loether, 415 U.S. 189 (1974) ............. 19, 21

Del Monte Dunes v. City of Monterey, 920 F.2d 1496

SR COOP antditncvecadsnwenepcbinsecdcucves 24

Dolan v. City of Tigard, 512 U.S. 374 (1994)...... passim

Dolence v. Flynn, 628 F.2d 1280 (10th Cir. 1980)...... 21

Duquesne Light Co. v. Barasch, 488 U.S. 299 (1989)... 36, 37

Esposito v. South Carolina Coastal Council, 939 F.2d

Be ee SS WE neh esc cncéccusevstocectntans 28, 38

Euclid v. Amber Realty Co., 272 U.S. 365 (1926)....... 38

First English Evangelical Lutheran Church v. County

of Los Angeles, 482 U.S. 304 (1987) ................ 23

Garneau v. City of Seattle, _. F.3d __, 1998 W.L.

ee SE ES ED nbd ccusy cus votecviscocectec 46

Goldblatt v. Hempstead, 369 U.S. 590 (1962)........ 29, 34

Golden Pacific Bancorp v. United States, 15 F.3d 1066

(Fed. Cir.), cert. denied, 513 U.S. 961 (1994)........ 35

Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989) .... 22

Greenbriar Ltd. v. City of Alabaster, 881 F.2d 1570

SN Re DOs 36 4 cde vadenbosboncecasesdtacesscés 30

Hadacheck v. Sebastian, 239 U.S. 394 (1915)........... 34

Hurley v. Kincaid, 285 U.S. 95 (1932)............. .. 23

Jacobs v. United States, 290 U.S. 13 (1933)............ 23

Kirby Forest Indus., Inc. v. United States, 467 U.S. 1

SED wecesccucdscocsncceegsasncesegeseudsccodsiee 33

TABLE OF AUTHORITIES - Continued

Page

Loretto v. Teleprompter Manhattan CATV Corp., 458

. GRD BPG oc ccvcccnnssvcnences ceacsvstbchoust 46

Lorillard v. Pons, 434 U.S. 575 (1978) ................ 19

Lucas v. South Carolina Coastal Council, 505 U.S.

DGD CORED ov osnscctdscunnshs seveasettacews 32, 35, 36

MacLeod vy. Santa Clara County, 749 F.2d 541 (9th

GR TD vcaccccnccsccepchckdnvdescenadbiek subse 34

Markman v. Westview Instruments, Inc., 517 U.S. 370

(i BPIOTOTITLivT Tritt et 21, 27, 30, 31

McDougal v. County of Imperial, 942 F.2d 668 (9th

Ge, BOOED 5 vcctcnshsbéendssntecendends phases obasbe 30

Midnight Session, Ltd. v. City of Philadelphia, 945

fF gf eG tr re ee 30

Miller v. Fenton, 474 U.S. 104 (1985)................. 31

Monell v. Department of Social Services, 436 U.S. 658

GRIGG occ cvavicvccecndepsbansecss 6 babs eunsede diet 20

Nectow v. City of Cambridge, 277 U.S. 183 (1928) ..... 30

New Port Largo, Inc. v. Monroe County, 95 F.3d 1084

Gets GE SOE cnceceacé sp cduteunessanannat 24, 30, 45

Nollan v. California Coastal Comm'n, 483 U.S. 825

GOGETD v0 ecb cccdbcochecnssgiesens capone 30, 44, 45, 46

Ornelas v. United States, 517 U.S. 690 (1996) ......... 31

Pace Resources, Inc. v. Shrewsbury Township, 808

F.2d 1023 (3rd Cir.), cert. denied, 482 U.S. 906

GROUT « occccncncncasesvcensncdesucedeactesectd Gein 35

Vii

TABLE OF AUTHORITIES - Continued

Page

Pearson vy. City of Grand Blanc, 961 F.2d 1211 (6th

PAGS IEE: LR ey ME ey UE 30, 39

Penn Central Transp. Co. » City of New York, 438

TD NE hci cc ccc ccccdadaduababcububaket 29, 33

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922) .... 27

Ruckelshaus v. Monsanto Co., 467 U.S. 985 (1984)..... 35

Tull v. United States, 481 U.S. 417 (1987).......... 19, 36

United States v. 21.54 Acres of Land, 491 F.2d 301

Ss Th es i eiicnd bbc edede vest sbdesbubioba ves 26

United States v. Keller, _. F.3d __, 1998 W.L.

Ss os on ou 6 ons bbanes Bin enuane 26

United States v. Reynolds, 397 U.S. 14 (1970) ...... 22, 23

Village of Belle Terre v. Borass, 416 U.S. 1 (1973)...... 39

Village of Euclid v. Ambler Realty Co., 272 U.S. 365

GE odd Chal bounbue coceactksbscoons 28, 30, 34, 37, 38

Webbs Fabulous Pharmacies, Inc. v. Beckwith, 449

ee Goi ce dk. ace ke hive aouhkvsetddusdes 35

William C. Haas & Co. v. City & County of San

Francisco, 605 F.2d 1117 (9th Cir. 1979)............ 34

Williamson County Regional Planning Comm'n v.

Hamilton Bank, 473 U.S. 172 (1985)................ 16

Zahn v. Board of Public Works, 274 U.S. 325 (1928) .... 39

Vill

TABLE OF AUTHORITIES - Continued

Page

State Cases

City of Northglenn v. Grynberg, 846 P.2d 175 (Colo.),

cert. denied, 510 U.S. 815 (1993) ..... 2... 6.0.0 ee, 23

Hensler v. City of Glendale, 8 Cal. 4th 1 (1994), cert.

Gonted, 115 S.Cv. BITS CADIS) .. nc ccccccccscccces 23, 24

Kavanan v. Santa Monica Rent Control Bd., 16 Cal.

BRE are Pree > fre Pee: eee 36

Rueth v. State, 596 P.2d 75 (Idaho 1978) ............. 23

STATUTES

BD WA. GB Te 600 cee siced civ sesees Satestdicasne 1

GB UGK. B Wee coe dekvcvsseccct 2, 13, 19, 20, 21, 37

MIsceLLANEOUS

1A Nichols, The Law of Eminent Domain (3rd ed. &

BOTS BED) . vive ccc csvccvoctsececiveccbedessneuss 23

Note, Federal Condemnation Proceedings and the Sev-

enth Amendment, 41 Harv. L. Rev. 29 (1927) ....... 23

OPINION BELOW

The opinion of the court of appeals is reported at 95

F.3d 1422 (9th Cir. 1996). The relevant, prior orders of the

district court are unreported but are included in the

appendix to the Petition For A Writ of Certiorari at Pet.

App. 30-43.

JURISDICTION

The court of appeals filed its initial opinion on Sep-

tember 13, 1996 (95 F.3d 1422). The court of appeals

initially granted rehearing on June 26, 1997 (Pet. App. 44)

and subsequently decided on October 28, 1997 not to

amend its opinion. (Pet. App. 46). The Petition For A Writ

of Certiorari was filed on January 26, 1998 and was

granted on March 30, 1998. The jurisdiction of the

Supreme Court is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS,

STATUTES AND REGULATIONS INVOLVED

1. The Fourteenth Amendment to the United States Con-

stitution, Section 1, which provides in pertinent part:

No state shall make or enforce any law which

shall abridge the privileges or immunities of

citizens of the United States; nor shall any State

deprive any person of life, liberty or property

without due process of law; nor deny to any

person within its jurisdiction the equal protec-

tion of the laws.

2. The Fifth Amendment to the United States Constitu-

tion, which provides in pertinent part:

No person shall be . . . deprived of life, liberty,

or property, without due process of law; nor

shall private property be taken for public use,

without just compensation.

3. The Seventh Amendment to the United States Consti-

tution, which provides:

In Suits at common law, where the value in

controversy shall exceed twenty dollars, the

right of trial by jury shall be preserved, and no

fact trial by a jury, shall be otherwise re-exam-

ined in any Court of the United States, than

according to the rules of the common law.

4. 42 U.S.C. § 1983, which provides in pertinent part:

Every person who, under color of any statute,

ordinance, regulation, custom or usage of any

state or territory or the District of Columbia,

subjects or causes to be subjected, any citizen of

the United States or other person within the

jurisdiction thereof to the deprivation of any

rights, privileges or immunities secured by the

Constitution and laws, shall be liable to the

party injured in an action at law, suit in equity,

or other proper proceeding for redress.

STATEMENT

This case involves a 37-acre parcel of undeveloped

property located in the coastal area of the City of Mon-

terey (“City”) in California. Faced with conflicting infor-

mation concerning environmental impacts and other

issues, the City denied Del Monte Dunes’ request to build

a 190-unit condominium development in an environmen-

tally sensitive beachfront area. Federal and state reguia-

tory agencies, City staff and others participating in the

public hearing process advised the City Council that the

developer had not yet formulated a plan that would

adequately mitigate likely impacts of the proposed devel-

opment. While Del Monte Dunes presented contrary

information, the City Council concluded that Del Monte

Dunes had not yet sufficiently addressed environmental

problems and other concerns. Consequently, the City

refused to approve the proposed project.

After considering essentially the same evidence that

was evaluated by the City Council, the trial court ruled

that the City’s decision did not violate any substantive

due process right of Del Monte Dunes. The trial court

concluded that “the City Council was not acting arbi-

trarily and irrationally in passing a resolution in June of

1986 [denying the proposed development], it was acting

for valid regulatory reasons and not attempting to fore-

stall all reasonable development.” Pet. App. 43.

The jury was allowed to decide Del Monte Dunes’

claims for inverse condemnation and denial of equal pro-

tection. With respect to the inverse condemnation claim,

the jury was allowed to determine whether the City’s

action substantially advanced a legitimate purpose; that

is, whether denial of a 190-unit condominium develop-

ment in an environmentally sensitive area bore a reason-

able relation to the City’s legitimate goal of protecting the

environment. The jury was also allowed to determine

whether the City’s decision had deprived Del Monte

Dunes of all economically viable use of the subject prop-

erty even though Del Monte Dunes had sold the property

for $4.5 million ($800,000 more than its purchase price)

while the case was pending.

Without indicating which of these theories of inverse

condemnation liability it had accepted, the jury con-

cluded that a regulatory taking had occurred and

awarded damages of $1.45 million.! The Ninth Circuit

1 The jury also found in favor of Del Monte Dunes on its

equal protection claim. Because the Ninth Circuit affirmed the

judgment on the basis of the jury’s inverse condemnation

affirmed the jury’s decision, concluding that these issues

were properly triable to the jury and that there was some

evidence to support a jury determination that tne City’s

decision was either unreasonable or at least not roughly

proportional to the City’s legitimate concerns.

1. The Subject Property.

This action arises out of efforts by Del Monte Dunes

and its predecessors to build a 190-unit condominium

development on a 37-acre parcel of undeveloped coastal

property within the area known as Del Monte Beach. This

property lies within the City’s jurisdiction and, in the

first instance, is subject to the City’s planning policies

and regulations. The City’s general plan designates the

property for multi-use residential development, which

includes condominium development. Tr. Exh. 6 at pp. 30

& 34.7

The subject property and the rest of the Del Monte

Beach area also lies within the jurisdiction of the Califor-

nia Coastal Commission (“Coastal Commission”). R.

231-32. The Coastal Commission has final regulatory con-

trol over developments in coastal areas, and any pro-

posed coastal development approved by the City must

verdict, it did not reach the merits of the equal protection claim

or the City’s appeal therefrom, and that claim is not before this

Court. If the Ninth Circuit’s decision is reversed as to the

inverse condemnation claim, this case must be remanded to the

Ninth Circuit for a decision on the equal protection cause of

action.

? All trial exhibits referenced herein were introduced at

trial as joint exhibits. Prior to the commencement of trial, the

parties stipulated to the admissibility of trial exhibits numbers

1-120, 122-134, and 136-165. R. 7-9.

also comply with Coastal Commission requirements. R.

232. Included was a requirement that any development in

the Del Monte Beach area would require a detailed resto-

ration plan describing how the developer would mitigate

impacts on the existing habitat. Jt. App. 202-05; Tr. Exh.

28.

Substantial portions of the subject property consisted

of sand dunes that are among the largest and best pre-

served in any of the Central California dune systems. Tr.

Exh. 48 at p. 15. These dunes provide natural habitat for

various types of native plants and animals. Most signifi-

cantly, the dunes are home to a type of native buckwheat

which is the natural habitat of the endangered Smith’s

Blue Butterfly (“SBB”). Jt. App. 136-37. Due to the pres-

ence of this buckwheat, the SBB and other habitat, the

City, the U.S. Fish and Wildlife Service (“USFWS”), the

California Department of Fish and Game (“Cal DFG”)

and the Coastal Commission all considered the subject

property to be environmentally sensitive and important.

Jt. App. 11-18, 42-44, 84-88 and 200-01.

2. The 1984 Conditional Site Plan Approval.

Prior to late 1984, the subject property was owned by

Ponderosa Homes (“Ponderosa”). During the early 1980s,

Ponderosa pursued efforts to develop the subject prop-

erty, beginning with a proposed 344-unit development

that included a clubhouse, swimming pool, and tennis

courts. R. 259-60. Gradually, Ponderosa scaled back its

proposal. By mid-1984, Ponderosa had redesigned its pro-

posal to consist of a 190-unit condominium development.

In September of 1984, Ponderosa sought approval of

a site plan for this proposed 190-unit development. Jt.

App. 57. The site plan identified the number of units, the

proposed layout of those units and designated access

routes. Because the proposed development would affect

sensitive dune habitat, Ponderosa prepared a preliminary

habitat restoration plan that described measures to miti-

gate the environmental damage likely to result from the

proposed development. Jt. App. 21-31. Ponderosa circu-

lated this preliminary restoration plan to the City, Cal

DFG, USFWS and others.

The City actively sought input from USFWS in light

of its recognized expertise in such matters. R. 271-72.

When the time came for the City Council to make a

decision on the proposed site plan in September of 1984,

however, USFWS responded that they needed more

information to evaluate the adequacy of the preliminary

restoration plan. Jt. App. 50-51; Tr. Exh. 84 at p. 16. Due to

the lack of definitive input regarding the preliminary

restoration plan, the City Council deferred final approval

of the proposed 190-unit development. Jt. App. 59.

Instead, the City Council granted a conditional use per-

mit (“CUP”), which conditionally approved the site plan,

and thereby expressed general acceptance of the location,

density and accessways for the project. Jt. App. 60-65. In

so doing, however, the City Council and staff made clear

that the 190-unit development would be given final

approval only if the developer could adequately mitigate

the harm to the habitat likely to be caused by the pro-

posed development. Tr. Exh. 84 at p. 16; R. 828-29. The

CUP required that the final habitat protection measures

satisfy the criteria in the local coastal plan and that those

measures be reviewed and approved by the City, the

USFWS and Cal DFG. Jt. App. 62. The CUP expressly

provided that, if it appeared that the final restoration

plan would not adequately mitigate the environmental

impacts of the proposed 190-unit development, the devel-

oper would be required to modify and resubmit its site

plan. Jt. App. 62.

3. The City’s 1986 Denial of the Proposed Develop-

ment.

In late 1984, Del Monte Dunes purchased the subject

property from Ponderosa for approximately $3.7 million.

R. 511. Thereafter, it pursued efforts to obtain final

approval for the proposed 190-unit development. Among

other things, Del Monte Dunes prepared a final restora-

tion plan and circulated that plan to the City, USFWS, Cal

DFG and others. Jt. App. 108-34; R. 281 & 838-39.

The “final” restoration plan was completed in Febru-

ary 1986. Jt. App. 108-34. In general, the final plan desig-

nated certain portions of the subject property as

preservation areas that would not be impacted by the

development. Jt. App. 119-21. Public access to these des-

ignated areas was to be restricted to protect the habitat

located therein. Jt. App. 120. Portions of the subject prop-

erty that would be altered by construction activities were

deemed “restoration” areas. Jt. App. 121. The final plan

contemplated that native plants would be removed from

these areas prior to the construction and efforts would be

made to revegetate the impacted areas after construction

was completed. Jt. App. 121-23. After these efforts to

revegetate the affected areas, the developer or its

designee would be responsible for a maintenance pro-

gram for several years. Jt. App. 128. Thereafter, Del

Monte Dunes’ final restoration plan contemplated that

maintenance responsibility for the restoration areas

would be turned over to an appropriate public agency,

such as the California Department of Parks and Recre-

ation. Jt. App. 128-29.

The City Council held public hearings on the pro-

posed development in May and June of 1986. During the

months preceding those hearings, the City’s staff actively

sought and obtained input concerning the final restora-

tion plan from a wide variety of sources. Jt. App. 78,

145-46, 150 and 287-88. Most of that input indicated that

the final plan was deficient in important respects. The

view expressed by the USFWS in a letter presented to the

City Council at the public hearings was that “the project

will destroy most, if not all, of the Smith's blue butterflies

(SBB) and their host plants on the site, and the final

restoration plan will not likely succeed in replacing lost

habitat or preserving SBB at that location.” Jt. App. 150.

The USFWS letter also referenced its own prior biological

opinion, generated the preceding year, which had con-

cluded that, although the proposed development was not

likely to jeopardize the continued existence of the SBB

species as a whole, it would destroy important buck-

wheat habitat. Jt. App. 78. USFWS also asserted in its

biological opinion that the restoration plan had “little

chance for long term success ... .” Jt. App. 78.

The Cal DFG was also critical of the final restoration

plan. The Cal DFG representative at the public hearings

asserted that it continued to have problems with the

project and that the final restoration plan had not been

approved by the Cal DFG. Jt. App. 287-88. Dr. Richard

Arnold, an outside expert on habitat protection issues,

echoed these concerns over the proposed habitat mitiga-

tion measures, as did others. R. 860-64.

—

Del Monte Dunes disagreed with the concerns

expressed over the final restoration plan. Its consultant,

Dr. Richard Bright, attended the public hearings and

opined that the final restoration plan was adequate and,

in fact, would ultimately improve the condition of the

site. Tr. Exh. 150 at pp. 20-34.

After considering all of this information, the City

Council denied Del Monte Dunes’ application for final

approval of the proposed 190-unit development. Tr. Exh.

151. Among other things, the City Council cited the inad-

equacy of the final restoration plan and the unwillingness

of state and federal agencies to express their approval of

that plan.* Tr. Exh. 150 at pp. 47-55; Tr. Exh. 151.

The City Council's denial of the proposed 190-unit

development did not modify the existing general plan or

zoning ordinances, which continued to permit residential

development on the subject property. Tr. Exh. 151. Nor

did the City Council express any views about the likeli-

hood that a revised plan or development would be

approved. Nevertheless, Del Monte Dunes made no sub-

sequent attempt to modify its development proposal in

order to meet the problems identified by the City Coun-

cil. R. 288. Because it felt that any redesign would reduce

* Another problem considered by members of the City

Council in denying the proposed development was that Del

Monte Dunes had not yet acquired the property needed to

provide the secondary access that was required for the project.

Some members of the City Council raised a concern that Del

Monte Dunes apparently expected the City to exercise its power

of eminent domain to acquire the necessary property for this

secondary accessway. Jt. App. 289-90. These council members

further expressed a reluctance to use the City’s condemnation

power to benefit a private party. Jt. App. 289-90; Tr. Exh. 150 at

pp. 47-51.

density or increase costs so as to make the project

unprofitable, Del Monte Dunes was not interested in

pursuing any such alternatives. R. 288-89. Instead, Del

Monte Dunes filed suit against the City, asserting that the

City’s decision te deny its application had denied Del

Monte Dunes iis s.ght to substantive due process and

equal protection, and had resulted in the taking of the

subject property.

During the pendency of the action, Del Monte Dunes

sold the subject property in 1991 to the State of California

for $4.5 million. R. 518-19. In arriving at the $4.5 million

dollar purchase price, the State relied upon an appraisal

that assumed that the highest and best use of the prop-

erty was for residential development with a density of up

to 150 units. R. 532-33 & 535-37.

4. The Allocation of Decision-Making Responsibility

at Trial.

Prior to the commencement of trial, the City

requested that the liability issues raised by each of Del

Monte Dunes’ claims be decided by the court rather than

the jury. Jt. App. 1, USDC Docket Entry No. 105. The

district court granted this request insofar as it was

directed at the substantive due process claim and con-

cluded that it would decide whether the City’s actions

were arbitrary and capricious. Pet. App. 33. However, the

district court ruled that all aspects of Del Monte Dunes’

equal protection and inverse condemnation claims would

be decided by the jury. Pet. App. 33-34.

The evidence at trial consisted largely of the same

conflicting evidence that the City Council had considered

in mid-1986 when it denied the proposed development.

Del Monte Dunes presented the same consultant that it

had presented to the City Council, and he expressed the

same opinion that the final habitat restoration plan was

adequate. R. 332-76. The City introduced contrary opin-

ions from Dr. Richard Arnold, who had also previously

expressed his opinions to the City Council. R. 1054-86.

The City also introduced as evidence the same USFWS

and Cal DFG evaluations considered by the City Council

in 1986, which described likely environmental impacts

and inadequacies in the final restoration plan. See, e.g., Jt.

App. 149, 150-52 and 287-88.

After hearing all of the evidence, the trial court con-

cluded that the City had not acted arbitrarily and capri-

ciously so as to violate Del Monte Dunes’ right to

substantive due process. The court noted that “exhaustive

time and energy was spent by the staff of the City and by

its planning commission in working on this develop-

ment” and that “it was all a sincere effort by those

people.” Pet. App. 41. The court went on to conclude that,

in rejecting the proposed development, the City “was not

acting arbitrary and irrationally . . . it was acting for valid

regulatory reasons and not attempting to forestall all

reasonable development.” Pet. App. 43. In arriving at this

conclusion, the district court specifically noted that the

proposed project raised significant environmental issues

that both USFWS and Cal DFG had concluded were not

adequately mitigated. Pet. App. 42.

In contrast, with respect to the claims for denial of

equal protection and for inverse condemnation, the jury

concluded that the City’s denial of the proposed 190-unit

condominium development had violated Del Monte

Dunes’ constitutional rights. Jt. App. 1, USDC Docket

Entry No. 141. Although Del Monte Dunes had sold the

subject property during the pendency of the action for

$4.5 million, the jury awarded $1.45 million in temporary

takings damages.

5. The Ninth Circuit’s Reasonableness and Rough Pro-

portionality Standard of Liability.

The Ninth Circuit ruled that all issues relating to the

inverse condemnation claim were properly submitted to

the jury for decision. Pet. App. 7-15. The court reasoned

that such inverse condemnation claims were analogous to

common law damage actions, such as actions for trespass,

which historically had been triable by jury. Pet. App. 9.

The Ninth Circuit further concluded that the underlying

issues of inverse condemnation liability were questions of

fact for the jury, rather than mixed questions of fact and

law of a type that were properly decided by the court.

Pet. App. 15.

As to the standard that should be applied to deter-

mine whether the jury’s inverse condemnation verdict

could be upheld, the Ninth Circuit applied a reasonable-

ness test. The court determined that the jury’s decision

was sustainable as long as there was evidence in the trial

record that would support a finding that the City had

acted unreasonably in concluding that the proposed pro-

ject failed to provide adequate protection for sensitive

environmental habitat or otherwise failed to satisfy the

conditions imposed by the City’s prior conditional

approval of the site plan. Pet. App. 14, 16-20.

In arriving at this reasonableness standard, the Ninth

Circuit did not simply determine whether the jury could

have properly found that the City’s action in denying the

proposed 190-unit project failed to substantially advance

the legitimate public goal of protecting the environment.

—~

—~—

~~ — ory

Instead, the court applied the standard of rough propor-

tionality based on Dolan v. City of Tigard, 512 U.S. 374

(1994), which was decided several months after the trial

in the present action. In framing the issue, the Ninth

Circuit reasoned that “[e]ven if the City had a legitimate

interest in denying Del Monte’s development application,

its action must be ‘roughly proportional’ to furthering

that interest.” Pet. App. 16. The Ninth Circuit concluded

that “[s]ignificant evidence supports Del Monte’s claim

that the City’s actions were disproportional to both the

nature and extent of the impact of the proposed develop-

ment.” Pet. App. 20.

SUMMARY OF ARGUMENT

1. The availability of a right to jury trial in inverse

condemnation claims brought under 42 U.S.C. § 1983

depends on whether such claims, and the issues encom-

passed therein, were triable by jury at common law when

the Seventh Amendment was adopted. At common law,

governments have long exercised the power to take pri-

vate property for public use by exercising their power of

eminent domain and initiating condemnation proceed-

ings. When a public entity initiates such an action, the

courts have consistently recognized that the property

owner has no right to a jury in condemnation proceed-

ings because the historical practice both in England and

in the Colonies did not include a trial by jury for govern-

mental takings.

Inverse condemnation actions are also based on

claims that a government entity has taken private prop-

erty and must pay just compensation. Like a direct con-

demnation proceeding, a claim for inverse condemnation

arises from the Fifth Amendment and seeks just compen-

sation for the “taken” property. That an inverse condem-

nation action is initiated by the property owner, rather

than by the government, does not change its essential

nature. Inverse condemnation actions are equivalent to

direct condemnation proceedings and therefore are not

triable by jury under the Seventh Amendment or Section

1983.

Separate and apart from the historical absence of a

right to jury trial in condemnation proceedings at com-

mon law, there is a second reason why juries should not

decide liability issues in inverse condemnation actions

based upon an alleged regulatory taking. By their nature,

those liability issues are not based primarily on the reso-

lution of disputed facts. Rather, those issues involve

legalistic determinations that require consideration of the

appropriate balance among competing concerns and due

deference to local land use decision-makers. One theory

of regulatory taking liability - whether a regulation sub-

stantially advances a valid public purpose - is directly

analogous to substantive due process challenges, which

have consistently been decided by courts as a matter of

law or as a mixed question of fact and law. The other

theory — whether the regulation deprives the property of

all economically viable use — also involves interwoven

factual and legal determinations that are more properly

decided by courts.

2. No less important than who should decide

inverse condemnation liability issues is the appropriate

standard to be applied in reviewing decisions of local

public entities. Recognizing that federal courts are not to

become federal land use planners, courts have consis-

tently refused to second-guess the wisdom or factual

correctness of local land use decisions. Instead, they have

accorded deference to determinations made by local leg-

islative and administrative bodies. For this reason, when

a property owner asserts a takings claim on the theory

that a land use regulation or permit denial fails to sub-

stantially advance a legitimate purpose, courts have

rejected such claims as long as there is some logical

relationship between the regulation and the goal identi-

fied by the public entity.

The Ninth Circuit's decision eliminates this deference

and fundamentally changes the standard for inverse con-

demnation liability. By treating inverse condemnation lia-

bility issues as purely factual matters and allowing a jury

to impose liability based upon its de novo determination

of the reasonableness of the City’s land use decision, the

Ninth Circuit has established a new standard that allows

de novo consideration of such decisions. This new stan-

dard creates a constitutional violation whenever a second

decision-maker (judge or jury) concludes that it would

have reached a different conclusion than the public

agency.

3. The Ninth Circuit’s affirmance of the jury’s

inverse condemnation decision must also be set aside

because that affirmance was based upon the use ot a

“rough proportionality” standard of liability that does

not apply in a regulatory takings context and that was

never presented to the jury in this case. The “rough

proportionality” standard of inverse condemnation lia-

bility was established in Dolan v. City of Tigard, 512 U.S.

374 (1994), to impose limitations on a public entity’s

ability to require the conveyance of property as a condi-

tion of development approvals. Neither the holding nor

the rationale of Dolan applies to a regulatory denial.

Unlike the situation in Dolan, a regulatory denial does not

involve a compelled conveyance of a property interest to

the public. Additionally, the rough proportionality stand-

ard cannot be applied in any meaningful way in a regula-

tory denial context. In a situation involving a required

dedication of property, the burden of a proposed devel-

opment can be compared to the property interest being

dedicated to determine the “rough proportionality” of the

dedication requirement. However, a regulatory denial

does not allow such a comparison. There is no second

side of the “rough proportionality” equation that can be

compared to the impacts or concerns which prompted

denial of the project.

ARGUMENT

During recent decades, this Court has worked to

strike an appropriate balance in defining the role of the

Constitution and federal courts in local land use decision-

making. This Court has recognized that, in the first

instance, such decisions are primarily matters of state

law. When disputes arise over such decisions, such dis-

putes must first be considered in the state courts. Will-

iamson County Regional Planning Comm'n v. Hamilton Bank,

473 U.S. 172, 186 (1985). This approach is consistent with

the historically limited role of the federal courts and

federal law in the local land use context.

On a substantive level, federal courts have accorded

substantial deference to local decision-makers in land use

decision-making that involves only regulatory impacts.

Recognizing that local officials must have discretion to

regulate and balance competing interests and policies,

courts step in only in extreme cases involving regulations

that do not substantially advance public interest or that

have confiscatory impact. See Agins v. City of Tiburon, 447

U.S. 255, 260 (1980). At the same time, the Supreme Court

has imposed a higher standard of scrutiny when local

entities attempt to extract for the public the actual right

to use property interests held by private parties. See

Dolan, 512 U.S. at 391 (requirements that property owner

dedicate interest to the public are valid only if the dedica-

tion requirement is roughly proportional to the burdens

of the proposed development).

The Ninth Circuit’s decision seriously upsets the bal-

ance between the legitimate role of the Constitution in

protecting property rights and the discretion needed by

local governments to regulate land use. Rather than hav-

ing local planning decisions evaluated by courts experi-

enced in applying deferential legal standards and

sensitive to federalism concerns, the Ninth Circuit would

have juries consider de novo the evidence considered in

the land use process and impose liability on local deci-

sion-makers if the jury disagrees with the reasonableness

of the land use decision. What’s more, the Ninth Circuit's

decision would impose liability on local public entities

for regulatory denials of proposed development projects

based on a supposed failure to meet a roughly propor-

tional standard that has no meaningful application in the

regulatory takings context. The City requests that the

Court restore the balance that the Ninth Circuit has dis-

turbed.

I. THERE IS NO RIGHT TO JURY DETERMINATION

OF INVERSE CONDEMNATION LIABILITY

ISSUES.

Courts, and not juries, have been responsible for

adjudicating claims that a private party is entitled to just

compensation for a taking of property under the Fifth

Amendment. Courts have done so because, as a matter of

historical practice, condemnation claims were not triable

by jury at common law. Courts have also done so

because, especially in the context of regulatory takings,

the nature of the liability standards make resolution of

those issues the appropriate domain of the courts.

In the face of this longstanding practice, Del Monte

Dunes sought and obtained the right to have the jury

determine whether inverse condemnation occurred and

impose liability on the City. The jury was asked to apply

the amorphous standards of inverse condemnation lia-

bility that have frequently bedeviled courts over the

years. Whereas, as a matter of law, this Court has consis-

tently upheld local land use decisions and regulations in

the face of claims that they did not substantially advance

legitimate public goals, the jury in this case was allowed

to decide, as a factual matter, that denial of a proposed

190-unit condominium in an environmentally sensitive

area did not reasonably relate to the City’s environmental

protection goals or other concerns. Whereas this Court

has rejected taking challenges, as a matter of law, even

when the regulatory action dramatically reduced the

value of property, the jury in this case was allowed to

decide, as a factual matter, that the subject property had

no economically viable use even while the City’s plan-

ning guidelines permitted residential development and

the property was sold to the State of California for $4.5

million in its “taken” condition. It was error for the Ninth

Circuit to affirm the jury’s resolution of either of these

inverse condemnation liability issues.*

A. Section 1983 Does Not Alter the Longstanding

Practice That Claims Based Upon the Fifth

Amendment Are Not Actions Triable by Jury at

Common Law.

1. Section 1983 Neither Broadens Nor Narrows

the Seventh Amendment Right to Jury Trial

Applicable to the Underlying Federal Claim

That Gives Rise to a Section 1983 Claim.

In determining the scope of the right to jury trial in

actions brought under 42 U.S.C. § 1983, the threshold

inquiry is whether the language or legislative history of

Section 1983 evidences an intent to confer a statutory

right to jury trial independent of Seventh Amendment

requirements. Tull v. United States, 481 U.S. 417, 417 n.3

(1987); Curtis v. Loether, 415 U.S. 189, 192 n.6 (1974). When

such an intent can be discerned, the right to a jury can be

decided without regard to the Seventh Amendment.

Lorillard v. Pons, 434 U.S. 575, 577 (1978).

It is well settled that 42 U.S.C. § 1983 is not a source

of substantive rights but merely provides a vehicle for

4 The jury was asked to determine inverse condemnation

liability under two theories: a) whether the City’s denial of the

project substantially advanced a legitimate public purpose; and

b) whether the City’s decision deprived the property of all

economically viable use. Because the jury’s verdict did not

indicate which of these theories formed the basis of its liability

finding, the Ninth Circuit recognized that the jury’s inverse

condemnation verdict could be upheld on appeal only if each of

these theories was properly submitted to the jury and legally

supportable. Pet. App. 10.

vindicating rights that are conferred by other federal

laws. Albright v. Oliver, 510 U.S. 266, 271 (1994). Consis-

tent with its non-substantive nature, Section 1983 makes

no independent or express provision for jury determina-

tion of claims or issues arising thereunder. Instead, Sec-

tion 1983 provides generally that an aggrieved party

deprived of any constitutional, common law or statutory

right existing under federal law may seek redress “in

an action at law, suit in equity or other proper proceed-

_ oes

The derivative nature of Section 1983 strongly sug-

gests that Congress did not intend that Section 1983

would create an independent, statutory right to jury trial

for claims arising thereunder. Unlike statutory measures

that address a single discrete subject and provide specific

remedies pertinent to that subject, Section 1983 can be

used to vindicate a wide range of underlying rights. By

providing that redress under Section 1983 could be

obtained in “an action at law, suit in equity or other

proper proceeding,” Congress did not attempt to fore-

close jury entitlement in appropriate cases “at law,” but it

also recognized that, depending upon the nature of the

underlying right, redress could be obtained in a non-jury

action for equitable relief or in some other form of pro-

ceeding.

The limited legislative history of Section 1983 is con-

sistent with the absence of any Congressional intent to

confer an independent, statutory right to jury, separate

and apart from the underlying substantive rights being

pursued. As the Court noted in Monell v. Department of

Social Services, 436 U.S. 658, 665 (1978), in discussing the

legislative history of the Civil Rights Act of 1871, “Section

1, now codified as 42 U.S.C. § 1983, was the subject of

only limited debate and was passed without amend-

ment.” To the extent that any intent was expressed in the

debates leading to the adoption of § 1983, that intent was

simply to provide remedies as broad as the protections

afforded by the Constitution. Id. at 685 (“[Section 1 is] so

simple and really [reenacts] the Constitution.”) (quoting

Senator Edmonds).

Under these circumstances, it is not possible to dis-

cern any congressional intent to grant a right to jury trial

above and beyond the right to jury trial that exists under

the Seventh Amendment. For this reason, the Ninth Cir-

cuit’s statement that Section 1983 creates a statutory right

to jury trial is wrong. While there clearly exists a right to

jury for some types of actions and issues brought under

Section 1983, the source of that right is the Seventh

Amendment, not Section 1983 itself. Cf. Curtis v. Loether,

415 U.S. 189, 194 (1974) (right to jury trial in damage

action under Title VII of the Civil Rights Act of 1968 arose

under the Seventh Amendment); see also Dolence v. Flynn,

628 F.2d 1280, 1282 (10th Cir. 1980); Burt v. Abel, 585 F.2d

613, 616 n.7 (4th Cir. 1978); Amburgey v. Cassady, 507 F.2d

728, 730 (6th Cir. 1974).

2. Inverse Condemnation Claims Are Analo-

gous to Eminent Domain Proceedings,

Which Were Not Triable by Jury at Common

Law.

In determining whether a particular claim or issue

carries with it a right to jury trial under the Seventh

Amendment, the focus is on whether that claim or issue

was triable by jury at common law or is analogous to one

that was. Markman v. Westview Instruments, Inc., 517 U.S.

370, 378 (1996). For this purpose, courts compare “the

action in question to 18th-century actions brought in the

courts of law and equity.” Granfinanciera, S.A. v. Nordberg,

492 U.S. 33, 42 (1989).

An action for inverse condemnation based upon an

alleged regulatory taking did not exist, as such, when the

Seventh Amendment was adopted. However, as the term

“inverse condemnation” would suggest, the nature of an

inverse condemnation claim is an alleged appropriation

of private property by a governmental entity for which

compensation must be paid. As such, inverse condemna-

tion proceedings are equivalent to actions by which a

government affirmatively exercised its power of eminent

domain to acquire private property.

The Court has consistently recognized that there is

no common law right to jury in eminent domain proceed-

ings.> United States v. Reynolds, 397 U.S. 14, 18 (1970) (“it

has long been settled that there is no constitutional right

to a jury in eminent domain proceedings.”); Bauman v.

Ross, 167 U.S. 548, 593 (1897) (“By the constitution of the

United States, the estimate of the just «~ pensation for

property taken for public use, under th «ght of eminent

domain, is not required to be made by a jury... .”).

Courts have reached this conclusion because the

practice both in England and in the majority of the thir-

teen colonies for the assessment of compensation where

property was taken for public use did not involve a

5 For the purposes of deciding whether a claim or issue is

properly decided by a jury, the focus is not simply whether an

analogous proceeding existed at common law, but whether that

analogous proceeding was decided by a jury at common law.

See, e.g., Atlas Roofing Co. v. Occupational Safety Comm'n, 430 U.S.

442, 458 (1977) (“Condemnation was a suit at common law but

constitutionally could be tried without a jury.”).

common law jury of twelve presided over by a judge. See

United States v. Reynolds, 397 U.S. 14, 18 (1970); Chicago B

& QR. Co. v. Chicago, 166 U.S. 226, 245 (1897); see also 1A

Nichols, The Law of Eminent Domain, § 4.105 [1] at 4-137

(3rd ed. & 1992 Supp.); Note, Federal Condemnation Pro-

ceedings and the Seventh Amendment, 41 Harv. L. Rev. 29,

32-38 (1927). Consistent with the analysis employed in

federal courts, the overwhelming majority of state courts

have also concluded that these state constitutional provi-

sions that protect or preserve the right to jury trial exis-

ting at common law do not apply to condemnation

proceedings. 1A Nichuls, The Law of Eminent Domain

§ 4.105[3] at 4-146 n.20 (3rd ed. & 1992 Supp.); see also

Hensler v. City of Glendale, 8 Cal. 4th 1, 15 (1994), cert.

denied, 115 S. Ct. 1176 (1995); Rueth v. State, 596 P.2d 75, 94

(Idaho 1978).

That inverse condemnation actions are initiated by

the property owner, rather than by the government, does

not change their nature. See First English Evangelical

Lutheran Church v. County of Los Angeles, 482 U.S. 304, 315

(1987) (“The fact that condemnation proceedings were

not instituted and that the right [to just compensation]

was asserted in suits by the owners did not change the

essential nature of the claim.”) (quoting Jacobs v. United

States, 290 U.S. 13, 16 (1933)); see also Hurley v. Kincaid,

285 U.S. 95, 104 (1932). Accordingly, for purposes of

determining whether there exists a right to jury trial for

inverse condemnation claims brought under Section 1983,

the most analogous type of proceeding is that involving

the exercise of the power of eminent domain actions. See

City of Northglenn v. Grynberg, 846 P.2d 175, 178 (Colo.),

cert. denied, 510 U.S. 815 (1993) (trial court decides inverse

condemnation liability issue; “Because an inverse con-

demnation action is based on the ‘takings’ clause of our

constitution, it is to be tried as if it were an eminent

domain proceeding.”).

This rationale has been adopted by the Eleventh Cir-

cuit in New Port Largo, Inc. v. Monroe County, 95 F.3d 1084,

1092 (11th Cir. 1996), cert. denied, 117 S. Ct. 2514 (1997). In

that case, the court held that there was no right to have a

jury decide liability issues in a regulatory takings context.

In reaching this result, the Eleventh Circuit reasoned that

it had “discovered no indication that the rule in regula-

tory takings cases differs from the general eminent

domain framework, in which issues pertaining to

whether a taking has occurred are for the court while

damage issues are the province of the jury.” Id.

The establishment of a federal right to jury trial in

inverse condemnation cases would not only be unsup-

portable by reference to common law practice, but would

also potentially conflict with the procedures employed in

many states and give rise to anomalous results. Under

ripeness principles, an aggrieved property owner is ordi-

narily required to have its regulatory takings claim adju-

dicated in state courts, at least initially.© However, in

most states, including California, courts and not juries,

are responsible for deciding whether a regulatory taking

has occurred. Hensler v. City of Glendale, 8 Cal 4th 1, 15

(1994), cert. denied, 115 S. Ct. 1176 (1995). Under these

circumstances, creating a federal right to jury determina-

tion of regulatory takings issues would be either mean-

ingless (because those issues will be conclusively decided

® Del Monte Dunes was not required to pursue remedies in

state court before filing this federal action because, at the time

of the alleged taking, it was not established that a damage

remedy was available in California courts. Del Monte Dunes v.

City of Monterey, 920 F.2d 1496, 1507 (9th Cir. 1990).

by state courts under applicable state procedures) or

disruptive to state court proceedings (if the federal right

to jury impairs the preclusive effect of the state court

adjudication).

3. The Ninth Circuit’s Analysis Misconceives

the Constitutional Origins and Nature of

Regulatory Takings Claims.

In concluding that there was a right to have juries

decide inverse condemnation claims, the Ninth Circuit

analogized regulatory takings to common law actions for

trespass and focused upon the availability of a “damage”

remedy in the form of just compensation. This analysis is

flawed.

A regulatory taking claim is not analogous to com-

mon law trespass. Whereas common law trespass

involves the wrongful physical interference with property

rights, regulatory takings do not. Regulatory takings do

not involve physical dispossession or damage to prop-

erty. Nor does a regulatory takings claim depend upon a

showing of wrongful or tortious conduct. Rather, a regu-

latory takings claim provides a means to ensure that the

impact of governmental regulation or action is not borne

disproportionately by individual property owners. Agins,

447 U.S. at 260.

Significantly, the primary authority cited by the

Ninth Circuit to support its effort to analogize regulatory

takings claims to common law trespass was Beatty v.

United States, 203 F. 620, 626 (4th Cir. 1913), writ of error

dismissed and cert. denied, 232 U.S. 463 (1914). However,

the Beatty decision is inconsistent with pronouncements

of this Court regarding the availability of jury trial in the

condemnation context and has been overruled by impli-

cation by subsequent decisions in the Fourth Circuit.

United States v. Keller, __ F.3d __, 1998 W.L. 199713 (4th

Cir. 1998); United States v. 21.54 Acres of Land, 491 F.2d

301, 304, 306-307 (4th Cir. 1973). The flaw in analogizing

inverse condemnation claims to trespass claims improp-

erly ignores both the Fifth Amendment origin of those

claims and the well-documented absence of a common

law right to have a jury resolve issues arising out of

takings by the government.

The Ninth Circuit’s emphasis on the availability of a

monetary remedy in inverse condemnation actions is also

misplaced. In some circumstances, courts rely on the

nature of the remedy in analyzing the right to jury under

the Seventh Amendment. When the right to jury depends

upon whether the cause of action can most accurately be

characterized as one “at law” rather than “in equity,” this

focus upon remedy and the availability of damages is

appropriate. However, in considering inverse condemna-

tion claims, the distinction between law and equity and

the focus on remedies are largely irrelevant. They are

irrelevant because historically condemnation matters

were not triable by jury despite the availability of a just

compensation remedy.

B. The Nature of The Liability Issues That Must

Be Resolved in a Regulatory Takings Case Pro-

vides a Separate Reason Why Those Issues Are

Not Properly Decided by a Jury.

Aside from the absence of any right to jury trial in

condemnation proceedings in general, there is a second,

independent reason why juries should not be permitted

to letermine whether a regulatory taking has occurred. It

is well settled that, in determining the proper role of

juries, the inquiry does not stop with whether the claim is

one in which the jury played a role at common law.

Rather, even assuming that the jury has some role, it is

necessary to determine whether the particular issues in

dispute are properly triable by the jury. See Markman, 517

U.S. at 376. In making this inquiry, the test is “whether

the jury must shoulder this responsibility [to decide the

issue] as necessary to preserve the substance of the common-

law right of trial by jury.” Id. at 377 (emphasis in original).

In the present case, the jury was asked to determine

two separate theories of takings liability: a) whether the

City’s action substantially advanced a legitimate purpose;

and b) whether the City’s denial of the 190 unit project

deprived the subject property of all economically viable

use. Each of these issues is predominantly legal and must

be resolved by the courts to ensure that takings standards

are applied consistently and with due regard to the lim-

ited role of the Constitution in local land use decision-

making.

1. Courts, and Not Juries, Must Decide the

Predominantly Legal Issue of Whether a

Local Regulation or Land Use Decision Sub-

stantially Advances a Legitimate Public

Purpose.

More than seventy-five years ago, the Court first

extended the Fifth Amendment beyond cases involving

direct appropriation of property or its functional equiva-

lent. See generally Pennsylvania Coal Co. v. Mahon, 260 U.S.

393 (1922). Since that time, this Court has stated on

several occasions that a regulatory taking will occur if a

governmental regulation or action does not substantially

advance a legitimate public purpose. Agins, 447 U.S. at

260. In these prior decisions, the Court has not expressly

addressed the issue of whether this component is one of

fact for resolution by juries or one of law for courts.

However, the nature of this issue and the analysis

employed by courts in the takings and analogous sub-

stantive due process contexts lead to the inescapable

conclusion that courts, and not juries, must decide this

issue.

That courts should decide whether governmental

regulations substantially advance a legitimate public goal

derives, in substantial part, from the nature of the

inquiry. A claim that a governmental regulation does not

bear the requisite relationship to a legitimate objective

does not contemplate a reweighing of the information

available to the governmental agency or a redetermina-

tion of the wisdom or correctness of that regulation.

Rather, the focus is upon the existence of facts or circum-

stances sufficient to demonstrate that the challenged

action was not arbitrary and that the governmental

agency had some basis for its action. Agins, 447 U.S. at

261; Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 395

(1926); Clajon Production Corp. v. Petera, 70 *3d 1566,

1579-1580 (10th Cir. 1995); Esposito v. South Carolina

Coastal Council, 939 F.2d 165, 169 (4th Cir. 1991), cert.

denied, 505 U.S. 1219 (1992). By its nature, this is a pre-

dominantly legal issue. Courts apply this sort of limited

review in a variety of contexts and have developed sub-

stantial institutional competence in doing so. By way of

contrast, juries are not customarily called upon to review

the factual basis for governmental regulations or deci-

sions or to apply deferential standards of review.

— Ue ee * Ae, dete 5 at tw «

In light of the deferential, predominantly legal nature

of this inquiry, it is not surprising that, in applying this

standard, courts have almost invariably resolved this

issue as one of law. In case after case, the issue of whether

a regulation substantially advanced a legitimate public

purpose has been decided by courts as a matter of law.

See, e.g., Goldblatt v. Hempstead, 369 U.S. 590, 595-96

(1962); Agins, 447 U.S. at 260-263; Penn Central Transp. Co.

v. City of New York, 438 U.S. 104, 122 (1978). In all such

cases, the courts concluded that the challenged regulation

satisfied the deferential standard of liability and could

not be said to constitute a taking on this basis. Even when

the takings issue was reviewed following a trial of some

sort, this Court has treated the issue as one of law and

accorded little or no deference to the lower court's deter-

mination. See, e.g., Penn Central Transp. Co., 438 U.S. at

130-31.

The conclusion that the “substantially advance” test

under the takings clause is a predominately legal issue

for resolution by the courts is reinforced by the courts’

treatment of analogous or equivalent substantive due

process challenges to state and local regulations.” The

component of a takings analysis which requires that a

regulatory action substantially advance a legitimate pub-

lic purpose has its origin in substantive due process

? While the Court has stated that a taking can be found if a

regulation does not substantially advance a legitimate public

purpose, it has never so held. The City concurs with arguments

made by amici that this analysis has its origin in substantive due

process precedent and principles and is indistinguishable from

a substantive due process analysis in the context of a regulatory

denial of a permit.

principles and precedents. The cases articulating and dis-

cussing this component of takings analysis frequently cite

and rely upon substantive due process standards and

precedent. See, e.g., Nollan v. California Coastal Comm'n,

483 U.S. 825, 834-35 (1987) (citing Village of Euclid v.

Ambler Realty Co., 272 U.S. 365 (1926), a due process case

using “arbitrariness” standard of review); Agins, 447 U.S.

at 260 (citing Village of Euclid, supra, and Nectow v. City of

Cambridge, 277 U.S. 183, 188 (1928), a due process case

using “arbitrary and irrational” standard of review); Bick-

erstaff Clay Products v. Harris County, Georgia, 89 F.3d 1481,

1489-1490 (11th Cir. 1996); McDougal v. County of Imperial,

942 F.2d 668, 677 (9th Cir. 1991) (noting the Supreme

Court’s use of Village of Euclid in Agins and Nollan).

In the substantive due process context, the federal

courts have recognized that whether there is a rational

basis for land use decisions is a mixed question of fact

and law to be decided by the courts. See, e.g., New Port

Largo, Inc. v. Monroe County, 95 F.3d 1084, 1091 (11th Cir.

1996), cert. denied, 117 S.Ct. 2514 (1997); Pearson v. City of

Grand Blanc, 961 F.2d 1211, 1221-22 (6th Cir. 1992); Green-

briar, Ltd. v. City of Alabaster, 881 F.2d 1570, 1578 (11th Cir.

1989); Bateson v. Geisse, 857 F.2d 1300, 1303 (9th Cir. 1988);

see also Midnight Session, Ltd. v. City of Philadelphia, 945

F.2d 667, 682 (3rd Cir. 1991), cert. denied, 503 U.S. 984

(1992).

Important functional considerations also support

entrusting to the courts the responsibility for determining

whether a challenged regulation or action substantially

advances a legitimate public purpose. As the Court

explained in Markman:

Where history and precedent provide no clear

answers, functional considerations also play

their part in the choice between judge and jury

to define terms of art. We said in Miller v. Fen-

ton, 474 U.S. 104, 114 (1985), that when an issue

“falls between a pristine legal standard and a

simple historical fact, the fact/law distinction at

times has turned on a determination that, as a

matter of the sound administration of justice,

one judicial actor is better positioned than

another to decide the issue in question.”

Markman, 517 U.S. at 388.

As was true in Markman, determining that there is

some legal basis for governmental actions is “one of those

things that judges often do and are likely to do better

than juries unburdened by training in exegesis.” Id. More-

over, giving courts the responsibility for such decisions is

more likely to promote consistency in decision-making

which is an “independent reason” to give such respon-

sibility to the courts. Id. at 390; see also Ornelas v. United

States, 517 U.S. 690, 697-698 (1996) (whether probable

cause existed was mixed question of fact and law that

would be reviewed de novo by the appellate courts so as

to facilitate consistency and clarity of constitutional prin-

ciples).

The present case illustrates the institutional limita-

tions of the jury and how permitting juries to decide

constitutional issues as a purely factual matter will result

in confusion and uncertainty. The jury in this case may

have found an unconstitutional taking because it con-

cluded that the City’s denial of the proposed develop-

ment did not bear a reasonable relation to legitimate

environmental protection or health and safety goals. Yet,

as is typical, the jury’s verdict provides no insight or

guidance as to why it reached this conclusion. Thus, if

this City or other public agencies were faced with future

applications to develop this property or other property in

similar circumstances, those public agencies wou'd have

no way of knowing what criteria to employ to avoid

liability. Judicial resolution of inverse condemnation lia-

bility issues would result in an opinion or findings set-

ting forth the basis of the decision, which would provide

guidance to the City and other public agencies and a

meaningful basis for appellate review.

Treating the issue of whether a regulation substan-

tially advances a legitimate public purpose as one of law

would also minimize inconsistent application of constitu-

tional principles. Suppose, for example, two cities deny

two identical developments based upon inadequacies in

two identical restoration plans. If juries are allowed to

decide liability issues as a question of fact, two separate

trials could result in one finding that the denial is a

taking and another that the denial is not a taking. Yet, if

the issue is treated as a factual matter, both of these

decisions may be sustainable on appeal, leaving directly

inconsistent results. No such anomaly is likely to arise if

the issue is treated as one of law.

2. The “Economically Viable Use” Test of

Inverse Condemnation Liability Is Properly

Decided by the Court Rather Than the Jury.

Even if reasonably related to a legitimate interest, a

governmental action or regulation may result in a taking

if it deprives a property owner of all economically viable

use of that property. Lucas v. South Carolina Coastal Coun-

cil, 505 U.S. 1003, 1016 (1992). “The principle that under-

lies this doctrine is that, while most burdens consequent

upon government action undertaken in the public interest

must be borne by individual landowners as concomitants

of the advantage of living and doing business in a civi-

lized community, some are so substantial and unforesee-

able, and can so easily be identified and redistributed,

that justice and fairness require that they be borne by the

public as a whole.” Kirby Forest Indus., Inc. v. United

States, 467 U.S. 1, 14 (1984) (internal quotations omitted).

Although the underlying principle is easy enough to

articulate, applying the principle “has proved to be a

problem of considerable difficulty.” Penn Central Transp.

Co., 438 U.S. at 123.

There is no “set formula for determining when justice

and fairness require that economic injuries caused by

public action be compensated by the government rather

than remain disproportionately concentrated on a few

persons.” Id. at 124. Rather, the circumstances of each

case must be evaluated. “[]]udicial determinations have

relied on ad hoc factual inquiries and case-specific weigh-

ing of the competing public and private interests. Resolu-

tion of each case ‘ultimately calls as much for the exercise

of judgment as for the application of logic.’ ” Armour and

Co., Inc. v. Inver Grove Heights, 2 F.3d 276, 278 (8th Cir.

1993) (internal citation omitted).

The Court has identified three factors to be especially

considered in conducting this ad hoc analysis: (1) the

economic impact of the challenged action, (2) the extent

of interference with distinct investment-backed expecta-

tions and (3) the character of the governmental action. See

Connelly v. Pension Benefit Guaranty Corp., 475 U.S. 211,

224-25 (1985); Penn Central Transp. Co., 438 U.S. at 124;

Corn v. City of Lauderdale Lakes, 95 F.3d 1066, 1072 (11th

Cir.), cert. denied, 118 S. Ct. 441 (1996); Armour and Co.,

Inc., 2 F.3d at 278. The Court has never expressly decided

whether courts or juries are responsible for evaluating

these factors and applying this test. Everything in the

Court's jurisprudence in this area, however, suggests that

the question must be one for the courts, not juries.

On its face, it would appear that evaluation of the

economic impact of the challenged action is a type of

inquiry that could be appropriate for either courts or

juries. However, closer analysis reveals a judicial gloss

applied to this term, which makes the inquiry neither

simple nor jury friendly. The threshold issue of any eco-

nomic impact analysis is necessarily the legal impact and

limitations imposed by the challenged regulations or

action. Whether this threshold issue involves construc-

tion of a zoning ordinance, an administrative regulation

or a conditional use permit, it is decidedly a legal rather

than factual matter.

Even beyond the threshold issue of the legal impact

of the challenged regulation, entrusting economic impact

issues to a jury would be problematical. Superficially,

determining the existence of an “economically viable

use” would appear to be purely a matter of economic

analysis. However, this is not the case. It is settled that a

regulatory takings is not to be determined based on the

impact on expected profits. See MacLeod v. Santa Clara

County, 749 F.2d 541, 548 (9th Cir. 1984), cert. denied, 472

U.S. 1009 (1985). It is also settled that the absence of

economically viable use cannot be established by show-

ing diminution in value caused by the regulation, even if

that diminution is very substantial. See, e.g., Goldblatt v.

Town of Hempstead, 369 U.S. 590, 596 (1962) (80% diminu-

tion in value); Village of Euclid, 272 U.S. at 384 (75%

diminution in value); Hadacheck v. Sebastian, 239 U.S. 394,

404-08 (1915) (87.5% diminution); William C. Haas & Co. v.

City & County of San Francisco, 605 F.2d 1117, 1120 (9th

Cir. 1979), cert. denied, 445 U.S. 928 (1980) (affirming

summary judgment for defendant despite 95% diminu-

tion); Pace Resources, Inc. v. Shrewsbury Township, 808 F.2d

1023, 1031 (3rd Cir.), cert. denied, 482 U.S. 906 (1987) (89%

diminution). Because the meaning of “economically via-

ble use” and the types of impacts that will constitute a

taking are not susceptible of clear definition, there is no

simple legal formulation or standard that can be mean-

ingfully applied by a jury.

The second factor to be considered, the extent to

which the regulation interferes with “distinct investment-

backed expectations,” is similarly beyond the purview of

factual questions appropriate for jury determination. “A

‘reasonable investment backed expectation’ must be more

than a ‘unilateral expectation or an abstract need.’ ”

Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155

(1980) “Reasonable expectations must be understood in

light of the whole of our legal tradition.” Lucas, 505 U.S.

at 1035 (Kennedy, J. concurring). Were this not the case,

perhaps juries could reasonably be expected to fix the

meaning of this factor. But juries are ill-suited to the task

of evaluating the regulatory climate and assessing, as a

matter of law and policy, whether a particular landowner

had a “distinct investment-backed expectation.” See, e.g.,

Concrete Pipe Prods. of Cal., Inc. v. Construction Laborers

Pension Trust for S. Cal., 508 U.S. 602 (1993) (no reasonable

expectation in light of Congressional legislation in pen-

sion field); Ruckelshaus v. Monsanto Co., 467 U.S. 985,

1005-06 (1984) (no reasonable expectation that EPA would

keep submitted data confidential, in light of prior legisla-

tive amendments); Golden Pacific Bancorp v. United States,

15 F.3d 1066, 1074 (Fed. Cir.), cert. denied, 513 U.S. 961

(1994) (no reasonable expectation that Federal Deposit

Insurance Corporation would not take over insolvent

bank).

The final factor, requiring evaluation of the “charac-

ter” of the governmental action, is likewise most appro-

priately assigned to courts. For example, even if a

regulatory action deprives property of all economically

viable use, it is still necessary to consider whether the

reg»'stion can be upheld because the circumstances

prom,» ag the regulation amount to a public nuisance.

Lucas, 505 U.S. at 1031. This inquiry “will ordinarily entail

(as the application of state nuisance law ordinarily

entails) analysis of, among other things, the degree of

harm to public lands and resources, or adjacent private

property, posed by the claimant's proposed activities, the

social value of the claimant's activities and their suit-

ability to the locality in question and the relative ease

with which the alleged harm can be avoided ... .” Id. at

1030-31 (citations omitted). Given the nature and com-

plexities of this analysis, it is not surprising that courts,

rather than a jury, are normally charged with determining

the existence of a public nuisance. See Tull, 481 U.S. at

423.

The approach taken by courts in evaluating whether

state or local regulations have confiscatory impacts in

other contexts demonstrates that the takings inquiry is a

hybrid of questions of fact and questions of law. For

example, the Fifth Amendment prohibits a state or local

government from imposing limits on rates or rents that

are so unjust as to be confiscatory. See Duquesne Light Co.

v. Barasch, 488 U.S. 299, 307 (1989) (state regulation of

utility rates); Kavanan v. Santa Monica Rent Control Bd., 16

Cal. 4th 761, 763 (1997) (local regulation of rents). While

the inquiry into the confiscatory impact of such regula-

tions is necessarily very fact-oriented, the notion of sub-

mitting such issues to juries for resolution as a purely

factual matter makes no sense. As a result, courts have

decided and reviewed this issue as one of law. See, e.g.,

Duquesne Light Co., 488 at 307.

Il. THE NINTH CIRCUIT’S DECISION THAT A

TRIER OF FACT CAN DETERMINE INVERSE

CONDEMNATION LIABILITY BY REWEIGHING

CONFLICTING EVIDENCE FUNDAMENTALLY

ALTERS THE ROLE OF THE CONSTITUTION IN

THE REVIEW OF LOCAL LAND USE POLICIES

AND DECISIONS.

The Ninth Circuit's decision in this case fundamen-

tally changes and expands the role of the Fourteenth

Amendment and Section 1983 in the review of local land

use policies and decisions. It doe» » by changing the

standard of constitutional review *) <gulatory takings

cases from one which requires .auy that a challenged

action sufficiently relate to a valid public purpose to one

of “reasonableness” with the jury free to find inverse

condemnation liability if it disagrees with the conclusion

reached by the local public entity based upon essentially

the same evidence.

As discussed above, this Court has stated that, in a

regulatory takings context, inverse condemnation liability

exists if a challenged regulation or action fails to substan-

tially advance a legitimate public purpose. Agins, 447 U.S.

at 260. Neither Agins nor subsequent cases have elabo-

rated on the application of this test in the regulatory

takings context. However, nothing in Agins suggests that

the Court intended to fundamentally change the deferen-

tial approach that federal courts have historically

accorded to local land use regulations. In fact, Agins cited

approvingly the “seminal” case of Euclid v. Ambler Realty

Co., 272 U.S. 365 (1926), in which the Court explained that

a land use ordinance would not be declared unconstitu-

tional unless “such provisions are clearly arbitrary and

unreasonable, having no substantial relation to the public

health, safety, morals or general welfare.” 272 U.S. at 395.

(emphasis supplied) Essentially, Agins took the Euclid “no

substantial relation” language and restated it as an affir-

mative standard that regulations should “substantially

relate” to a legitimate state interest.

Subsequent to Agins, courts in regulatory takings

cases have generally repeated the Agins “substantially

advance a legitimate state interest” test rather than

describing their review in substantive due process terms.

However, regardless of whether the standard of constitu-

tional review described in Agins was intended to differ

from the standard formulated and applied in the substan-

tive due process context, the change in the precise formu-

lation of the standard did not eliminate the deference that

the federal courts had traditionally given to local land

use decision-makers. Esposito, 939 F.2d at 169 (sand dune

protection upheld; “we view the matter as one in which

[s]tate legislatures . .. who deal with the situation from a

practical standpoint, are better qualified than the courts

to determine the necessity, character and degree of regu-

lation which these new and perplexing conditions

require.”). This deference does not derive from the speci-

fic constitutional provision (takings versus due process),

but from principles of federalism and the limited role of

the Constitution and the federal courts in the review of

local legislature and administrative land use decisions.

Simply put, it is the responsibility of local governments

to determine policy, evaluate competing concerns and

conflicting information, and make land use decisions. The

Constitution does not contemplate that this responsibility

will pass to the federal courts (or federal juries) merely

because the decision is subject to constitutional challenge.

See Village of Belle Terre v. Borass, 416 U.S. 1, 8 (1973); Zahn

v. Board of Public Works, 274 U.S. 325, 328 (1927).

For this reason, in addressing “takings” or substan-

tive due process challenges, courts do not conduct de novo

inquiries into the merits of land use regulations or the

correctness of governmental decisions that such regula-

tions are appropriate. Rather, courts employ deferential

standards of review and require only that there be some

basis to support the local government's decision. See Pear-

son, 961 F.2d at 1222 (“The federal court may make only

the most limited review of the evidence before the state

administrative agency.”) (emphasis in original).

As discussed above, the deferential nature of the

review to be given to local land use regulations and

decisions was one of the reasons that regulatory taking

liability issues are predominantly legal and are to be

decided by courts. Here, however, the Ninth Circuit not

only upheld the use of a jury to decide such liability

issues but compounded this error by treating the liability

issue as a purely factual inquiry into the reasonableness

of the City’s decision based upon the jury’s de novo

review of the evidence. As to each reason by identified in

the City’s denial of the proposed development, the Ninth

Circuit described the conflicting evidence and upheld the

jury decision because Del Monte Dunes had presented

some evidence sufficient to rebut each of the City’s rea-

sons. Pet. App. 17-19.

The Ninth Circuit’s decision fundamentally changes

the traditionally deferential approach applied to local

land use decisions. In effect, the panel's decision would

allow any jury to become a substitute city council with

the power to impose constitutional liability if it chooses

to reject evidence supporting the local decision and to

accept other evidence that the legislative or quasi-legisla-

tive body found unpersuasive.

In the present case, for example, the record demon-

strates that the City Council was presented with substan-

tial evidence from state and federal regulatory bodies and

others that the proposed development would harm sensi-

tive habitat and that the final restoration plan proposed

by Del Monte Dunes would not adequately mitigate that

harm. Among other things, in a letter presented to the

City Council during the public hearing process, the Assis-

tant Regional Director of USFWS advised the City Coun-

cil that “[o]ur position has been clearly stated — the

project will destroy most, if not all of the Smith’s blue

butterflies (SBB) and their host plants on the site (p. 6),

and the final restoration plan will not likely succeed in

replacing lost habitat or preserving SBB at the location.”

Jt. App. 150. At that same hearing, a Cal DFG representa-

tive advised the City Council that his department still

had problems with the project and that “the restoration

plan [had] not been approved.” Jt. App. 288. Prior input

from a habitat expert, Dr. Richard Arnold, had raised

these same concerns over the measures proposed by Del

Monte Dunes to mitigate environmental damage. Jt. App.

145-46. While Del Monte Dunes witnesses conceded that

the subject property raised important environmental

issues, they presented their views that the restoration

plan was adequate.

Under the approach traditionally applied in review-

ing land use regulations, the focus would be whether the

City’s action (denying the development) had a sufficient

relationship to environmental protection goals, and the

City’s action could not be found unconstitutional merely

because a court (or jury) chose to accept the property

owner’s evidence that the owner had adequately miti-

gated the environmental impacts. However, in upholding

the jury’s verdict the Ninth Circuit concluded that “the

jury was entitled to credit Del Monte’s experts, and dis-

credit the City’s testimony.”*® By establishing a new stan-

dard of liability that permits a jury to reweigh the

evidence and de novo determinations as to the reasonable-

ness of the City’s decision, the panel has fundamentally

and erroneously changed the scope of constitutional

review of local land use decisions.’

® In its opinion, the Ninth Circuit suggested that there was

evidence that the City had “already approved Del Monte's

environmental restoration plan in 1984. ...” Pet. App 17. This is

simply wrong. As noted above, in approving the site plan in

1984, the City Council and staff made very clear that there was

insufficient information at that time to approve or disapprove

the preliminary restoration plan. Jt. App. 273-80. The CUP

granted in 1984 expressly conditioned approval of the

development upon the development of an adequate restoration

plan. Jt. App. 60-65.

® Similarly, the jury was allowed to determine, as a factual

matter, that the City could not constitutionally reject Del Monte

Dunes’ proposal because the City did not want to obligate itself

to condemn private property for Del Monte Dunes’ benefit. The

City required Del Monte Dunes to have a secondary, emergency

accessway for the proposed development. To obtain this

accessway, Del Monte Dunes needed to acquire an easement

from the owner of the neighboring property but had taken no

steps to do so. R. 286. Instead, Del Monte Dunes apparently

expected that the City would condemn this property. However,

the City Council was reluctant to use its condemnation power

for the benefit of a private developer. Jt. App. 289-90. The City

therefore rejected the proposal because it failed to provide the

The Ninth Circuit’s adoption of a de novo reasonable-

ness test as the constitutional standard of review has

implications for virtually all land use decisions made by

public agencies. Almost invariably, significant develop-

ment proposals will raise a number of legitimate public

concerns and the information considered by the local

decision-making body will be in conflict as to the magni-

tude of these concerns and the extent to which they have

been mitigated. For example, a city may believe that a

new proposed development will cause serious traffic

problems that have not been adequately mitigated by

proposed developer-paid roadway improvements. The

Ninth Circuit’s standard would allow any party to mount

a successful constitutional challenge to any denial of a

project merely by showing that the local decision-maker

acted unreasonably in rejecting the evidence favoring

development.

The extraordinary result of the panel's application of

this new standard is made stark by comparing the panel's

review of the jury’s decision with the district court's

decision on the analogous substantive due process claim,

which was not challenged by Del Monte Dunes on

appeal. Based upon the same evidence considered by the

jury, the district court decided, as a matter of law, that the

City had not acted arbitrarily and “was not attempting to

forestall all reasonable development.” The district court

concluded that the City was acting in good faith and that

required secondary accessway. Tr. Exh. 151. By virtue of the de

novo approach upheld by the Ninth Circuit, the jury was

allowed to countermand this policy decision and determine that

the City had acted unconstitutionally in refusing to condemn

property for Del Monte Dunes’ benefit.

there was substantial evidence supporting the City’s con-

cern that habitat protection concerns had not been met.

Pet. App. 36-43. This conclusion is not surprising inas-

much as both Cal DFG and USFWS raised questions

concerning the adequacy of the final restoration plan

proposed by Del Monte Dunes. The information and con-

clusiens of these agencies, which possess special exper-

tise in such matters, provided a more than ample basis to

support the City Council's decision under the traditional,

deferential standard. Yet, the Ninth Circuit allowed the

jury finding of inverse condemnation liability to stand

merely because Del Monte Dunes had presented evidence

(apparently accepted by the jury) that the City’s decision

was unreasonable.

Ill. THE NINTH CIRCUIT’S DECISION CONSTI-

TUTES AN ERRONEOUS AND UNWARRANTED

EXPANSION OF THE ROUGH PROPOR-

TIONALITY TEST ADOPTED BY THIS COURT

IN DOLAN V. CITY OF TIGARD.

While the jury was asked in jury instructions to

determine whether the City’s action bore a reasonable

relationship to any legitimate public purpose, the Ninth

Circuit’s decision upholding inverse condemnation lia-

bility did not apply this standard. Rather, ‘he Ninth Cir-

cuit imposed a new and different standard based upon

Dolan vy. City of Tigard, 512 U.S. 374 (1994), which was

decided by the Supreme Court months after the jury

reached its verdict in the present case.'!° The Ninth

unexpected, to say the least. Neither side had cited Dolan in

their respective Ninth Circuit briefs prior to the issuance of the

Ninth Circuit decision.

Circuit concluded that the City’s action must not only

further a legitimate public purpose, but that the action

must also be “roughly proportional” to that purpose. Pet.

App. 16 (“Even if the City had a legitimate interest in

denying Del Monte’s development, its actions must be

‘roughly proportional’ to furthering that interest.”).

As a matter of law, the panel’s extension of the Dolan

holding into the regulatory takings context of the present

case was inappropriate. Dolan arose in the context of a

land use decision that had required that a landowner

dedicate property to a public entity. Dolan provided a

standard for determining whether such a dedication

would be excessive. Central to the Dolan analysis is the

distinction between governmental action which regulates

property uses and governmental actions that require that

an interest in the property be dedicated to the public

agency. As the Chief Justice explained in Dolan:

The sort of land use regulations discussed in the

[regulatory takings] cases just cited . . . differ

from the present case. . . . [T]he conditions

imposed were not simply a limitation on the use

petitioner might make of her own parcel but a

requirement that she deed portions of her prop-

erty to the city.

512 U.S. at 385.

The distinction made in Dolan between property reg-

ulation, on the one hand, and development conditions

requiring the actual conveyance of property interests, on

the other hand, was previously emphasized by this Court

in Nollan. In Nollan, this Court explained that “[w]Je are

inclined to be particularly careful about the adjective

[substantial] where the actual conveyance of property is

made a condition to the lifting of a land use restriction,

since in that context there is heightened risk that the

purpose is avoidance of the compensation requirement,

rather than the stated police power objective.” 483 U.S. at

841.

In articulating its rough proportionality standard,

Dolan expressly held that the city in that case “must make

some sort of individualized determination that the

required dedication related both in nature and extent to

the impact of the proposed development.” 512 U.S. at 391.

By its express terms, this standard was applied only to a

required dedication of property, and nothing in Dolan

suggests that its holding changed the settled standard of

inverse condemnation liability in regulatory taking cases

that a challenged action need only bear a reasonable

relationship to a legitimate public purpose.

Consistent with the language and rationale expressed

in both Dolan and Nollan, the vast majority of federal

courts have held that the Dolan standard is limited to the

exactions context. See, e.g., New Port Largo, Inc. v. Monroe

County, 95 F.3d 1084, 1088 (11th Cir. 1996), cert. denied, 117

S. Ct. 2514 (1997) (distinguishing Nollan and Dolan as

inapposite because in those cases the “state had

demanded that a person open his or her property to the

public .. . .”); Clajon Production Corp v. Petera, 70 F.3d at

1578 (“Based on a close reading of Nollan and Dolan, we

conclude that these cases (and the tests outlined therein)

are limited to the context of development exactions where

there is a physical taking or its equivalent.”).

By applying a different and somewhat more exacting

standard in cases involving required dedication of prop-

erty, the Nollan and Dolan decisions were in accord with

prior precedents, which consistently differentiated

between physical takings and regulatory takings. Because

physical takings directly interfere with the actual owner-

ship or physical possession of property, liability arises

under the Fifth Amendment regardless of the public’s

benefits or the availability of remaining uses for the

property. See Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419, 426 (1982). Not surprisingly, courts

have been careful to differentiate between physical tak-

ings and regulatory takings and to employ very different

analyses in the two situations.

The required dedications of property that were being

challenged in both Nollan and Dolan were somewhat akin

to a physical taking. In each case, the Court emphasized

that, absent some affirmative justification, a requirement

that a property owner convey an easement to the public

would constitute a taking. Dolan, 512 U.S. at 384; Nollan,

483 U.S. at 831. For this reason, this Court in Dolan

deemed it appropriate to impose upon the public agency

the burden of justifying the dedication requirement. This

rationale does not apply in the context of a regulatory

denial where there has been no required dedication of

property or anything else akin to a physical taking. See

Garneau v. City of Seattle, _. F.3d ___, 1998 W.L. 214579

(9th Cir. 1998).

Aside from the important legal distinction between

regulating property and requiring dedication of property

interests, there are also practical reasons that the Dolan

rough proportionality standard cannot be applied in a

regulatory denial context. An essential prerequisite to

application of the rough proportionality standard in

Dolan is the ability to compare the expected impacts of a

project to the particular dedication requirement imposed

by the public entity. However, in cases involving a regu-

latory denial of a project, no such comparison can be

made. The denial may be based upon a myriad of factors

or reasons that cannot be readily isolated from one

another in the minds of the decision-maker. Even more

importantly, however, assuming that each such concern

could be isolated, there is no way to evaluate meaning-

fully the rough proportionality of a project’s impact as to

each such area of concern. Because there is no specific

condition or dedication requirement being imposed in a

regulatory denial context, the rough proportionality test

is meaningless.

For example, a typical residential proposal will raise

a number of possible concerns, including traffic, impacts

on environment, increased demands on public services

and other considerations. Suppose a city rejects a pro-

posed development due to traffic concerns. As to such

traffic concerns, there would be no way to compare the

magnitude of the City’s concern to the expected traffic

burdens of the development for purposes of a rough

proportionality test. For this reason, even assuming that

it was feasible to treat separately each area of possible

concern and to make an individualized determination of

expected project impacts to the extent required by Dolan,

the rough proportionality test cannot be applied in any

meaningful way.!!

The facts of the present case aptly illustrate the Ninth

Circuit’s error in applying the Dolan rough propor-

tionality standard in a regulatory denial context. The City

‘1! Put otherwise, the rough proportionality test requires

that X (the dedication condition) be roughly proportional to Y

(the project impacts). In a regulatory denial context, while it

would often be administratively burdensome, it may be possible

to estimate project impacts (Y) for each area of concern.

However, there is no X to which those impacts can be compared.

denied Del Monte Dune’s proposed 190-unit develop-

ment due to environmental and other concerns. The City

Council concluded that the final restoration plan pro-

posed by Del Monte Dunes was inadequate. The basis for

that denial was not Del Monte Dunes’ unwillingness to

convey property interests demanded by the City.

The Ninth Circuit concluded the City had the obliga-

tion to show that its action (denial of the proposed devel-

opment) was roughly proportional to the environmental

protection concerns. However, even putting aside the fact

that the Dolan rough proportionality standard was not

established until after this case was tried, there is no way

for the City to meet this burden. While the City could and

did present evidence of the environmental significance of

the subject property and the expected impacts of the

project, the Ninth Circuit's standard of liability requires

more. If the Ninth Circuit standard requires that the

environmental concerns be roughly proportional to a

decision denying any development on the subject prop-

erty, the standard misconceives the City’s decision, which

was only to deny a specific proposed 190-unit develop-

ment, including the specific habitat mitigation measure in

the final restoration plan. On the other hand, if the Ninth

Circuit standard would require that the environmental

concerns be roughly proportional to the burdens imposed

by a restoration plan that would be acceptable to the City,

there is no way to apply this standard because the terms

of any such acceptable plan are purely hypothetical.

Even assuming that some meaningful way of apply-

ing the rough proportionality standard to regulatory

denial could be devised, doing so would constitute a

major departure in the constitutional review of such deci-

sions. Any dissatisfied property owner could challenge

rationally-based land use regulations or decisions that

had appropriate goals by claiming that the concerns

underlying the decision were not roughly proportional to

the impacts of the proposed development. Thus, for

example, a local decision to deny a project based upon

concerns that the proposed project did not adequately

address risks of earth movement could be constitutionally

challenged on the ground that these concerns were not

roughly proportional to the impacts of the project. Sim-

ilarly, a regulatory decision that a proposed building had

not mitigated seismic concerns could be rendered void

unless the public agency established that its concerns or

its design requirements were roughly proportional to the

impacts of the project.

In and of itself, extending the rough proportionality

standard into the context of regulatory denials would be

an erroneous and unwarranted expansion of constitu-

tional review over land use decision-making. When com-

bined with the Ninth Circuit’s application of a fact-based

reasonableness standard of liability based upon de novo

review of the relevant information considered by the

public agency, the Ninth Circuit’s decision would turn

the federal courts (or juries) into land use planners and

expose local agencies across the country to great uncer-

tainty and unwarranted liability.

CONCLUSION

For all of the reasons set forth above, the City

respectfully requests that the Ninth Circuit's decision in

this matter be reversed.

Respectfully submitted,

RicHarp E.V. Harris

Georce A. YuHaAs*

CATHERINE A. RoGers

Orrick, HerrRInctOoN & SuTCLIFrE

LLP

Old Federal Reserve Bank

Building

400 Sansome Street

San Francisco, California 94111

Telephone: (415) 392-1122

Facsimile: (415) 773-5759

Counsel for Petitioner

* Counsel of Record

June 1998

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.