Amicus Curiae Brief — Monterey v. Del Monte Dunes at Monterey, Ltd.

* FILED

No. $7-4288 JUL 3 1 1998

OFFICE OF THE CLERK

IN THE SUPREME COURT, U.S.

SUPREME COURT OF THE UNITED LS

OCTOBER TERM, 1997

CITY OF MONTEREY,

Petitioner,

v.

DEL MONTE DUNES AT MONTEREY, LTD.

AND

MONTEREY-DEL MONTE DUNES CORP.,

Respondents.

ON WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF OF THE

NATIONAL ASSOCIATION OF HOME BUILDERS

AND THE BUILDING INDUSTRY

LEGAL DEFENSE FOUNDATION

AS AMICI CURIAE IN SUPPORT OF RESPONDENTS

Of Counsel: Gus BAUMAN

Mary V. DiCrESCENZO (Counsel of Record)

DUANE J. DESIDERIO JAMEs B. HOLMAN

NATIONAL ASSOCIATION BEVERIDGE & DIAMOND, P.C.

OF HOME BUILDERS 1350 I Street, N.W.

1201 - 15th Street, N.W. Suite 700

Washington, D.C. 20005 Washington, D.C. 20005

(202) 789-6000

Nick CAMMAROTA

BUILDING INDUSTRY

LEGAL DEFENSE

FOUNDATION

1330 S. Valley Vista Drive

Diamond Bar, California 91765

July 31, 1998

Waeshinqren, D.C © THIZL PRESS © (202) 338-3208

——

BEST AVAILABLE COPY

TABLE OF CONTENTS

TABLE OF AUTHORITIES .................. TT

INTEREST OF THE AMICI CURIAE .......... l

SUMMARY OF ARGUMENT ................ 3

i EF PEE Es REE RES Se ye 5

I. IF NEITHER JUDGE NOR JURY CAN

WEIGH THE EVIDENCE OF AN AGENCY’S

LAND USE DECISION WHERE A PROPERTY

OWNER CLAIMS A TAKING, THEN THIS

COURT’S TAKINGS CLAUSE CASE LAW

WP PRT 5 0k cha nau cdvekcewe ances 5

Il. THE COURT OF APPEALS PROPERLY

APPLIED THIS COURT’S REGULATORY

TAKING TESTS TO THE FACTS BY

DISCUSSING DOLAN’S “ROUGH

PROPORTIONALITY” STANDARD,

A SUBSET OF THE NOLLAN “SUBSTANTIAL

ADVANCEMENT” TEST, IN A JUDGMENT

NOV CONTEXT AFTER THE CITY HAD

FAILED THE NOLLAN TEST ............ 16

CATE oi sev's 0k batncwaneu ae 27

TABLE OF AUTHORITIES

Cases

Agins v. City of Tiburon, 447 U.S. 255

eee eee ies sedans 660408 passim

Armstrong v. United States, 364 U.S. 40

IS Sr ea 9, 21, 22, 26

Berman v. Parker, 348 U.S. 26 (1954) .......... 7

Christopher Lake Development Co. v. St. Louis

County, 35 F.3d 1269 (8th Cir. 1994) ...... 23

Clark v. City of Albany, 904 P.2d 185 (Or. App. 1995),

rev. denied, 912 P.2d 375 (Or. 1996) ...... 23

Del Monte Dunes at Monterey, Ltd. v. City

of Monterey, 920 F.2d 1496

SS a ee 9,11." 24

Del Monte Dunes at Monterey, Ltd. v. City

of Monterey, 95 F.3d 1422

De. ke eseees passim

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

Ehrlich v. City of Culver City, cert. granted, judg.

vacated, and remanded, 512 U.S. 1231

LL aig se hey Und ee see ye’ 18

Ehrlich v. City of Culver City, 911 P.2d 429

(Cal. 1996), cert. denied, 117 S. Ct. 299

UEC LS Tak kis pe clak.s ov neve 18, 22

First English Evangelical Lutheran Church of

Glendale v. Los Angeles County,

482 U.S. 304 (1987) ............ 1, 18, 19, 26

Hodel v. Irving, 481 U.S. 704 (1987) ........... 7

Hoehne v. County of San Benito, 870 F.2d 529

esd Sav edei ase beve Go eues: 10

Kaiser Aetna v. United States, 444 U.S. 164

NS thet cite Rasta chit Ss Pil 6

Keystone Bituminous Coal Association vy.

DeBenedictis, 480 U.S. 470 (1987) ..... passim

Loretto v. Teleprompter Manhattan CATV Corp.,

i ~dencssceebsudeesess 7

Lucas v. South Carolina Coastal Council, 505 US.

EE Saudve piu vdiwe ese e rae’ passim

MacDonald, Sommer & Frates v. Yolo County,

og of EP 1, 7, 10

Monell v. Department of Social Services,

ER ee 15

Nollan v. California Coastal Commission,

ee er rere passim

iv

Northern Illinois Home Builders Association v.

County of DuPage, 649 N.E.2d 384

Se MD + od cokincnsdabuabeus seas eu 23

Penn Central Transportation Co. v. New York City,

ec passim

Pennell v. City of San Jose, 485 U.S. 1 (1988) .... 2

Pennsylvania Coal Co. v. Mahon,

a EE: 0 ov iawancucons ee 7, 8, 26

San Diego Gas and Electric Co. v. City of San Diego,

450 U.S. 621 (1981) .......... 1, 7, 16, 20, 26

Suitum v. Tahoe Regional Planning Agency,

S27 88 CS ere 2, 11, 21

United States v. Riverside Bayview Homes, Inc.,

Gen, GP GENED occdbevkvceueeducnts 20

Williamson County Regional Planning

Commission v. Hamilton Bank,

ee EE oo o's Rh aweexdews 1, 10, 18

Yee v. City of Escondido,

Ss SED ocd vedececoader 7, 12, 20

Statute

Ce RN a ee 7, 12, 14, 18

Other Authoriti

Dennis J. Coyle, Property Rights and the Constitution:

Shaping Society Through Land Use Regulation

SE is Ss FECT eee bee eee selva: 10

Steven J. Eagle, Regulatory Takings (1996) ..... 16

William A. Fischel, Regulatory Takings: Law,

Economics, and Politics (1995) .......... 8, 10

Daniel R. Mandelker, Land U/se Law

DSN ha st oud caee aces dessa 10, 12

Daniel R. Mandelker, Jules B. Gerard, and Thomas E.

Sullivan, Federal Land Use Law

ns eae KGu sa bb'.8 oe 12

Laurence H. Tribe, American Constitutional Law

BRR a Ne es eS 5

Gus Bauman, 7he Supreme Court, Inverse

Condemnation and the Fifth Amendment:

Justice Brennan Confronts the Inevitable in

Land Use Controls, 15 Rutgers L.J. 15 (1983) . 22

Jan G. Laitos, Takings and Causation,

5 Wm. & Mary Bill Rts. J. 359(1997)....... 22

vi

Molly S. McUsic, Looking Inside Out: Institutional

Analysis and the Problems of Takings,

92 Nw. U.L. Rev. 591 (1998) ........... 9, 10

Gregory Overstreet, The Ripeness Doctrine of

the Taking Clause: A Survey of Decisions

Showing Just How Far Federal Courts Will

Go to Avoid Adjudicating Land Use Cases,

10 J. Land Use & Envtl. L. 91 (1994) ....... 11

Leigh Raymond, Comment, 7he Ethics of

Compensation: Takings, Utility, and Justice,

23 Ecology L.Q. 577 (1996) .............. -

Carol M. Rose, 7akings, Federalism, Norms,

SE Wed eal. CHOCO a iv k Vawae se coeur 8

Ann Louise Strong, Daniel R. Mandelker, and

Eric Damian Kelly, Property Rights and

Takings, 62 J. Am. Plan. Ass‘n 5

ed co cual pes desc 12, 13, 14

Michael K. Whitman, 7he Ripeness Doctrine in the

Land Use Context: The Municipality's Ally and

the Landowner's Nemesis, 29 Urb. Law. 13

SISO SEE CTU UE ns 6 hs 0 doce teed kee ane 11

Private Property Rights Implementation Act: Hearings

on H.R. 1534 Before the Subcomm. on Courts and

Intellectual Property of the House Comm. on the

Judiciary, \0Sth Cong., Ist Sess. (1997) ..... 1

vil

Brief for Petitioner, City of Monterey v.

Del Monte Dunes at Monterey, Lid.

Pct chaed ence dia 4 <dand «64s « 26

Brief for United States as Amicus Curiae, City of

Monterey v. Del Monte Dunes at Monterey, Lid

i Ps base eadsuces kioadeens On 17

Brief for United States as Amicus Curiae,

Dolan v. City of Tigard (No. 93-518)... .... 19

Brief for United States as Amicus Curiae,

Nollan v. California Coastal Commission

i CC hc coast favs wa bee e biee de 19

Brief for United States as Amicus Curiae,

First English Evangelical Lutheran Church

of Glendale v. Los Angeles County

i CT rc. Aca wt dbase daada ons. a 6-1 18

Brief for United States as Amicus Curiae,

Williamson County Regional Planning

Commission v. Hamilton Bank (No. 84-4)... . 18

INTEREST OF THE AMICI CURIAE

The amici have received the parties’ written

consent to submit this brief.' Letters of consent have

been filed with the Clerk of this Court.

The National Association of Home Builders

(“NAHB”) represents over 190,000 builder and associate

members throughout the United States. Its members

include not only people and firms that construct and

supply single family homes but also apartment,

condominium, comMercial and industrial builders, as

well as land developers and remodelers. It is the voice of

the American shelter industry.

The NAHB has appeared before this Court as an

amicus curiae or as “of counsel” on behalf of the

property owner in prior takings cases involving land use

regulation. These include Agins v. City of Tiburon, 447

U.S. 255 (1980); San Diego Gas and Electric Co. v. City

of San Diego, 450 U.S. 621 (1981);? Williamson County

Regional Planning Commission v. Hamilton Bank, 473

U.S. 172 (1985); MacDonald, Sommer & Frates v. Yolo

County, 477 U.S. 340 (1986); First English Evangelical

' Pursuant to Rule 37.6 of this Court, amici state that

their counsel authored this brief and amici paid for it.

This brief was not written in whole or part by counsel for

a party, and no one other than amici made a monetary

contribution to its preparation.

? Justice Brennan's dissent cited approvingly the

NAHB brief. 450 U.S. at 643 n.6.

2

Lutheran Church of Glendale v. Los Angeles County,

482 U.S. 304 (1987); Nollan v. California Coastal

Commission, 483 U.S. 825 (1987); Pennell v. City of

San Jose, 485 U.S. 1 (1988); Lucas v. South Carolina

Coastal Council, 505 U.S. 1003 (1992); Dolan v. City of

Tigard, 512 U.S. 374 (1994); and Suitum v. Tahoe

Regional Planning Agency, 117 S. Ct. 1659 (1997).

The Building Industry Legal Defense (“BILD”)

Foundation is a not-for-profit corporation organized

under the laws of the State of California. The BILD

Foundation is a wholly-owned subsidiary of the Building

Industry Association of Southern California, whose .

1,650 members include a significant number of

residential developers and associate businesses

accounting for 70% of all annual new home construction

in Southern California. The BILD Foundation’s mission

is to “[dJefend the legal rights of home and property

owners.” It appeared before this Court as an amicus

curiae in Suitum v. Tahoe Regional Planning Agency,

supra.

The amici are here to present constitutional, legal

and policy arguments on why the decision of the Court

of Appeals squares with this Court’s precedents

regarding the application of the Just Compensation, or

Takings, Clause to land use regulation that goes “too

far.” Property owning citizens, such as those represented

> The Court opinion cited approvingly the NAHB

brief. 483 U.S. at 840.

3

by the amici, must have available the right, a meaningful

right, to go before judge and jury to seek just

compensation for regulatory takings. If the

circumstances of this development case are found not to

amount to an unconstitutional taking, then members of

the amici who face similar deliberate abuses of the land

use system have little protection, in the real world, under

the Constitution’s Bill of Rights.

SUMMARY OF ARGUMENT

Regarding Question 2 (on “reasonableness”), the

City of Monterey would expand the normal deference

accorded municipal land use actions to a virtual bar on

any meaningful judicial inquiry into those actions where

a citizen is singled out for particularized treatment and

can make out a cognizable claim of a violation of the

Fifth Amendment’s Takings Clause. Why? Why should

this one constitutional right be treated differently from

the others? Why should the defending government,

rather than the impartial fact finder, make the final

decision on the reasonableness of that government’s

actions when a citizen’s constitutional right is at stake in

court? Because, as the city candidly contends in its

Brief, the Constitution should play a “limited role” in

local land use decisions. To the city’s way of thinking,

its unilateral assertion of the “reasonableness” of its land

use actions would serve as a pretext to defeat almost

automatically any claim of an unconstitutional taking.

But such an idea is contrary to this Court’s precedents as

well as to fundamental fairness. It is already exceedingly

difficult, under ripeness doctrines, to get a takings claim

4

into court and, if to trial, to win such a claim. The

argument pressed here by the city and its amici would

make it well nigh impossible.

Regarding Question 3 (on Dolan), the Court of

Appeals properly applied this Court’s regulatory taking

tests to the facts before it. The lower court did not

misapply the Dolan “rough proportionality” standard

because, as it held, the city never got past the threshold

Nollan “substantial advancement” test. Indeed, the

court’s main discussion of Do/an concerned no live issue

in the case; the court was merely bending over

backwards in deference to the city in order to reinforce —

the meritlessness of the city’s post-trial motion for a

judgment notwithstanding the verdict. The city’s attempt

now to distinguish, on a_ constitutional level,

development “exactions” from “denials” creates a

distinction without a difference in the real world of land

development application processing because exactions

and denials are used interchangeably to leverage the

police power to sometimes unconstitutional effect. Here,

as proven at trial, conditions on use (exactions) and

denials were applied over a period of years by Monterey

for shifting and inconsistent reasons, which had the

effect of securing private land as de facto public open

space. After all, as the record shows in this case, a

denial was simply an exaction in exiremis.

Injury is done to the Constitution’s great themes --

of separating governmental powers, of protecting

individual rights, of insuring federalism -- by the

arguments of the city and its amici. Here, if the local,

5

state and federal governments have it their way, an

individual right would take a back seat to the convenient

prerogatives of the majority, whether the as-applied

police power action is local, state or federal, and neither

a state nor federal court could realistically intercede to

do what is just under the Constitution’s Takings Clause.

The Court of Appeals below did not abuse the

Constitution nor this Court’s decisions nor common

sense.

ARGUMENT

I. IF NEITHER JUDGE NOR JURY CAN

WEIGH THE EVIDENCE OF AN

AGENCY’S LAND USE DECISION WHERE

A PROPERTY OWNER CLAIMS A

TAKING, THEN THIS COURT’S TAKINGS

CLAUSE CASE LAW IS NUGATORY.

The courts below, after exhaustive fact finding

and application of the law, found a regulatory taking of

the owner’s land by the city. The city now asks this

Court to ignore those findings and to go beyond the

normal deference accorded governmental actions

affecting land use. The city is asking this Court to rule

that where the Fifth Amendment’s Takings Clause is at

issue, no court can look into the asserted

“reasonableness” of the city’s action, irregardless,

apparently, of that action’s effect on a citizen’s Fifth

Amendment rights and the notion that the Just

Compensation Clause is “an attempt to limit arbitrary

sacrifice of the few to the many.” Laurence H. Tribe,

6

American Constitutional Law § 9-6, at 605 (2d ed. 1988).

Under the city’s reasoning, where a regulatory

taking claim is made, the Constitution would offer only

token protection to a citizen because the trier of facts

could not weigh the evidence in a courtroom once the

defending agency claims it acted reasonably. But what

agency or city does not make such a defense in every

such case?

As will be shown, Monterey’s argument is

directly contrary to this Court’s takings jurisprudence.

It would move the law from constitutional deference to .

abdication in this one arena of the Bill of Rights.

Additionally, the Court of Appeals’ discussion of

the “reasonableness” standard is in the context of the

“reasonable relationship” test used by many state courts

and referred to in Dolan vy. City of Tigard, 512 U.S. 374

(1994). Del Monte Dunes at Monterey, Ltd. v. City of

Monterey, 95 F.3d 1422, 1429 (9th Cir. 1996) (Del

Monte Dunes II). The Court of Appeals said nothing

extraordinary, and the city overreaches by arguing

otherwise.

Over the decades, this Court has been clear that

when it comes to determining a land use taking, the

“particular circumstances” of each case must be analyzed

because these are “essentially ad hoc, factual inquiries.”

Penn Central Transportation Co. v. New York City, 438

U.S. 104, 124 (1978) (tower denied over an historic train

terminal). See Kaiser Aetna vy. United States, 444 US.

7

164, 175 (1979) (navigational servitude on a marina-

related subdivision); San Diego Gas & Electric Co. v.

City of San Diego, 450 U.S. 621, 649-50 (1981)

(Brennan, J., dissenting) (challenge to rezoning and

adoption of open space plan); Loretto v. Teleprompter

Manhattan CATV Corp., 458 U.S. 419, 426 (1982)

(cable television facilities attached to apartment

building); MacDonald, Sommer & Frates v. Yolo County,

477 U.S. 340, 349 (1986) (residential subdivision

denied); Keystone Bituminous Coal Association vy.

DeBenedictis, 480 U.S. 470, 474, 495 (1987) (challenge

to coal subsidence statute); Hode/ v. Irving, 481 U.S.

704, 714 (1987) (challenge to land consolidation statute):

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

1003, 1015 (1992) (residential development denied).

Some of the above cases involved as-applied

challenges, others were facial; some involved regulatory

takings, others were physical; some _ involved

development denials, others conditions on development;

some involved 42 U.S.C. § 1983, others did not; some

were from state courts, others federal. But they a//

concerned the Takings Clause and not one established a

rule of governmental insulation from judicial scrutiny as

pressed by the city here. Rather, as explained by this

Court in the rent control case of Yee v. City of

Escondido, a takings allegation “necessarily entails

complex factual assessments of the purposes and

economic effects of government actions.” 503 U.S. 519,

523 (1992). See Pennsylvania Coal Co. v. Mahon, 260

U.S. 393, 413 (1922) (“the [taking] question depends on

the particular facts .. . .”); Berman v. Parker, 348 U.S.

26, 32 (1954) (“each [takings] case must turn on its own

facts.”).

This Court’s consistent emphasis on a case-by-

case factual assessment in the takings context (based on

tules discussed in Argument II below) stems from Justice

Holmes’ admonition that “while property may be

regulated to a certain extent, if regulation goes too far it

will be reccg*zed as a taking.” Pennsylvania Coal, 260

U.S. at 415. As Professor Rose has observed, real

property is a uniquely vulnerable regulatory target.

“Land is the perfect object for confiscatory regulation,

because the owner cannot pick it up and take it away ....” .

Carol M. Rose, 7akings, Federalism, Norms, 105 Yale

L.J. 1121, 1126 (1996) (book review). Indeed, in

reviewing Professor Fischel’s comprehensive book on

takings, she (as did he) notes that the citizen most apt to

be treated unfairly and to lose its property to the majority

is the citizen that owns land that is undeveloped and ts

subject to local regulatory power. /d.; William A.

Fischel, Regulatory Takings: Law, l:conomics, and

Politics 105, 139, 204, 271 (1995). A citizen, in other

words, precisely situated like Del Monte Dunes at

Monterey, Ltd.

It is this “singling out” phenomenon that the City

of Monterey (and its amici) wishes to ignore in its

argument for de facto immunity from judicial scrutiny of

its land use regulatory actions in this case. As recounted

by the Court of Appeals in its first decision in this case,

the land owners made five separate applications over as

many years to use its property, all in conformance with

9

the city’s general plan and zoning ordinance, only to be

denied each use even though, by the fifth denial, the

“city council did not base its denial upon failure to meet

any of the specific numbered conditions.” De/ Monte

Dunes at Monterey, Lid. v. City of Monterey, 920 F.2d

1496, 1505 (9th Cir. 1990) (Del Monte Dunes 1).

Instead, “the city council abruptly changed course and

rejected the [fifth] plan, giving only broad conclusory

reasons.” /d. at 1508. These deliberate, multi-year

actions, based on no “substantial advancement” of a

legitimate state interest, assured that the subject private

property would remain “useless.” Thereafter, the State

of California purchased the land for public open space.

Whether government has acquisition on its mind

or not, this Court has stated that “{* he Fifth

Amendment's guarantee that private proper" — _.ail not be

taken for a public use without just compensation was

designed to bar Government from forcing some people

alone to bear burdens which, in all fairness and justice,

should be borne by the public as a whole.” Armstrong v.

United States, 364 U.S. 40, 49 (1960). Professor

McUsic observes _ that Armstrong's principle

condemning the “*ingling out” phenomenon carries

straight through this Court's regulatory taking cases to

Dolan. Molly S. McUsic, Looking Inside Out:

Institutional Analysis and the Problems of lakings, 92

Nw. U.L. Rev. 591, 642, 646 (1998). In a non-

doctrinaire explanation of takings law, including the

recent Lucas and Dolan decisions, Professor McUsic

relates that these cases’ “[land use] regulations violate

the Constitution not for the now discredited [Lochner

10

era] reason that they single out a particular class for

economic harm, but because they single out individuals

within a particular class for economic harm.” /d. at 652.

And nowhere is a U.S. citizen more at risk of losing his

or her Fifth Amendment property rights, based on a

broad consensus of land use commentators as well as

review of lower court decisions, than in California.

William A. Fischel at 226-31; Dennis J. Coyle, Property

Rights and the Constitution: Shaping Society Through

Land Use Regulation 113-14 (1993).

It should be the impartial fact finder, not the

defending government, that decides the “reasonableness” .

of that government’s actions when a citizen's

constitutional right is at stake in court. The city’s

reasonableness argument is particularly mischievous

given the extraordinary barriers already facing any

citizen trying to get a takings claim before a court,

federal or state, on the merits. First, “[t}he lower federal

courts have vigorously applied the Supreme Court's

ripeness doctrines to refuse jurisdiction in as-applied

taking cases.” Daniel R. Mandelker, Land Use Law

§ 2.26, at 44 (4th ed. 1997). See Agins v. City of

Tiburon, 447 U.S. 255 (1980), Williamson County

Regional Planning Commission v. Hamilton Bank, 473

U.S. 172 (1985); MacDonald, supra (1986). As the

Ninth Circuit itself has recognized, “ruling case law

makes it very difficult to open the federal courthouse

door for relief from state and local land use decisions.”

Hoehne v. County of San Benito, 870 F.2d 529, 532 (9th

Cir. 1989).

In a survey of all regulatory taking cases involving

as applied challenges to land use actions, decided in the

lower federal courts between 1990 and 1997, it was

found that 81% of the takings claims never reached the

merits in the district courts. For those claimants who

continued through the courts of appeals, more than half

saw their takings claims deemed unripe. Private

Property Rights Implementation Act: Hearings on H.R.

1534 Before the Subcomm. on Courts and Intellectual

Property of the House Comm. on the Judiciary, \OSth

Cong., Ist Sess. 1-4 (1997) (statement of John J.

Delaney, Esq., retained by NAHB). See also Gregory

Overstreet, The Ripeness Doctrine of the Taking Clause:

A Survey of Decisions Showing Just How Far Federal

Courts Will Go to Avoid Adjudicating Land Use Cases,

10 J. Land Use & Envtl. L. 91 (1994).

Indeed, counsel for a well-known firm that

generally represents local governments in land use

matters agrees that the ripeness doctrine, in state as well

as federal court, is “the municipality’s best friend.”

Michael K. Whitman, 7he Ripeness Doctrine in the Land

Use Context: The Municipality's Ally and the

Landowner's Nemesis, 29 Urb. Law. 13, 14 (1997). The

Court need only reflect on the ripeness arguments made

last term in Suitum v. Tahoe Regional Planning Agency,

117 S. Ct. 1659 (1997), to appreciate the lengths to

which local, state and federal governments will go to

keep a land use litigant out of court.

Second, if a property owner can somehow

overcome the ripeness doctrine (as in De/ Monte Dunes

12

I, with five development applications), he or she then

usually encounters the absention doctrine. And while

“the Supreme Court has frequently stated that abstention

is the exception rather than the rule, the federal courts

often abstain in land use cases.” Daniel R. Mandelker,

§ 8.38, at 376.

Finally, assuming a citizen makes it before a judge

and jury in state or federal court, there are “few cases”

where “courts have awarded damages in § 1983 land use

cases,” and “most state courts do not award

compensation in taking cases.” Daniel R. Mandelker,

Jules B. Gerard, and Thomas E. Sullivan, /ederal Land —

Use Law § 1.05[6], at 1-20 (1986, rev. 1998). Given this

Court’s rulings in Agins (1980), Keystone (1987) and Yee

(1992), a facial takings challenge is extremely hard to

sustain (to bring one is to face an “uphill battle,”

Keystone, 480 U.S. at 495). Yet the inevitable

implication of Monterey’s argument on “reasonableness”

would be to make an as-applied challenge equally

onerous, if not virtually impossible. The courthouse

door, federal and state, would be effectively closed to

citizens with land use takings claims.

Three prominent law and planning professors/

practitioners (one of whom is currently president of the

American Planning Association), in a major essay, admit

that the current system of presuming the constitutionality

of municipal land use regulation has gone too far because

the presumption has led to abuses of individual rights in

the United States. Ann Louise Strong, Daniel R.

Mandelker, and Eric Damian Kelly, Property Rights and

13

Takings, 62 J. Am. Plan. Ass’n 5 (1996). While the City

of Monterey argues to this Court that it should tighten

even further the traditional judicial deference accorded

a government’s land use decision, and that this tightening

should be cast as a constitutional rule, Professors Strong,

Mandelker and Kelly argue precisely the opposite -- that,

if anything is changed, the constitutional presumption

should be shified where a citizen makes out a good case

of a regulatory taking, whether it involves an exaction or

outright denial of use.

Courts have shifted the presumption to

be against regulation in cases of exclusionary

zoning; of arbitrary downzoning; and of

regulations discriminating against vulnerable

uses, such as group homes and unrelated

families. This is only a partial list. Some of

these cases are totally unrelated to takings

claims arising out of economic impact on

property, but they can raise legitimacy of

purpose questions that are important in takings

litigation. Courts should continue to shift the

presumption against land use regulations in

appropriate cases.... One logical area in

which to shift the presumption is in

“exactions” cases....

Id. at 12.

What has brought the [taking] tssue to

14

the forefront is the frustration of many

individual citizens and property owners with

the complexity of a regulatory system that

often involves multiple entities of government

and multiple sets of regulation by a particular

entity. In the absence of alternative uses or of

administrative relief, landowners have, over

the last two decades, begun to seek monetary

relief for their perceived wrongs... .

In those cases where the system is

unfair -- where the rules change in sudden or

surprising ways, where a particular landowner

is arbitrarily required by regulation to bear a

disproportionate share of the burden of

implementing public policy, where a

landowner is in fact left with no economically

viable use of her or his land -- the system

offers too few alternatives... .

ld at 15.

In Keystone, a regulatory taking case brought as

a facial challenge under 42 U.S.C. § 1983 in federal

court,’ this Court stated that:

* Given the varied challenges by Monterey’s amici

to this Court’s regulatory takings jurisprudence,

including the assertion by local and state governments

that they should be effectively exempt from judicial

scrutiny in the land use takings area, it is worth recalling

that § 1983 was enacted to protect citizens from

15

Pennsylvania Coal instructs courts to

examine the operative provisions of a

Statute, not just its stated purpose, in

assessing its true nature. In

Pennsylvania Coal, that inquiry led

the Court to reject the Pennsylvania

Legislature’s stated purpose for the

Statute .... In this case, we, the

Court of Appeals, and the District

Court, have conducted the same type

of inquiry the Court in Pennsylvania

Coal conducted, and have determined

[a different outcome].

480 US. at 487 n.16.

Lucas drove the Keystone judicial inquiry point

home. In an as-applied takings case, giving complete

deference to legislative findings is misplaced and unfair

because it ignores how an individual citizen's rights are

treated by a specific governmental action; the Fifth

Amendment requires a “total taking inquiry” intc a case's

circumstances. 505 U.S. at 1030. “South Carolina must

do more than proffer the legislature's declaration that the

uses Lucas desires are inconsistent with the public

violations of their constitutional rights under color of

state law, including, infer alia, the specific problem of

takings without just compensation. Monell vy.

Department of Social Services, 436 U.S. 658, 685-87 &

n.45 (1978).

16

interest... .” /d. at 1031. Of course, as found below in

this case, Monterey “abruptly changed course” and did

no more than offer “conclusory reasons” for its action,

Del Monte Dunes |, at 1508, an action that “forced Del

Monte to bear the burden of creating open space for the

public to enjoy.” Del Monte Dunes II, at 1434.

The Court of Appeals (and the District Court) did

nothing more than apply 76 years of this Court's

regulatory takings law and some common sense to the

circumstances of this case.

il. THE COURT OF APPEALS PROPERLY

APPLIED THIS COURT’S REGULATORY

TAKING TESTS TO THE FACTS BY

DISCUSSING DOLAN’S “ROUGH

PROPORTIONALITY” STANDARD, A

SUBSET OF THE NOLLAN “SUBSTANTIAL

ADVANCEMENT” TEST, IN A JUDGMENT

NOV CONTEXT AFTER THE CITY HAD

FAILED THE NOLLAN TEST.

The city’s Dolan argument is a red herring on

several levels, most importantly because the city never

passed the threshold substantial advancement test of

Penn Central, Agins and Nollan v. California Coastal

Commission, 483 U.S. 825 (1987). In inverse

condemnation law, there are “regulatory” takings and

“physical” takings. Lucas, 505 U.S. at 1028 n.15; Yee,

503 U.S. at 522; San Diego Gas & Electric, 450 U.S. at

651-53 (Brennan, J., dissenting). See Steven J. Eagle,

Regulatory Takings § 7-4(c), at 251 (1996). First and

17

foremost, De! Monte Dunes is a regulatory taking case.

So were Penn Central and Agins, cases in which. as in

Del Monte Dunes, the property owners claimed that

denial of use had triggered a taking. This Court’s two-

pronged regulatory takings test -- that a taking occurs

where “the ordinance does not substantially advance

legitimate state interests . . . or denies an owner

economically viable use of his land,” Agins, 447 U.S.

at 260 -- was first articulated by this Court in Penn

Central, 438 U.S. at 127,138.°

* In a remarkable argument, the United States,

eighteen years after Agins, now contends that the takings

test enunciated there is just “dictum” and therefore

should be renounced. Br. for United States as Amicus

Curiae at 21 (No. 97-1235). But the Court in Agins

concluded that “the zoning ordinance on its face does not

take the appellants’ property,” 447 U.S. at 259, stated the

two-prong takings test, id. at 260, then held that “[i]n this

case, the zoning ordinances substantially advance

legitimate governmental goals.” /d. at 261. In fact, after

so holding, the Court never then addressed the

alternative, economically viable use prong because of its

holding on the “substantial advancement” prong.

Additionally, the Court later held in No//an that because

there was no substantial advancement of a legitimate

State interest in that case, a taking had occurred. The

new-found U.S. assertion that the two-prong takings test

was not a holding in Agins is explicitly contradicted by

this Court in Keystone, 480 U.S. at 485.

18

Second, nowhere in Agins or Penn Central or

Nollan did the Court hold that the substantial

advancement test required a land dedication component.

To the contrary, in Ehrlich v. City of Culver City, which

concerned development fees, this Court issued a writ for

certiorari, vacated judgment and then remanded the case

to the California Court of Appeal for further

consideration in light of Dolan. 512 U.S. 1231 (1994).

Ultimately, the California Supreme Court agreed with

this Court. Ehrlich v. City of Culver City, 911 P.2d 429

(Cal. 1996), cert. denied, 117 S. Ct. 299 (1996).

Finally, it must be noted that the United States did

not dispute the Penn Central Agins “no substantial

advancement of a legitimate state interest” test in

Williamson County, which, like De/ Monte Dunes, also

concerned a § 1983 jury trial. After arguing that the

taking issue was not ripe, the U.S. argued alternatively

that no taking had occurred because the zoning and

subdivision regulations as applied to the subject property

“clearly advanced legitimate state interests.” Br. for

United States as Amicus Curiae at 18 (No. 84-4). The

U.S. then moved on to argue satisfaction of Agins’

“economic use” test. /d. at 22. Nor did the U.S. dispute

the two-prong test in First English Evangelical Lutheran

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

(1987), where the government argued (unsuccessfully)

that the Fifth Amendment did not require just

compensation as the remedy for regulatory takings. Br.

for United States as Amicus Curiae (No. 85-1199). In

19

There, despite a development denial, the Court found no

taking because the existing building on the site (Grand

Central Terminal) had not been interfered with “in any

way” and because the property owner had received

“valuable” transferable development rights from the city.

Id. at 136, 137.

The land use taking test was then given

constitutional meaning as to remedy by /irst English

Evangelical Lutheran Church of Glendale v. Los Angeles

County, 482 U.S. 304 (1987) (land use regulatory takings

are compensable, including for temporary periods of

time). The test’s “economic use” prong was later

clarified by Lucas (denial of all use is a categorical

taking; anything less requires a weighing of the three

Nollan, the U.S., without disputing it, recited the two-

prong test, Br. for United States as Amicus Curiae at 18

n.14 (No. 86-133), and argued favorably in its behalf.

Id. at 20-21. Nor did the U.S. dispute the test and call it

dictum in its Do/an arguments. Br. for United States as

Amicus Curiae (No. 93-518).

This Court, by contrast, has been clear and

consistent. In Agins, it held no taking occurred because

there was a substantial advancement of legitimate state

interests. In No//an, it held a taking did occur because

there was no substantial advancement of legitimate state

interests. In Keystone, it stated that the two-prong

takings test is a holding. Win a case, lose a case, but law

is law, or should be.

20

factors enunciated in Penn Central: economic impact on

the claimant, extent to which the regulation interfered

with distinct investment-backed expectations, and

character of the governmental action, 438 U.S. at 124).

Meanwhile, the “substantial advancement” prong

of the takings test was clarified by No//an (1987) and by

Dolan (1994). Taken together, these cases require a

close fit, or nexus, between regulatory means and ends.

Importantly, if the government does not pass the No//an

substantial advancement test, the Dolan rough

proportionality inquiry is analytically superfluous.

In short, the Penn Central Agins test, repeatedly

used by this Court in a variety of settings (see United

States v. Riverside Bayview Homes, Inc., 474 U.S. 121,

126 (1985); Keystone, 480 U.S. at 485; Nollan, 483 US.

at 834; Lucas, 505 U.S. at 1016; Dolan, 512 U.S. at 385;

see also Sar-Diego Gas & Electric, 450 U.S. at 647, 648

(Brennan, J., dissenting)), is grounded in “regulatory

taking” cases, of which Dolan is one, involving denials

as well as conditional approvals. As this Court noted in

Yee, Nollan's nexus requirement is a regulatory taking

concept. 503 U.S. at 530, 534.

The City of Monterey’s attempt to distinguish

development “exactions” from “denials” creates a

distinction without a difference in the actual world of

land development application processing. Sometimes

applications are denied; sometimes they are approved

with conditions; sometimes they are denied and later

approved with conditions. And sometimes a citizen is

21

strung along for years on the exaction/denial continuum.

That is exactly what happened here. For purposes of the

Fifth Amendment, De/ Monte Dunes, like every land use

taking case cited above from Penn Central (1978) to

Suitum (1997), concerns alleged (and here, proven) use

of the police power to transform a private property

interest into public use without just compensation.® That

is the constitutional core of all of the above-cited cases,

including the Court of Appeals’ opinion in De/ Monte

Dunes II. The court below properly applied this Court’s

regulatory taking tests to uphold this Fifth Amendment

principle.

Dolan reinforces the fact thai Nollan’s nexus

requirement derives from Penn Central, a case, like De/

Monte Dunes, concerning the denial of a development

application. 512 U.S. at 388. In a thoughtful article,

Professor Laitos elegantly ties together this Court’s

takings cases from Armstrong (1960) to Dolan (1994),

explaining how John Rawls’ philosophy of “justice as

fairness” reverberates in the Court’s application of the

° As the court below explained, the evidence

established “that the City progressively denied use of

portions of the Dunes until no part remained available for

a use inconsistent with leaving the property in its natural

state.” Del Monte Dunes I/, at 1433. In short, the use

“conditions” required by Monterey were the functional

equivalent of an “exaction” of the property, which the

city then formalized with its “denial” of the fifth

application.

22

Takings Clause. Jan G. Laitos, 7akings and Causation,

5 Wm. & Mary Bill Rts. J. 359 (1997); see also Gus

Bauman, 7he Supreme Court, Inverse Condemnation and

the Fifth Amendment: Justice Brennan Confronts the

Inevitable in Land Use Controls, 15 Rutgers L.J. 15, 59-

69 (1983) (cited in Williamson County, 473 U.S. at 199

n.17). Laitos recognizes De/ Monte Dunes // as an

example of the Armstrong-to-Dolan principle of limiting

government’s ability to require a few to bear the burdens

for the many. Jan G. Laitos at 363 n.25; 379 n. 115. He

writes, “[c]rucial to Do/an's test is ‘impact’ -- the Court

must expect [to] find that the planned property use will

cause a societal problem that the government action

intends to alleviate. Absent causation, as in Dolan, a

regulation violates Armsfrong's notion of fairness and

Rawlsian requirements of equality.” /d. at 370-71. See

also Leigh Raymond, Comment, 7he kthics of

Compensation: Takings, Utility, and Justice, 23 Ecology

L.Q. 577 (1996).

Several lower courts have recognized the proper

role of Dolan in this Court’s regulatory takings

jurisprudence. For example, /hrlich v. City of Culver

City, 911 P.2d 429 (Cal. 1996), cert. denied, 117 S. Ct

299 (1996), concerned a scenario where a development

application was denied by the city, the landowner filed

suit for damages, the city then reversed its position and

approved the application but on condition that certain

fees be paid by the owner to the city, and the owner then

amended his complaint to allege that the fees amounted

to an unconstitutional taking. The state supreme court

held that one of the development fees violated Dolan

23

after first finding that the fee met the Noll/an test.

Similarly, in Clark v. City of Albany, 904 P.2d 185 (Or.

App. 1995), rev. denied, 912 P.2d 375 (Or. 1996), the

state court found that a street improvement required of a

developer violated Dolan's “rough proportionality”

standard while another requirement did not. See a/so

Northern Illinois Home Builders Ass'n v. County of

DuPage, 649 N.E. 2d 384 (Ill. 1995). In Christopher

Lake Development Co. v. St. Louis County, 35 F.3d 1269

(8th Cir. 1994), a developer's site plan was denied by the

county unless the developer would subsequently agree to

build a storm water drainage system for the entire

watershed in which the subject property sat. Not until

the developer built the system for the entire watershed

did the county then approve the site plan for the single

property. The developer sued, and the Court of Appeals,

citing Dolan, agreed that “from our review of the record,

the County has forced the Partnership to bear a burden

that should fairly have been allocated throughout the

entire watershed area.” /d. at 1275.

The City of Monterey tries to draw a

constitutional distinction between a development

“denial” and “exaction” and then contends that De/

Monte Dunes I/ fatally misapplied Dol/an's “rough

proportionality” standard. But as the above sampling of

cases shows, as do the facts of De/ Monte Dunes itself,

“denials” and “exactions,” which are cut from the same

regulatory cloth by localities acting in the development

process, are sometimes used interchangeably to leverage

tne police power in order to accomplish ends that go

24

beyond the constitutional limit.’

It should not be the case -- and under this Court’s

precedents it is not -- that government can deny an

application and defeat the Fifth Amendment by

proclaiming pretextual rationales that relate neither in

nature nor extent to the impacts of the proposed use. Of

course, where the proffered reasons for a denial bear no

substantial advancement of a legitimate state interest, the

’ As for the city’s argument that Do/an cannot be

applied to a development denial, it must be noted that

the facts of De/ Monte Dunes belie that position. After

five applications, the city refused to permit use of the

property even though conditions previously specified by

the city had been substantially met by the owner. De/

Monte Dunes I, at 1506. In addition to demonstrating the

illegitimacy of the city’s denial (the No//an test), the

denial was not roughly proportional to the impacts of the

housing development because the concessions made by

the landowner met the earlier stated concerns of the city

and properly mitigated the project’s impacts. Of course,

the fact that the city would have continued to leverage

ever more concessions (or exactions) beyond the five

applications should not stand in the way of finding that

the concessions the city sought to expand were not

roughly proportional to the shifting reasons given by the

city for denying the application. Both sides of the

equation are present here; the ratio between the

conditions and the project’s impacts is so out of balance

that even rough proportionality would not be satisfied.

25

question of proportionality is not critical since the Dolan

rough proportionality standard is only relevant if the

Nollan substantial advancement test has been met by the

government.

Here, as the Court of Appeals made clear, the City

of Monterey never got past the “substantial

advancement” prong of the takings test laid down by

Penn Central and Agins and explicated in Nol/lan. The

court began by observing that “[t]o prevail on its inverse

condemnation claim, Del Monte had to show that the

City’s actions (1) did not substantially advance a

legitimate public purpose; or (2) denied it economically

viable use of its property. No//an v. California Coastal

Comm'n [cite].”. De/ Monte Dunes I], at 1428. The

court then found that “substantial evidence” in the record

supported a finding that each prong of the regulatory

takings test had been violated, and the court repeatedly

emphasized that the jury had considered evidence on the

substantial advancement “issue” or “theory.” /d. at

1428-30. Indeed, the city did not object to the jury

instruction on the No//an issue. /d. at 1429.

The Court of Appeals’ main treatment of the

Dolan rough proportionality standard was triggered not

because of any live issue in the case (the city had already

failed the threshold test under No//an) but simply to

reinforce the meritlessness of the city’s post-trial motion

for a judgment notwithstanding the verdict. /d. at

1430-32. In that context, the court merely bent over

backwards to give the city the benefit of doubt as it

reviewed all the trial evidence:

26

Even if the City had a legitimate interest in

denying Del Monte’s [fifth] development

application, its action must be “roughly

proportional” to furthering that interest... .

For the purposes of reviewing the district

court’s denial of the City’s motion for

judgment notwithstanding the verdict, we

assume that the City’s stated interests of

protecting the environment and health and

safety of its citizens were legitimate.

Id. at 1430 (emphases added).

In an earlier inverse condemnation case heard by

this Court, also one with a jury trial, it was asked, “if a

policeman must know the Constitution, then why not a

planner?” San Diego Gas & Electric, 450 U.S. at 661

n.26 (Brennan, J., dissenting).* First English and Nollan,

Lucas and Dolan answered that question as the progeny

of Pennsylvania Coal and Armstrong. The Court of

Appeals did not abuse those decisions nor did it forget

that the Takings Clause is a part of the Bill of Rights.

* Yet. the City of Monterey now asks this Court to

give “due regard to the limited role of the Constitution in

local land use decision-making.” Br. for Petitioner at 27

(No. 97-1235).

27

CONCLUSION

For the above reasons, and because citizens with

rights in property should not be singled out and denied

absolutely the opportunity to put their case to a jury (a

jury, after all, of local taxpayers), the decision of the

Court of Appeals for the Ninth Circuit should be

affirmed.

Respectfully submitted,

Of Counsel: Gus Bauman

Mary V. DiCrescenzo = (Counsel of Record)

Duane J. Desiderio James B. Holman

National Association Beveridge & Diamond, P.C.

of Home Builders 1350 I St., N.W., Suite 700

1201 15th St., N.W. Washington, DC 20005

Washington, DC 20005 (202) 789-6000

Nick Cammarota

Building Industry Legal

Defense Foundation

1330 S. Valley Vista Drive

Diamond Bar, CA 91765

July 31, 1998