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National Association of Counties * Washington, D.C.            Vol. 31, No. 12 * June 21, 1999

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Supreme Court rejects local
government arguments in ‘takings’ case

By Diane S. Shea
associate legislative director


By a 5 to 4 vote, the U.S. Supreme Court ruled this month that property owners who sue local governments under Section 1983 (seeking monetary damages) over a land use ordinance may be entitled to a jury trial. The Court also held that the city’s denial of a development permit need not be "roughly proportional" to the harm expected by the development.

The case, City of Monterey v. Del Monte Dunes (No. 97-1235), arose out of the denial by Monterey, Calif. to allow a subdivision to be developed on a 37-acre oceanfront parcel owned by a large development company. The city’s reasons included the need to maintain beach access, blockage of ocean views from the highway, and protection of an endangered butterfly. The developer filed suit in federal court claiming that a "taking" had occurred, for which it was owed compensation. A jury awarded $1.45 million in damages, which the city appealed.

The city argued that the case should never have gone to a jury because under Section 1983 there is no traditional right to a jury in property rights cases. NACo, along with several other local and state government organizations, filed an amicus brief in support of the city maintaining that courts should not allow jury trials in regulatory takings cases.

NACo’s brief noted that Supreme Court precedent had supported the responsibility of legislative and administrative bodies, not juries, to assess whether a land use decision "substantially advances a public purpose."

Rejecting the local governments’ arguments, a majority of the Supreme Court justices said that in cases such as Del Monte Dunes, a jury trial may be appropriate, but in most situations, a jury may not second-guess the reasonableness of a local zoning law or land use policy. Juries should be given instructions, said the Court, that they may decide the reasonableness of the permit denial only in light of all the history and the context of the case.

The Court also rejected the extension of an earlier legal standard to the case, ruling that the denial of a development permit need not be "roughly proportional" to the development’s anticipated effects. The roughly proportional standard, developed in Dolan vs. City of Tigard, 512 U.S. 374 (1994) applies, said the Court, only where conditions have been placed on development, not where development has been completely denied.

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