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Eric Grant *
The only takings case of the Supreme Court's 1998 Term, City of
Monterey v. Del Monte Dunes at Monterey, Ltd.(2) was highly anticipated
on both sides of the property-rights fault line. When it was argued
back in October of last year, the case seemed to portend a major
reappraisal of the so-called "first prong" of the regulatory
takings standard set forth in Agins v. City of Tiburon, namely,
that a land use regulation effects a compensable taking if it "does
not substantially advance legitimate state interests."(3) The
Court had granted certiorari to consider, among other things, 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 [a] public agency's land use decision."(4) The City of Monterey
and its amici curiae had argued strenuously in the negative, propounding
a vision of regulatory takings law in which "courts employ
deferential standards of review and require only that there be some
basis to support the local government's [land use] decision."(5)
Indeed, at oral argument, the representative of the Solicitor General
had gone so far as to urge the Court explicitly to discard the first
prong of Agins altogether, in favor of a much more relaxed standard
derived from due process jurisprudence.(6)
In this light, the actual decision in Del Monte Dunes was anti-climactic.
In the litigation that occurred before the Supreme Court accepted
the case for review, the Ninth Circuit had affirmed a jury verdict
awarding $1.45 million to the property owner for having suffered
a regulatory taking when the City repeatedly -- and, so the jury
found, unreasonably -- rejected the owner's applications to develop
beachfront property.(7) The bulk of the Supreme Court's three opinions
was devoted to the question of whether the district court had properly
submitted the City's liability to the jury, as opposed to determining
that liability for itself purely as a matter of law. On this question,
the Court split along somewhat non-intuitive lines, with a bare
majority answering the question in the affirmative. Justice Kennedy
-- writing for himself, the Chief Justice, and Justices Stevens,
Scalia, and Thomas -- concluded that a jury trial was proper because
the owner's regulatory takings claim "sound[ed] basically in
tort" and sought "legal relief" (that is, money damages),
making the claim an "action at [common] law" within the
purview of the Seventh Amendment.(8)
Losing Justice Scalia at this point, Justice Kennedy's opinion
proceeded to distinguish precedent that had held "there is
no constitutional right to a jury in eminent domain [i.e., condemnation]
proceedings."(9) Although this precedent might profitably have
been discarded on the basis that it is "not just wrong, but
manifestly wrong,"(10) the plurality chose to rest on hypertechnical
(and, to my mind, unconvincing) distinctions between a condemnation
proceeding on the one hand and "a § 1983 action to redress
an uncompensated taking" on the other.(11) Justice Scalia,
by contrast, took a more categorical approach: "all §
1983 actions must be treated alike insofar as the Seventh Amendment
right to jury trial is concerned, [and] that right exists when monetary
damages are sought."(12) Justice Souter, on behalf of himself
and Justices O'Connor, Ginsburg, and Breyer, dissented on the jury
trial question. His opinion concluded that "the analogy between
direct and inverse condemnation is apparent," and "[t]he
strength of the analogy is fatal to [the property owner's] claim
to a jury trial as a matter of right."(13)
If this debate strikes you as somewhat arcane, not to mention far
afield from the substance of takings law, then you are not alone.
But at least the Court clarified an important procedural point,
didn't it? We can say with certainty that a property owner who asserts
a takings claim through the vehicle of § 1983 in federal court
is entitled to a jury trial on the question of . . . . Well, the
devil is in the ellipses. The Court self-consciously did "not
attempt a precise demarcation of the respective provinces of judge
and jury in determining whether a zoning decision substantially
advances legitimate governmental interests."(14) Thus, the
Court emphasized that its holding did not necessarily extend to
a claim that presents "a broad challenge to the constitutionality
of [a] city's general land-use ordinances or policies."(15)
The Court also took pains to say that its holding did not address
the allocation of decisionmaking power between judge and jury in
the context of a claim that "[a] city's general regulations
were unreasonable as applied to [particular] property."(16)
So a property owner's right to jury trial does not necessarily extend
to "broad" (facial?) constitutional challenges to land
use regulations or to "as applied" challenges either.
Well, at least in the somewhat narrow context of a claim like Del
Monte's -- "the city's denial of the final development permit
was inconsistent not only with the city's general ordinances and
policies but even with the shifting ad hoc restrictions previously
imposed by the city"(17) -- a property owner is entitled to
a jury trial in federal court. In principle, this rule is praiseworthy,
since takings law practitioners generally agree that juries are
more sympathetic to property owners than judges. In practice, however,
the rule is virtually meaningless. As the Court itself pointed out,
current doctrine provides that a federal court "cannot entertain
a takings claim under § 1983 unless or until the complaining
landowner has been denied an adequate postdeprivation remedy."(18)
This means, in practical terms, that so long as a state "provides
a facially adequate procedure for obtaining just compensation for
[regulatory] takings" -- and the Court apparently believes
that "[e]ven the State of California" now provides such
a procedure -- then a property owner must "pursue relief in
state court as a precondition to federal relief."(19) Moreover,
by virtue of collateral estoppel, this supposed precondition to
federal relief has become a substitute for federal relief, driving
virtually all federal takings claims out of federal court for all
time.(20)
Let us return now to the issues that suggested Del Monte Dunes
might result in a significant ruling on the law of takings. (With
respect to the following issues, bear in mind that the Court's opinion
was unanimous, joined by everyone from Justice Scalia on the one
end of the property rights spectrum to Justice Stevens on the other.)
Recall that briefing and oral argument had given credence to the
speculation that Del Monte Dunes would produce a comprehensive,
if not definitive, explication of the "substantially advance"
prong of the Agins standard. That speculation was wrong. Having
observed that the Court has not provided "a thorough explanation
of the nature or applicability of the requirement that a regulation
substantially advance legitimate public interests outside the context
of required dedications or exactions,"(21) Del Monte Dunes
again ducked the opportunity to provide that thorough explanation.
Instead, as set forth below, the Court gave us four "negatives."
First, whatever the law is, it has not been changed by this case.
As noted above, the Solicitor General had asked the Court to discard
the "substantially advance" prong of the Agins test in
favor of a less-exacting due process-type standard. The Court, however,
explicitly declined to "revisit" Agins and the many other
decisions that have reiterated the Agins standard: "the applicability
or continued viability of the general test for regulatory takings
liability recited by these authorities" was simply not up for
reconsideration.(22)
Second, the law applicable in the aforementioned "context
of required dedications or exactions" -- where the Court has
indeed explicated the meaning of the substantially advance standard
-- is not applicable outside that context. As laid down and applied
in Dolan v. City of Tigard,(23) the specific rule governing "land-use
decisions conditioning approval of development on the dedication
of property to public use" is that "dedications demanded
as conditions of development [must be] proportional to the development's
anticipated impacts."(24) In Del Monte Dunes, the Court held
that such rule "was not designed to address, and is not readily
applicable to, the much different questions arising where, as here,
the landowner's challenge is based not on excessive exactions but
on denial of development."(25) Accordingly, the Court held
that "the rough-proportionality test of Dolan is inapposite
to a case such as this one."(26)
Third, the Court emphasized that whatever the significance of the
Ninth Circuit's decision upholding the jury verdict, that decision
"did not adopt a rule of takings law allowing wholesale interference
by judge or jury with municipal land-use policies, laws, or routine
regulatory decisions."(27) So, despite the presence of the
word "reasonable" in the instructions to the jury with
respect to whether the city's actions substantially advanced a legitimate
public purpose, the verdict was not based on "a jury determination
of the reasonableness of [the city's] general zoning laws or land-use
policies."(28) Moreover, the jury instructions "did not
allow the jury to consider the reasonableness, per se, of the customized,
ad hoc conditions imposed on the property's development," and
"the jury was not given free rein to second-guess the city's
land-use policies."(29) We do not know from Del Monte Dunes
if any of these things are definitely proscribed -- though terms
like "wholesale interference" and "second-guess"
surely put them in a negative light -- but we do know that by affirming
the judgment below, the Supreme Court definitely did not endorse
them.
Finally, perhaps to provide the balance necessary to maintain unanimity,
the Court also emphasized that is not the law that municipal "land-use
decisions are immune from judicial scrutiny under all circumstances."(30)
Such a notion "is contrary to settled regulatory takings principles."(31)
What, then, is the significance of Del Monte Dunes? Although the
Court left unanswered most of the important questions regarding
the "substantially advance" standard, I suspect that the
four negatives described above will provide substantial new ammunition
for both advocates and detractors of property rights. Let me briefly
make the obvious case on behalf of the latter, followed by the rebuttal
case on behalf of the former.
If I were a lawyer for a public agency that regulates land use,
I would argue that Del Monte Dunes rejected "heightened scrutiny"
-- shorthand for any scrutiny greater than required by the rational
basis test -- of any land-use decisions outside the narrow context
of exactions and dedications. In restricting Dolan's rough-proportionality
test to that context, the Court necessarily rejected the notion
that heightened scrutiny is generally applicable to regulatory actions
challenged as takings. This conclusion is confirmed by the Court's
rejection of "reasonableness" as a generally applicable
standard in takings law and by the Court's emphasis on the notion
that the decisions of land-use regulators are protected from "wholesale
interference" by judges and juries, and thus that those decisions
may not be "second-guessed" in court.
In response to these arguments, I would lay great weight on the
fact that Del Monte Dunes explicitly rejected the Solicitor General's
call to discard the "substantially advance" prong of Agins
and replace it with the non-heightened scrutiny of the rational
basis test. I would point out that the Court cited -- with apparent
endorsement -- footnote 3 of Nollan v. California Coastal Commission,
in which Justice Scalia had unmistakably distinguished the "substantially
advance" standard from the more deferential "rationally
could have decided" standard, dismissing the notion that "the
standards for takings challenges, due process challenges, and equal
protection challenges are identical."(32) I would argue that
the rejection of Dolan's rough-proportionality test outside the
context of exactions and dedications is precisely that -- a rejection
of a context-specific rough-proportionality test, not a rejection
of heightened scrutiny, the test of which is but a single application.
Finally, I would take solace in the Court's clear rejection of any
notion that municipal land-use decisions are "immune from judicial
scrutiny," a condition that would effectively obtain if the
rational basis test were to govern regulatory takings law.
As an objective observer, however, I would have to say that lower
courts should simply ignore Del Monte Dunes as they try to flesh
out the "nature or applicability" of the substantially
advance standard. In that regard, the most salient point about the
decision is that the law has not changed. Whatever footnote 3 of
Nollan means and whatever the appropriate level of deference owed
by federal courts to land-use regulators, the resolutions of these
issues are the same after Del Monte Dunes as they were before. This
conclusion makes perfect sense in light of the unanimity of the
Court with respect to the substantive issues. Any proposition to
which all nine Justices agree is quite likely to be a truism, understood
and (usually) accepted by all lower courts.(33)
If Del Monte Dunes has any significance at all, then, I would say
it lies not in what the Court said but what it did. For the very
first time, the Supreme Court of the United States affirmed a money
judgment in favor of a property owner on a regulatory takings claim.
If nothing else, that fact may "keep hope alive" for property
rights advocates, particularly those in California, who have had
little success in the lower courts in recent years.
- * Mr. Grant practices property rights law at
the Pacific Legal Foundation, a nationwide public-interest law
firm based in Sacramento, California.
- 119 S. Ct. 1624 (1999).
- 447 U.S. 255, 260 (1980).
- Petition for Certiorari
at i.
- Brief for Petitioner
at 39 (emphasis added).
- See Transcript of Oral
Argument at 22-29.
- See 119 S. Ct. at 1634.
- Id. at 1638.
- Id. at 1639 (plurality
opinion) (quoting United States v. Reynolds, 397 U.S. 14, 18 (1970)).
- So I argued at length
in A Revolutionary View of the Seventh Amendment and the Just
Compensation Clause, 91 Nw. U. L. Rev. 144, 146 (1996).
- 119 S. Ct. at 1639
(plurality opinion).
- Id. at 1645 (Scalia,
J., concurring in the judgment).
- Id. at 1651 (Souter,
J., dissenting). In the course of contending that the anti-jury
precedent mentioned in the text is "on solid footing,"
id. at 1653, Justice Souter's opinion repeats a number of historical
assertions about the role of the jury in 1791-era eminent domain
proceedings. In my judgment, those assertions -- exemplified by
the statement that "condemnation proceedings carried `no
uniform and established right to a common law jury trial in England
or the colonies [sic] at the time the Seventh Amendment was adopted,'"
id. at 1652 (quoting Moore's Federal Practice) -- are exposed
as frauds by an actual examination of the governing statutes of
that era. See Grant, supra note 9, at 177-91.
- 119 S. Ct. at 1644.
- Id.
- Id. at 1645.
- Id.
- Id. at 1644. This doctrine
derives principally from Williamson County Regional Planning Commission
v. Hamilton Bank, 473 U.S. 172, 194-97 (1985).
- Id. at 1633, 1644.
The Court's casual acceptance of the "adequacy" of California
takings law can only rest on ignorance or an overly ironic use
of the word "facially." Anyone who is familiar with
this body of law knows that it is adequate for one thing only
-- rejecting takings claims no matter what. See, e.g., Santa Monica
Beach, Ltd. v. Superior Ct., 968 P.2d 993 (Cal.), cert. denied,
119 S. Ct. 1804 (1999); Landgate, Inc. v. California Coastal Comm'n,
953 P.2d 1188 (Cal.), cert. denied, 119 S. Ct. 179 (1998); Kavanau
v. Santa Monica Rent Control Bd., 941 P.2d 851 (Cal. 1997), cert.
denied, 118 S. Ct. 856 (1998).
- For example, in Dodd
v. Hood River County, 136 F.3d 1219 (9th Cir.), cert. denied,
119 S. Ct. 278 (1998), property owners who suffered a regulatory
taking unsuccessfully sought just compensation in state court
under state law before pursing their federal takings claim. Accordingly,
the Ninth Circuit ruled that the owners were not barred from federal
court by Williamson County. The owners were barred from federal
court by collateral estoppel, however: because the test for a
regulatory taking under the Oregon Constitution is substantially
similar to the test under the federal Just Compensation Clause,
and because the owners had unsuccessfully litigated the takings
issue in state court, the owners were precluded from relitigating
the issue in federal court. Of course, that "issue"
was the essentially the whole case, with the result that the property
owners were never able to litigate their federal takings claims
in federal court -- even though they had followed all the rules,
including having properly "reserved" their federal claims
in the state court litigation.
- 119 S. Ct. at 1636.
- Id.
- 512 U.S. 374 (1994).
- Del Monte Dunes, 119
S. Ct. at 1635.
- Id. (emphasis added).
- Id.
- Id. at 1637 (emphasis
added).
- Id. at 1636.
- Id. at 1637 (emphasis
added).
- Id.
- Id.
- 483 U.S. 825, 835-36
n.3 (1987).
- Ironically, it was the one court that seemingly
has the greatest trouble applying legal truisms, namely, the Ninth
Circuit, that was affirmed in Del Monte Dunes.
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