In The
Supreme Court of the United States
October Term, 1997
CITY OF
MONTEREY,
Petitioner,
v.
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
REPLY BRIEF FOR THE
PETITIONER
RICHARD E. V.
HARRIS
GEORGE A. YUHAS*
CATHERINE A. ROGERS
ORRICK, HERRINGTON & SUTCLIFFE LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Telephone: (415) 392~1122
Counsel for Petitioner
*Counsel of Record
TABLE OF CONTENTS
- INTRODUCTION
- RESPONDENTS MISCHARACTERIZE THE
RECORD, THE CITY'S REGULATORY ACTION AND THE
JURY'S VERDICT
- RESPONDENTS' ANALYSIS OF WHETHER A
RIGHT TO JURY TRIAL EXISTS FOR INVERSE
CONDEMNATION PROCEEDINGS AVOIDS THE RELEVANT
INQUIRIES
- Respondents'
Attempt to Read a Right to Jury Trial
Into the General Character of § 1983 Is
Improper
- Respondents
Offer No Meaningful Basis for Finding a
Seventh Amendment Right to Jury Trial in
Inverse Condemnation Actions.
- Respondents
Provide No Basis to Ignore the
Close Analogy to Direct
Condemnation Actions, Which Do
Not Implicate the Seventh
Amendment
- Respondents'
Attempt to Lump Inverse
Condemnation Claims Into a
General Category with Other
Constitutional Torts Ignores the
Unique Character of Such Claims.
- Respondents
Ignored the Fact that the Issues Raised
in Inverse Condemnation Are Not of a Type
Traditionally Resolved By Juries.
- RESPONDENTS' DEFENSE OF THE NINTH
CIRCUIT'S REASONABLENESS STANDARD OF REVIEW
MISSES THE POINT
- RESPONDENTS' DEFENSE OF THE ROUGH
PROPORTIONALITY STANDARD IGNORES THE LEGAL AND
PRACTICAL DIFFERENCES BETWEEN EXACTIONS AND
REGULATORY DENIALS
- CONCLUSION
TABLE OF AUTHORITIES
FEDERAL CASES
Albright v. Oliver, 510 U.S. 266 (1984)
Armstrong v. United States, 364 U.S. 40 (1960)
Bendix Autolite Corp. v. Midwesco Enterprises,
Inc., 486 U.S. 888 (1988)
Berkeley v. Common Concil, 63 F.3d 295 (4th
Cir. 1995)
Borst v. Chevron Corp., 36 F.3d 1308 (5th Cir.
1994)
Bowen v. Massachusetts, 487 U.S. 879 (1988)
Chapman v. Houston Welfare Rights Organization, 441
U.S. 600 (1979)
City of St. Louis v. Praprotnik, 485 U.S. 112
(1988)
Department of Army v. Federal Labor Relations
Authority, 56 F.3d.273 (1995)
Dolan v. City of Tigard, 512 U.S. 374 (1994)
Dolence v. Flynn, 628 F.2d 1280 (10th Cir.
1981)
Eastern Enterprises v. Apfel, 118 S.Ct. 2131
(1998)
Federal Power Commission v. Florida Power &
Light Co., 404 U.S. 453 (1972)
First English Evangelical Lutheran Church v. County
of Los Angeles, 482 U.S. 304 (1987)
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33
(1989)
Haines v. Fisher, 82 F.3d 1503 (10th Cir. 1996)
In re U.S. Financial Securities Litigation, 609
F.2d 411 (9th Cir. 1979)
Jacobs v. United States, 290 U.S. 13 (1933)
Lucas v. South Carolina Coastal Council, 505
U.S. 1003 (1992)
Markman v. Westview Instruments, Inc., 517 U.S.
370 (1996)
Midnight Sessions, Ltd. v. City of Philadelphia, 945
F.2d 667 (3rd Cir. 1991)
Mitchell v. United States, 267 U.S. 341 (1925)
Nectow v. City of Cambridge, 277 U.S. 183
(1928)
New Port Largo, Inc. v. Monroe County, 95 F.3d
1084 (11th Cir. 1996)
Pearson v. City of Grand Blanc, 961 F.2d 1211
(6th Cir. 1992)
Recupero v. New England Telephone & Telegraph
Co., 118 F.3d 820 (1st Cir. 1997)
Regents of the Univ. of Mich. v. Ewing, 474
U.S. 214 (1985)
Roma Constr. Co. v. Russo, 96 F.3d 566 (1st
Cir. 1996)
Ross v. Bernhard, 396 U.S. 531 (1970)
Turner v. Upton County, 915 F.2d 133 (5th Cir.
1990)
United States v. 87.30 Acres of Land, 430
F.2d 1130 (9th Cir. 1970)
Valley Citizens for a Safe Environment v. Aldridge,
886 F.2d 458 (1st Cir. 1989)
Williamson County Regional Planning Comm'n v.
Hamilton Bank, 473 U.S. 172 (1985)
Wisconsin Central Limited v. Public Services
Commission of Wisconsin, 95 F.3d 1359 (7th Cir. 1996)
Zellous v. Broadhead Assoc., 906 F.2d 94 (3d
Cir. 1990)
STATUTES AND RULES
42 U.S.C. § 1983
Federal Rule of Civil Procedure
Rule 50
Rule 52
MISCELLANEOUS
II Davis & Pierce, Administrative Law Treatise
II Charles A. Wright, Arthur R. Miller & Mary Kay
Kane, Federal Practice and Procedure (1995)
I. INTRODUCTION
Respondents portray the City as presenting extreme and
novel legal positions designed to insulate the City
against liability for its supposedly outrageous abuses of
power. For this purpose, Respondents distort the factual
record concerning the City's land use decision and
advocate new legal standards that would fundamentally
change the role of the Constitution in the local land use
process. Respondents advocate assigning to juries, rather
than courts, the task of applying the perplexing
standards governing regulatory takings. They seek to
replace the historically deferential standard of
constitutional review with a de novo reevaluation
of the same evidence considered by the governmental
decisionmaker. Finally. Respondents seek to impose
takings liability for all governmental actions that a
jury concludes did not achieve an appropriate equipoise
between public and private interests.
While any one of these formulas alone would undermine
the authority of local governments responsible for land
use planning, cumulatively they promise to "throw
one of the most difficult and litigated areas of the law
into confusion, subjecting States and municipalities to
the potential of new and unforeseen claims in vast
amounts." Eastern Enterprises v. Apfel, 118
S.Ct. 2131, 2155 (1998) (Kennedy, J., concurring in part
and dissenting in part). Respondents assert that this
result is perfectly acceptable because, through the
proposed standards, juries can inject "common sense
into the balancing process. " Resp. Br. at 14 n.13.
The problem with Respondents' assertion is that juries
are not city councils and they should not intrude on
local governments' inherently political power to make and
implement land use policies.
All this is not to say that local land use
decisions and regulations are immune from constitutional
review. Constitutional review is always available to
ensure that there is some legitimate basis for the
government's decision. This review is accomplished by
applying to local land use decisions the same type of
deferential review that courts apply to governmental
decisions in other legislative, quasi-legislative and
quasi-adjudicative contexts.[1] Deference to the
legitimate purpose of a land use decision does not make
the Fifth Amendment a dead letter. There remains the
Fifth Amendment requirement that just compensation be
paid when a legitimate government action goes too far and
deprives property of all economically viable use.
footnote [1] The City supports the
substantial arguments made by the United States and
certain other amici that a finding that a regulation
fails to advance a legitimate state interest cannot be a
basis for imposing liability for "just
compensation" under the Takings Clause. These
arguments appear to be consistent with views recently
expressed by members of this Court in Eastern
Enterprises. 118 S.Ct. 2131, 2157-60, 2162-64 (1998)
(Kennedy, J., concurring in part and dissenting in part;
Breyer, J. dissenting).
The ultimate issue posed by all three questions upon
which certiorari was granted is how constitutional
limitations on local land use decisions should be
applied. Respondents would have a jury compare the
benefits and burdens of a project, and impose liability
if it concludes, as a matter of fact and policy, that
project benefits outweigh project burdens, giving no
deference to the local government's decision. Resp. Br.
at 44. This approach is wrong. It would be tantamount to
transforming the Constitution into a federal land use
plan with juries acting as land use planners.
II. RESPONDENTS
MISCHARACTERIZE THE RECORD, THE CITY'S REGULATORY ACTION
AND THE JURY'S VERDICT.
In their brief, Respondents essentially ignore the
factual context of the City's decision to reject their
development proposal. Respondents do not deny that
inadequacies in their proposed habitat restoration plan
were the primary ground for the City's decision and they
make no mention of the fact that their restoration plan
was seriously criticized by the United States Fish &
Wildlife Service ("USFWS"), the California
Department of Fish & Game ("Cal DFG") and
others. Although they condemn the City's decision as an
outrageous abuse of power, Respondents make no attempt to
explain how their proposed plan was sufficient or why
improvements to that plan were not feasible.
Proper review of the Ninth Circuit's decision in this
case requires an accurate understanding of exactly what
the City did and did not decide in rejecting the proposed
190-unit condominium development, and what the jury did
and did not decide when it imposed takings liability.
Contrary to Respondents' fervid protests, the City's
rejection of the 190-unit condominium proposal did not
constitute a declaration that the subject property was to
be preserved as open space or that all development on the
subject property was precluded. Certainly, the trial
court made no such finding. On the contrary, the trial
court expressly concluded that the City did not intend
to forestall all development on the subject property.[2]
Pet. App. 41-42. Nor can it be said that the jury found
that the City intended to preserve the property as open
space. The jury imposed takings liability, but there is
no indication of the basis for its verdict. There is no
way of knowing whether the jury concluded that the City's
action failed to advance a legitimate purpose or
determined that the project denial deprived the property
of all economically viable use. For this reason,
Respondents are simply wrong insofar as they assert that
it can be inferred from the jury's general verdict that
that City's denial of the proposed 190-unit development
constituted a denial of all use of the subject
property.[3] Indeed, it was because the verdict form made
it impossible to know which of the two theories of
takings liability the jury had accepted that the Ninth
Circuit correctly recognized that it could affirm only if
the jury's decision was legally sustainable with respect
to each theory of liability. Pet. App. 10.
[2] Respondents argue that, because the
district court denied the City's post-trial motions for
entry of judgment as a matter of law and for a new trial,
"[t]he City got the same result from the judge as it
did from the jury." Resp. Br. at 7. This argument
ignores the distinction between making initial factual
findings and reviewing a verdict under Federal Rule of
Civil Procedure 50 to detem1ine whether there is .'no
legally sufficient basis for a reasonable jury" to
support a verdict. In refusing to grant judgment as a
matter of law, the trial court did not conclude that a
taking had occurred.
[3] The jury was instructed that, in
order to find denial of all economically viable use of
the property, "there must be a showing that after
the action of the City that is being challenged here, the
property is left with no significant value." Jt.
App. 304. Given that plaintiffs' own experts conceded
that the property retained millions of dollars in value
and was ultimately sold for $4.5 million after the City's
action (RT 602-604, 518-19), it seems unlikely that the
jury would have concluded that the property had "no
significant value" and imposed takings liability on
a "denial of all use" theory.
Respondents further mischaracterize the City's actions
by asserting that, in rejecting Respondents' proposal,
the City "announced that the only place that it had
earmarked for the homes was also the only place to create
a butterfly preserve for the [Smith's Blue
Butterfly]." Resp. Br. at 5. The reality was quite
different. Before Respondents even acquired the subject
property, their predecessor and the City recognized that
concerns over shoreline erosion and the requirements of
the Califomia Coastal Act would preclude development on
the beach area, leaving the central portion of the
property as the only area large enough for a proposed
residential development, It. App. 57, 193- 199;
Tr. Exh. 24. Contrary to Respondents' rhetoric, the City
did not "announce" an intent to create a
"butterfly preserve" in this central portion of
the property in lieu of the proposed development. To the
contrary, when the City conditionally approved the
190-unit site plan in September of I 984, it acknowledged
and accepted that much of the native habitat would be
destroyed. Jt. App. 185-86, 251-52; R.T. 829. The City
simply required that Respondents mitigate this harm by
means of an appropriate restoration plan, which both
Respondents and their predecessors knew would be
required.[4] Jt. App. 273-80.
[4] Respondents suggest that further
efforts to modify their project would have been pointless
because "the City" rejected five different
development plans, even though these proposals were well
below the applicable zoning limits, which permitted up to
1000 units on the property. Resp. Br. at 3-4 & n.3.
These statements are misleading. When Respondents
purchased the property in 1984. the local coastal plan
regulating the property permitted a maximum density of
seven units per acre for a maximum aggregate density of
approximately 250 units. Tr. Exh. 28 at 15. Moreover, the
City Council. which is the ultimate decisionmaker,
considered only three proposed development plans. As the
district court concluded in rejecting Respondents'
substantive due process claim, these prior decisions by
the City Council provide no basis upon which to infer an
intent to preclude all development. Pet. App. 4 1 -42.
Respondents also suggest that this is not really a
regulatory denial case because the development proposal
presented to the City contemplated substantial dedication
of property. Resp. Br. at 4-5. What Respondents fail to
mention is that the property dedication included as part
of Respondents' development proposal had nothing to do
with the City's decision to deny this project.[5] The
vast majority of the dedication contemplated by
Respondents' proposal consisted of the beachfront area on
the seaward side of the development line. Jt. App. 57.
This proposed dedication was never the subject of any
objection by Respondent and was completely unrelated to
the City's decision in June of 1986 to deny this
development due to access and habitat concerns.[6]
[5] The contemplated dedications were
included in Respondents' development proposal because
both Respondents and the City recognized that it was
required by the California Coastal Act and would be
demanded by the California Coastal Commission, which had
ultimate decisionmaking authority over the property. Jt.
App. 193-98.
[6] Significantly, when Respondents
purchased the subject property, the conditionally
approved site plan proposal that they
"acquired" with the property included all of
the dedications about which they now complain. At no time
thereafter did the City demand additional dedication of
property. The price Respondents paid, and hence their
"reasonable investment-backed expectations"
regarding property. were necessarily based on the
property as subject to all of these proposed dedications.
Respondents also repeatedly try to characterize the
City's actions as having effected a total taking of their
property. This is not a "total taking" case.
Respondents purchased the property for $3.7 million in
1984. R.T. 511. Then, despite the City's rejection of the
proposed 190-unit development, the property increased in
value and was sold for $4.5 million less than five years
later.[7] R.T. 518-19. These undisputed facts do not
equate to a total taking.
[7] Respondents complain that they were
forced to sell the property to the State of Califomia
based upon a non-negotiable take-it-or-leave-it offer for
less than half of its fair market value. Resp Br. at 6.
In fact, the State's offer was based upon an appraisal
that ascribed a fair market value of $4.500,(XX) to the
property based on a highest and best use of condominium
development of up to 150 units. R.T. 532-33, 535-37.
III. RESPONDENTS' ANALYSIS
OF WHETHER A RIGHT TO JURY TRIAL EXISTS FOR INVERSE
CONDEMNATION PROCEEDINGS AVOIDS THE RELEVANT INQUIRIES.
A. Respondents' Attempt to
Read a Right to Jury Trial Into the General Character of
§1983 Is Improper.
Respondents concede that the legislative history and
plain meaning of 42 U.S.C. § 1983 evidences no express
congressional intent to confer a statutory right to jury
trial. In the absence of any express statement of intent,
Respondents claim to have found congressional intent
implied by the language in § 1983 creating liability for
"an action at law."[8]
[8] Respondents argue that the onus is
on the City to prove not only the absence of a right to
jury trial, but the existence of a right not to have a
jury trial. Resp. Br. at 10-11. This argument is
seriously amiss. When a court is the proper
decisionmaker, parties have a right to have the court
make express findings of fact pursuant to Federal Rule of
Civil Procedure 52. When a jury is erroneously permitted
to resolve questions properly for the Court, and the
court considers itself bound to follow the jury verdict
even though contrary to its own appraisal of the
evidence, the result is error. See II Charles A.
Wright, Arthur R. Miller & Mary Kay Kane, Federal
Practice and Procedure § 2887, at 476 (1995); see
also Pet. App. 10. In fact, Respondents and the cases
to which they cite, acknowledge that an erroneous trial
by jury can only be treated as harmless "if [the
court is] satisfied that the proper result was
reached." Resp. Br. at 12 (quoting Great American
Ins. Co. v. Johnson, 27 F.2d 71 (4th Cir.
1928)). In this case, the district court would almost
certainly have reached a different result if it did not
feel bound by the jury's verdict. Based on the same
evidence relied on by the jury, the district court
expressly concluded that the City had a legitimate basis
for its decision and did not intend to "foreclose
all reasonable development." Pet. App. 41-42.
If § 1983 was adopted to address only a single
category of wrong and if the statutory reference to
"an action at law" was the only statutory
remedy, Respondents' argument might have some force.
However, Respondents' argument ignore the fact that
"an action at law" is only one of the possible
types of claims that can be brought under § 1983.[9]
Section 1983 also encompasses "suits in equity"
and all other "property proceedings for
redress." This reference to multiple types of
actions is consistent with Congress's primary purpose in
promulgating § 1983, which was to create a federal
remedy for persons deprived of all types of
constitutional rights. See Haines v. Fisher, 82
F.3d 1503, 1508 (10th Cir. 1996). Section 1983 is an
empty vessel that provides a vehicle for vindicating
rights elsewhere created. Albright v. Oliver, 510
U.S. 266 (1984); Chapman v. Houston Welfare Rights
Organization, 441 U.S. 600, 618 (1979). The
determination of whether inverse condemnation claims are
for a jury turns on the substantive nature of the claim
itself, an inquiry that must be determined in accordance
with the requirements of the Seventh Amendment.
[9] Contrary to the suggestion in
footnote 17 of Respondents' Brief, none of the cases
cited therein concludes that § I 983 creates a statutory
right to jury trial. To the extent that they address the
issue at all, the cases cited by Respondents merely
demonstrate what the City already concedes, that there is
a right to jury trial if the nature of the claim asserted
under § 1983 is analogous to one traditionally subject
to jury trial at common law. See, e.g., Do/ence v.
F/ynn, 628 F.2d 1280, 1282 (10th Cir. 1981) (finding
right to jury trial in § 1983 action brought by prisoner
who was allegedly kicked and pushed down stairs because
the "case at bar is clearly a garden variety tort
action based on common law of assault and battery").
Respondents' argument that there exists a statutory
right to jury trial also imputes a Congressional intent
to interfere with state courts' procedures in inverse
condemnation claims under § 1983. Regulatory takings
claims must ordinarily be pursued initially in state
courts. See Williamson County Regional Planning
Comm'n v. Hamilton Bank, 473 U.S. 172, 186 ( 1985).
As documented in the amicus brief of the State Attorneys
General, the overwhelming majority of state courts
provide no right to jury determination of liability
issues in state inverse condemnation proceedings.
Nevertheless, a congressionally conferred right to jury
trial under § 1983 would require that state courts
provide jury trials for inverse condemnation claims
brought under § 1983.[10] This conflict would
significantly confuse and complicate the litigation of
regulatory takings claims.
[10] For example, if a state inverse
condemnation action and a federal takings action were
litigated seriatim in state court, a claimant in state
court could contend that it had the right to assert the
same claim first to a court (under state law) and then to
a jury (under § 1983).
B. Respondents Offer No
Meaningful Basis for Finding a Seventh Amendment Right to
Jury Trial in Inverse Condemnation Actions.
1. Respondents Provide
No Basis to Ignore the Close Analogy to Direct
Condemnation Actions, Which Do Not Implicate the
Seventh Amendment.
The preeminent question that determines whether a
particular claim or issue carries with it a right to jury
trial under the Seventh Amendment is whether that claim
or issue was triable by a jury at common law or is
analogous to one that was, See Markman v. Westview
Instruments. Inc., 517 U.S. 370, 378 (1996); Granfinanciera,
S.A. v. Nordberg, 492 U.S. 33, 42 (1989). The most
obvious analogy to inverse condemnation actions is direct
condemnation actions. Both actions arise out of the
Takings Clause. Both actions are predicated on a
government's taking of property for a public purpose.
Both actions have as their focus the payment of just
compensation.
Respondents' entire basis for rejecting the analogy
between condemnation and inverse condemnation actions
rests on the supposed distinction that condemnation
actions involve compliance with the Takings Clause and
inverse condemnation actions involve defiance of the
Takings Clause. Based on this distinction, Respondents
argue that the proper analogy for Seventh Amendment
purposes is between inverse condemnation actions and
other "constitutional torts" cognizable under
§ 1983. Essentially, Respondents assert that whenever a
complaint contains a § 1983 claim and has a dollar sign
in the prayer, the claimant is entitled to a jury trial.
Respondents' analysis operates at a level of
abstraction that is not supported by Seventh Amendment
jurisprudence. Respondents argue that the general
character of § 1983 actions for damages implies a
right to jury trial under the Seventh Amendment. This
categorical approach to Seventh Amendment analysis is not
only unpersuasive, but also contrary to this Court's
clear directives. The Court has consistently held that
the determination of whether there is a Seventh Amendment
right to jury trial depends on the nature of the
issues to be tried, not the character of the
overall action. See Ross v. Bernhard, 396 U.S.
531, 538 (1970); In re U.S. Financial Securities
Litigation, 609 F.2d 411, 422 (9th Cir. 1979). Under
these precedents, the supposedly all-encompassing
tort-like character of claims brought under § 1983
cannot be the starting point for Seventh Amendment
analysis. Rather, the analog must be to the nature of the
specific type of claim asserted under § 1983.
Respondents have offered no appropriate analog to
inverse condemnation actions, and in fact have
acknowledged, in other sections of their brief, the
unmistakable kinship between condemnation and inverse
condemnation actions. Resp. Br. at 39 (acknowledging the
" 'practical equivalence in this setting of negative
regulation and appropriation.' ") (quoting Lucas,
505 U.S. at 1019), Respondents cannot have it both
ways. They cannot equate regulatory and direct takings
for one purpose, but claim that regulatory takings are
completely distinct from direct condemnation for purposes
of the Seventh Amendment. See First English
Evangelical Lutheran Church v. County of Los Angeles, 482
U.S. 304, 315 (1987) ('The fac that condemnation
proceedings were not instituted and that the right was
asserted in suits by the owners [does] not change the
essential nature of the claim.").
2. Respondents'
Attempt to Lump Inverse Condemnation Claims Into a
General Category with Other Constitutional Torts
Ignores the Unique Character of Such Claims.
Respondents' analysis inappropriately assumes that an
inverse condemnation action under § 1983 is just like
any other § 1983 action. In fact, there are meaningful
differences between the nature of claims and remedies
under the Takings Clause, and those arising under other
constitutional amendments. Those differences affect the
relevant Seventh Amendment analysis and demonstrate
further why regulatory takings claims should be treated
the same as direct condemnation proceedings and
differently from other constitutional claims brought
under § I 983.
With every constitutional right, other than inverse
condemnation, money that is awarded to a claimant under
§ 1983 compensates for a government action that is prohibited
by the Constitution. By contrast, in the context of
inverse condemnation, the government action - the
"taking" of property - is express1y permitted
by the Constitution, as long as just compensation is
paid. See Eastern Enterprises, 118 S.Ct. 2131,
2156 (Kennedy, J., concurring in part and dissenting in
part) ('The [Takings] Clause operates as a conditional
limitation, permitting the Government to do what it wants
so long as it pays the charge."); First English, 482
U.S. at 314 (The Takings Clause "does not prohibit
the taking of private property, but instead places a
condition on the exercise of that power.").
Moreover, unlike other constitutional rights, the
Fifth Amendment expressly prescribes the remedy for both
direct and inverse condemnation of property - payment of
just compensation. The unique nature of the "just
compensation" remedy demonstrates why Respondents'
simplistic equation (§ 1983 + $ = "jury
trial") is incorrect. Because a taking is not
prohibited under the Constitution, there is no
"damage" from the government's action in
effecting a "taking." There is only a
"constitutional obligation to pay just
compensation." Armstrong v. United States, 364
U.S. 40, 49 ( 1960); see also Jacobs v. United States,
290 U.S. 13, 16 (1933) ("[A] promise [to pay]
was implied because of the duty to pay imposed by the
[Fifth] Amendment").
Moreover, even ignoring the unique Fifth Amendment
origin of the just compensation remedy and employing a
traditional Seventh Amendment analysis, the nature of the
just compensation remedy does not support a right to jury
trial. Not all claims for monetary relief constitute
claims for "damages" giving rise to a right to
jury trial under the Seventh Amendment. A monetary award
can be either legal or equitable in nature. See
Department of Army v. Federal Labor Relations Authority, 56
F.3d 273, 276 ( 1995). The legal remedy of money damages
provides an injured party with a substitute for
consequential loss, while the equitable remedy of
specific relief attempts to give the very thing to which
the claimant is entitled. See id. The concept of
"just compensation," by its nature, is more
akin to payment of a monetary entitlement in the nature
of specific relief than a payment for consequential loss.
Federal courts have consistently held that the measure of
just compensation is limited to the fair market value of
the property interests being taken, and that 1ost
profits, loss of good will and other consequential losses
are not recoverable as "just compensation." See
Wisconsin Central Limited v. Public Services Comm 'n of
Wisconsin, 95 F.3d 1359 (7th Cir. 1996); Mitchell
v. United States, 267 U.S. 341, 34-45 ( 1925); United
States v. 87.30 Acres of Land, 430 F.2d 1130,
1132 (9th Cir. 1970).
The essentially equitable nature of the just
compensation remedy is not, as Respondents argue, changed
by the fact that, in the context of inverse condemnation,
the claim is for wrongful withholding of the entitlement
to just compensation. To the contrary, in other contexts,
courts have refused to characterize payments of
entitlements as "damages" simply because they
are wrongfully withheld. See, e.g., Bowen v.
Massachusetts, 487 U.S. 879, 910 (1988) (order
compelling Secretary of Health and Human Services to
"undo [its] refusal to reimburse the State" was
"specific relief" and not money damages); see
also Borst v. Chevron Corp., 36 F.3d 1308,
1324 (5th Cir. 1994); Ze//ous v. Broadhead Assoc., 906
F.2d 94. 97 (3d Cir. 1990).
C. Respondents Ignored the
Fact that the Issues Raised in Inverse Condemnation Are
Not of a Type Traditionally Resolved By Juries.
Respondents do not deny that, even in cases that are
subject to Seventh Amendment requirements generally,
courts may be the appropriate decisionmaker for some
issues. See Markman. 517 U.S. at 378 (1996); City
of St. Louis v. Praprotnik. 485 U.S. 112, 136 (1988).
Nevertheless, Respondents assert that juries must resolve
all inverse condemnation liability issues when regulatory
taking claims are asserted under § 1983.
Respondents' argument is premised on the assumption
that regulatory takings liability is a simple factual
inquiry into the reasonableness of the government action.
This premise is incorrect. Inverse condemnation claims
have "proven difficult to explain in theory and to
implement in practice. Cases attempting to decide when a
regulation becomes a taking are among the most litigated
and perplexing in current law." Eastern
Enterprises, 118 S.Ct. at 2155 (Kennedy, J.,
concurring in part and dissenting in part). Determining
inverse condemnation liability requires review of the
local government's decision and evaluation of the factors
that contributed to the relevant policy
determinations.[11] Under well-established standards for
reviewing such decisionmaking, the City Council's factual
and policy determinations are to be given substantial
deference. See II Davis & Pierce, Administrative
Law Treatise § 11.2, at 174; see also Valley
Citizens for a Safe Environment v. Aldridge, 886 F.2d
458, 469 (1st Cir. 1989) (Breyer, J.). Conducting
deferential review of factual and policy determinations
is an inherently legal task. Juries find facts; they do
not review factual findings.
[11] Courts have repeatedly
acknowledged and affirmed this truism. See, e.g.,
Recupero v. New England Telephone &. Telegraph
Co., 118 F.3d 820 (lst Cir. 1997) ("Compared
with judges, jurors typically have less experience and
training relevant to competence to review decisions of
others with an appropriate degree of deference while at
the same time assuring no misunderstanding or
misapplication of governing law.").
Respondents incorrectly assert that, with the
exception of New Port Largo, Inc. v. Monroe County, 95
F.3d 1084 (11th Cir. 1996), the City and amici could not
"point to a single case decided in § 1983's
127-year history that denied plaintiff the right to a
jury trial." Resp. Br. at 17. This assertion ignores
numerous cases cited by the City and others in which
courts have found that a jury would not be appropriate to
determine liability issues in § 1983 actions involving
local land use regulation. See, e.g., Pearson v. City
of Grand Blanc, 961 F.2d at 1211, 1222 (6th Cir.
1992) ("[W]e hold that the application of this
deferential standard of review is a matter of law for the
court. Otherwise federal juries would sit as local boards
of zoning appeals."). Respondents in effect admit
that there are exceptions to this general rule by
conceding in their brief that their own § 1983
substantive due process claim was tried to the court, but
nowhere suggesting that it was improper for the court to
decide that claim. Indeed, they cannot because the weight
of authority is decidedly against them. See Midnight
Sessions, Ltd. v. City of Philadelphia, 945 F.2d 667,
682 (3rd Cir. 1991).
To deflect attention from these concerns about jury
competence, Respondents extol the virtues of the jury
process and assert that citizens who comprise juries are
fully capable of deciding policy issues. Respondents miss
the point. Certainly, individual jurors can be expected
to have their own views on matters of policy. However,
the six people sitting on a federal jury are not the duly
elected policy makers of the local government.[12] The
Seventh Amendment does not contemplate allowing these six
citizens to review policy determinations.[13]
[12] Respondents also miss the mark in
arguing that jurors buffer the "unwholesome
closeness'. that is presumed to exist between local
government officials and local judges. Resp. Br. at 14
n.13. Whatever "unwholesome closeness" may be
presumed to exist between local officials and state
judges cannot be imputed to federal judges.
[13] Respondents point to the
initiative or referendum process as evidence that
citizens are institutionally competent to second guess
policy decisions of elected officials. However, in these
contexts, it is the entire electorate that decides the
policy issue. That there exists a means for voters to
review political decisions says nothing about the
propriety of allowing a six-person jury to make those
decisions. In voting for legislation, citizens are
exercising political decisionmaking power. In reviewing
governmental actions as federal jurors, citizens are
trenching on political decisionmaking power exercised by
their elected representatives. See Regents of the
Univ. of Mich. v. Ewing, 474 U.S. 214. 225 (1985)
("Federalism and comity demand a reluctance by
federal courts 'to trench on the prerogatives of state
and local. . . institutions' ").
Respondents also assert that juries are frequently
called upon to "judge the reasonableness" of
local government policy decisions. Resp. Br. at 14-15. It
is wrong to suggest that juries could or should usurp
governmental functions in this way, and none of the cases
cited by Respondents so hold. At best, in those cases
that were otherwise subject to the Seventh Amendment,
juries are allowed to resolve factual issues and impose
liability for constitutional transgressions that may
result from governmental policy.[14] They do not act as
super legislators dispensing liability whenever they find
government policies to be unreasonable. Given the
complexity of the necessary policy determinations, the
separation of powers and federalism concerns raised, and
the delicate balance that must be struck, courts are the
proper decisionmakers for determining whether
governmental regulations or decisions constitute
regulatory takings.
[14] For example, Respondents cite Roma
Constr: Co. v. Russo, 96 F.3d 566(lst Cir. 1996) for
the proposition that juries assess the reasonableness of
a broad range of municipal "policies." That
case considered a Rule 12(b)(6) dismissal of a § 1983
claim alleging that town officials extorted money from a
construction company. "Policy" was only raised
in the other context of determining whether the extortion
plan could be imputed to the town. Indeed, it should be
noted that Roma Construction, and many of the
other cases cited by Respondents in footnote 15 of their
brief, were never submitted to a jury. See, e.g.,
Berkeley v. Common Council, 63 F.3d 295 (4th Cir.
1995) (en banc) (reviewing Rule 12(b)(6)
dismissal); Turner v. Upton County, 915 F.2d 133
(5th Cir. 1990) (same). Accordingly, these cases cannot
be relied on to support the proposition that juries are
frequently called on to resolve policy issues.
IV. RESPONDENTS' DEFENSE OF
THE NINTH CIRCUIT'S REASONABLENESS STANDARD OF REVIEW
MISSES THE POINT.
In defending the Ninth Circuit's de novo reasonableness
standard, Respondents contend that the City is advocating
that local land use decisionmaking be exempt entirely
from judicial review. In particular, Respondents suggest
that deferential review of local land use decisions would
somehow mean that there could be no liability for a
regulatory taking under any circumstances. Resp. Br. at
41. This argument is nothing but a straw man. The City
has never contended that its actions should be immune
from judicial scrutiny under the Takings Clause, and it
is absurd for Respondents to characterize the City's
arguments in this fashion. What the City contests is the
propriety of allowing juries to impose inverse
condemnation liability based upon de novo reassessments
of conflicting facts and policy judgments.
To support their straw man argument, Respondents cite Nectow
v. City of Cambridge, 277 U.S. 183 (1928), for the
proposition that "specific applications of zoning
power have always been subject to judicial review "
Resp. Br. at 34. The City has never contested either this
proposition or the deferential standard of review
articulated in Nectow. 277 U.S. at 187.
Respondents also assert that Lucas v. South
Carolina Coastal Council, 505 U.S. 1003 (1992),
somehow altered the deference historically accorded to
local land use decisionmakers. However, Lucas did
not involve judicial review of the government's
determination that the challenged regulation related to a
beneficial purpose. That was conceded by all parties in Lucas.
The issue in Lucas was whether and under what
circumstances takings liability could be avoided if a
challenged regulation was well intended, but deprived
property of all use. The Court's comments relating to the
"public nuisance" showing required to avoid
liability in these circumstances did not relate at all to
whether the government's liability for regulatory takings
could be tested under a de novo reasonableness
standard in the first instance.
Standards of takings liability should provide
"some necessary predictability for governmental
entities." Eastern Enterprises, 118 S.Ct. at
2155 (Kennedy, J., concurring in part and dissenting in
part). The record in this case illustrates clearly how
and why the de novo reasonableness standard
applied by the Ninth Circuit and advocated by Respondents
would make such predictability totally impossible.
In considering Respondents' development proposal, the
City Council was faced with conflicting information.
Respondents' consultant testified that the Smith Blue
Butterfly ("SBB") had not been spotted on the
subject property until 1984. Resp. Br. at 3. On the other
hand, the biological opinion issued by the USFWS had
concluded that "even moderately consiencious (sic)
search surveys" would have resulted in earlier
sightings of the SBB on the subject property. Jt. App.
74. Respondents presented evidence that the subject
property was of limited environmental significance with
limited potential. Resp. Br. at 2. However, USFWS and
others advised that the subject property had great
environmental significance, that the SBB habitat on the
property was increasing and that the property would soon
become an "active pathway" for genetic
interchange for the SBB. Jt. App. 66-86, 202-05.
Respondents' consultant opined that his restoration plan
was adequate, Representatives from USFWS, the California
Department of Fish and Game and others concluded that it
was inadequate. Without question, there was a substantial
factual basis for the City's determination that denial of
the proposed project and its restoration plan would
further legitimate environmental concerns.[15]
[15] Certainly, the City cannot be
faulted for preferring the expert opinion of the USFWS
over the opinion of Respondents' hired consultant. The
USFWS was not an interested party and it has substantial
expertise in assessing the potential success of
restoration plans. The City afforded the USFWS no more
deference than this Court has repeatedly insisted is due
to governmental agencies. Cf. Federal Power Commission
v. Florida Power & Light Co., 404 U.S.
453, 467 (1972) (citing agency's technical expertise and
experience as one reason why courts defer to
administrative agency decisionmaking).
Respondents in effect urge that the City's liability
depend not on the existence of such a factual basis for
the City's decision, but on the credibility of
conflicting witnesses. Under this standard, the
predictability of governmental liability will be a
function of how accurately the local government can
predict how a jury will assess issues of credibility,
policy and reasonableness. The result would be
uncertainty for public entities and potential liability
in virtually every case.
V. RESPONDENTS' DEFENSE OF THE
ROUGH PROPORTIONALITY STANDARD IGNORES THE LEGAL AND
PRACTICAL DIFFERENCES BETWEEN EXACTIONS AND REGULATORY
DENIALS.
Central to the Ninth Circuit's analysis was the
application of the rough proportionality concept in
evaluating the City's denial of Respondents' condominium
project. Yet, Respondents pay scant attention to this
issue. Respondents do not respond to the practical and
conceptual difficulties involved in applying that
standard in a regulatory denial context. Instead,
Respondents merely argue that the Ninth Circuit's
reference to that standard was gratuitous and, in any
event, "rough proportionality" is an
appropriate standard to measure the legality of
governmental action. Resp. Br. at 42-45.
The Ninth Circuit's reliance on a rough
proportionality standard was not a mere afterthought,
incidental to its decision. On the contrary, in upholding
the jury's decision, the Ninth Circuit based its decision
squarely on a standard of rough proportionality, and it
evaluated the sufficiency of evidence to sustain a jury's
decision based upon that standard. Pet. App. 17-18. The
Ninth Circuit unequivocally asserted 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. Accordingly, the Ninth Circuit's decision cannot
be upheld unless the Ninth Circuit's extension of
"rough proportionality" into the regulatory
denial context was correct.
On the merits, Respondents assert that the concept of
proportionality is found everywhere in takings law.[l6]
However, Respondents have not identified a single
regulatory denial case that has imposed inverse
condemnation liabi1ity on the basis of a "rough
proportionality" standard. This absence of authority
is not surprising because the rationale articu1ated in Dolan
v. City of Tigard, 512 U.S. 374 (1994), does not
apply in regulatory denial cases. Denials do not involve
the physical appropriation of property interests that was
critical to the Dolan analysis.
[16] In the broadest sense, a
regulation or land use decision that furthers a
legitimate public interest but deprives property of all
economically viable use can be said to impose a
"disproportionate" burden on that property.
However, the nonnative conclusion that a regulative or
land use decision imposes a "disproportionate"
burden is a far cry from a balancing test based on a
"rough proportionality" standard.
Contrary to Respondents' assertion, Lucas provides
no support for Respondents' embrace of this type of
proportionality standard. In Lucas, the Court
rejected the proportionality-based argument that a total
taking could be justified if the regulation furthered
compelling public interests. Instead, the Court adopted a
more categorical approach to reviewing regulations that
admittedly deprived property of all economically
beneficial use. For those cases, the government can only
avoid paying past compensation if the activity proposed
by the property owner would be akin to a public nuisance.
The Court identified various factors to be considered in
determining whether the proposed use would satisfy this
public nuisance test. This test only comes into play after
a "total taking" has been found. These
factors have no applicability in determining whether a
taking has occurred. Additionally, the public nuisance
evaluation contemplated by Lucas did not involve a
proportional weighing of regulatory benefits against
project impacts. In fact, by rejecting the argument that
a total taking could be justified by strong regulatory
benefits, the Lucas court impliedly rejected a
proportionality based approach to takings cases in favor
of a more categorical approach.
Respondents' own formulation of the "rough
proportionality" standard in the context of this
case most clearly illustrates its unworkability.
According to Respondents, this standard requires the jury
to compare "the proposed development with
surrounding land uses and [evaluate] such intangibles as
'social value' and 'suitability.' " Resp. Br. at 44.
Based upon this analysis, Respondents assert that the
jury should impose inverse condemnation liability for a
project denial unless it concludes "that the harm
caused by the proposed development is disproportionate (i.e.,
its burden outweighs its utility). . . . " Resp.
Br. at 44. Thus, in some undefinable way, juries would be
asked to mentally tabulate all of the tangible and
intangible burdens resulting from a project and balance
those burdens against all of the tangible and intangible
benefits resulting from the project, and decide, as a
factual matter, whether the burdens outweigh the
benefits, presumably giving no deference to the factual
and policy determinations of the local governmental
decisionmaker. Attempting to strike such a complex
balance between such incommensurable and unquantifiable
factors would befuddle courts and bewilder juries. Cf.
Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486
U.S. 888, 897 (1988) ("[T]he scale analogy is not
really appropriate, since the interests on both sides are
incommensurate. It is more like judging whether a
particular line is longer than a particular rock is
heavy." (Scalia, J., concurring)
VI. CONCLUSION
For all the reasons set forth above, the City
respectfully requests that the Ninth Circuit's decision
in this matter be reversed.
Respectfully submitted,
RICHARD E. V. HARRIS
GEORGE A. YUHAS*
CATHERINE A. ROGERS
ORRICK, HERRINGTON & SUTCLIFFE LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Telephone: (415) 392~1122
Counsel for Petitioner
*Counsel of Record
September 1998
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