Today the Court granted certiorari in one case of interest to the business community. Amicus briefs in support of the petitioner are due on May 14, 1998, and amicus briefs in support of the respondents are due on June 15 (because June 13 is a Saturday). Any questions about this case should be directed to Evan Tager (202-778-0618) or Alan Untereiner (202-778-0656) in our Washington office.

Regulatory Takings — Inverse Condemnation. When a local government regulates land use in such a way as to deprive a property owner of the economically viable use of its land, the property owner may seek just compensation for the government's "regulatory taking" by filing an inverse condemnation suit under 42 U.S.C. 1983. The Supreme Court granted certiorari in City of Monterey v. Del Monte Dunes at Monterey, Ltd., No. 97-1235, to determine (1) whether, in an inverse condemnation suit under 42 U.S.C. 1983, the plaintiff has the right to have liability issues determined by a jury; and (2) whether the standard for assessing liability under an inverse condemnation theory requires that the governmental action be "disproportionate" to the putative governmental interest at stake, or whether liability should attach only when the govermental action is not "rationally related" to a legitimate governmental purpose.

Respondent Del Monte Dunes, owner of a 37-acre parcel of undeveloped coastal property near the City of Monterey, California, submitted a proposed site plan to the city for a 190-unit condominium development. After the United States Fish and Wildlife Service and the California Fish and Game Department advised the city that the plan raised unmitigated environmental problems, the city denied Del Monte's plan. Del Monte sued the city, alleging under 42 U.S.C. 1983 that the city's denial effected a regulatory taking. The district court ordered that Del Monte's inverse condemnation claim be tried to a jury. The jury found that the city's regulatory action resulted in an unconstitutional taking of Del Monte's property and awarded Del Monte $1,450,000 in compensation. The Ninth Circuit affirmed, holding that (1) the issue of liability properly went to a jury and (2) the jury reasonably could have found that "the City's actions were disproportional to both the nature and extent of the impact of the proposed development." 95 F.3d 1422, 1428-1432 (1996).

The Court's decision in this case, particularly its selection between the deferential "rational relationship" standard and the more searching proportionality standard applied by the court of appeals, should be of considerable interest to property owners, land developers and local governments alike.

Copyright 1998 Mayer, Brown & Platt. This Mayer, Brown & Platt publication provides information and comments on legal issues and developments of interest to our clients and friends. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

This Mayer, Brown, Rowe & Maw Supreme Court Docket Report provides information and comments on legal issues and developments of interest to our clients and friends. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.