Juries OKd in Land Development Cases

In a victory for property owners, the Supreme Court ruled Monday that a developer who has been blocked from building on his land has a right to take his case to a jury and to seek damages for violation of his property rights.

The 5-4 ruling upholds a $1.45-million verdict against the city of Monterey, Calif., which rejected five development proposals for an ocean-front parcel.

Until now, unsuccessful developers have had to go before judges and argue that the city had essentially taken their property.

By contrast, Monday’s court opinion recasts such complaints as a type of federal civil-rights suit that should be decided by jurors.

Most plaintiffs’ lawyers would rather take their cases to juries in hopes of winning huge verdicts. For the same reason, most defendants--in this case, local governments--seek to avoid juries.

Property-rights activists applauded the ruling, saying that it gives landowners a new tool to challenge undue restrictions on development.

But some government lawyers said that they fear the ruling could leave local governments vulnerable to large damage verdicts.

Lawyers who had closely followed the Monterey case said they were unsure of its impact because the high court did not spell out who can take advantage of the new right to jury trials.

“The bottom line is that this will encourage more burdensome and costly litigation against local governments over land-use issues,” said Georgetown University Law Professor John D. Echeverria. “The court has created a new right but it has not defined its scope.”

An environmentalist, Echeverria represented the National Wildlife Federation and the League for Coastal Protection in urging the court to overturn the verdict in the Monterey case. The city claimed that it had rejected the proposed development to protect the habitat of a rare butterfly.

But Santa Monica attorney Michael M. Berger, who represented the developer, said he was delighted with the outcome and predicted that stymied California landowners now will take their cases to federal court.

The development company in this case claimed that it got the run-around from the city. In 1981, it bought a 37-acre parcel along Highway 1 that once had been an oil storage site. The land was zoned for residential development, and the company first proposed building 344 housing units there.

In a series of back-and-forth proposals, the city rejected one plan after another, even though the developer steadily scaled down its plans.

Finally after five years, five formal rejections and 19 different site plans, the company sued the city in federal court. As the lawsuit moved through the courts, the developer sold the land to the state for a small profit.

In 1994, the claim went before a jury, which awarded $1.45 million to the company. The U.S. court of appeals upheld the award but the city appealed to the Supreme Court, arguing that jurors should not be permitted to second-guess land use decisions. If so, cities could be vulnerable to large damage verdicts whenever they deny a development permit, the city maintained.

The high court upheld the verdict (City of Monterey vs. Del Monte Dunes, 97-1235).

Berger, the developer’s lawyer, said that the outcome favoring federal jury trials will likely have its greatest impact in California.

*

Times staff writer Maria La Ganga in San Francisco contributed to this story.