In the past, I have discussed "takings" cases. These are lawsuits filed by private property owners who complain that the government has over-regulated their property to the extent that they can no longer use it productively. In a takings case, the property owner asks the Court to make the offending government purchase the property from the owner, at fair market value.

Don't expect the rest of this column to be completely impartial. You should know that I personally try many of these cases and I always represent property owners. I will try to be unbiased, but caveat emptor!

Very recently, the United States Supreme Court issued a landmark ruling which may prove to be very important to developers and others who own property but cannot develop it because of government regulations -- in other words, people who need to file takings lawsuits. In the case of City of Monterey v. Del Monte Dunes at Monterey, Ltd., the High Court ruled that in certain instances, juries can now decide when the government has over-regulated property to the extent that it becomes worthless, and whether a government's asserted basis for not allowing development advances any legitimate public interest whatsoever.

Who is affected by this ruling? Developers with properties that contain large amounts of wetlands or are otherwise undevelopable because of federal, state or local laws. So are "regular" small property owners who, for example, might own investment properties or properties on which they wish to build retirement residences, that have become undevelopable because of wetland laws or other laws or regulations.

The Monterey case involved a proposed residential development in California. At issue were more than 37 acres of prime, environmentally sensitive, oceanfront property located on Del Monte Beach. The property contained naturally developed sand dunes, which are generally heavily regulated because they protect shore property from flooding. The City naturally did not want these dunes to be disturbed for the sake of development.

But, the property was "blessed" with more than just these dunes. It also had protected butterflies. The property's plant life includes buckwheat, which is the natural habitat of the Smith's Blue Butterfly, a species listed as endangered under the federal Endangered Species Act. This created a double whammy, which was certain to make development all but impossible.

In 1981, the then-owner of the property applied to the City of Monterey for a permit to build a 344-unit residential complex on the property. After denying several development proposals, the City Council approved a site plan for 190 units in 1984, subject to 15 conditions.

While this might have seemed fair, the City ultimately reneged. In June 1986, the City denied the construction permit, listing six reasons for the denial, including the significant harm to the environment expected from the development.

In late 1986, the developer, Del Monte, filed suit in federal district court, alleging that the permit denial constituted a "taking" of private property under the Fifth Amendment of the U.S. Constitution, which entitled Del Monte to fair market value compensation. Del Monte also claimed that the denial violated other Constitutional rights.

Against the City's wishes, a federal trial court ordered that a jury rule whether the permit denial either (1) deprived the owner of all economically viable use of the property, or (2) did not substantially advance a legitimate public purpose. The jury awarded Del Monte $1,450,000.00. A federal appeals court, and now the Supreme Court, upheld this verdict.

The Supreme Court ruled a property developer has a right to jury trial in a federal civil rights litigation, such as the one before it, when the owner is alleging both that a state had (1) taken property, and (2) no procedure exists by which the owner could recover compensation for that taking.

While this may be a limited ruling, it is important for several reasons. First, it allows certain owners who are alleging that their property became worthless as a result of government regulation to have a jury hear the case. Many times, this will favor property owners since taxpaying jurors may see these kinds of cases in a different light than might seasoned trial judges.

Second, the case confirms that a taking may occur simply when a government blocks development for reasons which do not substantially advance legitimate public interests. Thus, it appears that even when some economic value is left after the regulation, a lawsuit may proceed if the regulation does not further a legitimate public interest.

When might this happen? Perhaps a ruling that blocks development because a dune is present, when it fact it is clear that the dune serves no protective function whatsoever. Or a ruling that development may not occur for fear of flooding, when internal government reports show that the property in question is at a very high elevation and there is no real flood threat at all.

From now on, if the government unfairly precludes all development and refuses to pay a developer for the property, he or she may have a new ally: a jury of his/her peers. Now, a jury may decide whether the government has acted fairly. While the government might not mind confronting one unfairly treated property owner in court, a jury consisting of twelve of his or her neighbors might be another story altogether.

The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.

Stuart Lieberman, Esq., and IRED.Com, Inc., will not accept any responsibilty for any reliance on the information in this column or any damages whatsoever resulting from reading this column.