direct actions

On January 13, 1972, two Indiana residents were involved in a single-car accident in Elkhart, Indiana. Appellee Savchuk, who was a passenger in the car driven by appellant Rush, was injured. The car, owned by Rush's father, was insured by appellant State Farm Mutual Automobile Insurance Co. under a liability insurance policy issued in Indiana. Savchuk moved with his parents to Minnesota in June 1973. On May 28, 1974, Savchuk commenced an action against Rush in the Minnesota state courts. The complaint alleged negligence and sought $125,000 in damages. The prayer was later reduced voluntarily to $50,000, the face amount of the policy. As Rush had no contacts with Minnesota that would support in personam jurisdiction, Savchuk attempted to obtain quasi in rem jurisdiction by garnishing State Farm's obligation under the insurance policy to defend and indemnify Rush in connection with such a suit. State Farm does business in Minnesota. Rush was personally served in Indiana. The trial court denied the motion to dismiss and granted the motion for leave to file the supplemental complaint. On appeal, the Minnesota Supreme Court affirmed the trial court's decision. The Supreme Court vacated the judgment and remanded the cause for further consideration in light of Shaffer v. Heitner. On remand, the Minnesota Supreme Court held that the assertion of quasi in rem jurisdiction through garnishment of an insurer's obligation to an insured complied with the due process standards enunciated in Shaffer. This appeal followed.

The respondent Del Monte Dunes and its predecessor in interest owned a 37.6-acre ocean-front parcel in the city of Monterey that had previously served as an oil-company terminal and tank farm. The parcel contained remnants of industrial use, including tank pads, broken concrete, oil-soaked sand, and nonnative ice plant that had spread across roughly 25 percent of the site and threatened the remaining native buckwheat habitat of the endangered Smith's Blue Butterfly. The property was zoned for multi-family residential development under the city's general zoning ordinance. Between 1981 and 1986 the landowners submitted a series of development proposals that began with 344 units and were successively reduced, at the city's suggestion, to 264 units, then 224 units, and finally 190 units. The planning commission denied each application. The city council twice overruled the commission and granted a conditional-use permit for 190 units subject to specific conditions. After the landowners revised their plans to satisfy those conditions, devoting substantial acreage to public open space, beach access, view corridors, and buckwheat restoration, the planning commission rejected the final proposal in January 1986 and the city council denied it in June 1986 without specifying further measures the landowners could take. After five years, five formal decisions, and nineteen site plans, Del Monte Dunes filed suit in the United States District Court for the Northern District of California under 42 U.S.C. § 1983, alleging that the city's actions effected a regulatory taking, violated due process, and denied equal protection. The district court initially dismissed the claims as unripe. The Ninth Circuit reversed and remanded. On remand the district court submitted the takings and equal-protection claims to a jury while reserving the substantive-due-process claim for the court. At trial the jury heard evidence of the city's shifting demands, inconsistent positions, and interest in acquiring the parcel for public use. The court instructed the jury that it should find for Del Monte Dunes if the city's denial either left the property without any economically viable use or failed to substantially advance a legitimate public purpose. The jury returned a general verdict for Del Monte Dunes on the takings claim, a separate verdict on the equal-protection claim, and an award of $1.45 million in damages. The district court denied the city's post-verdict motions, and the Ninth Circuit affirmed. The Supreme Court granted certiorari to address whether liability issues on the regulatory-takings claim were properly submitted to the jury. The Court also addressed whether the court of appeals had applied an erroneous standard permitting reweighing of the city's land-use decision. Finally, the Court considered whether the rough-proportionality test of Dolan v. City of Tigard applied to this denial of development.