In the 1998 case City of Monterey v. Del Monte Dunes at Monterey, Ltd., and Monterey-Del Monte Dunes Corporation, the U.S Supreme Court ruled in favor of Del Monte Dunes. The dispute arose when the city repeatedly denied development permits to Del Monte Dunes for a property they owned. After five denials, each with different reasons given by the city council despite compliance from Del Monte Dunes, they sued under claims that their rights were violated under both California law and federal constitutional provisions (the Fifth Amendment's Takings Clause). The court held that landowners could seek compensation if local authorities had used planning laws to restrict what owners can do with their property so severely as to constitute a "taking". Furthermore, it was decided that such regulatory takings cases could be tried before a jury rather than just a judge.

In the dissenting opinion for City of Monterey v. Del Monte Dunes at Monterey, Ltd., Justice John Paul Stevens argued that the jury should not have been allowed to decide on a regulatory taking claim because it is a question of law, not fact. He believed that this decision could potentially open up floodgates for more cases where juries are asked to rule on complex constitutional issues which they may lack expertise in. Furthermore, he disagreed with the majority's view that there was no viable alternative use left for the property after its development plan was rejected by city officials five times; instead, he contended that potential uses still existed and thus did not constitute as a complete deprivation of economic value under Lucas v. South Carolina Coastal Council precedent.