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Palazzolo v. Rhode Island

Citation: 32 ELR 20516
No. No. 99-2047, 121 S. Ct. 2448/(U.S., 06/28/2001) rev'd

The court reverses the Rhode Island Supreme Court's holding that a landowner's takings claim arising from the state coastal protection agency's denial of the landowner's permit to develop coastal wetlands was not ripe, but affirms the court's holding that the landowner failed to establish a deprivation of all economic value of his property. The Court first holds that the Rhode Island Supreme Court erred in finding that the landowner's claim was unripe because he had not received a final decision from the coastal protection agency. Multiple applications by the landowner to the agency to develop the property were denied. The Court next holds that the state court erred in ruling that, notwithstanding those denials, doubt remained as to the extent of development the agency would allow on the landowner's property due to his failure to explore other uses for the property that would involve filling substantially less wetlands. The agency's regulations allow for a special exception to engage in prohibited use when a compelling public purpose is served, however, none of the landowner's proposals qualified for the special exception and there is no indication that the agency would have accepted a proposal that occupied a smaller surface area. To the contrary, the agency ruled that the proposed activity was not a compelling public purpose. The Court further holds that the landowner's claim is not unripe by virtue of his failure to seek permission for a use of the property that would involve development only of its upland portion, which is not wetlands. The Court additionally holds that the landowner's failure to apply for permission to develop the 74-lot subdivision that was the basis for the damages sought in his inverse condemnation suit did not render his claim unripe. The agency informed the landowner that he could not fill the wetlands; it therefore follows that he could not fill and then build 74 single-family dwellings on the wetlands. The Court moreover holds that the landowner's acquisition of title to the property after the effective date of regulations prohibiting the development of wetlands did not bar his takings claim. If the Court accepted the state's rule, the transfer of title after enactment of a law or regulation affecting the property would absolve the state of its obligation to defend any action restricting land use. The Court goes on to hold, however, that the Rhode Island Supreme Court correctly determined that the landowner was not denied all economically beneficial use of his property because the upland portion of the property may still be developed. A regulation permitting construction of a substantial residence on an 18-acre parcel does not leave the property economically idle or represent a token interest. Justice Anthony M. Kennedy delivered the opinion of the Court, in which Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor, Antonin Scalia, and Clarence Thomas joined. Justice John P. Stevens joined part of the opinion, but dissented in part. Justice Ruth Bader Ginsburg, joined by Justices David H. Souter and Stephen Breyer, dissented. Justice Breyer also filed a separate dissenting opinion.

[A prior decision in this litigation is published at 30 ELR 20420.]

Counsel for Petitioner
James S. Burling
Pacific Legal Foundation
10360 Old Placeville Rd., Sacramento CA 95827
(916) 362-2833

Counsel for Respondent
Michael Rubin, Ass't Attorney General
Attorney General's Office
150 S. Main St., Providence RI 02903
(401) 274-4400

Kennedy, J. Joined by Rehnquist, O'Connor, Scalia, and Thomas, JJ.; joined by Stevens, J., as to Part II-A; O'Connor and Scalia, JJ., concur separately; Stevens, J., concurs in part and dissents in part; Ginsburg, J., dissents, joined by Souter and Breyer, JJ.; and Breyer, J., dissents separately.