Facts
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A corporation formed by Anthony Palazzolo and others bought undeveloped waterfront land in Rhode Island, most of which was coastal salt marsh subject to tidal flooding.
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Rhode Island later created the Coastal Resources Management Council (CRMC) and adopted regulations treating salt marsh as protected coastal wetlands with sharply limited development.
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The corporation’s charter was revoked, and title passed to Palazzolo as sole shareholder.
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Palazzolo sought CRMC permission to fill and develop the marsh:
- In 1983, he applied to construct a bulkhead and fill the entire marsh; CRMC denied the request as inadequate and inconsistent with wetlands protections.
- In 1985, he proposed filling 11 wetland acres for a private beach club; CRMC denied the request because it did not satisfy the “special exception” standard requiring a compelling public purpose.
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Palazzolo sued for inverse condemnation, claiming the permit denials and wetlands restrictions effected a taking without just compensation under the Fifth and Fourteenth Amendments.
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State-court evidence showed the parcel included an upland portion of about one acre suitable for at least one single-family residence, valued at roughly $200,000.
Issues
- Whether the takings claim was unripe because Palazzolo had not pursued additional or alternative development proposals.
- Whether acquiring title after enactment of the wetlands regulations barred Palazzolo from asserting a regulatory takings claim based on those regulations.
- Whether the regulations and permit denials caused a Lucas-type total taking by eliminating all economically beneficial use.
Decision
- The Supreme Court held the takings claim was ripe because the 1985 denial reflected a final, definitive application of the regulations to the property.
- The Court rejected a categorical bar on takings claims by post-regulation purchasers; acquiring title after regulation does not forfeit the right to assert a Takings Clause claim.
- The Court held no total taking occurred because the parcel retained economically beneficial use through the developable upland area.
- The Court reversed in part and remanded for further proceedings, leaving any partial-taking claim to be assessed under Penn Central.
Legal Principles
- A regulatory takings claim becomes ripe when the relevant agency has reached a final, definitive position on the permitted use of the property; the owner need not submit serial, marginally revised applications once the agency’s position is clear.
- Transfer of title after enactment of a land-use regulation does not categorically bar a takings claim; constitutional protections are not extinguished by a change in ownership.
- Lucas’s categorical rule applies only when regulation leaves no economically beneficial or productive use of the property; if any significant beneficial use remains, the claim is not a total taking.
- The total-taking inquiry considers the parcel as a whole rather than isolating the regulated portion; where value remains, analysis proceeds under Penn Central’s multifactor framework.
- Background principles of state property and nuisance law remain relevant to defining the property interests against which a takings claim is measured.
Conclusion
The Court held that a definitive denial of a concrete development proposal can ripen a regulatory takings claim, and that post-regulation acquisition does not bar such claims, but it found no Lucas total taking because the property retained viable residential use and remanded for any partial-taking analysis under Penn Central.