Court Issues Split Marshland Ruling
Copyright 2001 Associated Press
June 28, 2001
By LARRY MARGASAK, Associated Press Writer
WASHINGTON (AP) - The Supreme Court ruled Thursday that a Rhode Island man has the right to challenge the state's prohibition on development of his coastal marshland property, but stopped short of ruling he was owed compensation for claimed economic losses.
The splintered ruling in Anthony Palazzolo's 40-year struggle to build on the land left each side of the property-rights issue - conservatives and officials of Rhode Island - with something to boast.
Palazzolo's fight became a rallying point for conservatives angry over government regulation of private property. The court, however, shied away from any sweeping analysis of governmental property-taking rights.
Justice Anthony M. Kennedy wrote the majority opinion and was joined by five other justices in whole or in part. Three justices dissented, and one concurred in part and dissented in part. Some key points in the case were remanded for further consideration by the state court.
Jim Burling of the Pacific Legal Foundation, which represented, Palazzolo, said the ruling ``sends a clear message to state and federal regulators across the country that, no matter how well-intentioned their environmental goals, they cannot simply put a freeze on the use of private property without giving the owner a fair price for it.''
Rhode Island Attorney General Sheldon Whitehouse said he was pleased the court rejected Palazzolo's principle contention that state regulations had wiped the property of its economic value.
``The important point is under the theory Mr. Palazzolo pursued, he lost and he lost flat out,'' said Whitehouse, who argued the case before the court. ``We're in very strong shape after this decision.''
He said that he was confident the government would prevail on the other issues remanded back for state proceedings.
Roger Pilon, vice president of legal affairs at the Cato Institute, said the most important element was the court's ``rejection of the state's claim that Palazzolo was barred from suing because he took title after the effective date of the (state) regulations.''
But Pilon conceded that, on the merits of the broader issue of property-taking, ``the law remains unsettled.''
Palazzolo argued that he was denied the opportunity to make money from his property, even as neighbors developed and sold their land. The government said Palazzolo bought the land knowing that wetlands restrictions would govern what he could do with it.
Kennedy said that if the government takes someone's property, it may not refuse to compensate the owner just because he or she is left with a token interest in the property. But he quickly added that those circumstances didn't apply in Palazzolo's case.
The owner was permitted to build a substantial residence on an 18-acre parcel of the property, Kennedy said.
The majority opinion said the Rhode Island Supreme Court was correct in finding that Palazzolo had ``failed to establish a deprivation of all economic value, for it is undisputed that the parcel retains significant worth for construction of a residence.''
However, in that opinion, Kennedy said the state court erred by ruling that the claim was not ready to be heard by a court because Palazzolo never specifically sought permission to build the 74-home development.
The state court also was wrong to rule against Palazzolo on grounds that federal and state wetlands regulations were in place before he acquired sole title to the land in 1978.
On those issues, the high court reversed the state court and ordered further proceedings.
On these key points, property-rights activists claimed they'd won a critical round.
The ``takings'' issue resonates with conservatives and lobbying groups that view many federal and state environmental land-use laws as capricious and fundamentally unfair to private property owners.
Palazzolo said that under the Fifth Amendment, government regulations amounted to an unconstitutional ``taking'' of his property without fair payment.
The amendment reads, ``Nor shall private property be taken for public use without just compensation.''
A long list of conservative and business groups, including Defenders of Property Rights and the National Association of Home Builders, sided with Palazzolo in friend-of-the-court briefs. A website, www.aboutpalazzolo.com, tracked developments in the case.
The Clinton administration Justice Department backed Rhode Island, as did 18 states, the National Wildlife Federation, and the National Conference of State Legislatures.
The case is 99-2047, Anthony Palazzolo v. Rhode Island.