Palazzolo
owned some waterfront property on a tidal marsh in Rhode Island.He attempted to develop the
property, but his proposals were rejected by the Rhode Island Coastal
Resources Management Council because the land was designated as a
"coastal wetland."
Palazzolo
had been trying to develop the property on and off for over thirty
years.At first, he'd just
been an investor on a corporation that bought the land in 1959, but the
corporation went bankrupt and he ended up owning the land directly in
1978.
Technically,
a person and a corporation are two separate individuals, even if the
corporation is wholly-owned by the person.
The
Rhode Island Coastal Resources Management Council came into existence in
1971.
Palazzolo sued, claiming that the wetlands regulations constituted a taking under the 5th Amendment.
Palazzolo
argued that the regulations deprived him of all economically beneficial
use of the property, and constituted an inverse condemnation of the land.
See
Lucas v. South Carolina Coastal Council (505 U.S. 1003 (1992)).
The
Trial Court found for Rhode Island. Palazzolo appealed.
The
Rhode Island Supreme Court affirmed. Palazzolo appealed.
The
Rhode Island Supreme Court rejected Palazzolo's arguments for two
reasons:
Since
he acquired title to the land in 1978, and the Council's regulations
were already in existence at that time, he had no right to challenge.
No
reasonable investment expectations were affected by the regulation
since it predated his ownership.
Second,
the land still maintained some value, so he could not challenge on the
basis of the total takings ruling
in Lucas.
Although
Palazzolo couldn't build right on the water, he could build on the other
side of the property, so the land wasn't totally useless, it was still worth about $200k.
The
US Supreme Court partially reversed and remanded for trial.
The
US Supreme Court found that when a regulation places limitations on land
that fall short of eliminating all
economically beneficial use, a taking may have still occurred, depending
on several factors including
The
regulation's economic effect on the landowner.
The
extent to which the regulation interferes with reasonable
investment-backed expectations.
The
character of the government action.
The
Court rejected the idea that you can't sue because you
purchased the land after the regulation came into effect.If so, that would put an
"expiration date" on the Takings Clause.
Technically,
the right to challenge laws regarding the runs with the land, like other property rights do.Therefore, Palazzolo had the
same right to bring a lawsuit as the original corporation did.
The
seller obviously loses the standing to sue once they sell the land,
therefore, the standing to sue must be running with the land.
The
US Supreme Court did not rule on the issue of whether the Council took
100% of part of the land (the conceptual severance argument), because Palazzolo didn't bring it
up.
