Amicus Curiae Brief — Palazzolo v. Rhode Island

SUPREME COURT OF THE UNITED S

ANTHONY PALAZZOLO,

Petitioner,

RHODE ISLAND ex rel. PAUL J. TAVARES,

General Treasurer, and

COASTAL RESOURCES MANAGEMENT COUNCIL,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME COURT OF RHODE ISLAND

BRIEF OF THE

NATIONAL ASSOCIATION OF HOME BUILDERS

AS AMICUS CURIAE

IN SUPPORT OF THE PETITIONER

DUANE J. DESIDERIO

CHRISTOPHER G. SENIOR

(Counsel of Record)

THE NATIONAL ASSOCIATION

OF HOME BUILDERS

1201 - 15th Street, N.W.

Washington, D.C. 20005

(202) 822-0200

Attorneys for Amicus Curae.

Weshington,0.C. © THIEL PRESS + (202) 328.3286

IRD P

TABLE OF CONTENTS

Page(s)

INTERESTS OF THE AMICUS CURIAE .................... l

SUMMARY OF ARGUMENT ....0000....ccccecccceeeeteeeeeeees 2

SITTEIIITET scssnscsensessnesticseonsnennennennesensssncenecenenvensnssesesinen 5

I THE MERE EXISTENCE OF A

REGULATION, ABSENT FURTHER

REVIEW, SHOULD NOT END’ THE

REQUIRED CONSTITUTIONAL ANALYSIS

OF A TAKINGS CLAIM | 0.0 ccceeeees 5

A. The Rhode Island Supreme Courts’ Cursory

Analysis Effectively Writes Out Of Existence

The Concept Of Regulatory Takings .................... 6

B. Investment-Backed Expectations Are Best

Utilized In Determining The Amount Of Just

BITTE . viinassdrsnntnnetonessintenntnnpeaesinenenvsconsmesenence 10

Il. ADDITIONAL RE-APPLICATIONS,

FOLLOWING SOME UNKNOWN NUMBER OF

REGULATORY DENIALS, SHOULD NOT BE

REQUIRED TO RIPEN A TAKINGS CLAIM .... 14

A. MacDonald Did Not Establish A Categorical

Re-Application Requirement ......................... 17

B. The Re-Application Standard Defies Consistent

Application By The Lower Courts ................ 18

ii iil

TABLE OF CONTENTS (Cont.) TABLE OF AUTHORITIES

Page(s) | Page(s)

CASES

C. The Court Should Adopt The “One Meaningful

Application” Standard, Modified By A Futility Abbot Labs. v. Gardner, 387 U.S. 136 (1967)...24, 25, 26

EL BOSIOISED .......0000csscesseensesssnessnnnnnnlensneinnnnnnnnnnnnnnnn 22

! Agins v. City of Tiburon, 447 U.S. 255 (1980) ........ 1,2,3

LTBI, «...2scccccssessescnsecsseecensenseenennennnnnnnnannnnnnnnn 29

~ Carson Harbor Village Ltd.v. City of Carson,

I I, UIE sccsccssesesssensssssseseccvsscccssessnesee y)

City of Chicago v. International College of

Surgeons, 522 U.S. 156 (1997) .......cccccsecseceseeceseerseeeeeees 15

City of Monterey v. Del Monte Dunes at Monterey,

En a: |

City of Virginia Beach v. Bell, 498 S.&.2d 414 (Va.),

cert. denied, 525 U.S. 826 (1998) ..........ccccccccccscccceceseeeees 6

Coniston Corp. v. Village of Hoffman Estates,

I IN, III cs ccccscecessssonscosscssovesensensseceseece 2

Dodd v. Hood River County, 136 F.3d 1219 (9" Cir.),

cert. denied, $25 U.S. 923 (19GB) 2.2.2... cccccccecceeeeeees 15

Dolan vy. City of Tigard, 512 U.S. 374 (1994) oo... 14

Eastern Minerals Int'l, Inc. v. United States,

Ss ssssemmannnnnonsnnes 26

Florida Rock Indus. v. United States,

I cesnsnneon 10

iV

TABLE OF AUTHORITIES (Cont.)

Page(s)

Forseth v. Village of Sussex, 20 F.Supp. 2d 167

(E.D. Wisc. 1998), aff'd in part, rev d in part,

POD G.30 SED GF Cae BD eeccerrerceccescetcnsenientencemnensi 14,19

Franklin v. Massachusetts, 505 U.S. 788 (1992) .......... 25

Front Royal and Warren County Indus. Park Corp. v.

Town of Front Royal, 135 F.3d 275 (4" Cir. 1998) ......22

Gilbert v. City of Cambridge, 932 F.2d 51

4g A. Rte 27

Good v. United States, 39 Fed. Cl. 81 (1997),

189 F.3d 1355 (Fed. Cir. 1999), cert. denied,

SED A, COP GED cceccnsssenninemennenmenannned passim

Grant v. South Carolina Coastal Council,

a ee is UD snisiisinatiiisintaiatiiitiaittinicnnreneel 6

Healing v. California Coastal Comm'n,

22 Cal. App. 4" 1158, Cal Rprtr. 758

a CRD, TD ccnsienicermemennniiemmenieell 27, 28

Hodel v. Virginia Surface Mining and

Reclamation Ass'n, 452 U.S. 264 (1981) ......cccccccceeeeeees 23

Hoehne v. County of San Benito, 870 F.2d 529

PP CRD iitisscesidceeatseietannntamnninae 2

Hunziker v. lowa, 519 N.W.2d 367 (lowa 1994),

cert. denied, 514 U.S. 1003 (1995) .......ccccccccccccceeeeeeeeeeees 6

TABLE OF AUTHORITIES (Cont.)

Idaho v. Coeur d'Alene Tribe of Idaho,

RE Df , 15

Kaiser Dev. Co. v. City and County of Honolulu,

649 F.Supp. 926 (D. Hawaii 1986), aff'd, 898 F.2d 112

(9" Cir. 1990), cert. denied, 499 U.S. 947 (1991) ........ 21

Kawaoka v. City of Arroyo Grande, \7 F.3d 1227

(9" Cir), cert. denied, 513 U.S. 870 (1994) .......cc00000+. 26

Kim v. City of New York, 681 N.E.2d 312 (N.Y.),

cert. denied, 522 U.S. 803 (1997) .0.......:ccccccccccceseeseeereeees 6

Kinzli v. City of Santa Cruz, 818 F.2d 1449,

amended, 830 F.2d 968 (9" Cir. 1987),

cert. denied, 484 U.S. 1043 (1988) ....cccccccccccccseceseseseees 26

Loretto v. Teleprompter Manhattan CATV Corp.,

| ee 12

Lucas v. South Carolina Coastal Council,

FOS UB. BGG CIGTE) ccccccccccsscssrsscsessccscesssssssssscseecs passim

MacDonald, Sommer & Frates v. Yolo County,

477 U.S. 340 (1986) ......0cccccrecrscccrrccsecesseceessesssoses passim

McQueen v. South Carolina,

530 S.E.2d 628 (S.C. 2000)...........cccccccsecsesseseeeeessneenennsnnens 6

vi

TABLE OF AUTHORITIES (Cont.)

Page(s)

Nollan v. California Coastal Comm'n,

RE eee 1,9

Palazzolo v. Rhode Island,

Se passim

Penn Central Transp. Co. v. City of New York,

ee 12, 28

Pennsylvania Coal Co. v. Mahon,

a 9

River Park, Inc. v. City of Highland Park, 23 F.3d 164

Fs Cee ieisiseinnhneiehinie ini 2

San Diego Gas & Electric Co. v. City of San Diego,

EE | eee l

Schulze v. Milne, 849 F Supp. 708 (N.D. Cal. 1994),

aff'd in part, rev'd in part, 98 F.3d 1346

PG CI ccctccstensinniinenenentesnsesnesincianvinacinsensnees 20

Shelter Creek Development Corp. v. Oxnard,

ge 28

Southview Assocs. v. Bongariz, 980 F.2d 84

(2d Cir. 1992), cert. denied, 507 U.S. 987 (1993) ........ 20

Suitum v. Tahoe Regional Planning Agency,

SEE: TEPID cucctncicvineiensemmeninanieninantiniiasnitl passim

Vii

TABLE OF AUTHORITIES (Cont.)

Page(s)

2BD Ltd. Partnership v. County Comm'rs for Queen

Anne 's County, 896 F. Supp. 518 (D.Md. 1995),

aff'd, 162 F.3d 1158 (4™ Cir. 1998) ....cccccccccsceseseseeseeees 20

Tahoe-Sierra Preservation Council, Inc. v.

Tahoe Regional Planning Agency, 216 F.3d 764

I BI saicictiterssceiibibcnininiiteiinieaetiniaeeesbbsitioneniias 12

Unity Ventures v. County of Lake,

oe ag 26

Vatalaro v. Department of Envtl. Conservation,

601 So.2d 1223 (Fla. App. 1992) .............ssccscscceeseeeees 8.9

Wilkinson v. Pitkin County Bd. of Comm'rs,

EF Ey SR Oe CD ercecesttcrcictinstenieciiieai 15

Williamson County Rezional Planning Comm'n

v. Hamilton Bank, 473 U.S. 172 (1985).........cccc000+ passim

OTHER SOURCES

Black’s Law Dictionary I a 24

Brief of Amicus Curiae American Planning Association

in Support of Respondent, Suitum v. Tahoe Regional

Planning Agency, No. 96-243 .........cccccccceceeeeeeeeeee 21, 22, 27

Michael Berger, 7he Ripeness Mess In Federal Courts,

Or How The Supreme Court Converted Federal Judges

Into Fruit Peddlers, INST. ON PLANNING, ZONING

AND EMINENT DOMAIN 7-1 (1991) ...........ccccceccceeececeeeeeees 14

Vill

TABLE OF AUTHORITIES (Cont.)

Page(s)

Michael Berger, Supreme Bait & Switch: The Ripeness

Ruse In Regulatory Takings, to be printed in

3 WASH U.J.L. & POLICY 99 (2000) 0.0... cece eeeeeesesteeeeees 16

Brian Blaesser, Closing The Federal Courthouse Door On

Property Owners, 2 HOFSTRA PRopP. L.J. 73 (1988) .......... 3

John Delaney and Duane Desiderio, Who Will Clean Up

the Ripeness Mess? A Call For Reform So Takings

Plaintiffs Can Enter The Federal Courthouse,

BR BE Reena oneee 2, 16

Timothy Kassouni, The Ripeness Doctrine And The

Judicial Relegation Of Constitutionally Protected

Property Rights, 29 CAL. W. L. REV. 1 (1992) ...... eee 3

Testimony of Professor Daniel R. Mandelker on H.R.

1534, reprinted at 31 THe UrB. LAW. 236

GIR TOS cccecsnccssccsncsssscenellicntevemnemeneeennn 18, 19, 27

Lynda Oswald, Cornering the Quark: Investment Backed-

Expectations and Economically Viable Uses in Takings

Analysis, 70 WASH. L. REV. 91 (1995) occ ceeeeeeeees 7

Gregory Overstreet, The Ripeness Doctrine Of The

Takings Clause: A Survey Of Decisions Showing Just How

Far Federal Courts Will Go To Avoid Adjudicating

Land Use Cases, 10 J. LAND USE & ENVTL. L. 91

PUTED | sassscndsnsesecnenniemsnnabinintieusmnmniimanisstiananiteeseniiin 3, 24

Paul Weiland, Unfunded Environmental Mandates:

Causes, Burdens, and Benefits 22 HARV. ENVTL. L. REV.

PCO OEED cccerisatscsrensicnscsesennenmmsenmateninntiemsnaninenendl 6

Gren

INTERESTS OF THE AMICUS CURIAE

The National Association of Home Builders (“NAHB”)

has received the parties’ written consent to file this brief as

amicus curiae in support of the petitioner. Letters of

consent have been filed with the Clerk of the Court. !

NAHB represents over 200,000 builder and associate

members throughout the United States. Its members

include people and firms that construct and supply single

family homes as well as apartment, condominium,

commercial and industrial builders, land developers, and

remodelers. It is the voice of the American shelter

industry. NAHB, therefore, is concerned with any judicial

decision that calls into question the remedy available to its

members under the Fifth Amendment when land use

regulators take private property for public use without the

payment of just compensation.

NAHB has been before the Court as an amicus curiae

or as “of counsel” to the landowner in a number of cases

involving the rights of landowners to use their property

and the remedy to be applied when those rights are

interfered with. These include Agins v. City of Tiburon,

447 U.S. 255 (1980), San Diego Gas & Elec. Co. v. City of

San Diego, 450 U.S. 621 (1981), Williamson County

Regional Planning Comm'n v. Hamilton Bank, 473 U.S.

172 (1985), MacDonald, Sommer & Frates v. Yolo

County, 477 U.S. 340 (1986), Nollan v. California Coastal

Comm'n, 483 U.S. 825 (1987)2, Lucas v. South Carolina

'No person or entity other than NAHB made any monetary

contribution to the preparation or submission of this brief.

2The Court’s opinion cited NAHB’s brief. 483 U.S. at 840.

2

Coastal Council, 505 U.S. 1003 (1992), Dolan v. City of

Tigard, 512 U.S. 374 (1994), Suitum v. Tahoe Regional

Planning Agency, 520 U.S. 725 (1997), and City of

Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S.

687 (1999),

SUMMARY OF ARGUMENT

The lower couris greet constitutional property rights

cases with hostility.> When takings claims are presented to

federal judges, their knee-jerk reaction is to cite this

Court's ripeness opinions as an easy avenue for dismissal.

Between 1990-98, for example, 83% of takings cases with

a reported opinion from a U.S. district court were

dismissed without ever reaching the merits. During that

same time period, property owners who could afford to

continue litigation before one of the U.S. Circuit Courts of

Appeal saw 64% of their takings claims sacrificed on the

ripeness altar. See John Delaney and Duane Desiderio,

Who Will Clean Up The Ripeness Mess? A Call For

3See, e.g., River Park, Inc. v. City of Highland Park, 23 F.3d

164, 165 (7" Cir. 1994) (“Federal courts are not boards of

zoning appeals. This message, oft-repeated, has not penetrated

the consciousness of property owners who believe that federal

judges are more hospitable to their claims than are state judges.

Why they should believe this we haven't a clue; none has ever

prevailed in this circuit....”) (emphasis supplied); Hoehne v.

County of San Benito, 870 F.2d 529, 532 (9" Cir. 1989) (court

perceives its role as “the Grand Mufti of local zoning boards”

and dismisses takings case); Coniston Corp. v. Village of

Hoffman Estates, 844 F.2d 461, 467 (7" Cir. 1988) (takings

claim is merely a “garden-variety zoning dispute dressed up in

the trappings of constitutional law”).

a

3

Reform So Takings Plaintiffs Can Enter The Federal

Courthouse, 31 THE URB. LAW. 195, 203-204 (1999).4

Because federal courts have abdicated their

responsibility to decide constitutional property rights

cases, the takings clause is unfortunately unique. Except

for the rare occasion when this Court agrees to hear a

takings case, no other provision in the Bill of Rights

depends almost entirely on the state court system to flesh-

Out its substantive meaning and requirements.

But state courts, following the federal courts’ example,

routinely sidestep the merits of takings claims as well.

Here, for example, the Supreme Court of Rhode Island

declined a thorough analysis of Mr. Palazzolo’s request for

just compensation simply because the wetland regulations

at issue pre-dated his acquisition of the subject property.

The Rhode Island courts believed that Mr. Palazzolo could

not reasonably expect to develop his property because he

must have known it would be regulated. But in today’s

regulatory climate, with hundreds of thousands of federal,

state and local statutes and regulations purporting to

protect the environment, who doesn’t acquire property

with the expectation that it will be regulated? Can anyone,

from here on in, ever assert a viable regulatory takings

4The federal courts’ avoidance of takings claims is a common

subject of analysis. See also Gregory Overstreet, The Ripeness

Doctrine of the Takings Clause: A Survey of Decisions Showing

Just How Far Federal Courts Will Go to avoid Adjudicating

Land Use Cases, 10 J. LAND Use & ENVTL. L. 91 (1994);

Timothy Kassouni, The Ripeness Doctrine and the Judicial

Relegation of Constitutionally Protected Property Rights, 29

CAL. W. L. Rev. | (1992); Brian Blaesser, Closing the Federal

Courthouse Door on Property Owners, 2 HOFSTRA PROP. L.J.

73 (1988).

4

claim? Under the reasoning of the Rhode Island courts, the

answer is no.

Additionally, the Rhode Island courts determined that

Mr. Palazzolo’s takings claim is not ripe because he did

not submit enough applications requesting permission to

use his land. Mr. Palazzolo (and his corporate predecessor-

in-interest) submitted four land use applications.

Regulators denied them all, but the Rhode Island courts

wanted more before it would deem the case ripe. How

many more is anyone’s guess.

Too frequently, lower courts rely on the date of

acquisition and finality questions presented here as a quick

and simple dodge out of the substantive and fact-intensive

issues surrounding takings claims. The approach taken by

the Rhode Island courts here—and innumerable other

federal and state courts—relegates the takings clause “to

the status of a poor relation.” Dolan v. City of Tigard, 512

U.S. 374, 392 (1994). This case begs the Court to restore

the takings clause to its rightful, equal place among the

other protections in the Bill of Rights. To achieve this

restoration, NAHB respectfully urges the Court to rule as

follows:

e The date of statutory or regulatory enactment can not

preclude the courts from deciding whether a land use

agency has committed a taking in the first instance.

The date of regulatory enactment may be a factor in

determining the amount of just compensation due to a

property owner, but it should not negate the very

existence of a takings claim.

e When a citizen applies to use his property, his takings

claim should ripen after (1) regulators have denied one

“meaningful” application, and (2) he seeks a single

waiver or variance that allows relief from the denial—

i

5

unless (3) following such procedures would be futile in

terms of receiving the requested relief. Denial of a

single land use application does not mean that a taking

has in fact occurred. Rather, denial of one application

should simply mean that a takings claim is ripe for a

court to decide on the merits.

R NT

I. THE MERE EXISTENCE OF A REGULATION,

ABSENT FURTHER REVIEW, SHOULD NOT

END THE REQUIRED CONSTITUTIONAL

ANALYSIS OF A TAKINGS CLAIM.

In concluding that Mr. Palazzolo suffered no regulatory

taking, the court below found that because “there were

already regulations in place limiting [the Petitioner's]

ability to . . . develop[ ]” his property, he could have no

investment-backed expectations and therefore suffered no

taking. Palazzolo v. Rhode Island, 746 A.2d 707, 717

(R.I. 2000). The court below quoted with favor the

Federal Circuit’s opinion in Good v. United States, with

particular emphasis on the finding that, “In view of the

regulatory climate that existed when [the landowner]

acquired the subject property, [the landowner] could not

have had a reasonable expectation that he would obtain

approval . . . to develop the land.” /d. (quoting Good, 189

F.3d 1355, 1361-62 (Fed. Cir. 1999)).

Once the regulations in question were adopted, the

court below declared, the State of Rhode Island had

removed from the title to the property “the right to fill

wetlands,” thus leaving Mr. Palazzolo with no further right

to develop his land. Palazzolo, 746 A.2d at 710. The mere

enactment of the regulations were enough to extinguish

6

property rights in the parcel, precluding any possible

recovery for a taking.

A. The Rhode Island Supreme Court’s Cursory

Analysis Effectively Writes Out Of Existence

The Concept Of Regulatory Takings.

The seemingly simple proposition laid out by the

Rhode Island Supreme Court - if you acquire property

under regulatory burden your investment-backed

expectations cease to exist - has devastating results. For

what parcel of land in the United States today does not fall

under the rubric of some regulatory scheme? “Between

1968 and 1978 Congress passed more regulatory statutes

than it had in the nation's previous 179 years.”

As previously noted, courts are extremely reluctant to

resolve the merits of takings claims, and have effectively

used the ripeness hurdle to keep cases from their

courtrooms. When that evasion won’t work, what better

way to get the plaintiff out of the courthouse than by

telling her, “sorry, your property is regulated, and

therefore you have no takings claim.”

Courts have already shown such plaintiffs out the

courthouse door.6 Many have followed the “logic” in

5Paul Weiland, Unfunded Environmental Mandates: Causes,

Burdens, and Benefits, 22 HARV. ENV1L. L. REV. 283, 287

(1998).

6See McQueen v. South Carolina, 530 S.E.2d 628 (S.C. 2000);

City of Virginia Beach v. Bell, 498 S.E.2d 414, 417 (Va.), cert.

denied, 525 U.S. 826 (1998); Kim v. City of New York, 681

N.E.2d 312, 314-16 (N.Y.), cert. denied, 522 U.S. 803 (1997);

Grant v. South Carolina Coastal Council, 461 S.E.2d 388, 391

7

Good, where the court concluded that, “In light of the

growing consciousness of and sensitivity toward

environmental issues, [the landowner] must also have been

aware that standards could change to his detriment.”

Good, 189 F.3d at 1363. Some might say this ‘test’

requires citizens to become regulatory psychics, peering

into their crystal balls to divine how their property might

be regulated so they might take whatever steps were

necessary to protect their distinct, investment-backed

expectations. Or, as the Supreme Court of Rhode Island

appears to have done to Mr. Palazzolo’s land, this ‘test’

may simply add a new clause to every deed in America

reading, “Property subject to uncompensated regulatory

seizure at any time — purchase at your own risk.”

One legal commentator has described this regulatory

nullification of property rights as follows:

If we accept the premise that enactment of one

piece of legislation puts a property owner “on

notice” that more restrictive regulations might be

enacted in the future as well, we find ourselves

faced with a reductio ad absurdum — the

exsitence of the first regulation will defeat any

claims the owner might have regarding the

sanctity of the property interest in the future. By

merely enacting one regulation (even a relatively

non-intrusive one that is clearly a legitimate

exercise of the police power), the government

opens a path for eventual, incremental taking of

the entire property interest without payment of

compensation.

(S.C. 1995); Hunziker v. State, 519 N.W.2d 367, 371 (lowa

1994), cert. denied, 514 U.S. 1003 (1995).

8

Lynda Oswald, Cornering the Quark: Investment-Backed

Expectations and Economically Viable Uses in Takings

Analysis, 70 WASH. L. REV. 91, 114 (1995).

Here, the Supreme Court of Rhode Island even added a

novel twist. In noting that this Court recognized the

limitations “that background principles of the State’s law

of property and nuisance already place upon land

ownership,” Lucas v. South Carolina Coastal Council, 505

U.S. 1003, 1029 (1992), the Court below declared that

governmental regulations have exactly the same effect.

“[W]here the regulation predated the landowner’s

acquisition of the property, ‘the bundle of rights which [the

landowner] acquired upon obtaining title to the property

did not include the right to develop the lots without

restrictions.” Palazzolo, 746 A.2d at 716 (citation

omitted).

The end result is that any owner acquiring property

already regulated has no possibility of a takings claim.

“Regardless of whether the government physically takes

property in the form of an easement or promulgates

regulations restricting the property's use, all subsequent

owners take the land subject to the pre-existing limitations

and without the compensation owed to the original

owner.” /d. at 716-717.

By equating physical and regulatory takings, the

Palazzolo court failed to note one substantial difference:

an owner acquiring property knows the specific parameters

of a physical taking and can easily factor its impact into

his investment-backed expectations. An owner acquiring

property under a regulatory scheme will often not know

the parameters of these regulations until they are actually

applied to his property. While there is surely some

element of risk involved in any land purchase, the degree

9

of uncertainty in any regulatory scheme is vastly more

difficult to ascertain than one involving a physical taking.

The vast majority of regulatory takings claims arise in

the context of as-applied challenges, because the full

impact of a regulation can usually be quantified only when

it is applied to a particular parcel. “Even after [the agency]

has issued a jurisdictional declaratory statement . . . it

remains to be determined whether the permit will be

granted ... [for] no taking occur[s] until [the agency]

denifes the applicant’s] permit application.” Vatalaro v.

Department of Envtl. Conservation, 601 So.2d 1223, 1229

(Fla. App. 1992). Indeed the Ninth Circuit has recognized

that an owner acquiring property after the adoption of a

regulatory scheme may have an as-applied challenge

available to address any injury suffered. See Carson

Harbor Village Ltd. v. City of Carson, 37 F.3d 468 (9" Cir.

1994).

By treating the ability to develop land as a privilege

under the exclusive domain of the state, the Supreme Court

of Rhode Island appears to have forgotten the words of this

Court in Nollan v. California Coastal Commission, 483

U.S. 825, 833 n.2 (1987): “[T]he right to build on one’s

property — even though its exercise can be subjected to

legitimate permitting requirements — cannot remotely be

described as a ‘governmental benefit.””

If the holding o: the court below stands, there will be

no constitutional relief for property owners stripped of

their rights by application of a regulation, no matter how

severe the consequences. The Fifth Amendment will apply

almost exclusively to physical appropriation of property.

Justice Holmes oft-quoted statement, "The general rule at

least is that while property may be regulated to a certain

extent, if regulation goes too far it will be recognized as a

taking" Pennsylvania Coal Co. v. Mahon, 260 U.S. 393,

10

415 (1922), will take its place in present day constitutional

analysis as simply another great dissent.

B. Investment-Backed Expectations Are Best

Utilized In Determining The A-sount Of Just

Compensation.

As this case and others indicate, courts can tie property

owners in knots over the degree to which distinct,

investment-backed expectations must be negatively

impacted by a regulation in order for a taking to be found

at all, much less in order to prove some level of

compensation. As Judge Smith of the Federal Court of

Claims has described, this debate can often reach absurd

heights:

The notion that the government can take two-

thirds of your property and not compensate you

but must compensate you if it takes 100% has a

ring of irrationality, if not unfairness, about it. If

the law said that those injured by tortious conduct

could only have their estates compensated if they

were killed, but not themselves if they could still

breathe, no matter how seriously injured, we

would certainly think it odd, if not barbaric. Yet

in takings trials, we have the government trying to

prove that the patient has a few breaths left, while

the plaintiffs seek to prove, often at great

expense, that the patient is dead. This all-or-

nothing approach seems to ignore the point of the

Takings Clause.

Florida Rock Indus. v. United States, 45 Fed. Cl. 21, 23

— 24 (1999).

This almost surreal legal battle underscores why

takings jurisprudence would be better served if distinct,

ll

investment-backed expectations played two roles rather

than one: as a simple threshold requirement, where proof

of deprivation of economically viable use of property

would be enough to show a taking; then as a central

component of the debate over compensation, where each

side would be free to battle over how much — if anything —

should actualiy be awarded.

Such a two-step analysis makes use of the investment

backed expectations concept where it works best — as a

tool to assess the amount of just compensation.

Rather than forcing plaintiffs to show the ‘death’ of all

investment-backed expectations to prove governmental

liability for a takings claim, a plaintiff should be required

to show only the existence of distinct, investment-backed

expectations and evidence indicating the degree to which

they have been frustrated. The government, at this

threshold stage, could present evidence challenging the

degree of impact, or the validity of the expectations in the

first place. |

However, instead of battling over percentages of loss

and the full impact of the regulation upon the property,

here a court would need only ascertain that 1) distinct

investment-backed expectations exist, and that 2) they

have been frustrated because the property owner has been

denied the ability to put his land to economically viable

uses.

Should the takings claim also meet the remaining Penn

Central tests and any other applicable hurdles, only then

would the court turn its attention to the actual,

compensable amount that is due and owing to the property

owner.

Such an analysis would greatly simplify the initial

review of a regulatory takings claim. Rather than fight

over what is essentially the specific degree of loss up front,

12

the parties would only reach such a level of detail when all

other factors have been addressed.

Of course, this Court would need to set some

guidelines as to what ‘quantifiable degree’ of loss triggers

further analysis.

In Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419 (1982), this Court found that physical

appropriation of a tiny fraction of a building for

installation of cable television equipment was a taking.

While such a specific, stringent standard need not be

adopted here, this Court must suggest some reasonable

parameters.

In Penn Central Transportation Co. v. City of New

York, 438 U.S. 104 (1978), this Court found that no taking

had occurred, in part, because the plaintiff's “primary

expectation concerning the use of the parcel” was not

frustrated. /d. at 136. Conversely, where a plaintiff's

“primary expectations” for his property are indeed

frustrated, it is reasonable to expect that his investment-

backed expectations have also been frustrated. In the

present case, Mr. Palazzolo’s inability to develop his

property for residential use — his primary expectation — has

been frustrated. Utilizing the proposed test, this evidence

should be enough to show sufficient impact on investment-

backed expectations to pass the initial threshold test for a

regulatory takings claim. Detailed analysis of actual loss

of compensable value would take place only after a court

found all other applicable takings tests fully satisfied.’

7 The difference between deprivation of use leading to a

taking, and computation of loss of value for purposes of

calculating compensation is one of the issues which has

bedeviled other courts, which consistently confuse the two.

See e.g, Tahoe-Sierra Preservation Council, Inc. v. Tahoe

> bs

13

Frustration of primary expectation of use is but one

possible factor in a threshold review of investment-backed

expectations, but certainly a reasonable one well-grounded

in existing precedent. With this Court’s guidance, other

similar threshold tests focusing on deprivation of use could

be established which would further assist courts

nationwide in more effectively analyzing investment-

backed expectations in the manner proposed here.

Meeting this threshold would not, of course, guarantee

recovery. Once a court finds a taking, the parties would

engage in a substantially more detailed presentation of

evidence indicating the specific degree of loss, taking into

account actual valuations, market realities, and the degree

of risk involved. Even when a fully-compensable physical

taking was found in Loretto, the actual loss per building

was largely insignificant due to the tiny amount of

property involved. Such an outcome is even more likely in

the considerably more speculative and uncertain world of

land development. But whatever the actual award, the

court would focus on investment-backed expectations as a

Regional Planning Agency, 216 F.3d 764, 780-81 (9" Cir.

2000)(“The central confusion centers on the relationship

between the ‘use’ of property and its ‘value.’ Clearly, the

economic value of property provides strong evidence of the

availability of "economically beneficial or productive uses"

of that property. . . Many cases treat the “use” and "value"

interchangeably, or speak only of the effect of a regulation

on the property's value.”) Cf. Tahoe Regional Planning

Agency, 520 U.S. 725, 749 (“[T]he relevant issue is the

extent to which use or development of the land has been

restricted.” (Scalia, J., concurring)

14

central issue only after a claim has reached the

compensation stage of review.

By clarifying the role of investment-backed

expectations during the first stage of a takings claim, this

Court will simplify the process of review of a regulatory

takings claim and remove the more detailed analysis of

loss to the compensation stage where it more properly

belongs.

Il. ADDITIONAL RE-APPLICATIONS, FOLLOW-

ING SOME UNKNOWN NUMBER OF

REGULATORY DENIALS, SHOULD NOT BE

REQUIRED TO RIPEN A TAKINGS CLAIM.

Suitum v. Tahoe Regional Planning Agency, 520 U.S.

725 (1997), was the last time the Court considered the

“prudential ripeness principles”® for a takings claim. The

case at bar presents a question unanswered by Suitum:

When a landowner’s initial application to use property is

denied, do the prudential ripeness elements require the

submission of additional applications—and an unknown

number of denials—before a takings claim becomes fit for

judicial review? See Id. at 738, n. 12.

The “ripeness mess” traces its genesis to Williamson

County Regional Planning Comm'n v. Hamilton Bank, 473

8520 U.S. at 733. The Seventh Circuit understands Suitum as

“distinguishing Williamson's prudential ripeness

requirements from ripeness requirements drawn from Article

II] limitations on judicial power.” Forseth v. Village of

Sussex, 199 F.3d 363, 368 n. 7 (7 Cir. 2000). See also

Lucas v. South Carolina Coastal Council, 505 U.S. 1003,

1012-1013 (1992) (takings ripeness requirements are

“prudential” in nature).

15

U.S. 172 (1985). See Michael M. Berger, The Ripeness

Mess in Federal Courts, Or How The Supreme Court

Converted Federal Judges Into Fruit Peddlers, INST. ON

PLANNING, ZONING AND EMINENT DOMAIN 7-1 (1991).

Williamson County established a two-part ripeness test for

takings claims. First, regulators must deliver a final

decision “regarding how [a landowner] will be allowed to

develop its property that represents a _ definitive

position...inflict{ing] an actual, concrete injury on the

property owner.” 473 U.S. at 191, 192. Second, a

property owner must exhaust available state remedies that

ae adequate compensation for a taking. /d. at

9If this Court did not grant certiorari, Mr. Palazzolo would

likely be forever precluded from having a federal court

review the merits of his takings claim. While the Court “has

frequently acknowledged the importance of having federal

courts open to enforce and determine federal rights,” Idaho

v. Coeur d'Alene Tribe of Idaho, 52\ U.S. 261, 293 (1997)

(O’Connor, J., concurring), the doors of the federal

courthouse are slammed shut on nearly all takings claimants.

This is because lower courts construe Williamson County

prong 2—the state compensation prong—as requiring

property owners to litigate their takings claims in state court

first under a state law inverse condemnation theory. Once

state court litigation is completed, federal courts avoid

deciding constitutional property rights claims under the

preclusive doctrines of res judicata or collateral estoppel.

See, e.g., Dodd v. Hood River County, 136 F.3d 1219, 1227

(9" Cir), cert. denied, 525 U.S. 923 (1998) (following state

court litigation on inverse condemnation under Oregon law,

“it was fair and efficient for the district court to decide the

Dodds are precluded from relitigating” their takings claim in

federal court); Wilkinson v. Pitkin County Bd. of Comm'rs,

16

Mr. Palazzolo’s situation implicates Williamson

County prong 1—the final decision prong. He (or his

corporate predecessor-in-interest) submitted four applica-

tions between 1962-1985 to fill wetlands on his property.

Every time, state environmental regulators denied the

applications. Every time, the regulators would have

permitted the construction of only one home on the

parcel’s upland portion. See Palazzolo, 746 A.2d at 710-

711. Despite the four permit denials, the Supreme Court of

142 F.3d 1319, 1325 n.4 (10" Cir. 1998) (Williamson County

prong 2 “may, in actuality, almost always result in

preclusion of federal claims....It is difficult to reconcile the

ripeness requirement of Williamson with the laws of [issue

and claim preclusion]).” The system is further stacked

against takings claimants because municipai defendants can

tactically remove Fifth Amendment cases to federal court

when it suits their purposes. See City of Chicago v.

International College of Surgeons, 522 U.S. 156 (1997).

Illogically, however, Williamson prong 2 is interpreted as

requiring plaintiffs to always initiate suit in state court. In

any event, “the synergy between the preclusion doctrines and

current ripeness rules is that property owners are forced to

litigate their constitutional takings claims in state court,

without ever receiving a federal adjudication on the merits.”

Delaney and Desiderio, supra at 2-3, 31 THe UrB. LAw. at

200-201 (emphasis in original). See also Michael Berger,

Supreme Bait & Switch: The Ripeness Ruse In Regulatory

Takings, to be printed in 3 WAsH. U.J.L. & PoLicy 99

(2000) (“When property owners follow Williamson County

and first sue in state court, they are met in some federal

circuits with the argument that the state court litigation, far

from ripening the federal cause of action, instead has

extinguished it. Under these courts’ reasoning, the state

proceedings are res judicata, and thus bar the pursuit of the

now-ripened federal action”) (emphasis in original).

17

Rhode Island decided that Mr. Palazzolo’s takings claim

was unripe because he never received a “final decision” on

how he could use his land. The court so ruled because Mr.

Palazzolo never re-applied for “less ambitious,” “less

grandiose” development plans. /d. at 714.

A. Macdonald Did Not Establish A Categorical Re-

Application Requirement.

The Rhode Island courts divined a categorical need for

re-applications from MacDonald, Sommer & Frates v.

Yolo County, 477 U.S. 340 (1986), where the Court wrote:

[A]ppellant has submitted one _ subdivision

proposal and has received the Board’s response

thereto [i.e., a denial]. Nevertheless, appellant still

has yet to receive the Board’s “final, definitive

position regarding how it will apply the

regulations at issue to the particular land in

question.”

Id. at 352-353 (quoting Williamson County, 473 U.S. at

191). The MacDonald Court further opined that the

takings claim before it was unripe because regulators did

not provide a “final and authoritative determination of the

type and intensity of development legally permitted on the

subject property.” Jd. at 349.

“MacDonald suggest|s] that the Williamson County

‘final decision’ requirement might sometimes require

multiple proposals or variance applications before a

landowner’s case will be considered ripe.” Suitum, 520

U.S. at 738, n.12 (emphasis added). This is a far cry from

the unconditional requirement, imposed by the Supreme

Court of Rhode Island and other courts, that multiple

applications are always required to ripen takings claims. In

fact, four Justices dissented in MacDonald because they

18

feared the majority opinion could be interpreted as a re-

application mandate. Justice White wrote: “Nothing in our

cases...suggests that the decisionmaker’s definitive

position may be determined only from explicit denials of

property owner applications for development. Nor do these

cases suggest that repeated applications and denials are

necessary to pinpoint that decision.” MacDonald, 477 U.S.

at 359 (White, J., dissenting.) Thus, the dissent expressly

refused to “import{] a re-application requirement into the

‘final decision’ analysis.” Jd.'°

B. The Re-Application Standard Defies Consistent

Application By The Lower Courts.

MacDonald’s four dissenting Justices were prescient.

The judiciary’s treatment of the re-application gloss on

ripeness is “riddled with obfuscation and inconsistency.

Testimony of Professor Daniel R. Mandelker on H.R.

1534, reprinted at 31 THE URB. LAW. 234, 236 (Spring

1999) (hereafter, “Mandelker Testimony”). The poster

child for re-application reform is probably City of

Monterey v. Del Monte Dunes at Monterey, Ltd. 526 US.

687 (1999). “The city, in a series of repeated rejections,

denied proposals to develop the property, each time

10The Court “noted probable jurisdiction” in MacDonald to

address the “importan[t]...question [of] whether a monetary

remedy in inverse condemnation is constitutionally required

in appropriate cases involving regulatory takings....’ 477

U.S. at 348. While that was the question it wanted to decide,

it became sidetracked with ripeness issues.

19

imposing more rigorous demands on the developers.” Jd. at

694.11

While the property owners in Del Monte ultimately

overcame the city’s ripeness objections after nine years of

'1Professor Mandelker summed-up.the endless carousel of

roundabout negotiations that the De! Monte property owners

faced before they litigated the merits: “In 1981, the property

owners submitted a subdivision proposal to build 344

residential units. The plan was rejected, and city planners

informed that a plan for 264 units would be reviewed

favorably. The owners then submitted a plan for 264 units;

city planners rejected it, and informed that a plan for 224

units would be reviewed favorably. The owners then

submitted a plan for 224 units; city planners rejected it, and

informed that a plan for 190 units would be reviewed

favorably. The owners then submitted a plan for 190 units:

city planners rejected it, and the owners appealed to the city

council. The city council found the plan ‘conceptually

satisfactory,’ and granted a conditional 18-month use permit

to commence construction for the project. Subsequently, the

developer worked with planning board staff to meet the city

council’s conditions for the 190-unit development. Staff

recommended approval of the site plan, but the planning

board overrode staff's recommendation and issued a denial.

The property owners then appealed this decision to the city

council, which this time denied the site plan for 190 units.

Meanwhile, a sewer moratorium was imposed, a request to

extend the special use permit was rejected, and the permit

expired. The local officials thus expected the developer to

start from square one. Following this Kafkaesque process,

the federal district court dismissed a takings claim for lack of

ripeness, but the appellate court then reversed. See 920 F.2d

at 1502-1506.” Mandelker Testimony, reprinted at 31 THE

UrB. LAW. at 237-38.

20

negotiation and litigation, the land use labyrinth they

navigated is not unique. Consider the following:

e Forseth v. Village of Sussex, 20 F.Supp.2d 1267, 1272

_ (E.D. Wisc. 1998), aff'd in part, rev'd in part, 199 F.3d

363, 366 (7" Cir. 2000): Three subdivision plats

submitted. Plaintiff should have pursued a variance

from an “offensive condition” that required him to

convey a two-acre strip of land to the adjoining land

owner—who also happened to be the Village Board

President voting on the application—for the President’s

own private use at considerably less than fair market

value.

Good vy. United States, 39 Fed. Cl. 81, 101-103 (1997),

aff'd, 189 F.3d 1355 (Fed. Cir. 1999), cert. denied, 120

S.Ct. 1554 (2000): Over a nine year period, eight

applications were submitted to federal and state

agencies to build a subdivision. Although the U.S

Army Corps of Engineers ultimately denied the

application for a wetlands permit, the decision was not

“final” under Williamson County and MacDonald

because “neither the Clean Water Act nor Corps

regulations limit plaintiff's ability to submit a new

application reflecting a different, less intensive plan.”

2BD Ltd. Partnership v. County Comm'rs for Queen

21

plan was “in compliance with all applicable zoning

laws,” yet local officials “refused to approve the plan,

and instead informed plaintiffs that there were

additional requirements, not found in any zoning or

other statutes, which plaintiffs had yet to meet.”

Southview Assocs. v. Bongartz, 980 F.2d 84, 92 (2d

Cir. 1992), cert. denied, 507 U.S. 987 (1993): Takings

claim unripe because landowner did not “attempt to

modify the location of the units or otherwise seek to

revise its application.” Court provided no indication of

how many re-applications would be necessary, or what

type of development regulators would approve, before

the takings claim would ripen.

Kaiser Dev. Co. v. City and County of Honolulu, 649

F. Supp. 926, 940, 941 n. 19, 942 n. 21 (D. Hawaii

1986), aff'd, 898 F.2d 112 (9 Cir. 1990), cert. denied,

499 U.S. 947 (1991): After “beat[ing] their heads

against a stone wall” and receiving “several final

rejections” to develop beachfront land, takings claim

nonetheless dismissed as unripe because “potentially

profitable uses,” for which the landowner never

applied, existed on the property—such as agriculture,

private riding academies, private recreation camps, a

cemetery, private utilities, and aquaculture.

Anne's County, 896 F. Supp. 5 18 (D.Md. 1995), aff d, The American Planning Association (APA)

remand, 162 F.3d 1158 (4" Cir. 1998): In addition to understands that this judicial disarray sends a clarion call

seeking federal and state permits to build a travel plaza, for this Court to clarify takings ripeness requirements.

plaintiff submitted at least three site plan applications Accordingly, the APA, whose national membership largely

to local officials for approval. includes land use

planning professionals that work for

e Schulze v. Milne, 849 F. Supp. 708, 709 (N.D. Cal. governmental bodies, has urged the Court to dispense with

1994), aff'd in part, rev'd in part on other grounds, 98 the re-application concept:

F.3d 1346 (9" Cir. 1996): Property owners submitted a

It must be recognized that the reapplication

total of 13 revised plans to renovate their home. Each - PP

requirement invites local government to create a

22

more complicated and time consuming review and

approval process. It is, in fact, an open invitation

for some local governments to do mischief.

Unscrupulous officials can and often do easily

assert, after the fact, that they “would have been

willing” to consider an intensity of use or an

alternative type of use that the landowner never

proposed. This is plainly unfair and an abuse of the

reapplication rule and is why such a rule is

unrealistic and should no longer be required to

demonstrate ripeness for adjudication.

Brief of Amicus Curiae American Planning Ass’n in

Support of Respondent, Suitum v. Tahoe Regional

Planning Agency, No. 96-243, at 13 (hereafter “APA

Suitum Brief”).

In short, all too often the re-application process causes

landowners to “pass{] through procedural purgatory” only

to “wend{] [their] way to procedural hell.” Front Royal

and Warren County Indus. Park Corp. v. Town of Front

Royal, 135 F.3d 275, 284 (4" Cir. 1998). This Court now

has the opportunity to clarify MacDonald and reconsider

the statements which lead some to mistakenly believe that

an unknown number of re-applications and denials is

always necessary to yield a ripe takings claim.

C. The Court Should Adopt The “One Meaningful

Application” Standard, Modified By A Futility

Exception.

There is nothing ambivalent about Rhode Island’s

treatment of Mr. Palazzolo’s applications. The record lacks

evidence that would lead him to believe he would have

received a permit to fill amy amount of wetlands. Nor

should he be required to blindly guess whether a

23

hypothetical future application for some lesser amount of

fill would receive administrative approval. When the

applications to fill 18 acres were denied, his injury became

concrete enough, and the administrative decision became

sufficiently final, for the limited purpose of ripening his

constitutional grievance. Accordingly, “(t]he demand for

finality is satisfied by (Mr. Palazzolo’s] claim,...there

being no question here about how the ‘regulations apply to

the particular land in question.’ ” Suitum, 520 U.S. at 739

(quoting Williamson County, 473 U.S. at 191).

Under Williamson County, a final decision arises when

the “initial decisionmaker” delivers a “definitive position

on the issue that inflicts an actual, concrete injury ....” 473

U.S. at 192 (emphasis supplied). Accordingly, as-applied

regulatory takings claims have been considered unripe

where a property owner did not: (1) submit initial

development plans for approval in the first instance; '2 (2)

submit to an available process to obtain a permit that may

allow development!3; or (3) once an initial application has

'2See Agins v. City of Tiburon, 447 U.S. 255, 260 (1980)

(because property owners “ha[d] not submitted a plan for

development of their property as the [challenged] ordinances

permit(ted}, there [was] as yet no concrete controversy

regarding the application of the specific zoning provisions”).

'3See Lucas v. South Carolina Coastal Council, 505 U.S.

1003, 1011-13 (1992) (had a “special permit procedure” to

the Coastal Council, for the purpose of determining

permanent deprivations of viable land uses, been available to

petitioner, he would have been required to pursue those

avenues for a ripe takings claim)

24

been denied, apply for a variance or waiver from

applicable land use regulations. '4

‘All of these avenues require some regulatory body to

act in an adjudicative capacity. In each situation, the

parties present evidence (often in the context of a public

hearing). Thereafter, an administrative agency is called

upon to issue some judgment, determination, or decree

relevant to the factual findings it made. See BLACK’S LAW

DICTIONARY at 39 (5" ed. 1979) (definition of

“adjudication”).'>

144 variance permits a land use that is otherwise prohibited.

See Hodel v. Virginia Surface Mining and Reclamation

Ass'n, 452 U.S. 264, 297 (1981) (as-applied claim unripe

because “[t]here is no indication in the record that appellees

ha[d] availed themselves of the opportunities provided by

the Act to obtain administrative relief by requesting...a

variance from the [applicable provisions of the Act}”;

Williamson County, 473 U.S. at 193 (the developer must

“resort to the procedure for obtaining variances ... [and

obtain] a conclusive determination by the Commission

whether it would allow” the proposed development).

ISFor example, a variance “provides relief from the

application of a land use regulation....For this reason, the

granting of a variance is an adjudicatory function’ ....Given

the rationales for the ripeness doctrine, the final decision

prong must be limited to adjudicatory relief. \n essence, the

ripeness doctrine requires that the land use agency adjudicate

the permissible uses of a given parcel of property.” Gregory

Overstreet, The Ripeness Doctrine of the Takings Clause: A

Survey of Decisions Showing Just How Far Federal Courts

Will Go to Avoid Adjudicating Land Use Cases, 10 J. LAND

Use & Envt’L L. 91, 111 (1994) (emphasis supplied).

25

For ripeness purposes, full completion of one land use

adjudication process—namely, submission of an

application, then pursuit of an available variance, and

denial of each—would amply satisfy any reviewing court’s

pragmatic need for ripeness'®. Denial of that application

and/or variance causes an injury to the landowner on that

request, and would not lead reviewing courts to

“entangl[e] themselves in abstract disagreements....”

Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967).

Initial denial would not mean that a taking has in fact

occurred, but simply that a reviewing court can conduct its

typical review to determine whether the administrative

record for that particular decision supports the finding of a

taking on the merits.

While a re-application would yield a second final

decision and a second distinct injury, it would not further

perfect the regulators’ “definitive position” from denial of

the first application and variance. See Williamson County,

473 U.S. at 193. A landowner’s pursuit in Round 2 (or

Rounds 3 or 4 or 5) would do nothing to

“formalize[]...[the] effects” he feels in a “concrete way”

from denials in Round 1. See Abbott Labs., 387 U.S. at

148-49. See also Franklin v. Massachusetts, 505 U.S. 788,

16 NAHB submits that denial of an application, followed by

denial of a variance, is sufficient for finality purposes to

ripen a takings claim. Often, however, the doctrine of

exhaustion of administrative remedies will require a property

owner to pursue further avenues reasonably available under

local ordinances, such as an appeal for review by a city

council or a board of zoning appeals. See Williamson

County, 473 U.S. at 192 (discussing differences between

doctrines of finality and exhaustion of administrative

remedies).

26

797 (1992) (“[t]he core question is whether the agency has

completed its decisionmaking process, and whether the

result of that process is one that will directly affect the

parties”).

Admittedly, under the proposed standard, issues will

likely arise as to whether a particular application is

“meaningful.”'7 In the takings arena, however, any

ripeness standard will likely require future litigation to

flesh-out its meaning. Setting a single application/variance

benchmark will lend much needed certainty to landowners,

regulators and courts who, right now, have no objective

starting point for determining when “enough is enough”

for prudential ripeness purposes. Indeed, NAHB's

suggested standard furthers the Court’s instruction that the

finality element for ripeness must be interpreted “in a

pragmatic way.” Abbott Labs. v. Gardner, 387 U.S. at,

149-50 (1967). Moreover, a body of precedent is

developing to explain the one meaningful application

requirement and the courts are becoming accustomed to

I7Regardless of the re-application issue, the property

owner's claim in MacDonald was arguably unripe because

he did not even submit a single “meaningful” application to

develop his parcel. “The Board found numerous reasons why

appellant’s tentative subdivision map was neither ‘consistent

with the General Plan of the County ... nor with the specific

plan of the County ... embodied in the Zoning Regulations

for the County." MacDonald, 477 U.S. at 342. The County

rejected the tentative subdivision map because it failed to

provide basic elements for a viable and safe land use plan,

such as access to a public street, sewer and water hook-ups,

and police protection. /d. at 343. How could MacDonald's

tentative subdivision map have been “meaningful” when it

was inconsistent with the county’s master plan for land use,

and did not provide the most basic public services?

27

the standard. See Eastern Minerals Int'l, Inc. v. United

States, 36 Fed. Cl. 541, 548 (1996); Kawaoka v. City of

Arroyo Grande, 17 F.3d 1227, 1232 (9" Cir.), cert. denied,

513 U.S. 870 (1994); Unity Ventures v. County of Lake,

841 F.2d 770, 775 (7" Cir. 1988); Kinzli v. City of Santa

Cruz, 818 F.2d 1449, amended, 830 F.2d 968 (9" Cir.

1987), cert. denied, 484 U.S. 1043 (1988).

While submission of one meaningful application is a

useful guidepost to initiate the ripeness inquiry, there may

be situations where submitting an application or pursuing a

variance would be a futile act. Justice White recognized

that while a “landowner must pursue reasonably available

avenues that might allow relief, it need not take...patently

fruitless measures.” MacDonald, 477 U.S. at 359. The

First Circuit applies a futility exception “where the degree

of hardship that would be imposed by waiting for the

permit process to run its course is so substantial and

severe, and the prospects of obtaining the permit so

unlikely, that the property may be found to be

meaningfully burdened and the controversy concrete

enough to warrant immediate judicial intervention.”

Gilbert v. City of Cambridge, 932 F.2d 51, 61 n. 12 (1"

Cir. 1991). See also APA Suitum Brief at 21 (“the

‘futility’ exception should always apply after one

application has been made for a land use approval or

administrative relief. ...”) (original emphasis).

A California appellate case best reflects the need for a

futility exception in the regulatory takings context. In

Healing v. California Coastal Comm'n, 22 Cal. App. 4"

1158, 27 Cal. Rprtr. 758 (Cal. App. 2d 1994), the Coastal

Commission denied a permit for a one-story, three

bedroom home, “where it had not received a

recommendation from a non-existent board as to whether

the property should be restricted from development under

28

a non-existent program for acquisition and set-asides of

lots in the Santa Monica mountains.” Mandelker

Testimony, reprinted in 31 THE URB. LAw. at 238. The

state argued that the property owner’s takings claim was

unripe for failure to pursue these unavailable procedures.

The court, however, ultimately found the claim ripe and

remarked:

It is in the nature of our work that we see many

virtuoso performances in the theaters of

bureaucracy, but we confess a sort of perverse

admiration for the Commission’s role in this case.

It has soared beyond both the ridiculous and the

sublime and presented a scenario sufficiently

extraordinary to relieve us of any obligation to

explain why we are reversing the judgment. To

state the Coastal Commission’s position is to

demonstrate its absurdity.

Healing, 27 Cal Rprtr. at 764. But see Shelter Creek Dev.

Corp. v. Oxnard, 838 F.2d 375, 379 (9" Cir. 1988)

(requiring application under an unavailable ordinance).

To summarize, NAHB respectfully urges the Court to

adopt a futility exception to the one meaningful

application/variance standard. On a case by case basis, a

property owner would bear the burden to convince a court

that it would be “patently fruitless” under all of the

circumstances to submit an application or pursue a

variance. Such an approach would be fully consistent with

the Court’s recognition that the very nature of takings

claims raises “essentially ad hoc, factual inquiries.” Penn

Central Transp. Co. v. City of New York, 438 U.S. 104,

127 (1978).

29

Ill. CONCLUSION

NAHB respectfully requests this Court to rule that Mr.

Palazzolo should not be (1) precluded from litigating the.

merits of his takings claim simply because the regulations

at issue pre-dated the acquisition of his property, and (2)

required to re-submit some additional number of land use

applications to ripen his takings claim.

November 22, 2000

Respectfully submitted.

DUANE J. DESIDERIO

CHRISTOPHER G. SENIOR*

*Counsel of Record

THE NATIONAL ASSOCIATION

OF HOME BUILDERS

1201 15" Street, N.W.

Washington, D.C. 20005

(202) 822-0200

Attorneys for Amicus Curiae