# Amicus Curiae Brief — Palazzolo v. Rhode Island

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2001
- **Citation:** 533 U.S. 606

## Text

JAN 3 200

ee : No. 99-2047 JAN 3 poi
In The | CE RK
Supreme Court of the United-States
+

ANTHONY PALAZZOLO,

. Petitioner,

RHODE ISLAND ex rel. PAUL J. TAVARES,
General Treasurer, and COASTAL RESOURCES
MANAGEMENT COUNCIL,

Respondents.

———____——_--—— @ — -— -— ——- —-—

On Writ Of Certiorari To The
Supreme Court Of Rhode Island
— ¢ —

BRIEF OF STATES OF CALIFORNIA, ALASKA,
COLORADO, CONNECTICUT, GEORGIA, HAWAIL
MAINE, MASSACHUSETTS, MONTANA, NEVADA,

NEW HAMPSHIRE, NEW JERSEY, NEW YORK, OHIO,
OKLAHOMA, SOUTH DAKOTA, VERMONT AND
WASHINGTON, THE DISTRICT OF COLUMBIA AND
THE UNITED STATES VIRGIN ISLANDS AS AMICI
CURIAE IN SUPPORT OF RESPONDENTS
— e ————

Biui. LockYER
Attorney General of the
State of California
RicHARD M. FRANK
Chief Assistant Attorney General
J]. MarrHew Roprigurz
Senior Assistant Attorney General
JoserpH Barsieri
Deputy Attorney General
Counsel of Record
1515 Clay Street, Suite 2000
Oakland, California 94612-1413
Telephone: (510) 622-2139

Attorneys for State of California

[Additional Counsel Listed On Inside Cover]

Ear I.

Miki

FRANKII

Bruce M. BoretHo,

Attorney General of the
State of Alaska

Ken SALAZAR,

Attorney General of the
State of Colorado

RicHARD BLUMENTHAL,

Attorney General of the
State of Connecticut

THursert E. Baker,

Attorney General of the
State of Georgia

ANZAL
Attorney General of the
State of Hawaii

ANDREW KETTERER,
Attorney General of the

State of Maine

THomas F. Reity,

Attorney General of the
State of Massachusetts

McGratH,
Attorney General of the
State of Montana

Sur Der
Attorney General of the
State of Nevada

Para,

Pour T. McLAuGHUN,

Attorney General of the
State of New Hampshire

JOHN J. Farmer, Jr.,
Attorney General of the
State of New Jersey

Evior Spirzer,
Attorney General of the
State of New York

Betry D. MontGomery,
Attorney General of the
State of Ohio

W.A. Drew EDMONDSON,
Attorney General of the
State of Oklahoma

Mark W. Barnett,
Attorney General of the
State of South Dakota

WittiaAmM H. Sorrett,
Attorney General of the
State of Vermont

CrHristine O. GreGorre,
Attorney General of the
State of Washington

Rosert R. Ricssy,
Corporation Counsel
District of Columbia

Iver A. SrRipiRON,
Attorney General of the
United States
Virgin Islands

[BEST AVAILABLE COPY

TABLE OF CONTENTS

Page
INTERESTS OF AMICI CURIAE ............-00055: 1
SUMMARY OF ARGUMENT............-6600005055 5
ARGUMENT ..o cc ccc cccccccccccccccccccccccssccces 7

Il.

Ill.

IV.

THE WRIT SHOULD BE DISMISSED
BECAUSE THE TRIAL COURT’S JUDG-
MENT WOULD NOT BE AFFECTED BY
THE COURT’S RESOLUTION OF PAL-
AZZOLO’S PETITION .......---- eee eee

A TAKING CLAIM IS NOT RIPE WHERE
THE APPLICANT HAS NEITHER ESTAB-
LISHED THE BOUNDARIES OF THE PROP-
ERTY NOR APPLIED FOR THE PROJECT
UPON WHICH HE BASES HIS CLAIM....

A. Palazzolo Failed to Establish That He
Owned the Property That He Alleged
Ee

B. Palazzolo Failed to Submit a Meaningful
Application .........6.00ceceeeeeeeeees

THE COURT SHOULD RETAIN THE RIPE-
NESS DOCTRINE’S REAPPLICATION
REQUIREMENT ..........- 00-0 eeeeeee eee:

A LANDOWNER MUST DEMONSTRATE
THAT A REGULATION HAS RENDERED
PROPERTY “VALUELESS” IN ORDER TO
ESTABLISH THAT THERE HAS BEEN A
PER SE TAKING ...........-0 eee eeeeeees

THE RHODE ISLAND COURT PROPERLY
FOUND THAT REASONABLE INVEST-
MENT-ACKED EXPECTATIONS AND
BACKGROUND PRINCIPLES OF RHODE
ISLAND LAW BARRED PALAZZOLO’S
TAKING CLAIM ........---- es eeee eee eees

11

14

16

ii
TABLE OF AUTHORITIES
Page

Cases:

Agripost, Inc. v. Miami-Dade County, 195 F.3d 1225
(11th Cir. 1999). cert. denied, 121 S.Ct. 51 (2000) .... 17

Alden v. Maine, 527 U.S. 706 (1999)................. 3, 5
Alegria v. Keeney, 687 A.2d 1249 (R.I. 1997).......... 17
Allen v. Allen, 19 R.I. 114, 32 A. 166 (R.I. 1895)....... 9
Andrus v. Allard, 444 U.S. 51 (1979) ................. 21
Assembly of God Church v. Vallone, 89 R.I. 1, 150

SRD Se CS PED ed cbcncdducandiadadeiddddnabes 19
Avenal v. United States, 100 F.3d 933 (Fed. Cir.

Seeonccksnepnecasustedseusedesdasdeusbualsdaac 24

Basile v. Town of Southhampton, 89 N.Y.2d 974, 678
N.E.2d 489, 655 N.Y.S.2d 877 (N.Y.App.), cert.
GeEa, GE WA. GE Gee ic ccc cccccccccccocecevccs 26

Board of Supervisors of Prince William County v.
Omni Homes, Inc., 253 Va. 59, 481 S.E.2d 460 (Va.
1997), cert. denied, 522 U.S. 813 (1997).......... 17, 23

Butner v. United States, 440 U.S. 48, 55 (1979)......... 3
Cavin v. United States, 956 F.2d 1131 (Fed.Cir. 1992) .... 10

CEEED v. California Coastal Zone Conservation
Comm'n, 43 Cal.App.3d 306, 118 Cal. Rptr. 315

GS GEPER esscecccsessccccencsesesecsnnseses 27
Chioffi v. City of Winooski, 165 Vt. 37, 676 A.2d 786
Gee BOOED cnccccecccvdccowencceceudesecénekenésces 18

City of Bakersfield v. Miller, 64 Cal.2d 93, 48
Cal.Rptr. 889, 410 P.2d 393 (Cal. 1966), cert.
denied, S04 US. SOB (1966) ........cccccccccccccess 27

TABLE OF AUTHORITIES - Continued

Page
City of Riviera Beach v. Taylor, 659 So.2d 1174
(Fla. App. 1995) ......cccccccccccccccccccccsccscces 12
City of Virginia Beach v. Bell, 255 Va. 395, 498 S.E.2d
414 (Va.), cert. denied, 525 U.S. 826 (1998) ......... 24

Concrete Pipe and Prods., Inc. v. Construction
Laborers Pension Trust, 508 U.S. 602 (1993)...... 17, 23

County of St. Clair v. Lovingston, 90 U.S. 46 (1874) .... 11
Creppel v. United States, 41 F.3d 627 (Fed.Cir. 1994) .... 25

Del Monte Dunes, Ltd. v. City of Monterey, 95 F.3d
1422 (9th Cir. 1996), aff'd on other grounds, 526
CG, GP GIRDER cccccccccccccccsccccsceccocccccccss 18

District Intown Properties Ltd. v. District of Colum-
bia, 198 F.3d 874 (D.C.Cir. 1999), cert. denied, 121

ee f —_ a rrrrrrrrir rere Tere 17
Eastern Enterprises v. Apfel, 524 U.S. 498 (1998) ....... 3
Executive 100 v. Martin County, 922 F.2d 1536 (11th

Cir.), cert. denied, 502 U.S. 810 (1991).............. 15

FIC Homes of Blackstone, Inc. v. Conservation
Comm'n, 41 Mass.App.Ct., 681 N.E.2d 61
(Mass.App. 1997) ........--.0e cece e eee eeeeeeeeees 17

Gazza v. New York State Department of Environmen-
tal Conservation, 89 N.Y.2d 603, 679 N.E.2d 1035,
657 N.Y.S.2d 555 (N.Y.App.), cert. denied, 522

CID. GED CITGO) 2 ccccccccccccccccccccccccccccesces 25
Gerhard v. Bridge Commn'rs, 15 R.I. 334, 5 A. 199
PRE, BIBER. ccccccccccccccccccccccccccccccecccccess 21

Gilbert v. City of Cambridge, 932 F.2d 51 (1st Cir.
1991), cert. denied, 502 U.S. 866 (1992)............. 11

iv

TABLE OF AUTHORITIES - Continued

Page
Grand River Dam Authority v. Grand-Hydro, 335

Se Se CP aubddddinencnccencencaeeceddceccses 19
Gregory v. Ashcroft, 501 U.S. 452 (1991)............... 3
Grundy Center v. Marion, 231 lowa 425, 1 N.W.2d

I a 27
Hay v. City of Hanover, 436 N.W.2d 800 (Minn.App.

Se 606085600800600sh00dedednceceedecoesesaseces 15
Herb v. Pitcairn, 324 U.S. 117 (1945)................ 7,8
Indianapolis v. Miller, 168 Ind. 285, 80 N.E. 626

Se CE SEKeSdéccdkncedccadeusccenenecesecheséan 27
Jackvony v. Powel, 67 R.I. 218, 21 A.2d 554 (R.I.

PPUNNShGRRhedsdaqekndcdnekesneonccsetseesancesess 29
Jewett v. Deerhorn Enterprises, Inc., 281 Or. 469, 575

Ee EE D SE scvconvnwnesdesguekesunenbeceen 28
Keystone Bituminous Coal Assn. v. DeBenedictis, 480

Sh Gl I cedAdcudonnvckesusacoueodenesecs 17, 19
Lake Country Estates v. Tahoe Regional Planning

ey Se We GE SE edcecewesontdcccsissocss 3
Landgate v. California Coastal Comm'n, 17 Cal.4th

1006, 73 yon 841, 953 P.2d 1188 (Cal.),

cert. denied, 525 U.S. 876 (1998) ................ 10, 16
Landmark Land Co. v. Buchanan, 874 F.2d 717 (10th

SD MEE Gtbbundunddnceobssaccandsuncsadesoleseds 15
Lechuza Villas West v. California Coastal Comm'n, 60

Cal.App.4th 218, 70 Cal.Rptr.2d 399 (1997), cert.

Gomiem, TED US. GED GROG... oc cccccccccccesccecss 10
Long Beach Equities, Inc. v. County of Ventura, 231

Cal.App.3d 1016, 282 Cal.Rptr. 877 (Cal.App.

1991), cert. denied, 505 U.S. 1219 (1992)............ 15

Vv

TABLE OF AUTHORITIES - Continued

Page
Lucas v. South Carolina Coastal Council, 505 U.S.
BED GIR s cc cccccccccccccessocceccssesesesss passim
MacDonald, Sommer & Frates v. County of Yolo, 477
CD, SED CITED 0 cccccscccccccccccccccccecces 9, 11, 15
McCuskey v. Canyon County Comm'rs, 128 Ida. 213,
912 P.2d 100 (Ida. 1996) ............ cece eee e ee eeee 17
Metropolitan Washington Airports Authority v. Citi-
zens for the Abatement of Aircraft Noise, 501 U.S.
BED GIGS. co cccccccccccccccescscccccsccsscsocsceccs 9
Nollan v. California Coastal Comm'n, 483 U.S. 825
SD ooo ccnccccccdecccctesdcocucceceseesssecceses 24
Olson v. United States, 292 U.S. 246 (1934)........ 20, 23
Outdoor Graphics v. City of Burlington, 103 F.3d 690
Wits Cle. BODE. wc cccccccccscccccscesccccccsccceces 26
Pace Resources, Inc. v. Shrewsbury Township, 808
F.2d 1023 (3d Cir.), cert. denied, 482 U.S. 906
PP rrrrerrrrrr rrr rr tt ttt tt 15
Penn Central Transportation Co. v. New York City,
438 U.S. 104 (1978).............. 6, 18, 21, 22, 23, 24
People v. Donovan, 57 Cal.2d 346, 19 Cal.Rptr. 473,
369 P.2d 1 (Cal. 1962) .......cccccccccccccsccceces 20
People v. New York Edison Co., 144 N.Y.S. 707, 159
A.D. 786 (N.Y.App.Div. 1913) ..... 6... 6 cece eee ees 27
Phillips Petroleum Co. v. Mississippi, 484 U.S. 469
PPPPPPPrrrrrrrrrrrrrrrrrtrritit Tritt ire 9

Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) ...4, 23

Smith v. Town of Wolfeboro, 136 N.H. 337, 615 A.2d
1252 CIN.B. 1992) nc ccccccccccccccccccccccccccese 10

vi

TABLE OF AUTHORITIES - Continued

Page
Southern Pacific Transpr. Co. v. Los Angeles, 922 F.2d
498 (9th Cir. 1990), cert. denied, 502 U.S. 943
SUPE ca cevcccenevnccececancneveceseceusancesess 12, 13
Southview Assoc., Ltd. v. Bongartz, 980 F.2d 84 (2d
Cir. 1992), cert. denied, 507 U.S. 987 (1993) ........ 15
Starr v. Commn'r, 226 Conn. 358, 627 A.2d 1296
Sh: SEED uudedendunéceusdneedébodncees eekureace 27
State v. McKee, 73 Conn. 18, 46 A. 409 (Conn. 1900) .... 27
Stern v. Halligan, 158 F.3d 729 (3d Cir. 1998) ........ 17
United States ex rel. Tennessee Valley Authority v.
PURIST, STEP Wa Be CHO ccccccccusccescescces 21
United States v. 50 Acres of Land, 469 U.S. 24 (1984) .... 19
United States v. Dow, 357 U.S. 17 (1958) .......... 10, 24
United States v. Riverside Bayview Homes, Inc., 474
SN Ce GE 8 eS Kc n cede dcbdacasccsecustesseacees 15
Williams v. City of Central, 907 P.2d 701 (Colo.App.
SOUS cdedecentcsscisccvbcecsesndccsenessduuadacs 23
Williamson Planning Comm'n v. Hamilton Bank, 473
a Ge GED cn vecccncceccues pesecenes 9, 12, 14, 15
Wilson v. Loew's, Inc., 355 U.S. 597 (1958)............. 7
Wooten v. South Carolina Coastal Council, 333 S.C.
G50, SIO S.B.28 716 GC. 199)... ccccccvecesccess 26
Zeman v. City of Minneapolis, 552 N.W.2d 548
Ph Uintdcd eenduedngnegkehedsnwedeueenes atid 17

——

Vii

TABLE OF AUTHORITIES - Continued

Page
CONSTITUTIONAL PROVISIONS:
U.S. Constitution
WM, Raman, ...o oo ccccccccccccecesceceseces 19, 21
STATUTES:
Cal. Pub. Resources Code § 30010............550055 13
R.I. Gen. Laws 46-6-1 (1956) ....- 6. eee ener e eee ees 21
OrHeR AUTHORITIES:
Appraisal Institute, “Real Estate Valuation in Liti-
gation” (2d.Ed. 1995) .........e eee eee erence eens 20
Interagency Land Acquisition Conference, “Uniform
Appraisal Standards For Federal Land Acquisi-
tions” (1992) ....... cece cece cece eee eeeeeneeenees 20
Office of Technology Assessment, U.S. Congress,
Wetlands: Their Use and Regulation (1984) .......... 28

INTERESTS OF AMICI CURIAE

This is not a case about ethereal concepts of property.
It concerns a speculator who, without providing the regu-
latory agency the opportunity to review his actual devel-
opment plan, seeks to have the taxpayers of Rhode Island
compensate him because he has been frustrated in his
pursuit of a use that, if permitted, would pollute the
town’s water supply. The expanded conception of the
taking doctrine being posed here threatens not only the
treasuries of the States, but their distinct interests in
developing real property and land use rules that strike an
appropriate balance between public needs and private
rights. The Rhode Island Supreme Court’s decision pre-
serves those interests, and its decision should be
affirmed.

Between 1959 and 1969 Anthony Palazzolo and his
corporation acquired the property that is the subject of
this taking claim for a total of $13,000, which Palazzolo
concedes was the fair market value of the property at the
time of acquisition. Decision, R.]. Sup.Ct. No. 88-0297, at
1-2; Trial Exh. E at 3. In the mid-1960’s and early 1970's,
Rhode Island rejected Palazzolo’s applications to fill this
intertidal salt marsh, and Palazzolo did not pursue a
taking claim following the last denial. Having waived
any taking claim based on the first round of administra-
tive decisions, Palazzolo then made identical applications
in the 1980's.

Palazzolo insisted during the 1985 administrative
process that he wished to fill a portion of the property for
a “beach facility,” and his attorney even objected during
the hearing to any consideration of residential use. See

pp. 11-12 infra. As Palazzolo later admitted, however, he
always intended to use the fill for residential development.
See pp. 11-12 n.3 infra. Palazzolo thus prevented the
agency from defining the residential uses that it might
have permitted had it known that Palazzolo wished to
develop the entire parcel for this quite different purpose.

At trial, Palazzolo dispensed with the beach facility
proposal and claimed that he was entitled to compensa-
tion for his lost opportunity to develop 74 residential
units. The State produced evidence which showed that
most of the fill proposed by Palazzolo would be depos-
ited on State-owned tidelands below the mean high tide
line. See p. 9 infra. At the conclusion of trial, the trial
court rejected Palazzolo’s taking claim, finding that his
residential project would create a public nuisance and
that, even with the permit denial, the property was worth
$200,000 because the State would have approved limited
residential use had he only applied. The Rhode Island
Supreme Court affirmed.

Retaining as much value as it does, Palazzolo’s prop-
erty is still worth more than fifteen times what he paid
for it. There has never been a regulatory taking in these
circumstances. But Palazzolo contends that a taking nev-
ertheless has occurred because he was entitled to a “rea-
sonable return” of $3.1 million - an amount more than 200
times the fair market value of his initial investment. No one
has ever strayed so far from the original meaning of the
Fifth Amendment.

Given the implications of Palazzolo’s extraordinary
arguments, the States’ concerns here are not surprising.
Some of these concerns are practical. This case invites an

enormous expansion of the ripeness doctrine and even
more takings litigation. If applicants are no longer
required to apply for the uses on which they base their
taking claims, it is not hyperbole to suggest that virtually
every applicant challenging a permit denial will append a
taking claim based on the loss of some use never consid-
ered by the agency.

The States also are concerned with the potential lia-
bility threatened by Palazzolo’s extravagant construction
of the taking doctrine. The Court in Lucas v. South Caro-
lina Coastal Council, 505 U.S. 1003 (1992) was clear: regula-
tion categorically denies all economically viable use only
when it renders property “valueless.” Palazzolo’s view
that there has been a per se taking under Lucas unless
government regulation allows a reasonable return to a
speculative enterprise would threaten to deplete the
States’ resources by creating “new and unforeseen claims
in vast amounts.” Eastern Enterprises v. Apfel, 524 U.S. 498,
542 (1998) (Kennedy, J., concurring in part and dissenting
in part).

But this latest threatened expansion of the taking
doctrine also touches important concerns of federalism.
In much of its recent jurisprudence this Court has empha-
sized the benefits of decentralized government and
acknowledged the sovereignty of the States. See, e.g.,
Alden v. Maine, 527 U.S. 706 (1999); Gregory v. Ashcroft, 501
U.S. 452, 458 (1991). The state interests implicated by this
case — state real property law and state land use regula-
tion -— are matters of peculiar state concern. See Lake
Country Estates v. Tahoe Regional Planning Agency, 440 U.S.
391, 402 (1979); Butner v. United States, 440 U.S. 48, 55

(1979). State law always has been understood to define
property interests, and accordingly, a landowner’s expec-
tations. E.g., Ruckelshaus v. Monsanto Co., 467 U.S. 986,
1001 (1984). But Palazzolo’s view federalizes property
law - rather than allow state law to define expectations, it
assumes that there is a natural law of property with an
inherent expectation of use to which the States must
conform their rules of property.

These concerns are more than philosophical. It is
sometimes easy to take for granted the extraordinary
responsibility that State and local governments bear in
regulating a society as large, complex and diverse as
ours, a responsibility that is weighted with the obligation
of conserving resources for future generations. When the
federal judiciary is asked to create an artificial conception
of “property” in which landowners are to be guaranteed
a return on investment and a permit denial is presumed
to conscript private property into public use, the balance
of the system is threatened. Rather than engage in the
sensitive accommodation of private and public interests
demanded by modern land use regulation, agencies will
begin to make decisions to avoid the exorbitant expense
of defending taking claims and the threat of liability if
they take any misstep along the way.

In the end, the Palazzolo view reflects a not-so-subtle
shift from the narrow restraints of Lucas to a regime in
which property is redefined in a way that “singles out”
the public interest to bear the risks of unfounded private
expectations. This level of intrusion into state property
law and land use decisionmaking is unjustified. After all,
the regulatory system is the product of a political process

in which landowners are well-represented, and this polit-
ical process already provides a powerful restraint against
excessive regulation. Moreover, the Court has informed
state courts and legislators of the need for vigilance in
these matters, and this Court has been “unwilling to
assume the States will refuse to honor the Constitution or
obey the binding laws of the United States.” Alden, 527
U.S. at 755.

There is no constitutional imperative to justify Pal-
azzolo’s proposed redefinition of state property rules and
recalibration of the delicate land use process. The deci-
sion reached here by the Rhode Island Supreme Court
was the end product of its evaluation of several factors:
state real property law, the expectations created by over a
century of land use restrictions on fill activities, the enor-
mous harms threatened by the proposed project, and the
equitable considerations presented by an applicant who
refuses to say what he is doing and expects the public to
pay for his speculative lost profits. The Court should not
overrule the Rhode Island court’s evaluation, much less
relax the ripeness doctrine and expose public agencies to
liability for every permit denial that frustrates a land-
owner’s profit expectations.

The judgment below should be affirmed.

+

SUMMARY OF ARGUMENT

1. The trial court’s judgment was based on the inde-
pendent ground that Palazzolo did not have a property
right to engage in the proposed use because the filling of
these particular wetlands would constitute a public

nuisance under Rhode Island common law. Because the
Court’s resolution of the questions presented will not
alter the trial court’s judgment, the writ should be dis-
missed as improvidently granted.

2. Palazzolo failed to meet even minimal ripeness
standards because he neither established that he owned
the property alleged to be taken nor did he apply for the
project upon which he bases his claim. Adherence to the
“reapplication requirement” remains necessary to insure
that an agency’s denial of a particular project is not
improperly construed as the denial of all use.

3. Whether an agency’s action deprives property of
all economically viable use under Lucas v. South Carolina
Coastal Council, 505 U.S. 1003 (1992) should be judged on
whether the agency’s action has rendered the property
“valueless.” In determining the impact of a regulation’s
impact on the value of property, an analysis of the prop-
erty’s fair market value before the alleged taking must
include all those restrictions on development that a rea-
sonable buyer would have considered.

4. Based on its assessment of Palazzolo’s reasonable
investment-backed expectations, the Rhode Island Court
properly rejected Palazzolo’s taking claim under the ad
hoc inquiry in Penn Central Transportation Co. v. New York
City, 438 U.S. 104, 123-125 (1978). Further, it makes little
difference when Palazzolo acquired the property, because
landowners in Rhode Island acquire property subject to
the right of the Legislature to declare public nuisances
such as the filling of these wetlands.

+

ARGUMENT

I. THE WRIT SHOULD BE DISMISSED BECAUSE
THE TRIAL COURT’S JUDGMENT WOULD NOT
BE AFFECTED BY THE COURT’S RESOLUTION OF
PALAZZOLO’S PETITION.

If a judgment below rests on an independent and
adequate state ground, the writ of certiorari should be
dismissed as improvidently granted. E.g., Wilson v.
Loew's, Inc., 355 U.S. 597 (1958). The Court exercises its
power “to correct wrong judgments, not to revise opin-
ions. We are not permitted to render an advisory opinion,
and if the same judgment would be rendered by the state
court after we corrected its views of federal laws, our
review would amount to nothing more than an advisory
opinion.” Herb v. Pitcairn, 324 U.S. 117, 125-126 (1945).
This case calls for the application of this principle.

As the trial court found, Palazzolo’s proposed filling
of 18 acres of salt marsh would have significant offsite
impacts. The proposed project would reduce existing salt
marsh in adjacent Winnapaug Pond, harm fish popula-
tions, and increase nitrate levels in the groundwater that
is the town’s sole source of drinking water. These serious
project impacts would constitute a public nuisance under
Rhode Island common law. The trial court thus concluded
that the State’s nuisance law prohibited Palazzolo’s tak-
ing claim. Decision, R.I. Sup.Ct. No. 88-0297, at 10-11; see
JA at 80-93 (testimony of Reis).

This conclusion would not be affected by the Court’s
resolution of the questions presented in Palazzolo’s peti-
tion for a writ of certiorari. None of the questions pre-
sented to this Court challenge the directive in Lucas that a

state’s common law of public nuisance serves as a back-
ground principle of real property law that limits the
permissible uses of property. Assuming arguendo that
this Court resolved all of the questions presented in
Palazzolo’s favor, the trial court on remand would need
to revise its written opinion, but its judgment would be
unaffected because its public nuisance determination
would continue to function as a complete defense to the
taking claim. This is not speculation. The trial court
already has said as much, finding that “even were this
Court to determine that the CRMC’s denial of the plain-
tiff’s application was a ‘total taking’ under Lucas, the
nuisance doctrine would prevent this Court from award-
ing the plaintiff compensation.” Decision at 11.

Because the same judgment would be rendered by
the state court after the Court corrected its views of
federal law, this Court’s present review would amount to
nothing more than an advisory opinion. See Herb, 324 U.S.
at 125-126. The writ therefore should be dismissed as
improvidently granted.

Il. A TAKING CLAIM IS NOT RIPE WHERE THE
APPLICANT HAS NEITHER ESTABLISHED THE
BOUNDARIES OF THE PROPERTY NOR APPLIED
FOR THE PROJECT UPON WHICH HE BASES HIS
CLAIM.

Under the “ripeness” doctrine, a claim that govern-
ment regulation effects a taking of property must be
dismissed unless the government entity charged with
implementing the regulation has reached a “final and
authoritative” decision regarding the application of the

regulation to the property at issue. MacDonald, Sommer &
Frates v. County of Yolo, 477 U.S. 340, 348 (1986); Williamson
Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 186, 190
n.11, 199-200 (1985). The Court’s cases “uniformly reflect
an insistence on knowing the nature and extent of permit-
ted development before adjudicating the constitutionality
of the regulations that purport to limit it.” MacDonald,
Sommer & Frates, 477 U.S. at 351. Although much of the
attention has focused on Palazzolo’s failure to resubmit
less ambitious development plans, Palazzolo’s taking
claim was unripe for other reasons.!

A. Palazzolo Failed to Establish That He Owned
the Property That He Alleged Was Taken.

During the administrative process and at trial, Rhode
Island demonstrated that most of the lands that Palazzolo
proposed to fill were below the mean high tide line, see,
e.g., Joint Appendix (JA) at 27 (CRMC decision), at 60-62
(testimony of Fugate), at 90 (stipulation of Palazzolo’s
attorney); Trial Exhs. T, U, V, AA (showing tidal eleva-
tions), and therefore were public trust lands belonging to
Rhode Island. Phillips Petroleum Co. v. Mississippi, 484 U.S.
469, 476 (1988); Allen v. Allen, 19 R.I. 114, 32 A. 166 (R.L.
1895). Finding the taking claim deficient on so many
other grounds, the lower courts never reached the owner-
ship issue, even though Rhode Island pressed it through-
out the lower court proceedings. Br. of Appellees,

1 Because it is jurisdictional, a ripeness argument may be
raised at any time. Metropolitan Washington Airports Authority v.
Citizens for the Abatement of Aircraft Noise, 501 U.S. 252, 265 n.13
(1991).

10

Palazzolo v. Rhode Island, R.1. Supr. Ct. No. 98-333A at 34.
Palazzolo’s taking claim is not ripe until this most basic
of ripeness issues - who owns what - is decided.

A taking claim cannot be predicated on the depriva-
tion of property unless the plaintiff can demonstrate
“undisputed ownership” of the property at the time of
the alleged taking. Cavin v. United States, 956 F.2d 1131,
1134 (Fed.Cir. 1992); see United States v. Dow, 357 U.S. 17,
20-21 (1958). It follows that an agency cannot make a final
decision on the scope, type, intensity and location of
approvable development if it does not know the bound-
aries of the property on which the development is to be
located. Likewise, it would be premature for a court to
adjudicate “how far” a regulation goes in its impact on
property without this information; as just one example, a
court could not begin to determine the economic impact
of a permit denial on the value of property without
knowing whether the affected property consisted of five,
ten or 20 acres.

The state courts have addressed this issue, and have
found that a taking claim is not ripe until the landowner
establishes the boundaries of the property that he pro-
poses to develop and upon which he bases his taking
claim. Lechuza Villas West v. California Coastal Comm’n, 60
Cal.App.4th 218, 70 Cal.Rptr.2d 399, 410-11 (1997), cert.
denied, 525 U.S. 868 (1998) (dismissing taking claim as
unripe where applicant had not established seaward tide-
lands boundary of property); see Landgate v. California
Coastal Comm'n, 17 Cal.4th 1006, 73 Cal.Rptr.2d 841, 953
P.2d 1188 (Cal.), cert. denied, 525 U.S. 876 (1998) (no final
decision until court first determined lot lines of property
proposed for development); Smith v. Town of Wolfeboro,

11
—
136 N.F.. 337, 615 A.2d 1252 (N.H. 1992) (no taking where
issue of lot legality had not been resolved).

The Court therefore should dismiss the taking claim
as unripe until the Rhode Island courts first decide
whether the State or Palazzolo owns the property alleged
to have been taken.?

B. Palazzolo Failed to Submit a Meaningful
Application.

The ripeness doctrine also requires that a claimant
submit a “meaningful application.” MacDonald, Sommer &
Frates, 477 U.S. at 353 n.8; see, e.g., Gilbert v. City of
Cambridge, 932 F.2d 51, 63 n.15 (1st Cir. 1991), cert. denied,
502 U.S. 866 (1992). As the Rhode Island court found,
Palazzolo never applied for the residential uses upon
which he now bases his taking claim. Palazzolo, 746 A.2d
at 714. Indeed, Palazzolo in both 1983 and 1985 failed to
disclose his actual reasons for seeking to fill the salt
marsh.* His failure to apply for the project upon which he

2 Palazzolo may contend that he had record title to these
lands and that Rhode Island did not acquire them through the
process of erosion. That argument would be erroneous because
riparian owners are subject to the gain and loss of title through
the processes of accretion and erosion. E.g., County of St. Clair v.
Lovingston, 90 U.S. 46 (1874). Moreover, any such argument only
would underscore the need for resolution of the title issue
before adjudicating the taking claim.

* At the August 18, 1983 administrative hearing, Palazzolo
testified under oath as follows:
Q: Do you propose to build on this property?
A: Not necessarily... .

12

bases his taking claim makes it unripe. Williamson Plan-
ning Comm'n, 473 U.S. at 189-90; see Southern Pacific
Transpr. Co. v. Los Angeles, 922 F.2d 498, 503-04 (9th Cir.
1990), cert. denied, 502 U.S. 943 (1991); City of Riviera Beach
v. Taylor, 659 So.2d 1174, 1180-81 (Fla.App. 1995).

Palazzolo says that none of this matters because
Rhode Island (in his estimation) would have denied any
project that he submitted. The ripeness doctrine, how-
ever, is not satisfied by having the landowner make
assumptions about the final decision that an agency
might have reached if the proper application had been
made. Public agencies seek to avoid making decisions
that result in the taking of property, and they need to
understand the consequences that their actions might

Q: Do you know whether or not it would pass a perk
test?

A: It is not necessary at this time. It would be
necessary if I said I wanted to build houses. I am not saying that.
Trial Exh. DD (transcript of 1983 hearing), pp. 20, 22; see Trial
Exh. I (1983 application of Palazzolo to CRMC, describing
proposed use of fill); Trial Exh. DD (transcript of 1985 hearing,
testimony of Palazzolo witness Grant) at 45; Trial Exh. I (1985
application of Palazzolo, stating “[t}here will be NO structures
on the property and no individual disposal systems”) (emphasis
in original).

At trial in 1997, Palazzolo told a much different story:

Q: Now, when you applied in 1983 to CRMC, what
did you make application for?

A: I made application to build houses, the house lots,
fill. I wanted to fill.

Q: And was that your intent at the time, was to do
residential development?

A: Yes, it was. Trial Testimony, Vol. 1, at 65.

13

have on a landowner’s actual intended use of property.
Moreover, many agencies have statutory (or implied)
authority to permit uses that might otherwise conflict
with the agency’s policies if such an approval is neces-
sary to avoid a taking. See, e.g., Cal. Pub. Resources Code,
§ 30010; Southern Pacific Transpr. Co, 922 F.2d at 503 n.5.
Agencies cannot exercise this authority, however, if pro-
ject proponents do not say what they really want.

Had Palazzolo applied for a residential use, he would
have been required to ‘undertake an environmental
review and obtain approvals for septic systems that
would have enabled the regulatory agency to determine
the costs and impacts of the proposed use and the conse-
quences of a permit denial. JA at 50-57 (testimony of
Chateauneuf); at 63-67 (testimony of Fugate). Once this
application was complete, the agency could have consid-
ered the possibility of an alternative residential project on
the upland portions of the site. See JA at 70. Palazzolo’s
application for a beach facility, however, gave the agency
no reason to consider residential use. JA at 63-65. Indeed,
at the 1985 hearing, Palazzolo’s attorney successfully
objected to questions about possible residential uses. Trial
Exh. DD (transcript of 1985 hearing) at 67.

In addition, Palazzolo’s taking claim is based on the
denial of use of the entire parcel but his beach facility
application proposed to fill only about 11.4 acres. Trial
Exh. I (Palazzolo’s profile of proposed fill). It cannot be
assumed that, because an agency denies use on one por-
tion of a parcel, it necessarily would have denied use of
the entire parcel. Here, the 11.4 acres that Palazzolo pro-
posed to fill were exclusively wetlands and excluded the

14

upland portions of the property. Trial Exh. I (1985 appli-
cation of Palazzolo) at 2 (“[t]here will be no filling of the
existing high areas”). Had Palazzolo applied to develop
the entire parcel for a residential use, the record suggests
that the Rhode Island agency might have approved up to
four houses on upland portions of the property that had
been excluded from the 1985 application. Trial Testimony,
Vol. 1, at 209-211 (testimony of Fugate). Although Rhode
Island finally had a chance to present evidence regarding
the possibility of residential use at trial, the ripeness
doctrine demands that this opportunity be provided dur-
ing the administrative process where the agency is in a
position to properly review and approve an alternative

development that might avoid a taking claim. E.g., Wil-
liamson Planning Comm'n.

Palazzolo’s taking claim is not ripe because he never
submitted a meaningful application for the residential
use that now forms the basis of his taking claim.

III. THE COURT SHOULD RETAIN THE RIPENESS
DOCTRINE’S REAPPLICATION REQUIREMENT.

Because “rejection of exceedingly grandiose develop-
ment plans does not logically imply that less ambitious
plans will receive similarly unfavorable reviews,” the
ripeness doctrine has required that applicants refine their
projects and submit additional applications to demon-
strate that there has been a definitive action by the
agency indicating with some specificity what level of

15

development will be permitted. MacDonald, Sommer &
Frates, 477 U.S. at 351, 353.4

The reapplication requirement performs an indispen-
sable function: it insures that the denial of a particular
project will not be equated as the denial of all use of the
property. This promotes the rule that takings only occur
in the “extreme circumstances” where a permit is denied
and the effect of the denial is to prevent “economically
viable” use of the property. United States v. Riverside
Bayview Homes, Inc., 474 U.S. 121, 126, 127 (1975).

In fact, most permit denials are not final and authori-
tative decisions about the use to which property can be
put. Agencies may be required to deny projects where
projects fail to comply with informational requirements,
ignore zoning restrictions, or conflict with resource pro-
tection policies. Even sophisticated, well-conceived pro-
jects may necessitate denials until they can be adjusted to
meet reasonable land use and environmental concerns.
Yet, once the developer has addressed the outstanding
issues and the agency is in a position to make a final use

4 Following the lead of Williamson and MacDonald, the
lower courts repeatedly have dismissed claims as unripe where
applicants failed to modify their projects in any meaningful way
following initial rejection of their plans. See, e.g., Southview
Assoc., Ltd. v. Bongartz, 980 F.2d 84, 95-98 (2d Cir. 1992), cert.
denied, 507 U.S. 987 (1993); Executive 100 v. Martin County, 922
F.2d 1536, 1541 (11th Cir.), cert. denied, 502 U.S. 810 (1991);
Landmark Land Co. v. Buchanan, 874 F.2d 717, 721 (10th Cir. 1989);
Pace Resources, Inc. v. Shrewsbury Township, 808 F.2d 1023, 1029
(3d Cir.), cert. denied, 482 U.S. 906 (1988); Long Beach Equities, Inc,
v. County of Ventura, 231 Cal.App.3d 1016, 282 Cal.Rptr. 877, 886
(Cal.App. 1991), cert. denied, 505 U.S. 1219 (1992); Hay v. City of
Hanover, 436 N.W.2d 800, 804-05 (Minn.App. 1991).

16

determination, development is usually approved. Thus,
by demanding that applicants stick with the process, the
reapplication requirement avoids taking claims and helps
insure that an interim permit denial is not wrongly
assumed to be a denial of all use.

Compliance with the reapplication requirement may
prove frustrating at times, but the requirement neverthe-
less encourages compromise by all parties at the adminis-
trative level and deters unproductive litigation. And,
while there may be occasional lapses, agencies have little
incentive to abuse the reapplication requirement. Where
agencies deny applications for reasons that, from an
objective standpoint, are pretextual and in bad faith, that
conduct by itself may be a constitutional violation. See
Landgate, 953 P.2d at 1199, 1203. Short of that, the appli-
cant should retain the burden of demonstrating that the
agency has made a final and authoritative decision.

Palazzolo’s claim that he was denied all use of the
property, rejected as a factual matter by the State courts,
is unripe under any conception of the ripeness doctrine.

IV. A LANDOWNER MUST DEMONSTRATE THAT A
REGULATION HAS RENDERED PROPERTY
“VALUELESS” IN ORDER TO ESTABLISH THAT
THERE HAS BEEN A PER SE TAKING.

Palazzolo contends that he may establish a categori-
cal (or “per se”) regulatory taking even if the property
retains significant value following the agency’s decision.
Palazzolo’s view represents an unwarranted departure
from Lucas and numerous cases following it, and the
Court should reject it.

17

In order to establish a per se regulatory taking, the
claimant must establish that there has been a final deter-
mination that both prohibits all use and that destroys the
property’s value. This follows from Lucas, where the
Court accepted that there had been a per se taking
because the South Carolina statute flatly prohibited all
use and left the property “valueless.” Lucas, 505 U.S. at
1015-19 & n.8. Acknowledging the stringency of this
approach, the Court recognized that per se takings would
be “relatively rare” and “extraordinary.” Id. at 1016, 1017.

Throughout its taking jurisprudence, the Court has
analyzed a taking claim on the basis of the regulation’s
impact on the walue of the affected property. E.g., Concrete
Pipe and Prods., Inc. v. Construction Laborers Pension Trust,
508 U.S. 602, 645 (1993); Keystone Bituminous Coal Assn. v.
DeBenedictis, 480 U.S. 470, 497 (1987). With rare exception,
the lower courts applying Lucas have required that a
person claiming a per se regulatory taking demonstrate
that the government action effectively destroyed the
value of the property. See, e.g., District Intown Properties
Ltd. v. District of Columbia, 198 F.3d 874, 882 (D.C.Cir.
1999), cert. denied, 121 S.Ct. 34 (2000); Agripost, Inc. v.
Miami-Dade County, 195 F.3d 1225, 1231 (11th Cir. 1999),
cert. denied, 121 S.Ct. 51 (2000).5 Implicitly recognizing

5 Other cases include Stern v. Halligan, 158 F.3d 729, 734-35
n.7 (3d Cir. 1998); FIC Homes of Blackstone, Inc. v. Conservation
Comm'n, 41 Mass.App.Ct. 681, 673 N.E.2d 61, 67 (Mass.App.
1997); Board of Supervisors of Prince William County v. Omni
Homes, Inc., 253 Va. 59, 481 S.E.2d 460, 464 (Va. 1997), cert. denied,
522 U.S. 813 (1997); Alegria v. Keeney, 687 A.2d 1249, 1253 (R.1.
1997); McCuskey v. Canyon County Comm'rs, 128 Ida. 213, 912
P.2d 100, 103 n.2 (Ida. 1996); Zeman v. City of Minneapolis, 552

18

that he cannot challenge the Rhode Island’s factual find-
ing that the property is still worth $200,000, Palazzolo
poses a number of approaches to avoid it. These raise a
number of problems.

Initially, Palazzolo’s contention that he lost 93.7% of
the value of the property based on his “allegation” that
his property was worth $3.1 million is erroneous. Pet. Br.
at 38-40. Palazzolo forgets that a trial was held on this
issue, and the Rhode Island court rejected Palazzolo’s
claim that the property was worth $3.1 million as “spec-
ulative.” Palazzolo, 746 A.2d at 715 & n.7. Palazzolo’s
entire claim of deprivation is therefore premised on an
allegation that was rejected as factually untrue by the
lower courts.®

In addition, Palazzolo’s allegation that the property
is worth $3.1 million is based on a serious misconception
of how the value of property should be computed when
quantifying the impact of regulation, whether under the
per se test in Lucas or the ad hoc inquiry in Penn Central.
Palazzolo’s computation of the value of the property
before the alleged taking improperly assumed that he

N.W.2d 548, 553 n.4 (Minn. 1996); Chioffi v. City of Winooski, 165
Vt. 37, 676 A.2d 786, 790 (Vt. 1996). One exception is Del Monte
Dunes, Ltd. v. City of Monterey, 95 F.3d 1422, 1433 (9th Cir. 1996),
aff'd on other grounds, 526 U.S. 687 (1999). The Court did not
address this aspect of the Ninth Circuit’s decision. Del Monte
Dunes, Ltd., 526 U.S. at 704.

6 At trial, Rhode Island demonstrated that, because of
substantial infrastructure costs ignored by Palazzolo’s
appraiser, the entire parcel was worth only $55,000 even if fully
developed as a residential project. JA at 101, 104 (testimony of
Andolfo); see Joint Lodging No. 1, Items 9 and 10.

19

would have been entitled to develop all 74 units without
any significant development restrictions. Palazzolo, 746
A.2d at 715 & n.7. Palazzolo’s misconception of how
value is determined is not unusual and merits consider-
ation by the Court.

In determining compensation claims under the Fifth
Amendment, the Court typically has measured depriva-
tion by the regulation’s impact on a property’s fair mar-
ket value. See Keystone Bituminous Coal Assn., 480 U.S. at
497 (taking determined by considering a property’s value
before and after taking); United States v. 50 Acres of Land,
469 U.S. 24, 25-26 (1984). Fair market value is typically
defined as:

the amount of money which a purchaser willing
but not obliged to buy the property would pay
to an owner willing but not obliged to sell it,
taking into consideration all uses to which the
land was adapted and might in reason be
applied. Assembly of God Church v. Vallone, 89 R.1.
1, 150 A.2d 11, (R.I. 1959), citing 4 Nichols,
Eminent Domain (3d ed.), § 12.2 [1], p. 32; see,
e.g., Grand River Dam Authority v. Grand-Hydro,
335 U.S. 359, 367-368 (1948) (applying Oklahoma
law).

The Court long ago rejected the idea that fair market
value is determined by the landowner’s idealized view of
the uses to which property might theoretically be put. In
determining fair market value between willing buyers
and sellers:

{[T]here should be taken into account all consid-
erations that fairly might be brought forward
and reasonably be given substantial weight in
such bargaining . . . Elements affecting value

20

that depend upon events or combinations of
occurrences which, while within the realm of
possibility, are not fairly shown to be reasonably
probable, should be excluded from consider-
ation... Olson v. United States, 292 U.S. 246, 257
(1934).

The state courts look at this the same way. See People v.
Donovan, 57 Cal.2d 346, 19 Cal.Rptr. 473, 369 P.2d 1, 8
(Cal. 1962) (“the trier of fact is entitled to and should
consider those facts which a buyer would take into con-
sideration in arriving at a fair market value,” including
zoning restrictions); see also Appraisal Institute, “Real
Estate Valuation in Litigation” (2d.Ed. 1995), at 135
(potential purchasers in market place consider added risk
of permit denial in determining price that they are will-
ing to pay); Interagency Land Acquisition Conference, “Uni-
form Appraisal Standards For Federal Land Acquisitions”
(1992), at A-23, found at http://www.usdoj.gov/enrd/
land-ack/.

Therefore, the value of property “before” an alleged
taking must take into account the existing restrictions on
use of the property and all other pertinent matters on
development potential that a buyer would consider. See
Olson, 292 U.S. at 257. In determining the fair market
value of the Palazzolo property in 1978, for example, it
must be assumed that a reasonable buyer would take into
account, inter alia, zoning, septic requirements, infrastruc-
ture costs, public trust claims, existing state and federal
wetlands regulations, and the State’s previous denial of
development applications in the 1960's. Although a rea-
sonable buyer in this situation would not assume that the
agency would unlawfully “take” the property, she would

21

assume that the permit process for intensive residential
use would be difficult and that, because of these various
problems, it would be speculative how much develop-
ment the agency might actually approve. Consequently,
when the agency denied the permit in 1985 — the time of
the action giving rise to the alleged taking - there would
be little diminution in value because the market had
already accounted for the possibility of that permit deci-
sion.”

The Court also should reject Palazzolo’s claim that
government regulation causes a per se taking unless the
landowner receives a “reasonable return” on his invest-
ment. Pet. Br. at 42, 44. There is no authority and no
constitutional policy that requires that the regulatory tak-
ing doctrine guarantee a profitable investment. The futil-
ity of Palazzolo’s position is underscored by the Court's
repeated admonitions that regulation legitimately may
cause a substantial diminution in value and that the Fifth
Amendment does not guarantee a profitable return.
Andrus v. Allard, 444 U.S. 51, 66 (1979); Penn Central, 438
U.S. at 131; see United States ex rel. Tennessee Valley Author-
ity v. Powelson, 319 U.S. 266, 285 (1943).

? Considering Palazzolo’s original purchase price and that
Rhode Island law has imposed restrictions on the filling of
tidelands and wetlands since before 1960, see Gerhard v. Bridge
Comm'rs, 15 R.I. 334, 5 A. 199 (R.1. 1886); R.I. Gen. Laws 46-6-1
(1956), it is doubtful that this property ever had much more than
speculative value.

22

Under any value standard, the evidence in this case
demonstrated that Palazzolo failed to establish that there
had been a per se taking of the property.®

V. THE RHODE ISLAND COURT PROPERLY FOUND
THAT REASONABLE INVESTMENT-BACKED
EXPECTATIONS AND BACKGROUND PRINCI-
PLES OF RHODE ISLAND LAW BARRED PAL-
AZZOLO’S TAKING CLAIM.

The Rhode Island Court took existing regulation into
account in two ways when evaluating Palazzolo’s taking
claim: it found that when Palazzolo became the owner of
the property in 1978, the right to fill wetlands was not
part of the title that he acquired, id. at 716, and that,
under the Penn Central test, Palazzolo lacked reasonable,
investment-backed expectations that he could fill the
property for a 74-unit subdivision, id. at 717. Palazzolo
contends, however, that a court evaluating a taking claim
should ignore the regulations in existence when the land-
owner acquired the property. Palazzolo’s approach
should be rejected.

The idea that there is no taking when a landowner
knowingly purchases property subject to developmental

§ Because at trial Palazzolo failed to establish any
diminution in value resulting from the permit denial, see pp. 1-2,
15-16 supra, he likewise faiied to establish a taking even under
the Penn Central formulation of the takings doctrine. It bears
emphasis that diminution in value should be measured by the
regulation’s impact on the entire parcel (such as the 20 acres in
this case), not some partial segment.

23

restrictions is the flipside to the taking doctrine’s pro-
scription against singling out landowners to bear societal
burdens - landowners, not society at large, must bear the
consequences of their own actions. “The public may not
by any means confiscate the benefits, or be required to
bear the burden, of the owner’s bargain.” Olson, 294 U.S.
at 255. Although courts have not always agreed on the
doctrinal category in which to place it, they have found
that pre-existing regulations may bar a taking claim for a
variety of reasons.

Reasonable, Investment-Backed Expectations. Existing
regulations always have played a role in defining a land-
owner’s reasonable investment-backed expectations in
the three-part ad hoc inquiry of Penn Central, 438 U.S. at
124. The Court has applied this concept a number of
times since, and has found that expectations are decisive
particularly where the property interest involves a well-
regulated enterprise and the landowner purchased the
property with actual notice of the challenged regulation.
Ruckelshaus, 467 U.S. at 1005, 1008-09; Concrete Pipe and
Prods., Inc., 508 U.S. at 646. The lower courts likewise
have found a landowner’s lack of reasonable expectations
to be dispositive in the Penn Central inquiry. See, e.g.,
District Intown Properties Ltd., 198 F.3d at 884; Williams v.
City of Central, 907 P.2d 701, 707 (Colo.App. 1995); Omni
Homes, Inc., 481 S.E.2d at 465-66.

Here, if Palazzolo’s representations and applications
in the 1980’s are taken at face value, he did not even
intend to engage in residential development when he
became the record owner of the property in 1978. See pp.
11-12 n.3, supra. Moreover, a reasonable buyer would
have known or should have known in 1978 (and most

24

likely in 1959) that there was little chance that he would
obtain approval to fill wetlands for 74 residential units, in
light of existing state and federal wetlands restrictions,
public trust limitations and septic requirements. E.g., JA
at 63-67 (testimony of Fugate); see p. 21 n.7, supra. The
original purchase price reflected these uncertainties. In
these circumstances, the Rhode Island court's straightfor-
ward application of the expectations principle disposes of
Palazzolo’s taking claim under Penn Central.

The Notice Defense. Numerous courts have found that
taking claims are barred where a landowner had actual
notice or assumed the risk that property would be subject
to the regulation upon which the taking claim was based.
See, e. g., Avenal v. United States, 100 F.3d 933, 937-38 (Fed.
Cir. 1996); City of Virginia Beach v. Bell, 255 Va. 395, 498
S.E.2d 414, 417-19 (Va.), cert. denied, 525 U.S. 826 (1998);
Alegria, 687 A.2d at 1254-55. This approach presents the
fairness issue in its most basic form: if a landowner knew
or should have known that his uses of the property
would be restricted when he voluntarily acquired it, the
public should not subsidize the risk that he undertook.
See Dow, 357 U.S. at 27 (not inequitable to deny recovery
where purchaser acquired property with “full notice” of
condemnation proceedings). A reasonable buyer in 1978
would have known that the Rhode Island agency would
not have approved the residential project upon which
Palazzolo predicates his taking claim.®

* Palazzolo’s reliance on Nollan v. California Coastal
Comm'n, 483 U.S. 825, 833 n.2 (1987), is misplaced. Nollan
involved an excessive exaction, which is the physical taking of
an already defined property interest (the right to exclude

25

Expectations and Value. Reasonable investment-backed
expectations inhere in the value of the property itself. See
Lucas, 505 U.S. at 1034 (Kennedy, J., concurring); Creppel
v. United States, 41 F.3d 627, 632 (Fed.Cir. 1994). In this
sense, preexisting regulations do not act as a defense to a
taking claim, but are factored into the value of property
because the value of the property at the time of acquisi-
tion will reflect the existing regulatory climate. See pp.
8-21 supra.'°

Pre-existing Regulations and Background Principles.
Numerous courts since Lucas have found, as did the
Rhode Island court, that regulations which exist at the

others). In a regulatory taking case, the property interest at
stake (a landowner’s right to engage in a particular
developmental use) is not static and is subject to constant
redefinition (e.g., a change in zoning where no rights have
vested). This type of property interest cannot be defined until
the landowner is denied a use and a court determines the
owner’s entitlement to engage in the use, measured in part by
the landowner’s expectations at the time of acquisition.

10 The facts in Gazza v. New York State Department of
Environmental Conservation, 89 N.Y.2d 603, 679 N.E.2d 1035, 657
N.Y.S.2d 555 (N.Y.App.), cert. denied, 522 U.S. 813 (1997)
illustrate this. Gazza paid $100,000 for a parcel of property, 65%
of which was subject to wetlands restrictions at the time of
purchase; this represented a substantial discount over the
$360,000 that Gazza claimed that the property would have been
worth without restrictions. Id. at 1036. The trial court found
that, following the denial of the variance, the property was still
worth $80,000, which meant that denial caused only a 20%
diminution in the “before” value of the property. Thus, while
the Gazza court properly found for other reasons that there was
no taking, such a modest diminution in value would not
independently result in a regulatory taking.

26

time of acquisition are part of the landowner’s title and
therefore form part of the background principles that
define the landowner’s ability to use property. See, e.g.,
Outdoor Graphics v. City of Burlington, 103 F.3d 690, 694
(8th Cir. 1996); Wooten v. South Carolina Coastal Council,
333 S.C. 469, 510 S.E.2d 716, 717-718 (S.C. 1999); Basile v.
Town of Southhampton, 89 N.Y.2d 974, 678 N.E.2d 489, 491,
655 N.Y.S.2d 877 (N.Y.App.), cert. denied, 522 U.S. 907
(1997).

Palazzolo contends, however, that the Court in Lucas
did not intend to include pre-existing regulations as part
of the antecedent inquiry into a claimant’s property inter-
ests. Despite the attention that Palazzolo gives this issue,
it has little application in practice because, as a defense to
a per se taking claim under Lucas, it comes into play only
in those rare circumstances where an applicant has met
the narrow test for establishing a denial of all economi-
cally viable use. Indeed, the Court need not reach this
issue if it finds that there was no per se taking or resolves
the taking claim against Palazzolo on some other ground.

Here, the Rhode Island Supreme Court properly
found that existing regulations formed part of the back-
ground principles defining Palazzolo’s property, and
Rhode Island and other amici curiae have demonstrated
the correctness of that holding. The States support those
arguments, and offer this additional consideration.

The background principles issue has been framed in
a way that focuses on the change in ownership - that is,
whether the wetlands regulations that were adopted after
Palazzolo’s corporation acquired the property but before

27

Palazzolo himself acquired it form “background princi-
ples” of Palazzolo’s ownership but not that of his corpo-
ration. But the change in ownership makes little
difference in this case. The wetlands regulations chal-
lenged by Palazzolo formed background principles defin-
ing his property interest because, no matter when he
acquired the property, Palazzolo’s property interest is
held subject to the Legislature’s authority to declare pub-
lic nuisances such as destruction of wetlands.

Legislatures have the inherent authority to declare
acts injurious to the public to be a public nuisance, even if
the acts were not nuisances at common law. See City of
Bakersfield v. Miller, 64 Cal.2d 93, 48 Cal.Rptr. 889, 410
P.2d 393, 397 (Cal. 1966), cert. denied, 384 U.S. 988 (1966);
Starr v. Commn’r, 226 Conn. 358, 627 A.2d 1296 (Conn.
1992); Grundy Center v. Marion, 231 lowa 425, 1 N.W.2d
677 (lowa 1942); People v. New York Edison Co., 144 N.Y.S.
707, 159 A.D. 786, 789 (N.Y.App.Div. 1913). Legislatures
may exercise this authority subject to a state court deter-
mination whether the legislature’s declaration was
unfounded or arbitrary. Indianapolis v. Miller, 168 Ind.
285, 80 N.E. 626, 627 (Ind. 1907); State v. McKee, 73 Conn.
18, 46 A. 409, 412 (Conn. 1900). As one court observed -
before Lucas was decided - contemporary environmental
legislation “represents an exercise by government of this
traditional power to regulate activities in the nature of
nuisances.” CEEED v. California Coastal Zone Conservation
Comm'n, 43 Cal.App.3d 306, 118 Cal. Rptr. 315, 324
(Cal.App. 1974); see Lucas, 505 U.S. at 1035 (recognizing
“unique concerns” presented by development of “fragile”
coastal land system and suggesting that expectations

28

regarding their regulation is not necessarily confined to
traditional nuisance law) (Kennedy, J., concurring).

Background principles restricting harmful uses of
property are not limited to only those uses prohibited by
the common law public nuisance doctrine as it existed at
the time of a particular State’s admission. Lucas, 505 U.S.
at 1030 (“changed circumstances or new knowledge may
make what was previously permissible no longer so”).
Human knowledge of what constitutes harmful activity
has developed dramatically. Many activities now almost
universally understood to cause public harm - the
destruction of wetlands comes to mind —- were not recog-
nized as such in the not so distant past.

Rhode Island’s system of wetlands regulation is an
exercise of its traditional power to regulate public nui-
sances. The destruction of wetlands causes numerous
public and private harms through increased flooding and
erosion, the reduction and pollution of available water
supply, and the lost commercial and recreational oppor-
tunities caused by the degradation of fish and wildlife
habitat. E.g., Office of Technology Assessment, U.S. Con-
gress, Wetlands: Their Use and Regulation (1984). If the
operation of a pig farm may constitute a public nuisance,
e.g., Jewett v. Deerhorn Enterprises, Inc., 281 Or. 469, 575
P.2d 164 (Or. 1978), then certainly it is not unreasonable
for a legislature to conclude that it is proper to impose
restrictions on the filling of wetlands to avoid these insid-
ious impacts. Further, that the trial court found that Pal-
azzolo’s project would constitute a common law
nuisance, see pp. 7-8 supra, confirms that the Rhode Island
legislation against wetlands destruction is the type of
traditional nuisance regulation found acceptable to the

29

Court in Lucas. See also Jackvony v. Powel, 67 R.I. 218, 21
A.2d 554 (R.I. 1941) (enjoining activity that interferes with
constitutional protection of tidelands).

Therefore, assuming arguendo that he even owns the
property, Palazzolo’s title is qualified by the possibility
that the Legislature might forbid or restrict uses in an
exercise of its traditional authority to declare public nui-
sances. This background principle of Rhode Island law
prohibited the wholesale destruction of wetlands pro-
posed by Palazzolo, regardless of when he acquired the
property. Therefore, Rhode Island did not engage in a
taking, even assuming that Palazzolo could overcome the
numerous other problems with his constitutional claim.

The judgment below should be affirmed.
Respectfully submitted,

Brit Lockyer
Attorney General of the
State of California
RicHarRD M. FRANK
Chief Assistant Attorney General
J. MattHew RopriQuez
Senior Assistant Attorney General
JosePH BARBIERI
Deputy Attorney General
Counsel of Record

Attorneys for State of California
January 2001

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0384%3A21. Public record. Not legal advice.