Supreme Court Upholds Broad Property Rights
NewsMax.com Wires
Friday, June 29, 2001
WASHINGTON - The Supreme Court ruled Thursday that an owner can claim property was unconstitutionally tied up by governmental regulations even if those rules were in effect before the owner acquired the property.
The ruling came in the case of a Rhode Island man who wanted to develop 18 acres of coastal marsh.
Writing for a 5-4 majority, Justice Anthony Kennedy cited the "takings clause" of the Fifth Amendment, which prohibits the government from taking private property without just compensation. The Supreme Court of Rhode Island had ruled earlier that the man could not invoke the "takings clause" because he did not acquire title to the land until after the regulations he is challenging had been handed down.
"The theory underlying the argument that post-enactment purchasers cannot challenge a regulation under the takings clause seems to run along these lines: Property rights are created by the state," Kennedy said. "So, the argument goes … the state can shape and define property rights and reasonable investment-backed expectations, and subsequent owners cannot claim any injury from lost value."
Kennedy said he didn't think much of that reasoning, while at the same time citing two of his favorite philosophers.
"The state may not put so potent a Hobbesian stick into the Lockean bundle," he said. " … This ought not to be the rule. Future generations, too, have a right to challenge unreasonable limitations on the use and value of land."
Anthony Palazzolo has been president of Shore Gardens Inc., or SGI, from the time of its incorporation. In 1983, he filed an application with Rhode Island's Coastal Resources Management Council to fill in about 18 acres of coastal salt marshes for development. He filed again in 1985, seeking to create a recreational beach. His application was denied both times.
The state Legislature had created CRMC in 1971 and gave it authority to regulate coastal wetlands.
While his appeal of the second application denial was pending, Palazzolo filed suit in state court, claiming an unconstitutional taking of his property without just compensation and asking for $3.15 million in damages. The damages were based on what Palazzolo figured would be the profits from developing the wetlands as 74 lots for single-family homes.
After a bench trial, without a jury, a state judge concluded that Palazzolo's property had not been taken for public use, and that no compensation was required.
The Supreme Court of Rhode Island upheld the judge.
The state high court noted that Palazzolo did not take personal possession of the title property, as opposed to SGI ownership, until 1978, at which time state regulations against filling in wetlands were already in place. The state court said "a regulatory takings claim may not be maintained where the regulation predates the acquisition of the property."
As a result, "Mr. Palazzolo is forever barred from obtaining compensation for regulations that require his 18-plus acres of land 'to be left substantially in its natural state," Palazzolo's lawyers said in his petition to the U.S. Supreme Court. "Accordingly, Mr. Palazzolo now 'owns' - if that term can be used ironically - nominally private property that has actually been 'pressed into some form of public service under the guise of mitigating serious public harm.'"
The U.S. Supreme Court heard argument in the case in February. Thursday's decision reverses the main part of the lower-court ruling and sends the case back down for rehearing.
(No. 99-2047, Palazzolo vs. Rhode Island et al.)
Copyright 2001 by United Press International.
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