Palazzolo v. Rhode Island

Brief Fact Summary.

The petitioner, Anthony Palazzolo, filed an application to Rhode Island Coastal Resources Management Council (Council) requesting permission to build a private beach club. The Council rejected the application. The petitioner appealed the decision to the Rhode Islands courts. The Council’s decision was affirmed. The petitioner filed an inverse condemnation action in Rhode Island Superior Court, asserting that the State’s wetland regulations had taken the property without just compensation in violation of the Fifth and Fourteenth Amendment.

Synopsis of Rule of Law.

The Takings Clause of the Fifth Amendment, applicable to the States through the Fourteenth Amendment, prohibits the government from taking private property for public use without just compensation.

Even a minimal “permanent physical occupation of real property” requires compensation under the Clause.

Facts.

The petitioner, in the efforts to develop his property, filed an application to Rhode Island Coastal Resources Management Council (Council) requesting permission to build a private beach club along the shore of Winnapaug Pond and to fill the entire marsh land area. The Council rejected the application, noting that the beach plan would conflict with the regulatory standard for a special exception and that to get a special exception, the plan must serve a “compelling public purpose which provides benefits to the public as a whole.” The petitioner appealed the decision to the Rhode Islands courts. The Council’s decision was affirmed. The petitioner filed an inverse condemnation action in Rhode Island Superior Court, asserting that the State’s wetland regulations had taken the property without just compensation in violation of the Fifth and Fourteenth Amendment.

Issue.

Did the Council’s action deprived the petitioner of all economically beneficial use of his property, resulting in a total taking requiring just compensation?

Held.

No. The uplands portion of the petitioner’s property can still be improved. While a State must obey the duty to compensate on the premise that the landowner is left with a little interest, this is not the situation of the landowner in this case, because the State regulation permits the petitioner to build a substantial residence on his parcel of land, which does not leave the property “economically idle.”

Concurrence.

Justice Stevens

If a regulating body such as a State fails to adhere to its procedural or substantive obligations in developing land use restrictions, anyone adversely impacted by the restrictions may challenge their validity if the restriction to a property owner would cause a “direct and substantial injury.” If state regulations are invalid, petitioner may seek to enjoin their enforcement, but he has no right to recover compensation for the value of property taken from someone else.

Discussion.

The right to improve property as the Council seeks to achieve here is subject to the reasonable exercise of state authority. The Takings Clause, however, allows a landowner to assert that a particular exercise of the State’s regulatory power is so unreasonable as to compel compensation. When the State allows a landowner more than a token interest in his land and permits to use a substantial property or residence on his parcel, the State cannot be said to have deprived the petitioner of all economically beneficial use of his property.