OCTOBER TERM, 2000
Syllabus
PALAZZOLO
v. RHODE ISLAND ET AL.
CERTIORARI TO THE SUPREME COURT OF RHODE ISLAND No. 99-2047.
Argued February 26, 200l-Decided June 28, 2001
In order to acquire the waterfront parcel of Rhode Island land
that is here at issue, petitioner and associates formed Shore
Gardens, Inc. (SGI), in 1959. After SGI purchased the property
petitioner bought out his associates and became the sole
shareholder. Most of the property was then, and is now, salt marsh
subject to tidal flooding. The wet ground and permeable soil would
require considerable fill before significant structures could be
built. Over the years, SGI's intermittent applications to develop
the property were rejected by various government agencies. After
1966, no further applications were made for over a decade. Two
intervening events, however, become important to the issues
presented. First, in 1971, the State created respondent Rhode
Island Coastal Resources Management Council (Council) and charged
it with protecting the State's coastal properties. The Council's
regulations, known as the Rhode Island Coastal Resources Management
Program (CRMP), designated salt marshes like those on SGI's
property as protected "coastal wetlands" on which development is
greatly limited. Second, in 1978, SGI's corporate charter was
revoked, and title to the property passed to petitioner as the
corporation's sole shareholder. In 1983, petitioner applied to the
Council for permission to construct a wooden bulkhead and fill his
entire marshland area. The Council rejected the application,
concluding,
inter alia, that it would conflict with the
CRMP. In 1985, petitioner filed a new application with the Council,
seeking permission to fill 11 of the property's 18 wetland acres in
order to build a private beach club. The Council rejected this
application as well, ruling that the proposal did not satisfy the
standards for obtaining a "special exception" to fill salt marsh,
whereby the proposed activity must serve a compelling public
purpose. Subsequently, petitioner filed an inverse condemnation
action in Rhode Island Superior Court, asserting that the State's
wetlands regulations, as applied by the Council to his parcel, had
taken the property without compensation in violation of the Fifth
and Fourteenth Amendments. The suit alleged the Council's action
deprived him of "all economically beneficial use" of his property,
resulting in a total taking requiring compensation under
Lucas v.
South Carolina Coastal Council, 505 U. S. 1003, and
sought $3,150,000 in damages, a figure derived from an appraiser's
estimate as to the value of a 74-lot residential subdivision on the
property. The court ruled against
607
petitioner, and the State Supreme Court affirmed, holding that
(1) petitioner's takings claim was not ripe; (2) he had no right to
challenge regulations predating 1978, when he succeeded to legal
ownership of the property; (3) he could not assert a takings claim
based on the denial of all economic use of his property in light of
undisputed evidence that he had $200,000 in development value
remaining on an upland parcel of the property; and (4) because the
regulation at issue predated his acquisition of title, he could
have had no reasonable investment-backed expectation that he could
develop his property, and, therefore, he could not recover under
Penn Central Transp. Co. v.
New York City, 438 U. S. 104, 124.
Held:
(a) A takings claim challenging application of land-use
regulations is not ripe unless the agency charged with implementing
the regulations has reached a final decision regarding their
application to the property at issue.
Williamson County Regional
Planning Comm'n v.
Hamilton Bank of Johnson City,
473 U. S. 172,
186. A final decision does not occur until the responsible agency
determines the extent of permitted development on the land.
MacDonald, Sommer &
Frates v.
Yolo County,
477 U. S. 340,
351. Petitioner obtained such a final decision when the Council
denied his 1983 and 1985 applications. The State Supreme Court
erred in ruling that, notwithstanding those denials, doubt remained
as to the extent of development the Council would allow on
petitioner's parcel due to his failure to explore other uses for
the property that would involve filling substantially less
wetlands. This is belied by the unequivocal nature of the wetland
regulations at issue and by the Council's application of the
regulations to the subject property. The CRMP permits the Council
to grant a special exception to engage in a prohibited use only
where a "compelling public purpose" is served. The proposal to fill
the entire property was not accepted under Council regulations and
did not qualify for the special exception. The Council determined
the use proposed in the second application (the beach club) did not
satisfy the "compelling public purpose" standard. There is no
indication the Council would have accepted the application had the
proposed club occupied a smaller surface area. To the contrary, it
ruled that the proposed activity was not a "compelling public
purpose." Although a landowner may not establish a taking before
the land-use authority has the opportunity, using its own
reasonable procedures, to decide and explain the reach of a
challenged regulation,
e. g., MacDonald, supra, at 342, once
it becomes clear that the permissible uses of the property are
known to a reasonable degree of certainty, a takings claim is
likely to have ripened. Here, the Council's decisions make plain
that
608
Syllabus
it interpreted its regulations to bar petitioner from engaging
in any filling or development on the wetlands. Further permit
applications were not necessary to establish this point. Pp.
618-621.
(b) Contrary to the State Supreme Court's ruling, petitioner's
claim is not unripe by virtue of his failure to seek permission for
a use of the property that would involve development only of its
upland portion. It is true that there was uncontested testimony
that an upland site would have an estimated value of $200,000 if
developed. And, while the CRMP requires Council approval to develop
upland property lying within 200 feet of protected waters, the
strict "compelling public purpose" test does not govern proposed
land uses on property in this classification. Council officials
testified at trial, moreover, that they would have allowed
petitioner to build a residence on the upland parcel. Nevertheless,
this Court's ripeness jurisprudence requires petitioner to explore
development opportunities on his upland parcel only if there is
uncertainty as to the land's permitted use. The State's assertion
that the uplands' value is in doubt comes too late for the
litigation before this Court. It was stated in the certiorari
petition that the uplands were worth an estimated $200,000. The
figure not only was uncontested but also was cited as fact in the
State's brief in opposition. In this circumstance ripeness cannot
be contested by saying that the value of the nonwetland parcels is
unknown. See
Lucas, supra, at 1020, and n. 9. Nor is there
genuine ambiguity in the record as to the extent of permitted
development on petitioner's property, either on the wetlands or the
uplands. Pp.621-624.
(c) Nor is petitioner's takings claim rendered unripe, as the
State Supreme Court held, by his failure to apply for permission to
develop the 74-lot subdivision that was the basis for the damages
sought in his inverse condemnation suit. It is difficult to see how
this concern is relevant to the inquiry at issue here. The Council
informed petitioner that he could not fill the wetlands; it follows
of necessity that he could not fill and then build 74 single-family
dwellings there. Petitioner's submission of this proposal would not
have clarified the extent of development permitted by the wetlands
regulations, which is the inquiry required under the Court's
ripeness decisions. pp. 624-626.
2. Petitioner's acquisition of title after the regulations'
effective date did not bar his takings claims. This Court rejects
the State Supreme Court's sweeping rule that a purchaser or a
successive title holder like petitioner is deemed to have notice of
an earlier-enacted restriction and is barred from claiming that it
effects a taking. Were the Court to accept that rule, the
postenactment transfer of title would absolve the State of its
obligation to defend any action restricting land use, no matter how
extreme or unreasonable. A State would be allowed, in effect, to
put an expiration date on the Takings Clause. This ought not to
be
609
the rule. Future generations, too, have a right to challenge
unreasonable limitations on the use and value of land. The State's
notice justification does not take into account the effect on
owners at the time of enactment, who are prejudiced as well. Should
an owner attempt to challenge a new regulation, but not survive the
process of ripening his or her claim (which, as this case
demonstrates, will often take years), under the State's rule the
right to compensation may not be asserted by an heir or successor,
and so may not be asserted at all. The State's rule also would work
a critical alteration to the nature of property, as the newly
regulated landowner is stripped of the ability to transfer the
interest which was possessed prior to the regulation. The State may
not by this means secure a windfall for itself. See,
e. g.,
Webb's Fabulous Pharmacies, Inc. v.
Beckwith, 449 U. S. 155, 164. The
rule is, furthermore, capricious in effect. The young owner
contrasted with the older owner, the owner with the resources to
hold contrasted with the owner with the need to sell, would be in
different positions. The Takings Clause is not so quixotic. A
blanket rule that purchasers with notice have no compensation right
when a claim becomes ripe is too blunt an instrument to accord with
the duty to compensate for what is taken.
Nollan v.
California Coastal Comm'n, 483 U. S. 825, 834, n. 2,
is controlling precedent for the Court's conclusion.
Lucas,
505 U. S., at 1029, did not overrule
Nollan, which is based
on essential Takings Clause principles. On remand the state court
must address the merits of petitioner's
Penn Central claim,
which is not barred by the mere fact that his title was acquired
after the effective date of the state-imposed restriction. Pp.
626-630.
3. The State Supreme Court did not err in finding that
petitioner failed to establish a deprivation of all economic use,
for it is undisputed that his parcel retains significant
development value. Petitioner is correct that, assuming a taking is
otherwise established, a State may not evade the duty to compensate
on the premise that the landowner is left with a token interest.
This is not the situation in this case, however. A regulation
permitting a landowner to build a substantial residence on an
18-acre parcel does not leave the property "economically idle."
Lucas, supra, at 1019. Petitioner attempts to revive this
part of his claim by arguing, for the first time, that the upland
parcel is distinct from the wetlands portions, so he should be
permitted to assert a deprivation limited to the latter. The Court
will not explore the point here. Petitioner did not press the
argument in the state courts, and the issue was not presented in
his certiorari petition. The case comes to the Court on the premise
that petitioner's entire parcel serves as the basis for his takings
claim, and, so framed, the total deprivation argument fails. Pp.
630-632.
610
Syllabus
4. Because petitioner's claims under the
Penn Central
analysis were not examined below, the case is remanded. Pp. 616,
632.
746 A. 2d 707, affirmed in part, reversed in part, and
remanded.
KENNEDY, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and O'CONNOR, SCALIA, and THOMAS, JJ., joined,
and in which STEVENS, J., joined as to Part II -A. O'CONNOR, J.,
post, p. 632, and SCALIA, J.,
post, p. 636, filed
concurring opinions. STEVENS, J., filed an opinion concurring in
part and dissenting in part,
post, p. 637. GINSBURG, J.,
filed a dissenting opinion, in which SOUTER and BREYER, JJ.,
joined,
post, p. 645. BREYER, J., filed a dissenting
opinion,
post, p. 654.
James S.
Burling argued the cause for petitioner.
With him on the briefs was
Eric Grant.
Sheldon Whitehouse, Attorney General of Rhode Island,
argued the cause for respondents. With him on the brief were
Michael Rubin, Assistant Attorney General,
Brian A.
Goldman and
Richard J.
Lazarus.
Malcolm L. Stewart argued the cause for the United States as
amicus curiae urging affirmance. With him on the brief were former
Solicitor General Waxman, Assistant Attorney General Schiffer,
Deputy Solicitor General Kneedler, William B. Lazarus, and R.
Justin Smith.*
*Briefs of
amici curiae urging reversal were filed for
the American Farm Bureau Federation et al. by
Timothy S.
Bishop, Jeffrey W Sarles, Steffen N. Johnson, John J.
Rademacher, and
John J.
Kupa; for the
California Coastal Property Owners Association by
Carter G.
Phillips, Mark E. Haddad, and
Catherine Valerio
Barrad; for Defenders of Property Rights by
Nancie G.
Marzulla; for the Institute for Justice by
William H.
Mellor, Clint Bolick, Scott G.
Bullock, and
Richard
A. Epstein; for the Washington Legal Foundation et al. by
Daniel J.
Popeo and
R. Shawn Gunnarson; and
for W. Frederick Williams III et al. by
Michael E.
Malamut.
Briefs of
amici curiae urging affirmance were filed for
the State of California et al. by
Bill Lockyer, Attorney
General of California,
Richard M. Frank, Chief Assistant
Attorney General, J.
Matthew Rodriquez, Senior Assistant
Attorney General, and
Joseph Barbieri, Deputy Attorney
General,
Robert R. Rigsby, Corporation Counsel of the
District of Columbia, and by the Attorneys General for their
respective jurisdictions as follows:
Bruce M. Botelho of
Alaska,
Ken Salazar of Colorado,
Richard
611
JUSTICE KENNEDY delivered the opinion of the Court. Petitioner
Anthony Palazzolo owns a waterfront parcel of land in the town of
Westerly, Rhode Island. Almost all of the property is designated as
coastal wetlands under Rhode Island law. After petitioner's
development proposals were rejected by respondent Rhode Island
Coastal Resources Management Council (Council), he sued in state
court, asserting the Council's application of its wetlands
regulations took the property without compensation in violation of
the Takings Clause of the Fifth Amendment, binding upon the State
through the Due Process Clause of the Fourteenth Amendment.
Petitioner sought review in this Court, contending the Supreme
Court of Rhode Island erred in rejecting his takings claim. We
granted certiorari. 531 U. S. 923 (2000).
I
The town of Westerly is on an edge of the Rhode Island
coastline. The town's western border is the Pawcatuck River, which
at that point is the boundary between Rhode
Blumenthal of Connecticut,
Thurbert E. Baker of
Georgia,
Earl I. Anzai of Hawaii,
Andrew Ketterer of
Maine,
Thomas F.
Reilly of Massachusetts,
Mike
McGrath of Montana,
Frankie Sue Del Papa of Nevada,
Phillip T. McLaughlin of New Hampshire,
John J.
Farmer, Jr., of New Jersey,
Eliot Spitzer of New
York,
Betty D. Montgomery of Ohio,
W A. Drew
Edmondson of Oklahoma,
Mark W Barnett of South Dakota,
William H. Sorrell of Vermont,
Iver A. Stridiron of
the Virgin Islands, and
Christine O.
Gregoire of
Washington; for the County of Santa Barbara by
Stephen Shane
Stark and
Alan L. Seltzer; for the American Planning
Association et al. by
Timothy J.
Dowling and
James
E. Ryan; for the Board of County Commissioners of the County of
La Plata, Colorado, by
Michael A. Goldman and
Jeffery P.
Robbins; for the National Conference of State Legislatures et
al. by
Richard Ruda and
James I. Crowley; for the
National Wildlife Federation et al. by
Vicki L. Been and
Glenn P. Sugameli; for Save the Bay-People for Narragansett
Bay by
Deming E. Sherman and
Kendra Beaver; and for
Daniel W. Bromley et al. by
John D. Echeverria.
Briefs of
amici curiae were filed for the National
Association of Home Builders by
Christopher G.
Senior; and for Dr. John M. Teal et al. by
Patrick A.
Parenteau and
Tim Eichenberg.
612
Island and Connecticut. Situated on land purchased from the
Narragansett Indian Tribe, the town was incorporated in 1669 and
had a precarious, though colorful, early history. Both Connecticut
and Massachusetts contested the boundaries-and indeed the
validity-of Rhode Island's royal charter; and Westerly's proximity
to Connecticut invited encroachments during these jurisdictional
squabbles. See M. Best, The Town that Saved a State-Westerly 60-83
(1943); see also W. McLoughlin, Rhode Island: A Bicentennial
History 39-57 (1978). When the borders of the Rhode Island Colony
were settled by compact in 1728, the town's development was more
orderly, and with some historical distinction. For instance, Watch
Hill Point, the peninsula at the southwestern tip of the town, was
of strategic importance in the Revolutionary War and the War of
1812. See Best,
supra, at 190; F. Denison, Westerly and its
Witnesses 118-119 (1878).
In later times Westerly's coastal location had a new
significance: It became a popular vacation and seaside destination.
One of the town's historians gave this happy account:
"After the Civil War the rapid growth of manufacture and
expansion of trade had created a spending class on pleasure bent,
and Westerly had superior attractions to offer, surf bathing on
ocean beaches, quieter bathing in salt and fresh water ponds,
fishing, annual sail and later motor boat races. The broad beaches
of clean white sand dip gently toward the sea; there are no odorous
marshes at low tide, no railroad belches smoke, and the climate is
unrivalled on the coast, that of Newport only excepted. In the
phenomenal heat wave of 1881 ocean resorts from northern New
England to southern New Jersey sweltered as the thermometer climbed
to 95 and 104 degrees, while Watch Hill enjoyed a comfortable 80.
When Providence to the north runs a temperature of 90, the mercury
in this favored spot remains at 77." Best, supra, at
192.
613
Westerly today has about 20,000 year-round residents, and
thousands of summer visitors come to enjoy its beaches and coastal
advantages.
One of the more popular attractions is Misquamicut State Beach,
a lengthy expanse of coastline facing Block Island Sound and beyond
to the Atlantic Ocean. The primary point of access to the beach is
Atlantic Avenue, a well-traveled 3-mile stretch of road running
along the coastline within the town's limits. At its western end,
Atlantic Avenue is something of a commercial strip, with
restaurants, hotels, arcades, and other typical seashore
businesses. The pattern of development becomes more residential as
the road winds eastward onto a narrow spine of land bordered to the
south by the beach and the ocean, and to the north by Winnapaug
Pond, an intertidal inlet often used by residents for boating,
fishing, and shellfishing.
In 1959 petitioner, a lifelong Westerly resident, decided to
invest in three undeveloped, adjoining parcels along this eastern
stretch of Atlantic Avenue. To the north, the property faces, and
borders upon, Winnapaug Pond; the south of the property faces
Atlantic Avenue and the beachfront homes abutting it on the other
side, and beyond that the dunes and the beach. To purchase and hold
the property, petitioner and associates formed Shore Gardens, Inc.
(SGI). After SGI purchased the property petitioner bought out his
associates and became the sole shareholder. In the first decade of
SGI's ownership of the property the corporation submitted a plat to
the town subdividing the property into 80 lots; and it engaged in
various transactions that left it with 74 lots, which together
encompassed about 20 acres. During the same period SGI also made
initial attempts to develop the property and submitted intermittent
applications to state agencies to fill substantial portions of the
parcel. Most of the property was then, as it is now, salt marsh
subject to tidal flooding. The wet ground and permeable soil would
require considerable fill-as much as six feet in some
614
places-before significant structures could be built. SGI's
proposal, submitted in 1962 to the Rhode Island Division of Harbors
and Rivers (DHR), sought to dredge from Winnapaug Pond and fill the
entire property. The application was denied for lack of essential
information. A second, similar proposal followed a year later. A
third application, submitted in 1966 while the second application
was pending, proposed more limited filling of the land for use as a
private beach club. These latter two applications were referred to
the Rhode Island Department of Natural Resources, which indicated
initial assent. The agency later withdrew approval, however, citing
adverse environmental impacts. SG I did not contest the ruling.
No further attempts to develop the property were made for over a
decade. Two intervening events, however, become important to the
issues presented. First, in 1971, Rhode Island enacted legislation
creating the Council, an agency charged with the duty of protecting
the State's coastal properties. 1971 R. 1. Pub. Laws, ch. 279, § 1
et seq. Regulations promulgated by the Council designated
salt marshes like those on SGI's property as protected "coastal
wetlands," Rhode Island Coastal Resources Management Program (CRMP)
§ 210.3 (as amended, June 28, 1983) (lodged with the Clerk of this
Court), on which development is limited to a great extent. Second,
in 1978, SGI's corporate charter was revoked for failure to pay
corporate income taxes; and title to the property passed, by
operation of state law, to petitioner as the corporation's sole
shareholder.
In 1983, petitioner, now the owner, renewed the efforts to
develop the property. An application to the Council, resembling the
1962 submission, requested permission to construct a wooden
bulkhead along the shore of Winnapaug Pond and to fill the entire
marshland area. The Council rejected the application, noting it was
"vague and inadequate for a project of this size and nature." App.
16. The agency also found that "the proposed activities will have
significant im-
615
pacts upon the waters and wetlands of Winnapaug Pond," and
concluded that "the proposed alteration ... will conflict with the
Coastal Resources Management Plan presently in effect."
Id.,
at 17. Petitioner did not appeal the agency's determination.
Petitioner went back to the drawing board, this time hiring
counsel and preparing a more specific and limited proposal for use
of the property. The new application, submitted to the Council in
1985, echoed the 1966 request to build a private beach club. The
details do not tend to inspire the reader with an idyllic coastal
image, for the proposal was to fill 11 acres of the property with
gravel to accommodate "50 cars with boat trailers, a dumpster,
port-a-johns, picnic tables, barbecue pits of concrete, and other
trash receptacles."
Id., at 25.
The application fared no better with the Council than previous
ones. Under the agency's regulations, a landowner wishing to fill
salt marsh on Winnapaug Pond needed a "special exception" from the
Council. CRMP § 130. In a short opinion the Council said the beach
club proposal conflicted with the regulatory standard for a special
exception. See App. 27. To secure a special exception the proposed
activity must serve "a compelling public purpose which provides
benefits to the public as a whole as opposed to individual or
private interests." CRMP § 130A(1). This time petitioner appealed
the decision to the Rhode Island courts, challenging the Council's
conclusion as contrary to principles of state administrative law.
The Council's decision was affirmed. See App.31-42.
Petitioner filed an inverse condemnation action in Rhode Island
Superior Court, asserting that the State's wetlands regulations, as
applied by the Council to his parcel, had taken the property
without compensation in violation of the Fifth and Fourteenth
Amendments. See id., at 45. The suit alleged the Council's action
deprived him of "economically, beneficial use" of his property,
ibid., resulting in a total tak-
616
ing requiring compensation under
Lucas v.
South
Carolina Coastal Council, 505 U. S. 1003 (1992).
He sought damages in the amount of $3,150,000, a figure derived
from an appraiser's estimate as to the value of a 74-lot
residential subdivision. The State countered with a host of
defenses. After a bench trial, a justice of the Superior Court
ruled against petitioner, accepting some of the State's theories.
App. to Pet. for Cert. B-1 to B-13.
The Rhode Island Supreme Court affirmed. 746 A. 2d 707 (2000).
Like the Superior Court, the State Supreme Court recited multiple
grounds for rejecting petitioner's suit. The court held, first,
that petitioner's takings claim was not ripe, id., at 712-715;
second, that petitioner had no right to challenge regulations
predating 1978, when he succeeded to legal ownership of the
property from SGI, id., at 716; and third, that the claim of
deprivation of all economically beneficial use was contradicted by
undisputed evidence that he had $200,000 in development value
remaining on an upland parcel of the property, id., at 715. In
addition to holding petitioner could not assert a takings claim
based on the denial of all economic use, the court concluded he
could not recover under the more general test of
Penn Central
Transp. Co. v.
New York City, 438 U. S. 104 (1978). On
this claim, too, the date of acquisition of the parcel was found
determinative, and the court held he could have had "no reasonable
investmentbacked expectations that were affected by this
regulation" because it predated his ownership, 746 A. 2d, at 717;
see also
Penn Central, supra, at 124.
We disagree with the Supreme Court of Rhode Island as to the
first two of these conclusions; and, we hold, the court was correct
to conclude that the owner is not deprived of all economic use of
his property because the value of upland portions is substantial.
We remand for further consideration of the claim under the
principles set forth in
Penn Central.
617
II
The Takings Clause of the Fifth Amendment, applicable to the
States through the Fourteenth Amendment,
Chicago, B. &
Q.
R. Co. v.
Chicago, 166 U. S. 226 (1897),
prohibits the government from taking private property for public
use without just compensation. The clearest sort of taking occurs
when the government encroaches upon or occupies private land for
its own proposed use. Our cases establish that even a minimal
"permanent physical occupation of real property" requires
compensation under the Clause.
Loretto v.
Teleprompter
Manhattan CATV Corp., 458 U. S. 419, 427
(1982). In
Pennsylvania Coal Co. v.
Mahon, 260 U. S. 393 (1922), the
Court recognized that there will be instances when government
actions do not encroach upon or occupy the property yet still
affect and limit its use to such an extent that a taking occurs. In
Justice Holmes' well-known, if less than self-defining,
formulation, "while property may be regulated to a certain extent,
if a regulation goes too far it will be recognized as a taking."
Id., at 415.
Since
Mahon, we have given some, but not too specific,
guidance to courts confronted with deciding whether a particular
government action goes too far and effects a regulatory taking.
First, we have observed, with certain qualifications, see
infra, at 629-630, that a regulation which "denies all
economically beneficial or productive use of land" will require
compensation under the Takings Clause.
Lucas, 505 U. S., at
1015; see also
id., at 1035 (KENNEDY, J., concurring);
Agins v.
City of Tiburon, 447 U. S. 255, 261
(1980). Where a regulation places limitations on land that fall
short of eliminating all economically beneficial use, a taking
nonetheless may have occurred, depending on a complex of factors
including the regulation's economic effect on the landowner, the
extent to which the regulation interferes with reasonable
investment-backed expectations, and the character of the government
action.
Penn Central, supra, at 124. These inquiries are
informed by the purpose of the
618
Takings Clause, which is to prevent the government from "forcing
some people alone to bear public burdens which, in all fairness and
justice, should be borne by the public as a whole."
Armstrong v.
United States, 364 U. S. 40, 49
(1960).
Petitioner seeks compensation under these principles. At the
outset, however, we face the two threshold considerations invoked
by the state court to bar the claim: ripeness, and acquisition
which postdates the regulation.
A
In Williamson County Regional Planning Comm'n v.
Hamilton Bank of Johnson City, 473 U. S. 172 (1985), the
Court explained the requirement that a takings claim must be ripe.
The Court held that a takings claim challenging the application of
land-use regulations is not ripe unless "the government entity
charged with implementing the regulations has reached a final
decision regarding the application of the regulations to the
property at issue."
Id., at 186. A final decision by the
responsible state agency informs the constitutional determination
whether a regulation has deprived a landowner of "all economically
beneficial use" of the property, see
Lucas, supra, at 1015,
or defeated the reasonable investment-backed expectations of the
landowner to the extent that a taking has occurred, see
Penn
Central, supra, at 124. These matters cannot be resolved in
definitive terms until a court knows "the extent of permitted
development" on the land in question.
MacDonald, Sommer
& Frates v.
Yolo County, 477 U. S. 340, 351
(1986). Drawing on these principles, the Rhode Island Supreme Court
held that petitioner had not taken the necessary steps to ripen his
takings claim.
The central question in resolving the ripeness issue, under
Williamson County and other relevant decisions, is whether
petitioner obtained a final decision from the Council determining
the permitted use for the land. As we have noted, SGI's early
applications to fill had been granted at one point,
619
though that assent was later revoked. Petitioner then submitted
two proposals: the 1983 proposal to fill the entire parcel, and the
1985 proposal to fill 11 of the property's 18 wetland acres for
construction of the beach club. The court reasoned that,
notwithstanding the Council's denials of the applications, doubt
remained as to the extent of development the Council would allow on
petitioner's parcel. We cannot agree.
The court based its holding in part upon petitioner's failure to
explore "any other use for the property that would involve filling
substantially less wetlands." 746 A. 2d, at 714. It relied upon
this Court's observations that the final decision requirement is
not satisfied when a developer submits, and a land-use authority
denies, a grandiose development proposal, leaving open the
possibility that lesser uses of the property might be permitted.
See
MacDonald, supra, at 353, n. 9. The suggestion is that
while the Council rejected petitioner's effort to fill all of the
wetlands, and then rejected his proposal to fill 11 of the wetland
acres, perhaps an application to fill (for instance) 5 acres would
have been approved. Thus, the reasoning goes, we cannot know for
sure the extent of permitted development on petitioner's
wetlands.
This is belied by the unequivocal nature of the wetland
regulations at issue and by the Council's application of the
regulations to the subject property. Winnapaug Pond is classified
under the CRMP as a Type 2 body of water. See CRMP § 200.2. A
landowner, as a general rule, is prohibited from filling or
building residential structures on wetlands adjacent to Type 2
waters, see id., Table 1, p. 22, and § 210.3(C)(4), but may seek a
special exception from the Council to engage in a prohibited use,
see id., § 130. The Council is permitted to allow the exception,
however, only where a "compelling public purpose" is served.
Id., § 130A(2). The proposal to fill the entire property was
not accepted under Council regulations and did not qualify for the
special exception. The Council determined the use pro-
620
posed in the second application (the beach club) did not satisfy
the "compelling public purpose" standard. There is no indication
the Council would have accepted the application had petitioner's
proposed beach club occupied a smaller surface area. To the
contrary, it ruled that the proposed activity was not a "compelling
public purpose." App. 27; cf. id., at 17 (1983 application to fill
wetlands proposed an "activity" conflicting with the CRMP).
Williamson County's final decision requirement "responds
to the high degree of discretion characteristically possessed by
land-use boards in softening the strictures of the general
regulations they administer."
Suitum v.
Tahoe Regional
Planning Agency, 520 U. S. 725, 738
(1997). While a landowner must give a land-use authority an
opportunity to exercise its discretion, once it becomes clear that
the agency lacks the discretion to permit any development, or the
permissible uses of the property are known to a reasonable degree
of certainty, a takings claim is likely to have ripened. The case
is quite unlike those upon which respondents place principal
reliance, which arose when an owner challenged a land-use
authority's denial of a substantial project, leaving doubt whether
a more modest submission or an application for a variance would be
accepted. See
MacDonald, supra, at 342 (denial of 159-home
residential subdivision);
Williamson County, supra, at 182
(476-unit subdivision); cf.
Agins v.
City of Tiburon,
447 U. S. 255
(1980) (case not ripe because no plan to develop was
submitted).
These cases stand for the important principle that a landowner
may not establish a taking before a land-use authority has the
opportunity, using its own reasonable procedures, to decide and
explain the reach of a challenged regulation. Under our ripeness
rules a takings claim based on a law or regulation which is alleged
to go too far in burdening property depends upon the landowner's
first having followed reasonable and necessary steps to allow
regulatory agencies to exercise their full discretion in
considering development
621
plans for the property, including the opportunity to grant any
variances or waivers allowed by law. As a general rule, until these
ordinary processes have been followed the extent of the restriction
on property is not known and a regulatory taking has not yet been
established. See
Suitum, supra, at 736, and n. 10 (noting
difficulty of demonstrating that "mere enactment" of regulations
restricting land use effects a taking). Government authorities, of
course, may not burden property by imposition of repetitive or
unfair land-use procedures in order to avoid a final decision.
Monterey v.
Del Monte Dunes at Monterey, Ltd.,
526 U. S. 687,
698 (1999).
With respect to the wetlands on petitioner's property, the
Council's decisions make plain that the agency interpreted its
regulations to bar petitioner from engaging in any filling or
development activity on the wetlands, a fact reinforced by the
Attorney General's forthright responses to our questioning during
oral argument in this case. See Tr. of Oral Arg. 26, 31. The
rulings of the Council interpreting the regulations at issue, and
the briefs, arguments, and candid statements by counsel for both
sides, leave no doubt on this point:
On the wetlands there can be no fill for any ordinary land use.
There can be no fill for its own sake; no fill for a beach club,
either rustic or upscale; no fill for a subdivision; no fill for
any likely or foreseeable use. And with no fill there can be no
structures and no development on the wetlands. Further permit
applications were not necessary to establish this point.
As noted above, however, not all of petitioner's parcel
constitutes protected wetlands. The trial court accepted
uncontested testimony that an upland site located at the eastern
end of the property would have an estimated value of $200,000 if
developed. App. to Pet. for Cert. B-5. While Council approval is
required to develop upland property which lies within 200 feet of
protected waters, see CRMP § 100.1(A), the strict "compelling
public purpose" test does not govern proposed land uses on property
in this classifica-
622
tion, see id., § 110, Table lA, § 120. Council officials
testified at trial, moreover, that they would have allowed
petitioner to build a residence on the upland parcel. App. to Pet.
for Cert. B-5. The State Supreme Court found petitioner's claim
unripe for the further reason that he "has not sought permission
for any ... use of the property that would involve ... development
only of the upland portion of the parcel." 746 A. 2d, at 714.
In assessing the significance of petitioner's failure to submit
applications to develop the upland area it is important to bear in
mind the purpose that the final decision requirement serves. Our
ripeness jurisprudence imposes obligations on landowners because
"[a] court cannot determine whether a regulation goes 'too far'
unless it knows how far the regulation goes."
MacDonald, 477
U. S., at 348. Ripeness doctrine does not require a landowner to
submit applications for their own sake. Petitioner is required to
explore development opportunities on his upland parcel only if
there is uncertainty as to the land's permitted use.
The State asserts the value of the uplands is in doubt. It
relies in part on a comment in the opinion of the Rhode Island
Supreme Court that "it would be possible to build at least one
single-family home on the upland portion of the parcel." 746 A. 2d,
at 714. It argues that the qualification "at least" indicates that
additional development beyond the single dwelling was possible. The
attempt to interject ambiguity as to the value or use of the
uplands, however, comes too late in the day for purposes of
litigation before this Court. It was stated in the petition for
certiorari that the uplands on petitioner's property had an
estimated worth of $200,000. See Pet. for Cert. 21. The figure not
only was uncontested but also was cited as fact in the State's
brief in opposition. See Brief in Opposition 4, 19. In this
circumstance ripeness cannot be contested by saying that the value
of the nonwetland parcels is unknown. See
Lucas, 505 U. S.,
at 1020, and n. 9.
623
The State's prior willingness to accept the $200,000 figure,
furthermore, is well founded. The only reference to upland property
in the trial court's opinion is to a single parcel worth an
estimated $200,000. See App. to Pet. for Cert. B-5. There was, it
must be acknowledged, testimony at trial suggesting the existence
of an additional upland parcel elsewhere on the property. See Tr.
190-191, 199-120 (testimony of Dr. Grover Fugate, Council Executive
Director); see also id., at 610 (testimony of Steven Clarke). The
testimony indicated, however, that the potential, second upland
parcel was on an "island" which required construction of a road
across wetlands, id., at 610, 623-624 (testimony of Mr.
Clarke)-and, as discussed above, the filling of wetlands for such a
purpose would not justify a special exception under Council
regulations. See
supra, at 619-621; see also Brief for
Respondents 10 ("Residential construction is not the basis of such
a 'special exception' "). Perhaps for this reason, the State did
not maintain in the trial court that additional uplands could have
been developed. To the contrary, its post-trial memorandum
identified only the single parcel that petitioner concedes retains
a development value of $200,000. See State's Post-Trial Memorandum
in No. 88-0297 (Super. Ct. R. 1.), pp. 25, 81. The trial court
accepted the figure. So there is no genuine ambiguity in the record
as to the extent of permitted development on petitioner's property,
either on the wetlands or the uplands.
Nonetheless, there is some suggestion that the use permitted on
the uplands is not known, because the State accepted the $200,000
value for the upland parcel on the premise that only a
Lucas
claim was raised in the pleadings in the state trial court. See
Brief for Respondents 29-30. Since a
Penn Central argument
was not pressed at trial, it is argued, the State had no reason to
assert with vigor that more than a single-family residence might be
placed on the uplands. We disagree; the State was aware of the
applicability of
Penn Central. The issue whether the
Council's decisions
624
amounted to a taking under
Penn Central was discussed in
the trial court, App. to Pet. for Cert. B-7, the State Supreme
Court, 746 A. 2d, at 717, and the State's own post-trial
submissions, see State's Post-Trial Supplemental Memorandum 7-10.
The state-court opinions cannot be read as indicating that a
Penn Central claim was not properly presented from the
outset of this litigation.
A final ripeness issue remains. In concluding that
Williamson
County's final decision requirement was not satisfied, the
State Supreme Court placed emphasis on petitioner's failure to
"appl[y] for permission to develop [the] seventy-four-Iot
subdivision" that was the basis for the damages sought in his
inverse condemnation suit. 746 A. 2d, at 714. The court did not
explain why it thought this fact significant, but respondents and
amici defend the ruling. The Council's practice, they
assert, is to consider a proposal only if the applicant has
satisfied all other regulatory preconditions for the use envisioned
in the application. The subdivision proposal that was the basis for
petitioner's takings claim, they add, could not have proceeded
before the Council without, at minimum, zoning approval from the
town of Westerly and a permit from the Rhode Island Department of
Environmental Management allowing the installation of individual
sewage disposal systems on the property. Petitioner is accused of
employing a hide the ball strategy of submitting applications for
more modest uses to the Council, only to assert later a takings
action predicated on the purported inability to build a much larger
project. Brief for the National Wildlife Federation et al. as
Amici Curiae 9.
It is difficult to see how this concern is relevant to the
inquiry at issue here. Petitioner was informed by the Council that
he could not fill the wetlands; it follows of necessity that he
could not fill and then build 74 single-family dwellings upon it.
Petitioner's submission of this proposal would not have clarified
the extent of development permitted by the wetlands regulations,
which is the inquiry required
625
under our ripeness decisions. The State's concern may be that
landowners could demand damages for a taking based on a project
that could not have been constructed under other, valid zoning
restrictions quite apart from the regulation being challenged.
This, of course, is a valid concern in inverse condemnation cases
alleging injury from wrongful refusal to permit development. The
instant case does not require us to pass upon the authority of a
State to insist in such cases that landowners follow normal
planning procedures or to enact rules to control damages awards
based on hypothetical uses that should have been reviewed in the
normal course, and we do not intend to cast doubt upon such rules
here. The mere allegation of entitlement to the value of an
intensive use will not avail the landowner if the project would not
have been allowed under other existing, legitimate land-use
limitations. When a taking has occurred, under accepted
condemnation principles the owner's damages will be based upon the
property's fair market value, see,
e. g.,
Olson v.
United States, 292 U. S. 246, 255
(1934); 4 J. Sackman, Nichols on Eminent Domain § 12.01 (rev. 3d
ed. 2000)-an inquiry which will turn, in part, on restrictions on
use imposed by legitimate zoning or other regulatory limitations,
see id., § 12C.03[1].
The state court, however, did not rely upon state-law ripeness
or exhaustion principles in holding that petitioner's takings claim
was barred by virtue of his failure to apply for a 74-10t
subdivision; it relied on
Williamson County. As we have
explained,
Williamson County and our other ripeness
decisions do not impose further obligations on petitioner, for the
limitations the wetland regulations imposed were clear from the
Council's denial of his applications, and there is no indication
that any use involving any substantial structures or improvements
would have been allowed. Where the state agency charged with
enforcing a challenged land-use regulation entertains an
application from an owner and its denial of the application makes
clear the extent of develop-
626
ment permitted, and neither the agency nor a reviewing state
court has cited noncompliance with reasonable statelaw exhaustion
or pre-permit processes, see
Felder v.
Casey,
487 U. S. 131,
150-151 (1988), federal ripeness rules do not require the
submission of further and futile applications with other
agencies.
B
We turn to the second asserted basis for declining to address
petitioner's takings claim on the merits. When the Council
promulgated its wetlands regulations, the disputed parcel was owned
not by petitioner but by the corporation of which he was sole
shareholder. When title was transferred to petitioner by operation
of law, the wetlands regulations were in force. The state court
held the postregulation acquisition of title was fatal to the claim
for deprivation of all economic use, 746 A. 2d, at 716, and to the
Penn Central claim, 746 A. 2d, at 717. While the first
holding was couched in terms of background principles of state
property law, see
Lucas, 505 U. S., at 1015, and the second
in terms of petitioner's reasonable investment-backed expectations,
see
Penn Central, 438 U. S., at 124, the two holdings
together amount to a single, sweeping, rule: A purchaser or a
successive title holder like petitioner is deemed to have notice of
an earlierenacted restriction and is barred from claiming that it
effects a taking.
The theory underlying the argument that postenactment purchasers
cannot challenge a regulation under the Takings Clause seems to run
on these lines: Property rights are created by the State. See,
e. g., Phillips v.
Washington Legal Foundation,
524 U. S. 156,
163 (1998). So, the argument goes, by prospective legislation the
State can shape and define property rights and reasonable
investment-backed expectations, and subsequent owners cannot claim
any injury from lost value. After all, they purchased or took title
with notice of the limitation.
627
The State may not put so potent a Hobbesian stick into the
Lockean bundle. The right to improve property, of course, is
subject to the reasonable exercise of state authority, including
the enforcement of valid zoning and land-use restrictions. See
Pennsylvania Coal Co., 260 U. S., at 413 ("Government hardly
could go on if to some extent values incident to property could not
be diminished without paying for every such change in the general
law"). The Takings Clause, however, in certain circumstances allows
a landowner to assert that a particular exercise of the State's
regulatory power is so unreasonable or onerous as to compel
compensation. Just as a prospective enactment, such as a new zoning
ordinance, can limit the value of land without effecting a taking
because it can be understood as reasonable by all concerned, other
enactments are unreasonable and do not become less so through
passage of time or title. Were we to accept the State's rule, the
postenactment transfer of title would absolve the State of its
obligation to defend any action restricting land use, no matter how
extreme or unreasonable. A State would be allowed, in effect, to
put an expiration date on the Takings Clause. This ought not to be
the rule. Future generations, too, have a right to challenge
unreasonable limitations on the use and value of land.
Nor does the justification of notice take into account the
effect on owners at the time of enactment, who are prejudiced as
well. Should an owner attempt to challenge a new regulation, but
not survive the process of ripening his or her claim (which, as
this case demonstrates, will often take years), under the proposed
rule the right to compensation may not be asserted by an heir or
successor, and so may not be asserted at all. The State's rule
would work a critical alteration to the nature of property, as the
newly regulated landowner is stripped of the ability to transfer
the interest which was possessed prior to the regulation. The State
may not by this means secure a windfall for itself. See
Webb's
Fabulous Pharmacies, Inc. v.
Beckwith, 449 U. S.
628
155, 164 (1980) ("[A] State, by
ipse dixit, may not
transform private property into public property without
compensation"); cf. Ellickson, Property in Land, 102 Yale L. J.
1315, 1368-1369 (1993) (right to transfer interest in land is a
defining characteristic of the fee simple estate). The proposed
rule is, furthermore, capricious in effect. The young owner
contrasted with the older owner, the owner with the resources to
hold contrasted with the owner with the need to sell, would be in
different positions. The Takings Clause is not so quixotic. A
blanket rule that purchasers with notice have no compensation right
when a claim becomes ripe is too blunt an instrument to accord with
the duty to compensate for what is taken.
Direct condemnation, by invocation of the State's power of
eminent domain, presents different considerations from cases
alleging a taking based on a burdensome regulation. In a direct
condemnation action, or when a State has physically invaded the
property without filing suit, the fact and extent of the taking are
known. In such an instance, it is a general rule of the law of
eminent domain that any award goes to the owner at the time of the
taking, and that the right to compensation is not passed to a
subsequent purchaser. See
Danforth v.
United States,
308 U. S. 271,
284 (1939); 2 Sackman, Eminent Domain, at § 5.01[5][d][i] ("It is
well settled that when there is a taking of property by eminent
domain in compliance with the law, it is the owner of the property
at the time of the taking who is entitled to compensation").
A challenge to the application of a land-use regulation, by
contrast, does not mature until ripeness requirements have been
satisfied, under principles we have discussed; until this point an
inverse condemnation claim alleging a regulatory taking cannot be
maintained. It would be illogical, and unfair, to bar a regulatory
takings claim because of the postenactment transfer of ownership
where the steps necessary to make the claim ripe were not taken, or
could not have been taken, by a previous owner.
629
There is controlling precedent for our conclusion.
Nollan
v.
California Coastal Comm'n, 483 U. S. 825 (1987),
presented the question whether it was consistent with the Takings
Clause for a state regulatory agency to require oceanfront
landowners to provide lateral beach access to the public as the
condition for a development permit. The principal dissenting
opinion observed it was a policy of the California Coastal
Commission to require the condition, and that the Nollans, who
purchased their home after the policy went into effect, were "on
notice that new developments would be approved only if provisions
were made for lateral beach access."
Id., at 860 (Brennan,
J., dissenting). A majority of the Court rejected the proposition.
"So long as the Commission could not have deprived the prior owners
of the easement without compensating them," the Court reasoned,
"the prior owners must be understood to have transferred their full
property rights in conveying the lot."
Id., at 834, n.2.
It is argued that
Nollan's holding was limited by the
later decision in
Lucas v.
South Carolina Coastal
Council, 505 U. S. 1003 (1992). In
Lucas the Court
observed that a landowner's ability to recover for a government
deprivation of all economically beneficial use of property is not
absolute but instead is confined by limitations on the use of land
which "inhere in the title itself."
Id., at 1029. This is
so, the Court reasoned, because the landowner is constrained by
those "restrictions that background principles of the State's law
of property and nuisance already place upon land ownership."
Ibid. It is asserted here that
Lucas stands for the
proposition that any new regulation, once enacted, becomes a
background principle of property law which cannot be challenged by
those who acquire title after the enactment.
We have no occasion to consider the precise circumstances when a
legislative enactment can be deemed a background principle of state
law or whether those circumstances are present here. It suffices to
say that a regulation that other-
630
wise would be unconstitutional absent compensation is not
transformed into a background principle of the State's law by mere
virtue of the passage of title. This relative standard would be
incompatible with our description of the concept in
Lucas,
which is explained in terms of those common, shared understandings
of permissible limitations derived from a State's legal tradition,
see id., at 1029-1030. A regulation or common-law rule cannot be a
background principle for some owners but not for others. The
determination whether an existing, general law can limit all
economic use of property must turn on objective factors, such as
the nature of the land use proscribed. See id., at 1030 ("The
'total taking' inquiry we require today will ordinarily entail ...
analysis of, among other things, the degree of harm to public lands
and resources, or adjacent private property, posed by the
claimant's proposed activities"). A law does not become a
background principle for subsequent owners by enactment itself.
Lucas did not overrule our holding in
Nollan, which,
as we have noted, is based on essential Takings Clause
principles.
For reasons we discuss next, the state court will not find it
necessary to explore these matters on remand in connection with the
claim that all economic use was deprived; it must address, however,
the merits of petitioner's claim under
Penn Central. That
claim is not barred by the mere fact that title was acquired after
the effective date of the stateimposed restriction.
III
As the case is ripe, and as the date of transfer of title does
not bar petitioner's takings claim, we have before us the
alternative ground relied upon by the Rhode Island Supreme Court in
ruling upon the merits of the takings claims. It held that all
economically beneficial use was not deprived because the uplands
portion of the property can still be improved. On this point, we
agree with the court's decision. Petitioner accepts the Council's
contention and the state trial
631
court's finding that his parcel retains $200,000 in development
value under the State's wetlands regulations. He asserts,
nonetheless, that he has suffered a total taking and contends the
Council cannot sidestep the holding in
Lucas "by the simple
expedient of leaving a landowner a few crumbs of value." Brief for
Petitioner 37.
Assuming a taking is otherwise established, a State may not
evade the duty to compensate on the premise that the landowner is
left with a token interest. This is not the situation of the
landowner in this case, however. A regulation permitting a
landowner to build a substantial residence on an 18-acre parcel
does not leave the property "economically idle."
Lucas,
supra, at 1019.
In his brief submitted to us petitioner attempts to revive this
part of his claim by reframing it. He argues, for the first time,
that the upland parcel is distinct from the wetlands portions, so
he should be permitted to assert a deprivation limited to the
latter. This contention asks us to examine the difficult,
persisting question of what is the proper denominator in the
takings fraction. See Michelman, Property, Utility, and Fairness:
Comments on the Ethical Foundations of "Just Compensation Law," 80
Harv. L. Rev. 1165, 1192 (1967). Some of our cases indicate that
the extent of deprivation effected by a regulatory action is
measured against the value of the parcel as a whole, see,
e. g.,
Keystone Bituminous Coal Assn. v.
DeBenedictis, 480 U. S. 470, 497
(1987); but we have at times expressed discomfort with the logic of
this rule, see
Lucas, supra, at 1016-1017, n. 7, a sentiment
echoed by some commentators, see,
e. g., Epstein, Takings:
Descent and Resurrection, 1987 S. Ct. Rev. 1, 16-17 (1987); Fee,
Unearthing the Denominator in Regulatory Takings Claims, 61 U. Chi.
L. Rev. 1535 (1994). Whatever the merits of these criticisms, we
will not explore the point here. Petitioner did not press the
argument in the state courts, and the issue was not presented in
the petition for certiorari. The case comes to us on the premise
that petitioner's entire
632
parcel serves as the basis for his takings claim, and, so
framed, the total deprivation argument fails.
***
For the reasons we have discussed, the State Supreme Court erred
in finding petitioner's claims were unripe and in ruling that
acquisition of title after the effective date of the regulations
barred the takings claims. The court did not err in finding that
petitioner failed to establish a deprivation of all economic value,
for it is undisputed that the parcel retains significant worth for
construction of a residence. The claims under the
Penn
Central analysis were not examined, and for this purpose the
case should be remanded.
The judgment of the Rhode Island Supreme Court is affirmed in
part and reversed in part, and the case is remanded for further
proceedings not inconsistent with this opinion.
It is so ordered.
JUSTICE O'CONNOR, concurring.
I join the opinion of the Court but with my understanding of how
the issues discussed in Part II-B of the opinion must be considered
on remand.
Part II-B of the Court's opinion addresses the circumstance,
present in this case, where a takings claimant has acquired title
to the regulated property after the enactment of the regulation at
issue. As the Court holds, the Rhode Island Supreme Court erred in
effectively adopting the sweeping rule that the preacquisition
enactment of the use restriction
ipso facto defeats any
takings claim based on that use restriction. Accordingly, the Court
holds that petitioner's claim under
Penn Central Transp. Co.
v.
New York City, 438 U. S. 104 (1978), "is
not barred by the mere fact that title was acquired after the
effective date of the state-imposed restriction."
Ante, at
630.
The more difficult question is what role the temporal
relationship between regulatory enactment and title acquisition
633
plays in a proper
Penn Central analysis. Today's holding
does not mean that the timing of the regulation's enactment
relative to the acquisition of title is immaterial to the
Penn
Central analysis. Indeed, it would be just as much error to
expunge this consideration from the takings inquiry as it would be
to accord it exclusive significance. Our polestar instead remains
the principles set forth in
Penn Central itself and our
other cases that govern partial regulatory takings. Under these
cases, interference with investmentbacked expectations is one of a
number of factors that a court must examine. Further, the
regulatory regime in place at the time the claimant acquires the
property at issue helps to shape the reasonableness of those
expectations.
The Fifth Amendment forbids the taking of private property for
public use without just compensation. We have recognized that this
constitutional guarantee is "'designed to bar Government from
forcing some people alone to bear public burdens which, in all
fairness and justice, should be borne by the public as a whole.' "
Penn Central, supra, at 123-124 (quoting
Armstrong v.
United States, 364 U. S. 40, 49 (1960)).
The concepts of "fairness and justice" that underlie the Takings
Clause, of course, are less than fully determinate. Accordingly, we
have eschewed "any 'set formula' for determining when 'justice and
fairness' require that economic injuries caused by public action be
compensated by the government, rather than remain
disproportionately concentrated on a few persons."
Penn Central,
supra, at 124 (quoting
Goldblatt v.
Hempstead,
369 U. S. 590,
594 (1962)). The outcome instead "depends largely 'upon the
particular circumstances [in that] case.'"
Penn Central,
supra, at 124 (quoting
United States
We have "identified several factors that have particular
significance" in these "essentially ad hoc, factual inquiries."
Penn Central, 438 U. S., at 124. Two such factors are "[t]he
economic impact of the regulation on the claimant and,
particularly, the extent to which the regulation has interfered
634
with distinct investment-backed expectations."
Ibid.
Another is "the character of the governmental action."
Ibid.
The purposes served, as well as the effects produced, by a
particular regulation inform the takings analysis.
Id., at
127 ("[A] use restriction on real property may constitute a
'taking' if not reasonably necessary to the effectuation of a
substantial public purpose, [citations omitted], or perhaps if it
has an unduly harsh impact upon the owner's use of the property");
see also
Yee v.
Escondido, 503 U. S. 519, 523 (1992)
(Regulatory takings cases "necessarily entai[l] complex factual
assessments of the purposes and economic effects of government
actions").
Penn Central does not supply mathematically
precise variables, but instead provides important guideposts that
lead to the ultimate determination whether just compensation is
required.
The Rhode Island Supreme Court concluded that, because the
wetlands regulations predated petitioner's acquisition of the
property at issue, petitioner lacked reasonable investment-backed
expectations and hence lacked a viable takings claim. 746 A. 2d
707, 717 (2000). The court erred in elevating what it believed to
be "[petitioner's] lack of reasonable investment-backed
expectations" to "dispositive" status.
Ibid.
Investment-backed expectations, though important, are not
talismanic under
Penn Central. Evaluation of the degree of
interference with investment-backed expectations instead is
one factor that points toward the answer to the question
whether the application of a particular regulation to particular
property "goes too far."
Pennsylvania Coal Co. v.
Mahon, 260 U.
S. 393, 415 (1922).
Further, the state of regulatory affairs at the time of
acquisition is not the only factor that may determine the extent of
investment-backed expectations. For example, the nature and extent
of permitted development under the regulatory regime vis-a-vis the
development sought by the claimant may also shape legitimate
expectations without vesting any kind of development right in the
property owner. We
635
also have never held that a takings claim is defeated simply on
account of the lack of a personal financial investment by a
postenactment acquirer of property, such as a donee, heir, or
devisee. Cf.
Hodel v.
Irving, 481 U. S. 704, 714-718
(1987). Courts instead must attend to those circumstances which are
probative of what fairness requires in a given case.
If investment-backed expectations are given exclusive
significance in the
Penn Central analysis and existing
regulations dictate the reasonableness of those expectations in
every instance, then the State wields far too much power to
redefine property rights upon passage of title. On the other hand,
if existing regulations do nothing to inform the analysis, then
some property owners may reap windfalls and an important indicium
of fairness is lost. * As I understand it, our decision today does
not remove the regulatory backdrop against which an owner takes
title to property from the purview of the
Penn Central
inquiry. It simply restores balance to that inquiry. Courts
properly consider the effect of existing regulations under the
rubric of investment-backed expectations in determining whether a
compensable taking
*JUSTICE SCALIA'S inapt "government-as-thief" simile is
symptomatic of the larger failing of his opinion, which is that he
appears to conflate two questions. The first question is whether
the enactment or application of a regulation constitutes a valid
exercise of the police power. The second question is whether the
State must compensate a property owner for a diminution in value
effected by the State's exercise of its police power. We have held
that "[t]he 'public use' requirement [of the Takings Clause] is ...
coterminous with the scope of a sovereign's police powers."
Hawaii Housing Authority v.
Midkiff, 467 U. S. 229, 240
(1984). The relative timing of regulatory enactment and title
acquisition, of course, does not affect the analysis of whether a
State has acted within the scope of these powers in the first
place. That issue appears to be the one on which JUSTICE SCALIA
focuses, but it is not the matter at hand. The relevant question
instead is the second question described above. It is to this
inquiry that "investment-backed expectations" and the state of
regulatory affairs upon acquisition of title are relevant under
Penn Central. JUSTICE SCALIA'S approach therefore would seem
to require a revision of the
Penn Central analysis that this
Court has not undertaken.
636
has occurred. As before, the salience of these facts cannot be
reduced to any "set formula."
Penn Central, 438 U. S., at
124 (internal quotation marks omitted). The temptation to adopt
what amount to
per se rules in either direction must be
resisted. The Takings Clause requires careful examination and
weighing of all the relevant circumstances in this context. The
court below therefore must consider on remand the array of relevant
factors under
Penn Central before deciding whether any
compensation is due.
JUSTICE SCALIA, concurring.
I write separately to make clear that my understanding of how
the issues discussed in Part II-B of the Court's opinion must be
considered on remand is not JUSTICE O'CONNOR'S.
The principle that underlies her separate concurrence is that it
may in some (unspecified) circumstances be "[un]fai[r]," and
produce unacceptable "windfalls," to allow a subsequent purchaser
to nullify an unconstitutional partial taking (though,
inexplicably, not an unconstitutional total taking) by the
government.
Ante, at 635. The polar horrible, presumably, is
the situation in which a sharp real estate developer, realizing (or
indeed, simply gambling on) the unconstitutional excessiveness of a
development restriction that a naIve landowner assumes to be valid,
purchases property at what it would be worth subject to the
restriction, and then develops it to its full value (or resells it
at its full value) after getting the unconstitutional restriction
invalidated.
This can, I suppose, be called a windfall-though it is not much
different from the windfalls that occur every day at stock
exchanges or antique auctions, where the knowledgeable (or the
venturesome) profit at the expense of the ignorant (or the risk
averse). There is something to be said (though in my view not much)
for pursuing abstract "fairness" by requiring part or all of that
windfall to be returned to the naIve original owner, who presumably
is the "rightful" owner of it. But there is nothing to be said for
giving
637
it instead to the
government-which not only did not lose
something it owned, but is both the
cause of the miscarriage
of "fairness" and the only one of the three parties involved in the
miscarriage (government, naIve original owner, and sharp real
estate developer) which
acted unlawfully-indeed
unconstitutionally. JUSTICE O'CONNOR would eliminate the
windfall by giving the malefactor the benefit of its malefaction.
It is rather like eliminating the windfall that accrued to a
purchaser who bought property at a bargain rate from a thief
clothed with the indicia of title, by making him turn over the
"unjust" profit
to the thief*
In my view, the fact that a restriction existed at the time the
purchaser took title (other than a restriction forming part of the
"background principles of the State's law of property and
nuisance,"
Lucas v.
South Carolina Coastal Council,
505 U. S. 1003,
1029 (1992)) should have no bearing upon the determination of
whether the restriction is so substantial as to constitute a
taking. The "investment-backed expectations" that the law will take
into account do not include the assumed validity of a restriction
that in fact deprives property of so much of its value as to be
unconstitutional. Which is to say that a
Penn Central
taking, see
Penn Central Transp. Co. v.
New York
City, 438 U. S.
104 (1978), no less than a total taking, is not absolved by the
transfer of title.
JUSTICE STEVENS, concurring in part and dissenting in part.
In an admirable effort to frame its inquiries in broadly
significant terms, the majority offers five pages of commentary on
the issue of whether an owner of property can chal-
*Contrary to JUSTICE O'CONNOR'S assertion,
ante, at 635,
n., my contention of governmental wrongdoing does not assume that
the government exceeded its police powers by ignoring the "public
use" requirement of the Takings Clause, see
Hawaii Housing
Authority v.
Midkiff, 467 U. S. 229, 240
(1984). It is wrong for the government to take property,
even for public use, without tendering just
compensation.
638
Opinion of STEVENS, J.
lenge regulations adopted prior to her acquisition of that
property without ever discussing the particular facts or legal
claims at issue in this case. See
ante, at 626-630. While I
agree with some of what the Court has to say on this issue, an
examination of the issue in the context of the facts of this case
convinces me that the Court has oversimplified a complex calculus
and conflated two separate questions. Therefore, while I join Part
II -A of the opinion, I dissent from the judgment and, in
particular, from Part II-B.
I
Though States and local governments have broad power to adopt
regulations limiting land usage, those powers are constrained by
the Constitution and by other provisions of state law. In adopting
land-use restrictions, local authorities must follow legally valid
and constitutionally sufficient procedures and must adhere to
whatever substantive requirements are imposed by the Constitution
and supervening law. If a regulating body fails to adhere to its
procedural or substantive obligations in developing land-use
restrictions, anyone adversely impacted by the restrictions may
challenge their validity in an injunctive action. If the
application of such restriction to a property owner would cause her
a "direct and substantial injury,"
e. g., Chicago v.
Atchison, T. & S.
F. R. Co., 357 U. S. 77, 83 (1958), I
have no doubt that she has standing to challenge the restriction's
validity whether she acquired title to the property before or after
the regulation was adopted. For, as the Court correctly observes,
even future generations "have a right to challenge unreasonable
limitations on the use and value of land."
Ante, at 627.
It by no means follows, however, that, as the Court assumes, a
succeeding owner may obtain compensation for a taking of property
from her predecessor in interest. A taking is a discrete event, a
governmental acquisition of private property for which the State is
required to provide just compensation. Like other transfers of
property, it occurs at a
639
particular time, that time being the moment when the relevant
property interest is alienated from its owner.1
Precise specification of the moment a taking occurred and of the
nature of the property interest taken is necessary in order to
determine an appropriately compensatory remedy. For example, the
amount of the award is measured by the value of the property at the
time of taking, not the value at some later date. Similarly,
interest on the award runs from that date. Most importantly for our
purposes today, it is the person who owned the property at the time
of the taking that is entitled to the recovery. See,
e. g.,
Danforth v.
United States, 308 U. S. 271, 284 (1939)
("For the reason that compensation is due at the time of taking,
the owner at that time, not the owner at an earlier or later date,
receives the payment"). The rationale behind that rule is true
whether the transfer of ownership is the result of an arm's-length
negotiation, an inheritance, or the dissolution of a bankrupt
debtor. Cf.
United States v.
Dow, 357 U. S. 17, 20-21
(1958).2
1 A regulation that goes so "far" that it violates the Takings
Clause may give rise to an award of compensation or it may simply
be invalidated as it would be if it violated any other
constitutional principle (with the consequence that the State must
choose between adopting a new regulatory scheme that provides
compensation or forgoing regulation). While some recent Court
opinions have focused on the former remedy, Justice Holmes appears
to have had a regime focusing on the latter in mind in the opinion
that began the modern preoccupation with "regulatory takings." See
Pennsylvania Coal Co. v.
Mahon, 260 U. S. 393, 414 (1922)
(because the statute in question takes private property without
just compensation "the act cannot be sustained").
2 The Court argues,
ante, at 628, that a regulatory
taking is different from a direct state appropriation of property
and that the rules this Court has developed for identifying the
time of the latter do not apply to the former. This is something of
an odd conclusion, in that the entire rationale for allowing
compensation for regulations in the first place is the somewhat
dubious proposition that some regulations go so "far" as to become
the functional equivalent of a direct taking. Ultimately, the
Court's regulations-are-different principle rests on the confusion
of two dates: the time an injury occurs and the time a claim for
compensation for that injury becomes cognizable in a judicial
proceeding. That we require plaintiffs making the claim that a
regulation is the equivalent of a taking to go
640
Opinion of STEVENS, J.
II
Much of the difficulty of this case stems from genuine confusion
as to when the taking Palazzolo alleges actually occurred.
According to Palazzolo's theory of the case, the owners of his
Westerly, Rhode Island, property possessed the right to fill the
wetland portion of the property at some point in the
not-too-distant past.3 In 1971, the State of Rhode Island passed a
statute creating the Rhode Island Coastal Resources Management
Council (Council) and delegating the Council the authority to
promulgate regulations restricting the usage of coastal land. See
1971 R. 1. Pub.
through certain prelitigation procedures to clarify the scope of
the allegedly infringing regulation does not mean that the injury
did not occur before those procedures were completed. To the
contrary, whenever the relevant local bodies construe their
regulations, their construction is assumed to reflect "what the
[regulation] meant before as well as after the decision giving rise
to that construction."
Rivers v.
Roadway Express,
Inc., 511 U. S.
298, 312-313 (1994).
3 This point is the subject of significant dispute, as the State
of Rhode Island has presented substantial evidence that limitations
on coastal development have always precluded or limited schemes
such as Palazzolo's. See Brief for Respondents 11-12, 41-46.
Nonetheless, we must assume that it is true for the purposes of
deciding this question.
Likewise, we must assume for the purposes of deciding the
discrete threshold questions before us that petitioner's complaint
states a potentially valid regulatory takings claim. Nonetheless,
for the sake of clarity it is worth emphasizing that, on my view,
even a newly adopted regulation that diminishes the value of
property does not produce a significant Takings Clause issue if it
(1) is generally applicable and (2) is directed at preventing a
substantial public harm. Cf.
Lucas v.
South Carolina
Coastal Council, 505 U. S. 1003, 1029
(1992) (owner of a powerplant astride an earthquake fault does not
state a valid takings claim for regulation requiring closure of
plant); id., at 1035 (KENNEDY, J., concurring in judgment)
(explaining that the government's power to regulate against harmful
uses of property without paying compensation is not limited by the
common law of nuisance because that doctrine is "too narrow a
confine for the exercise of regulatory power in a complex and
interdependent society"). It is quite likely that a regulation
prohibiting the filling of wetlands meets those criteria.
641
Laws, ch. 279, § 1
et seq. The Council promptly adopted
regulations that,
inter alia, effectively foreclosed
petitioner from filling his wetlands. See
ante, at 614; cf.
App. to Brief for Respondents 11-22 (current version of
regulations). As the regulations nonetheless provided for a process
through which petitioner might seek permission to fill the
wetlands, he filed two applications for such permission during the
1980's, both of which were denied. See
ante, at 614-615.
The most natural reading of petitioner's complaint is that the
regulations in and of themselves precluded him from filling the
wetlands, and that their adoption therefore constituted the alleged
taking. This reading is consistent with the Court's analysis in
Part II-A of its opinion (which I join) in which the Court explains
that petitioner's takings claims are ripe for decision because
respondents' wetlands regulations unequivocally provide that there
can be "no fill for any likely or foreseeable use."
Ante, at
621.4 If it is the regulations themselves of which petitioner
complains, and if they did, in fact, diminish the value of his
property, they did so when they were adopted.
To the extent that the adoption of the regulations constitute
the challenged taking, petitioner is simply the wrong party to be
bringing this action. If the regulations imposed a compensable
injury on anyone, it was on the owner of the property at the moment
the regulations were adopted. Given the trial court's finding that
petitioner did not own the property at that time,5 in my judgment
it is pellucidly clear
4 At oral argument, petitioner's counsel stated: "I think the
key here is understanding that no filling of any wetland would be
allowed for any reason that was lawful under the local zoning code.
No structures of any kind would be permitted by Mr. Palazzolo to
construct. So we know that he cannot use his wetland." Tr. of Oral
Arg. 14.
5 See App. to Pet. for Cert. A-13 ("[T]he trial justice found
that Palazzolo could not have become the owner of the property
before 1978, at which time the regulations limiting his ability to
fill the wetlands were already in place. The trial justice thus
determined that the right to fill the wetlands was not part of
Palazzolo's estate to begin with, and that he
642
Opinion of STEVENS, J.
that he has no standing to claim that the promulgation of the
regulations constituted a taking of any part of the property that
he subsequently acquired.
His lack of standing does not depend, as the Court seems to
assume, on whether or not petitioner "is deemed to have notice of
an earlier-enacted restriction,"
ante, at 626. If those
early regulations changed the character of the owner's title to the
property, thereby diminishing its value, petitioner acquired only
the net value that remained after that diminishment occurred. Of
course, if, as respondents contend, see n. 3,
supra, even
the prior owner never had any right to fill wetlands, there never
was a basis for the alleged takings claim in the first place. But
accepting petitioner's theory of the case, he has no standing to
complain that preacquisition events may have reduced the value of
the property that he acquired. If the regulations are invalid,
either because improper procedures were followed when they were
adopted, or because they have somehow gone "too far,"
Pennsylvania Coal Co. v.
Mahon, 260 U. S. 393, 415
(1922), petitioner may seek to enjoin their enforcement, but he has
no right to recover compensation for the value of property taken
from someone else. A new owner may maintain an ejectment action
against a trespasser who has lodged himself in the owner's orchard
but surely could not recover damages for fruit a trespasser
spirited from the orchard before he acquired the property.
The Court's holding in
Nollan v.
California Coastal
Comm'n, 483 U. S.
825 (1987), is fully consistent with this analysis. In that
case the taking occurred when the state agency compelled the
petitioners to provide an easement of public access to the beach as
a condition for a development permit. That event-a compelled
transfer of an interest in property-occurred
after the
petitioners had become the owner of the property and unquestionably
diminished the
was therefore not owed any compensation for the deprivation of
that right").
643
value of petitioners' property. Even though they had notice when
they bought the property that such a taking might occur, they never
contended that any action taken by the State before their purchase
gave rise to any right to compensation. The matter of standing to
assert a claim for just compensation is determined by the impact of
the event that is alleged to have amounted to a taking rather than
the sort of notice that a purchaser mayor may not have received
when the property was transferred. Petitioners in
Nollan
owned the property at the time of the triggering event. Therefore,
they and they alone could claim a right to compensation for the
injury.6 Their successors in interest, like petitioner in this
case, have no standing to bring such a claim.
III
At oral argument, petitioner contended that the taking in
question occurred in 1986, when the Council denied his final
application to fill the land. Tr. of Oral Arg. 16. Though this
theory, to the extent that it was embraced within petitioner's
actual complaint, complicates the issue, it does not alter my
conclusion that the prohibition on filling the wetlands does not
take from Palazzolo any property right he ever possessed.
The title Palazzolo took by operation of law in 1978 was limited
by the regulations then in place to the extent that such
regulations represented a valid exercise of the police power. For
the reasons expressed above, I think the regulations barred
petitioner from filling the wetlands on his property. At the very
least, however, they established a rule that such lands could not
be filled unless the Council
6 In cases such as
Nollan-in which landowners have notice
of a regulation when they purchase a piece of property but the
regulatory event constituting the taking does not occur until after
they take title to the property-I would treat the owners' notice as
relevant to the evaluation of whether the regulation goes "too
far," but not necessarily dispositive. See
ante, at 632-636
(O'CONNOR, J., concurring).
644
Opinion of STEVENS, J.
exercised its authority to make exceptions to that rule under
certain circumstances. Cf. App. to Brief for Respondents A-13
(laying out narrow circumstances under which the Council retains
the discretion to grant a "special exception"). Under the reading
of the regulations most favorable to Palazzolo, he acquired no more
than the right to a discretionary determination by the Council as
to whether to permit him to fill the wetlands. As his two hearings
before that body attest, he was given the opportunity to make a
presentation and receive such a determination. Thus, the Council
properly respected whatever limited rights he may have retained
with regard to filling the wetlands. Cf.
Lujan v. G & G
Fire Sprinklers, Inc., 532 U. S. 189 (2001)
(holding, in a different context, that, if a party's only relevant
property interest is a claim of entitlement to bring an action, the
provision of a forum for hearing that action is all that is
required to vindicate that property interest);
Lopez v.
Davis, 531 U.
S. 230 (2001) (involving a federal statute that created an
entitlement to a discretionary hearing without creating any
entitlement to relief).7
Though the majority leaves open the possibility that the scope
of to day's holding may prove limited, see
ante, at 629630
(discussing limitations implicit in "background principles"
exception); see also
ante, at 632-636 (O'CONNOR, J.,
concurring) (discussing importance of the timing of regula-
7 This is not to suggest that a regulatory body can insulate all
of its land-use decisions from the Takings Clause simply by
referencing longstanding statutory provisions. If the determination
by the regulators to reject the project involves such an
unforseeable interpretation or extension of the regulation as to
amount to a change in the law, then it is appropriate to consider
the decision of that body, rather than the adoption of the
regulation, as the discrete event that deprived the owner of a
pre-existing interest in property. But, if that is petitioner's
theory, his claim is not ripe for the reasons stated by JUSTICE
GINSBURG in her dissenting opinion,
post, p. 645. As I read
petitioner's complaint and the Court's disposition of the ripeness
issue, it is the regulations themselves that allegedly deprived the
owner of the parcel of the right to fill the wetlands.
645
tions for the evaluation of the merits of a takings claim);
post, at 654-655 (BREYER, J., dissenting) (same), the
extension of the right to compensation to individuals other than
the direct victim of an illegal taking admits of no obvious
limiting principle. If the existence of valid land-use regulations
does not limit the title that the first postenactment purchaser of
the property inherits, then there is no reason why such regulations
should limit the rights of the second, the third, or the thirtieth
purchaser. Perhaps my concern is unwarranted, but today's decision
does raise the spectre of a tremendousand tremendously
capricious-one-time transfer of wealth from society at large to
those individuals who happen to hold title to large tracts of land
at the moment this legal question is permanently resolved.
IV
In the final analysis, the property interest at stake in this
litigation is the right to fill the wetlands on the tract that
petitioner owns. Whether either he or his predecessors in title
ever owned such an interest, and if so, when it was acquired by the
State, are questions of state law. If it is clear-as I think it is
and as I think the Court's disposition of the ripeness issue
assumes-that any such taking occurred before he became the owner of
the property, he has no standing to seek compensation for that
taking. On the other hand, if the only viable takings claim has a
different predicate that arose later, that claim is not ripe and
the discussion in Part II-B of the Court's opinion is superfluous
dictum. In either event, the judgment of the Rhode Island Supreme
Court should be affirmed in its entirety.
JUSTICE GINSBURG, with whom JUSTICE SOUTER and JUSTICE BREYER
join, dissenting.
A regulatory takings claim is not ripe for adjudication, this
Court has held, until the agency administering the regulations at
issue, proceeding in good faith, "has arrived at a final,
definitive position regarding how it will apply [those
646
regulations] to the particular land in question."
Williamson
County Regional Planning Comm'n v.
Hamilton Bank of Johnson
City, 473 U. S.
172, 191 (1985). Absent such a final decision, a court cannot
"kno[w] the nature and extent of permitted development" under the
regulations, and therefore cannot say "how far the regulation[s]
g[o]," as regulatory takings law requires.
MacDonald, Sommer
&
Frates v.
Yolo County, 477 U. S. 340, 348, 351
(1986). Therefore, even when a landowner seeks and is denied
permission to develop property, if the denial does not demonstrate
the effective impact of the regulations on the land, the denial
does not represent the "final decision" requisite to generate a
ripe dispute.
Williamson County, 473 U. S., at 190.
MacDonald illustrates how a highly ambitious application
may not ripen a takings claim. The landowner in that case proposed
a 159-home subdivision. 477 U. S., at 342. When that large proposal
was denied, the owner complained that the State had appropriated
"all beneficial use of its property."
Id., at 352, n. 8; see
also
id., at 344. This Court concluded, however, that the
landowner's claim was not ripe, for the denial of the massive
development left "open the possibility that some development
[would] be permitted."
Id., at 352. "Rejection of
exceedingly grandiose development plans," the Court observed, "does
not logically imply that less ambitious plans will receive
similarly unfavorable reviews."
Id., at 353, n. 9.
As presented to the Rhode Island Supreme Court, Anthony
Palazzolo's case was a close analogue to
MacDonald.
Palazzolo's land has two components. Approximately 18 acres are
wetlands that sustain a rich but delicate ecosystem. See 746 A. 2d
707, 710, and n. 1 (R. 1. 2000). Additional acres are less
environmentally sensitive "uplands." (The number of upland acres
remains in doubt, see
ibid., because Palazzolo has never
submitted "an accurate or detailed survey" of his property, see Tr.
190 (June 18-19, 1997).) Rhode Island's administrative agency with
ultimate permitting au-
647
thority over the wetlands, the Coastal Resources Management
Council (CRMC), bars residential development of the wetlands, but
not the uplands.
Although Palazzolo submitted several applications to develop his
property, those applications uniformly sought permission to fill
most or all of the wetlands portion of the property. None aimed to
develop only the uplands.1 Upon denial of the last of Palazzolo's
applications, Palazzolo filed suit claiming that Rhode Island had
taken his property by refusing "to allow any development." App. 45
(Complaint ~ 17).
As the Rhode Island Supreme Court saw the case, Palazzolo's
claim was not ripe for several reasons, among them, that Palazzolo
had not sought permission for "development only of the upland
portion of the parcel." 746 A. 2d, at 714. The Rhode Island court
emphasized the "undisputed evidence in the record that it would be
possible to build at least one single-family home on the existing
upland area, with no need for additional fill."
Ibid.
Today, the Court rejects the Rhode Island court's determination
that the case is unripe, finding no "uncertainty as to
1 Moreover, none proposed the 74-lot subdivision Palazzolo
advances as the basis for the compensation he seeks. Palazzolo's
first application sought to fill all 18 acres of wetlands for no
stated purpose whatever. See App. 11 (Palazzolo's sworn 1983 answer
to the question why he sought to fill uplands) ("Because it's my
right to do if I want to to look at it it is my business.").
Palazzolo's second application proposed a most disagreeable "beach
club." See
ante, at 615 ("trash bins" and "port-a-johns"
sought); Tr. 650 (June 25-26, 1997) (testimony of engineer Steven
M. Clarke) (to get to the club's water, i.
e., Winnapaug
Pond rather than the nearby Atlantic Ocean, "you'd have to walk
across the gravel fill, but then work your way through
approximately 70, 75 feet of marsh land or conservation grasses").
Neither of the CRMC applications supplied a clear map of the
proposed development. See App. 7, 16 (1983 application); Tr. 190
(June 18-19, 1997) (1985 application). The Rhode Island Supreme
Court ultimately concluded that the 74-lot development would have
been barred by zoning requirements, apart from CRMC regulations,
requirements Palazzolo never explored. See 746 A. 2d 707, 715, n. 7
(2000).
648
the [uplands'] permitted use."
Ante, at 622. The Court's
conclusion is, in my view, both inaccurate and inequitable. It is
inaccurate because the record is ambiguous. And it is inequitable
because, given the claim asserted by Palazzolo in the Rhode Island
courts, the State had no cause to pursue further inquiry into
potential upland development. But Palazzolo presses other claims
here, and at his behest, the Court not only entertains them, but
also turns the State's legitimate defense against the claim
Palazzolo originally stated into a weapon against the State. I
would reject Palazzolo's bait-and-switch ploy and affirm the
judgment of the Rhode Island Supreme Court.
***
Where physical occupation of land is not at issue, the Court's
cases identify two basic forms of regulatory taking.
Ante,
at 617. In
Lucas v.
South Carolina Coastal Council,
505 U. S. 1003
(1992), the Court held that, subject to "certain qualifications,"
ante, at 617, 629, denial of
"all economically
beneficial or productive use of land" constitutes a taking. 505 U.
S., at 1015 (emphasis added). However, if a regulation does not
leave the property "economically idle," id., at 1019, to establish
the alleged taking the landowner may pursue the multifactor inquiry
set out in
Penn Central Transp. Co. v.
New York City,
438 U. S. 104,
123-125 (1978).
Like the landowner in
MacDonald, Palazzolo sought federal
constitutional relief
only under a straightforward
application of
Lucas. See
ante, at 615-616; App. 45
(Complaint ~ 17) ("As a direct and proximate result of the
Defendants' refusal to allow
any development of the
property, there has been a taking" (emphasis added)); Plaintiff's
Post Trial Memorandum in No. 88-0297 (Super. Ct., R. 1.), p. 6
("[T]his Court need not look beyond the
Lucas case as its
very lucid and precise standards will determine whether a taking
has occurred.");
id., at 9-10 ("[T]here is
NO USE for
the property whatsoever .... Not one scintilla of evidence was
proffered
649
by the State to prove, intimate or even suggest a theoretical
possibility of
any use for this property-never mind a
beneficial use. Not once did the State claim that there
is,
in fact, some use available for the Palazzolo parcel."); Brief of
Appellant in No. 98-0333, pp. 5, 7, 9-10 (hereinafter Brief of
Appellant) (restating, verbatim, assertions of Post Trial
Memorandum quoted above).
Responding to Palazzolo's
Lucas claim, the State urged as
a sufficient defense this now uncontested point: CRMC "would [have
been] happy to have [Palazzolo] situate a home" on the uplands,
"thus allowing [him] to realize 200,000 dollars." State's
Post-Trial Memorandum in No. 88-0297 (Super. Ct., R. 1.), p. 81;
see also Brief of Appellees in No. 98-0333A, p. 25 (hereinafter
Brief of Appellees) (Palazzolo "never even applied for the
realistic alternative of using the entire parcel as a single
unitary home-site"). The State did present some evidence at trial
that more than one lot could be developed. See
infra, at
653-654. And, in a supplemental post-trial memorandum addressing a
then new Rhode Island Supreme Court decision, the State briefly
urged that Palazzolo's claims would fail even under
Penn
Central. See
ante, at 624. The evidence of additional
uses and the post-trial argument directed to
Penn Central,
however, were underdeveloped and unnecessary, for Palazzolo
himself, in his pleadings and at trial, pressed only a
Lucasbased claim that he had been denied
all
economically viable use of his property. Once the State
demonstrated that an "economically beneficial" development was
genuinely plausible,
Lucas, 505 U. S., at 1015, the State
had established the analogy to
MacDonald: The record now
showed "valuable use might still be made of the land." 477 U. S.,
at 352, n. 8; see Brief of Appellees 24-25 (relying on
MacDonald). The prospect of real development shown by the
State warranted a ripeness dismissal of Palazzolo's complaint.
Addressing the State's
Lucas defense in
Lucas
terms, Palazzolo insisted that his land had "no use ... as a result
of
650
CRMC's application of its regulations." Brief of Appellant 11.
The Rhode Island Supreme Court rejected Palazzolo's argument,
identifying in the record evidence that Palazzolo could build at
least one home on the uplands. 746 A. 2d, at 714. The court
therefore concluded that Palazzolo's failure to seek permission for
"development only of the upland portion of the parcel" meant that
Palazzolo could not "maintain a claim that the CRMC ha[d] deprived
him of all beneficial use of the property."
Ibid.
It is true that the Rhode Island courts, in the course of ruling
for the State, briefly touched base with
Penn Central. Cf.
ante, at 624. The critical point, however, underplayed by
the Court, is that Palazzolo never raised or argued the
Penn
Central issue in the state system: not in his complaint; not in
his trial court submissions; not-even after the trial court touched
on the
Penn Central issue-in his briefing on appeal. The
state high court decision, raising and quickly disposing of the
matter, unquestionably permits us to consider the
Penn
Central issue. See
Raley v.
Ohio, 360 U. S. 423, 436-437
(1959). But the ruling below does not change the reality essential
here: Palazzolo litigated his takings claim, and it was incumbent
on the State to defend against that claim, only under
Lucas.
If Palazzolo's arguments in this Court had tracked his arguments
in the state courts, his petition for certiorari would have argued
simply that the Rhode Island courts got it wrong in failing to see
that his land had "no use" at all because of CRMC's rules. Brief of
Appellant 11. This Court likely would not have granted certiorari
to review the application of
MacDonald and
Lucas to
the facts of Palazzolo's case. However, aided by new counsel,
Palazzolo soughtand in the exercise of this Court's discretion
obtained-review of two contentions he did not advance below. The
first assertion is that the state regulations take the property
under
Penn Central. See Pet. for Cert. 20; Brief for
Petitioner 47-50. The second argument is that the regulations
651
amount to a taking under an expanded rendition of
Lucas
covering cases in which a landowner is left with property retaining
only a "few crumbs of value."
Ante, at 631 (quoting Brief
for Petitioner 37); Pet. for Cert. 20-22. Again, it bears
repetition, Palazzolo never claimed in the courts below that, if
the State were correct that his land could be used for a residence,
a taking nonetheless occurred.2
In support of his new claims, Palazzolo has conceded the very
point on which the State properly relied to resist the simple
Lucas claim presented below: that Palazzolo can obtain
approval for one house of substantial economic value. Palazzolo
does not merely accept the argument that the State advanced below.
He now contends that the evidence proffered by the State in the
Rhode Island courts supports the claims he presents here, by
demonstrating that
only one house would be approved. See
Brief for Petitioner 13 ("[T]he uncontradicted evidence was that
CRMC ... would not deny [Palazzolo] permission to build one
single-family home on the small upland portion of his property."
(emphasis deleted)); Pet. for Cert. 15 (the extent of development
permitted on the land is "perfectly clear: one single-family home
and nothing more").
As a logical matter, Palazzolo's argument does not stand up. The
State's submissions in the Rhode Island courts hardly establish
that Palazzolo could obtain approval for
only one house of
value. By showing that Palazzolo could have obtained approval for a
$200,000 house (rather than, say, two houses worth $400,000), the
State's submissions established only a floor, not a ceiling, on the
value of permissi-
2 After this Court granted certiorari, in his briefing on the
merits, Palazzolo presented still another takings theory. That
theory, in tension with numerous holdings of this Court, see,
e.
g., Concrete Pipe &
Products of Cal., Inc. v.
Construction Laborers Pension Trust for Southern Cal., 508
U. S. 602, 643-644 (1993), was predicated on treatment of his
wetlands as a property separate from the uplands. The Court
properly declines to reach this claim.
Ante, at 631.
652
ble development. For a floor value was all the State needed to
defeat Palazzolo's simple
Lucas claim.
Furthermore, Palazzolo's argument is unfair: The argument
transforms the State's legitimate defense to the only claim
Palazzolo stated below into offensive support for other claims he
states for the first time here. Casting away fairness (and fairness
to a State, no less), the Court indulges Palazzolo's
bait-and-switch maneuver. The Court concludes that "there is no
genuine ambiguity in the record as to the extent of permitted
development on ... the uplands."
Ante, at 623. Two theories
are offered to support this conclusion.
First, the Court asserts, it is "too late in the day" for the
State to contend the uplands give the property more than $200,000
in value; Palazzolo "stated" in his petition for certiorari that
the property has "an estimated worth of $200,000," and the State
cited that contention "as fact" in its Brief in Opposition.
Ante, at 622. But in the cited pages of its Brief in
Opposition, the State simply said it "would" approve a "single
home" worth $200,000. Brief in Opposition 4, 19. That statement
does not foreclose the possibility that the State would
also
approve another home, adding further value to the property.
To be sure, the Brief in Opposition did overlook Palazzolo's
change in his theory of the case, a change that, had it been
asserted earlier, could have rendered insufficient the evidence the
State intelligently emphasized below. But the State's failure to
appreciate that Palazzolo had moved the pea to a different shell
hardly merits the Court's waiver finding. The only precedent cited
for the waiver, a footnote in
Lucas, is not remotely on
point.
Ante, at 622. The landowner in
Lucas had
invoked a "finding" of fact by the state court, and this Court
deemed the State's challenge to that finding waived because the
challenge was not timely raised. 505 U. S., at 1020-1022, n. 9.
There is nothing extraordinary about this Court's deciding a case
on the findings made by a
653
state court. Here, however, the "fact" this Court has stopped
the State from contesting-that the property has value of
only $200,000-was never found by any court. That valuation
was simply asserted, inaccurately, see
infra this page and
654, in Palazzolo's petition for certiorari. This Court's waiver
ruling thus amounts to an unsavory invitation to unscrupulous
litigants: Change your theory and misrepresent the record in your
petition for certiorari; if the respondent fails to note your
machinations, you have created a different record on which this
Court will review the case.
The Court bolsters its waiver finding by asserting that the
$200,000 figure is "well founded" in the record.
Ante, at
623. But, as earlier observed, an absence of multiple valuation
possibilities in the record cannot be held against the State, for
proof of more than the $200,000 development was unnecessary to
defend against the
Lucas claim singularly pleaded below. And
in any event, the record does not warrant the Court's
conclusion.
The Court acknowledges "testimony at trial suggesting the
existence of an additional upland parcel elsewhere on the property"
on which a second house might be built.
Ante, at 623. The
Court discounts that prospect, however, on the ground that
development of the additional parcel would require a new road
forbidden under CRMC's regulations.
Ibid. Yet the one
witness on whose testimony the Court relies, Steven M. Clarke,
himself concluded that it
would be "realistic to apply for"
development at more than one location. Tr. 612 (June 25-26, 1997).
Clarke added that a state official, Russell Chateauneuf, "gave
[Clarke] supporting information saying that [multiple applications]
made sense."
Ibid. The conclusions of Clarke and Chateauneuf
are confirmed by the testimony of CRMC's executive director, Grover
Fugate, who agreed with Palazzolo's counsel during
cross-examination that Palazzolo might be able to build "on two,
perhaps three, perhaps four of the lots."
Id., at 211 (June
20-23, 1997); see also Tr. of Oral Arg. 27 ("[T]here
654
is ... uncertainty as to what additional upland there is and how
many other houses can be built.").
The ambiguities in the record thus are substantial. They persist
in part because their resolution was not required to address the
claim Palazzolo presented below, and in part because Palazzolo
failed ever to submit an accurate survey of his property. Under the
circumstances, I would not step into the role of supreme
topographical factfinder to resolve ambiguities in Palazzolo's
favor. Instead, I would look to, and rely on, the opinion of the
state court whose decision we now review. That opinion states:
"There was undisputed evidence in the record that it would be
possible to build at
least one single-family home on the
existing upland area." 746 A. 2d, at 714 (emphasis added). This
Court cites nothing to warrant amendment of that finding.3
***
In sum, as I see this case, we still do not know "the nature and
extent of permitted development" under the regulation in question,
MacDonald, 477 U. S., at 351. I would therefore affirm the
Rhode Island Supreme Court's judgment.
JUSTICE BREYER, dissenting.
I agree with JUSTICE GINSBURG that Palazzolo's takings claim is
not ripe for adjudication, and I join her opinion in full.
Ordinarily I would go no further. But because the Court holds the
takings claim to be ripe and goes on to address some important
issues of substantive takings law, I add that, given this Court's
precedents, I would agree with JusTICE O'CONNOR that the simple
fact that a piece of property has changed hands (for example, by
inheritance) does not
3 If Palazzolo's claim were ripe and the merits properly
presented, I would, at a minimum, agree with JUSTICE O'CONNOR,
post, at 632-636 (concurring opinion), JUSTICE STEVENS,
ante, at 643 (opinion concurring in part and dissenting in
part), and JUSTICE BREYER,
post this page and 655
(dissenting opinion), that transfer of title can impair a takings
claim.
655
always and
automatically bar a takings claim. Here, for
example, without in any way suggesting that Palazzolo has any valid
takings claim, I believe his postregulatory acquisition of the
property (through automatic operation of law) by itself should not
prove dispositive.
As JUSTICE O'CONNOR explains, under
Penn Central Transp.
Co. v.
New York City, 438 U. S. 104 (1978),
much depends upon whether, or how, the timing and circumstances of
a change of ownership affect whatever reasonable investment-backed
expectations might otherwise exist. Ordinarily, such expectations
will diminish in force and significance-rapidly and dramatically-as
property continues to change hands over time. I believe that such
factors can adequately be taken into account within the
Penn
Central framework.
Several
amici have warned that to allow complete
regulatory takings claims, see
Lucas v.
South Carolina
Coastal Council, 505 U. S. 1003 (1992),
to survive changes in land ownership could allow property owners to
manufacture such claims by strategically transferring property
until only a nonusable portion remains. See,
e. g., Brief
for Daniel W. Bromley et al. as
Amici Curiae 7-8. But I do
not see how a constitutional provision concerned with "'fairness
and justice,'"
Penn Central, supra, at 123-124 (quoting
Armstrong v.
United States, 364 U. S. 40, 49 (1960)),
could reward any such strategic behavior.
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