PALAZZOLO v. RHODE ISLAND

Status message

Unable to locate requested case

Syllabus

PALAZZOLO v. RHODE ISLAND ( No. 99-2047 )
746 A. 2d 707, affirmed in part, reversed in part, and remanded.

PALAZZOLO v. RHODE ISLAND et al.

certiorari to the supreme court of rhode island


No. 99–2047. Argued February 26, 2001—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 Second, in 1978 SGI’s corporate charter was revoked, and title to the property passed to petitioner as the corporation’s sole shareholder.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 marsh land 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 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

Held:

1. This case is ripe for review. Pp. 8–16.

(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. 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. 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 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. 8–12.

(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. 12–14.

(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. 14–16.

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 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 by 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. 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, n. 2, is controlling precedent for the Court’s conclusion. Lucas, supra, 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. 16–21.

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. 21–23.

4. Because petitioner’s claims under the Penn Central analysis were not examined below, the case is remanded. Pp. 7, 22.

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., and Scalia, J., filed concurring opinions. Stevens, J., filed an opinion concurring in part and dissenting in part. Ginsburg, J., filed a dissenting opinion, in which Souter and Breyer, JJ., joined. Breyer, J., filed a dissenting opinion.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

Concurrence

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

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 21.

The more difficult question is what role the temporal relationship between regulatory enactment and title acquisition 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 investment-backed 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 v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958) ).

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 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-à-vis the development sought by the claimant may also shape legitimate expectations without vesting any kind of development right in the property owner. We 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 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.


Notes

* *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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.


TOP

CDInPart

ANTHONY PALAZZOLO, PETITIONER v.
RHODE ISLAND et al.

on writ of certiorari to the supreme court of rhode island


[June 28, 2001]

Justice Stevens , concurring in part and dissenting in part.

In an admirable effort to frame its inquiries in broadly significant terms, the majority offers six pages of commentary on the issue of whether an owner of property can challenge 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 16–21. 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 over-simplified 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 18.

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 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

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. I. Pub. Laws, ch. 279, §1 et seq. The Council promptly adopted regulations that, inter alia , effectively foreclosed petitioner from filling his wetlands. See ante , at 4; 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 1980s, both of which were denied. See ante , at 4–5.

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 11. 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 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 17. 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 respondent contends, 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 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 may or 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 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. ___ (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 today’s holding may prove limited, see ante , at 20–21 (discussing limitations implicit in “background principles” exception); see also ante , at 1–4 (O’Connor, J. , concurring) (discussing importance of the timing of regulations for the evaluation of the merits of a takings claim); ante , at 1–2 ( 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 tremendous—and 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.


Notes

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 18–19, 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 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.

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 was therefore not owed any compensation for the deprivation of that right”).

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 1–4 (O’Connor, J., concurring).

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 long-standing 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.__. 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.