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Jewish World Review July 18, 2001 / 27 Tamuz, 5761

Joseph Perkins

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Consumer Reports

Supreme Court elevates the rights of property owners


http://www.jewishworldreview.com -- ERNESTO MIRANDA. Jane Roe. And, now, Anthony Palazzolo.

Miranda's 1966 Supreme Court case, for which he was immortalized, set forth the rights of arrestees. Roe's 1973 case, for which she achieved lasting notoriety, established women's right to abortion.

Palazzolo's case, decided by the high court at the conclusion of its latest term, affirms the rights of private landowners. As time goes by, the 80-year-old Rhode Island man may come to be known as the Jane Roe of the property rights movement. Palazzolo Rights may become as familiar as Miranda Rights.

Palazzolo owns 74 lots on a salt marsh in the town of Westerly, which sits on the edge of the Ocean State's coastline. He wanted to build houses on the land. But the state of Rhode Island designated his private property a protected area.

So every application Palazzolo made to build on his land was rejected by the state. He was left with no other recourse but to sue on grounds that the state's actions amounted to an unconstitutional "taking" of his property without just compensation.

Indeed, several important Supreme Court cases leading up to the Palazzolo decision established that the Fifth Amendment's taking clause applies not only when the government takes physical possession of private property, but also when government regulations leave property in private hands while restricting its economic potential.

As far back as 1987, the justices likened a state land-use regulation to "extortion" in the case of Nollan vs. California Coastal Commission.

Five years later, the court issued its landmark ruling in Lucas vs. South Carolina Coastal Council. It stated: "When the owner of a real property has been called upon to sacrifice all economically beneficial uses in the name of the common good," he must be paid for his loss.

Then there was the 1994 case, Dolan vs. City of Tigard. The Supremes declared: "We see no reason why the takings clause of the Fifth Amendment, as much a part of the Bill of Rights as the First Amendment or the Fourth Amendment, should be relegated to the status of poor relation."

Rhode Island's highest court was obviously mindful of the Lucas and Dolan decisions because it crafted its ruling against Palazzolo anticipating that he would appeal to the Supreme Court.

The Rhode Island court noted that Palazzolo took title as sole owner of the property in 1978; some seven years after the state government had adapted an environmental regulation that barred development of oceanfront wetlands. As such, the court declared, the developer had no reasonable expectations that he could build houses on the property. He was therefore entitled to no compensation.

The Supreme Court saw things differently.

Writing for the majority, Justice Anthony Kennedy held that Palazzolo's acquisition of title after the regulations took effect did not negate his takings claim, did not disentitle him to compensation. For if the Rhode Island court's ruling prevailed, the justice argued, "(a) state would be allowed, in effect, to put an expiration date on the takings clause. This ought not be the rule," Kennedy added. "Future generations, too, have a right to challenge unreasonable restrictions on the use and value of land."

The high court did not go so far as to order the state of Rhode Island to pay Palazzolo the $3 million in compensation he sought. Rather, the justices sent his case back to the Ocean State where the courts are to determine the lost economic value of Palazzolo's waterfront property, and whether the sum rises to the level where the state owes the developer a compensatory check.

Of course, environmental activists, who are adept at using environmental laws and regulations to prevent private landowners from developing their property, decried the Palazzolo decision. They fear that these landowners will mount a challenge to environmental and zoning rules, exposing state and local governments to millions of dollars in potential compensation.

That's how it always should have been. For if the public good is served by depriving a private landowner -- like Anthony Palazzolo -- of reasonable use of his or her property, then it should be more than worth it to the government, acting on the public's behalf, to cut said landowner a compensatory check.



JWR contributor Joseph Perkins is a San Diego Union-Tribune columnist and television commentator. Send your comments to him by clicking here.

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