Palazzolo v. Rhode Island, 533 U.S. 606 (2001)

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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 Second, in 1978, SGI's corporate charter was revoked, and title to the property passed to petitioner as the corporation's sole shareholder.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 marshland area. The Council rejected the application, concluding, inter alia, that it would conflict with the CRMP. In 1985, petitioner filed a new application with the Council, seeking permission to fill 11 of the property's 18 wetland acres in order to build a private beach club. The Council rejected this application as well, ruling that the proposal did not satisfy the standards for obtaining a "special exception" to fill salt marsh, whereby the proposed activity must serve a compelling public purpose. Subsequently, petitioner filed an inverse condemnation action in Rhode Island Superior Court, asserting that the State's wetlands regulations, as applied by the Council to his parcel, had taken the property without compensation in violation of the Fifth and Fourteenth Amendments. The suit alleged the Council's action deprived him of "all economically beneficial use" of his property, resulting in a total taking requiring compensation under Lucas v. South Carolina Coastal Council, 505 U. S. 1003, and sought $3,150,000 in damages, a figure derived from an appraiser's estimate as to the value of a 74-lot residential subdivision on the property. The court ruled against

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