Palazzolo v. Rhode Island, 533 U.S. 606, 29 (2001)

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634

PALAZZOLO v. RHODE ISLAND

O'Connor, J., concurring

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

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