No. 99-2047 

In the Supreme Court of the United States 

__________ 

ANTHONY PALAZZOLO, Petitioner, 

v. 
RHODE ISLAND ex rel. PAUL K. TAVARES, AND 

COASTAL RESOURCES MANAGEMENT COUNCIL, 

Respondents. 
___________ 

On Writ Of Certiorari To The 
Supreme Court of Rhode Island 
__________ 

BRIEF AMICUS CURIAE OF THE AMERICAN 
FARM BUREAU FEDERATION AND RHODE 
ISLAND FARM BUREAU IN SUPPORT OF 
PETITIONER 

__________ 

JOHN J. RADEMACHER 
TIMOTHY S. BISHOP 

General Counsel 

Counsel of Record 

American Farm Bureau 
JEFFREY W. SARLES 

Federation STEFFEN N. JOHNSON 
225 Touhy Avenue 

Mayer, Brown & Platt 
Park Ridge, Illinois 60068 
190 South LaSalle Street 

(847) 685-8600 

Chicago, Illinois 60603 

(312) 782-0600 

JOHN J. KUPA 
The Meadows Professional 
Office Building 
1130 Ten Rod Road 
North Kingstown, Rhode Island 02852 
(401) 294-5566 
Counsel for the Amici Curiae 

QUESTIONS PRESENTED 

1. Whether a regulatory taking is categorically barred 
whenever the enactment of the regulation predates the 
claimant’s acquisition of the property. 

2. Where a land-use agency has authoritatively denied a 
particular use of propertyand the owner alleges that such denial 
per se constitutes a regulatory taking, whether the owner must 
file additional applications seeking permission for “less 
ambitious uses” in order to ripen the takings claim. 

3. Whether the remaining permissible uses of regulated 
property are economically viable merely because the property 
retains a value greater than zero. 

ii 

TABLE OF CONTENTS 

Page 

QUESTIONS PRESENTED ........................ i 

INTEREST OF THE AMICI CURIAE ................ 1 

SUMMARY OF ARGUMENT ...................... 2 

ARGUMENT .................................... 3 

I. A FORMAL TRANSFER OF PROPERTY 
BY OPERATION OF LAW DOES NOT 
TRIGGER INQUIRY INTO THE 
REASONABLE EXPECTATIONS OF THE 
TRANSFEREE IN LIGHT OF THE 
REGULATORY REGIME AT THE TIME 
OF THE TRANSFER ....................... 4 

II. PETITIONER’S TAKINGS CLAIM IS RIPE ..... 6 

III. RHODE ISLAND TOOK PETITIONER’S 
PROPERTY BY ERASING SUB- 
STANTIALLY ALL OF ITS VALUE .......... 7 

A. Erasing Substantially All Of A 

Property’s Value Through Regulation 
May Be A Categorical Taking ............ 9 

B. As In Physical Takings Cases, A Partial 

Regulatory Taking Should Result In At 
Least Partial Compensation ............. 13 

C. The Consequences Of The Decision 

Below Are Absurd And Carry Heavy 
Social Costs .......................... 15 

iii 

D. Even If The State’s Taking Was Not 

Categorical, The Severe Economic 
Impact On Mr. Palazzolo Entitles Him 
To Just Compensation .................. 18 

CONCLUSION ................................. 20 

TABLE OF CONTENTS—Continued 

Page 

iv 

TABLE OF AUTHORITIES 

Cases: Page: 

Andrus v. Allard, 444 U.S. 51 (1979) .............. 4, 18 

Armstrong v. United States, 364 U.S. 40 (1960) ........ 18 

Babbitt v. Sweet Home Chapter of Communities 
for a Great Oregon, 515 U.S. 687 (1995) ........... 1 

Bauman v. Ross, 167 U.S. 548, 573 (1897) ............ 14 

City of Monterey v. Del Monte Dunes, Ltd., 
526 U.S. 687 (1999) ....................... passim 

Concrete Pipe & Prods., Inc. v. Construction Laborers 

Pension Trust, 508 U.S. 602 (1993) 

.............. 10 

Del Monte Dunes, Ltd. v. City of Monterey, 95 F.3d 
1422 (9th Cir. 1996) ............................ 8 

Dolan v. City of Tigard, 512 U.S. 374 (1994) ...... 
passim 

Eastern Enters. v. Apfel, 524 U.S. 498 (1998) 
......... 19 

First English Evangelical Lutheran Church v. 

County of Los Angeles, 482 U.S. 304 (1987) ........ 11 

Florida Rock Indus., Inc. v. United States, 18 F.3d 
1560 (Fed. Cir. 1994) .................... 11, 12, 19 

Franklin v. United States, 2000 WL 1665135, 
(Fed. Cir. Nov. 3, 2000) ...................... 5, 13 

Hodel v. Irving, 481 U.S. 704 (1987) ............. 10, 19 

v 

Kaiser Aetna v. United States, 444 U.S. 164 (1979) .... 10, 18 

Keystone Bituminous Coal Ass’n v. DeBenedictis, 
480 U.S. 470 (1987) ........................... 10 

Kirby Forest Indus., Inc. v. United States, 
467 U.S. 1 (1984) ............................. 13 

Loretto v. Teleprompter Manhattan CATV Corp., 
458 U.S. 419 (1982) .......................... 15 

Loveladies Harbor, Inc. v. United States, 
28 F.3d 1171 (Fed. Cir. 1994) ................... 12 

Lucas v. South Carolina Coastal Council, 
505 U.S. 1003 (1992) ...................... passim 

Nollan v. California Coastal Comm’n, 
483 U.S. 825 (1987) ....................... passim 

Palm Beach Isles Assocs. v. United States, 208 F.3d 1374 
(Fed. Cir. 2000), modified on panel rhg., sub nom. 
Franklin v. United States, 2000 WL 1665135 (Fed. Cir. 
Nov. 3, 2000) ................................. 5 

Penn Central Transp. Corp. v. New York City, 
438 U.S. 104 (1978) ......................... 4, 17 

Pennell v. City of San Jose, 485 U.S. 1 (1988) ......... 10 

Pennsylvania Coal Co. v. Mahon, 
260 U.S. 393 (1922) ........................ 11,19 

TABLE OF AUTHORITIES—Continued 

Page 

vi 

Pumpelly v. Green Bay & Miss. Canal Co., 80 U.S. 
(13 Wall.) 166 (1872) .......................... 13 

San Diego Gas & Elec. Co. v. City of San Diego, 
450 U.S. 621 (1981) ........................... 14 

Solid Waste Agency of Northern Cook County v. 

United States Army Corps of Engineers, No. 99-1178 
... 1 

TABLE OF AUTHORITIES—Continued 

Page 

Suitum v. Tahoe Regional Planning Agency, 
520 U.S. 725 (1997) ....................... 1, 7, 10 

United States v. Causby, 328 U.S. 256 (1946) 
......... 15 

United States v. General Motors Corp., 323 U.S. 373 
(1945) ...................................... 12 

United States v. Pewee Coal Co., 341 U.S. 114 (1951) 
.... 13 

United States v. Security Indus. Bank, 459 U.S. 70 
(1982) ...................................... 17 

Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 
449 U.S. 155 (1980) ........................... 18 

Williamson County Reg’l Planning Comm’n v. 

Hamilton Bank, 473 U.S. 172 (1985) .............. 10 

Yancey v. United States, 915 F.2d 1534 (Fed. Cir. 1990) ... 19 

vii 

TABLE OF AUTHORITIES—Continued 

Page 

Miscellaneous: 

FEDERALIST NO. 10 (C. Rossiter ed. 1961) ............. 8 

FEDERALIST NO. 54 (C. Rossiter ed. 1961) ............. 9 

J. LEWIS, A TREATISE ON THE LAW OF EMINENT 

DOMAIN § 55 (1888) .......................... 12 

McConnell, Contract Rights and Property Rights, 
76 CAL. L. REV. 267 (1988) ...................... 8 

J. NEDELSKY, PRIVATE PROPERTY AND THE 

LIMITS OF AMERICAN CONSTITUTIONALISM (1990) ..... 8 

Rose, Mahon Reconstructed: Why the Takings Issue 
is Still a Muddle, 57 S. CAL. L. REV. 561 (1984) ...... 17 

INTEREST OF THE AMICI CURIAE1 

The American Farm Bureau Federation (“AFBF”) was 
established in 1920 to protect, promote, and represent the 
business, economic, social, and educational interests of American 
farmers and ranchers. AFBF has member organizations in all 50 
states and Puerto Rico, representing more than 4.9 million member 
families. AFBF’s farmer and rancher members own or lease 
significant amounts of land, on which they depend for their 
livelihoods and on which all Americans depend for high quality, 
affordable food and other basic necessities. Because that land is 
subject to increasingly onerous regulation from all levels of 
government—such as the state wetlands regulation at issue in this 
case—AFBF and its members are vitally interested in the legal 
rules establishing the availability of compensation under the 
Takings Clause when regulation goes too far. Accordingly, AFBF 
has participated as an amicus in this Court in support of 
landowners in takings cases such as Lucas v. South Carolina 
Coastal Council, 505 U.S. 1003 (1992), Dolan v. City of Tigard, 
512 U.S. 374 (1994), Suitum v. Tahoe Regional Planning Agency, 
520 U.S. 725 (1997), and City of Monterey v. Del Monte Dunes, 
Ltd., 526 U.S. 687 (1999), as well as in cases concerning the 
permissible scope of federal land use regulation such as Babbitt v. 
Sweet Home Chapter of Communities for a Great Oregon, 515 
U.S. 687 (1995), and Solid Waste Agency of Northern Cook 
County v. United States Army Corps of Engineers, No. 99-1178. 

The Rhode Island Farm Bureau (“RIFB”) is a voluntary, non- 
profit organization with 2800 members which advocates for those 
involved in Rhode Island agriculture and rural living. It is the 
policy of RIFB, adopted by vote of its members, “to protect the 
right of private owners in questions concerning the use of private 

1 This brief was not written in whole or in part by any party and no 
one other than the amici made a monetary contribution to its 
preparation. The written consents of the parties to the filing of this 
brief have been filed with the clerk. 

2 

property for the public good. That right shall be a just 
compensation for use taken.” 

Because the land of many of Rhode Island’s commercial 
farmers abuts Narragansett Bay, Rhode Island Sound, or the tidal 
Sakonnet River, farmers generally must obtain a permit from 
respondent Coastal Resource Management Council (“CRMC”) 
before they can make full use of their land. RIFB has been active 
in attempting to constrain CRMC’s powers through legislation and 
in seeking to protect Rhode Island’s farm community by 
advocating state takings legislation—ultimately without success. 
As the opportunity to make a moderate living from agriculture is 
diminishing, farmers need the protection of the Fifth Amendment 
and the federal courts if they are to find economically feasible 
ways to use their land and remain in the agricultural business. 

SUMMARY OF ARGUMENT 

This case presents three issues of great importance to AFBF, 
RIFB, and their members. First, farmers and ranchers are 
threatened by formalistic rules that measure “investment backed 
expectations” as at the time of a transfer of property that occurs by 
operation of law—here, the 1978 transfer from petitioner Anthony 
Palazzolo’s single-shareholder corporation to Palazzolo in his 
personal capacity when Rhode Island revoked his corporation’s 
charter—or that otherwise do not occur as the result of an arms- 
length sale. Farm and ranch properties often are owned and 
worked by the same family for generations—facilitated by 
transfers among individuals, family corporations, and family 
partnerships. Those sorts of bequests and formal transfers—still 
less involuntary transfers by operation of law like that involved 
here—should have no substantive effect at all on determining a 
landowner’s reasonable investment backed expectations. 

Second, ripeness rules that require landowners to return 
repeatedly to regulating agencies with more and more limited and 

3 

less and less economically viable plans encourage gamesmanship 
on the part of regulators aware that they can delay or avoid a 
takings claim by dragging out the administrative process in this 
way. See City of Monterey, 526 U.S. 687. Such rules especially 
threaten the rights of farmers and ranchers, who generally lack the 
financial resources to engage in extended administrative 
proceedings. 

In this brief, however, AFBF and RIFB focus primarily on a 
third issue of tremendous importance to America’s farmers and 
ranchers—whether the mere fact that land retains some relatively 
small value and use after regulation is imposed prevents the 
occurrence of a compensable taking as a matter of law. If the Just 
Compensation Clause is not to be gutted of virtually all practical 
meaning—and if government regulators are to be restrained at all 
by that Clause—the answer to that question must be “no.” On any 
plausible theory of takings, the destruction of almost all the value 
and use of land is compensable even though some minimal value 
and use remains. Otherwise regulators will be free to take property 
from individuals to benefit the public at large, free of any 
obligation to compensate, by the simple expedient of leaving de 
minimis value and use for the land or even—as in this case—for 
just a small and distinct segment of the land. If petitioner’s land 
has not been taken, merely because a small part of it supposedly 
retains some economic use, no farmer or rancher is safe from 
huge, uncompensated regulatory burdens in the name of the public 
good. That is not what the Framers of the Bill of Rights 
contemplated. 

ARGUMENT 

Before focusing on the third question presented by the 
petition—whether a taking may occur where regulation leaves 
some relatively small value and use in the property—amici very 
briefly address why this Court should reach that issue. Neither of 
the Rhode Island Supreme Court’s other grounds for rejecting 

4 

petitioner’s takings claim—grounds that are the subject of the first 
two questions presented—withstands scrutiny. 

I. A FORMAL TRANSFER OF PROPERTY BY OPER- 
ATION OF LAW DOES NOT TRIGGER INQUIRY 
INTO THE REASONABLE EXPECTATIONS OF THE 
TRANSFEREE IN LIGHT OF THE REGULATORY 
REGIME AT THE TIME OF THE TRANSFER. 

The Rhode Island Supreme Court erred in attributing constitu- 
tional importance to the timing of a formalistic, involuntary 1978 
transfer of the property in question from petitioner’s single- 
shareholder corporation to petitioner in his individual capacity. 

Petitioner had owned the property in some capacity ever since 
1959 and 1960, acquiring another small part of it in 1969. All that 
happened in 1978 was that the State revoked the charter of 
petitioner’s single-shareholder corporation, which had previously 
held title. As the State admits, this revocation had the effect of 
“devol[ving] title by operation-of-law to Mr. Palazzolo” individu- 
ally. Br. in Opp. 3. Treating the date of such a formalistic, 
involuntary transfer as the appropriate time to determine what 
limitations “inhere in the title” to land as a result of “background 
principles of the State’s law of property and nuisance” under 
Lucas, 505 U.S. at 1029, or to determine a landowner’s reasonable 
investment-backed expectations under Penn Central Transp. Corp. 

v. New York City, 438 U.S. 104, 124 (1978), is inconsistent with 
the fairness considerations that inform the Takings Clause. See 
Andrus v. Allard, 444 U.S. 51, 65-66 (1979) (the Takings Clause 
subjects governmental regulation “to the dictates of ‘justice and 
fairness’”). 

5 

Even assuming that the existence of a mere regulatory scheme 
is relevant to determining whether a taking has occurred2—and 
amici agree with the Federal Circuit that “[t]he existence of a 
regulatory regime does not per se preclude all investment-backed 
expectations for development” (Franklin v. United States, 2000 
WL 1665135, at *11 (Fed. Cir. Nov. 3, 2000) (emphasis 
added))—the compensatory purpose of the Takings Clause may 
not be evaded by treating formal, insubstantial transfers as 
triggering an inquiry into the regulatory scheme in place at the 
time of the transfer. 

To the contrary, the economic rationale behind looking at the 
regulatory scheme in place at the time an owner acquires land in 
order to determine the owner’s reasonable investment-backed 
expectations is the assumption that the owner discounted the price 
he or she paid for the property to take account of regulatory 
restrictions on use.3 When the transfer has occurred not as the 

2 A regulatory permitting scheme that envisages agency 
decisionmaking particular to a parcel of land—such as Clean Water 
Act Section 404 permitting or Endangered Species Act “incidental 
take” permitting related to proposed habitat modification— is 
different in kind from a legal limitation on title that runs with the 
property, such as a negative easement or navigational servitude (see 
Palm Beach Isles Assocs. v. United States, 208 F.3d 1374, 1385 (Fed. 
Cir. 2000)), and from limitations on use that flow from state nuisance 
law. This court has n ever held that a mere permitting scheme—a 
scheme that assumes a permit may be granted—operates as a 
restriction on title or is analogous to a nuisance prohibition. 

3 It follows that when a rational purchaser would not discount the 
price paid, or wou ld discount only minimally, because a regulatory 
scheme usually does not interfere with productive use of the 
land— for exam ple, the U .S. Arm y Corps of Engin eers claims that it 
permits landowners to fill wetlands on their property in more than 
85% of all cases governed by Section 404—that regulatory scheme 

6 

result of an arms-length sale but as the result of an involuntary 
transfer by operation of law—or as the result of a bequest to heirs 
or an inter-vivos intra-family transfer driven by estate tax or 
operational considerations—it is especially clear that “the prior 
owners must be understood to have transferred their full property 
rights in conveying the” property. Nollan v. California Coastal 
Comm’n, 483 U.S. 825, 834 n.2 (1987). Because petitioner’s 
single-shareholder corporation acquired the property in issue 40 
years ago, before his wetlands were regulated either by Rhode 
Island or by the federal government, wetlands regulatory schemes 
are simply irrelevant to determining the scope of petitioner’s 
property interest or investment-backed expectations. 

II. PETITIONER’S TAKINGS CLAIM IS RIPE. 

Petitioner applied to the state no fewer than four times to fill the 
wetlands on his property over the course of two decades. CRMC 
and its predecessors denied each permit—taking five years to do 
so in one instance. Pet. App. A-4. In those circumstances, where 
filling the wetlands is the necessary precondition for any economic 
use of petitioner’s property and when permission to fill them has 
repeatedly been denied in a series of “final decisions,” petitioner 
need do no more to ripen his federal takings claim. See City of 
Monterey, 526 U.S. at 698 (no question takings claim was ripe 
where municipality put a developer through “five years, five 
formal [plan rejections], and 19 different site plans”); Cooley v. 
United States, 46 Fed. Cl. 538, 540 (2000) (takings claim ripe 
where U.S. Army Corps had once denied landowner a Section 404 
fill permit, and was not “unripened” by Corps’ demands that 
plaintiff submit a renewed application seeking less fill). Amici 
agree with the Court of Federal Claims that “[f]rom the moment 
[a] denial [is] signed, the right to compensation vest[s].” Cooley, 

should have no relevance at all to determining the purchaser’s 
reasonable investment-backed exp ectations. 

7 

46 Fed. Cl. at 548-549. But even if reapplication is required, 
petitioner more than satisfied that requirement here. 

Any doubt about the ripeness of petitioner’s takings claim is in 
any event conclusively resolved by his unrebutted testimony, as 
found by the trial court, that “CRMC informed him that any 
proposal involving the filling of wetlands would be denied.” Pet. 
App. B-5. See Suitum, 520 U.S. at 739 (claim is ripe where “there 
[is] no question * * * about how the regulations at issue apply to 
the particular land in question”). 

III. RHODE ISLAND TOOK PETITIONER’S PROP- 
ERTY BY ERASING SUBSTANTIALLY ALL OF 
ITS VALUE. 

The Rhode Island Supreme Court’s ruling that Mr. Palazzolo 
retains “beneficial use” of his property is refuted by its own 
opinion. His property consists of 18 acres of wetlands and “no 
more than a few additional upland acres.” Pet. App. A-3 n.1. The 
CRMC precluded him from filling the 18 acres of wetlands, 
effectively conscripting the bulk of his property to serve as “a 
refuge and feeding ground for fish, shellfish, and birds” and as a 
“buffer for flooding.” Pet. App. A-3. As a result, petitioner must 
leave most of his land in an undeveloped state and forgo the 
opportunityto build the 74 single-familyhomes for which the land 
is subdivided—or, indeed, to make any other productive use of his 
wetland acres. Nevertheless, based on estimates that the uplands 
piece would be worth $200,000 if developed and that Mr. Palazzo- 
lo can obtain another $157,500 by donating the wetlands “as an 
open space gift,” the court below held that his land retains enough 
value to prevent the CRMC’s action from being a categorical 
taking. 

As an initial matter, the record is less than clear as to how much 
value, if any, remains in Mr. Palazzolo’s land. The purported 
$200,000 figure represents the value of one single-family house 

8 

that the CRMC concluded could be built on the upland portion of 
Mr. Palazzolo’s land. Pet. 14; Br. in Opp. 19. That figure does not 
appear to account for any of the costs that petitioner would have 
to incur to develop the upland segment, and the decision below 
does not explain how building and marketing a single-family 
house surrounded by 18 acres of marshes and swamps would be 
economicallyfeasible. Moreover, the nominal amount that may be 
available for donated land bears no relation to the land’s commer- 
cial value. See Del Monte Dunes, Ltd. v. City of Monterey, 95 F.3d 
1422, 1432 (9th Cir. 1996) (jury could properly conclude that 
City’s permit denial left property owner without “an economically 
viable use” despite sale of property to the State of California for 
$800,000), aff’d, 526 U.S. 687 (1999). 

In any event, even the figures used by the court below show 
that Rhode Island has taken “substantially all” of the value of Mr. 
Palazzolo’s land. If his land retains $357,000 in total value, he 
suffered an 89 percent diminution in value from the $3.15 million 
that he would have reaped from the planned development of his 
property. The Takings Clause was intended to protect individual 
owners of private property from bearing such a heavy impact from 
government actions directed to the general public good. That is 
why it does not say: “Nor shall private property be taken for public 
use, without just compensation, unless the property retains some 
value.” And the italicized phrase cannot reasonably be read into 
the Clause consistent with the Framers’ intentions. 

“[P]rotection of private property was a nearly unanimous 
intention among the founding generation.” McConnell, Contract 
Rights and Property Rights, 76 CAL. L. REV. 267, 270 (1988). The 
Framers viewed the protection of property rights, and particularly 
rights in land, as “the first object of government.” FEDERALIST NO. 
10, at 78 (Madison) (C. Rossiter ed. 1961). That conviction rested 
on the Framers’ understanding that private property constitutes 
“the clear, compelling, even defining, instance of the limits that 
private rights place on legitimate government.” J. NEDELSKY, 

9 

PRIVATE PROPERTY AND THE LIMITS OF AMERICAN 
CONSTITUTIONALISM 9 (1990). Indeed, they understood govern- 
ment to be “instituted no less for protection of the property than of 
the persons of individuals.” FEDERALIST NO. 54, supra, at 339 
(Madison). Hence, the Takings Clause, a bulwark against arbitrary 
rule that fosters respect for individuals and their right to use and 
reap the benefits of their property, is fundamental to our constitu- 
tional order. As this Court has emphasized, there is “no reason 
why the Takings Clause of the Fifth Amendment, as much a part 
of the Bill of Rights as the First Amendment or Fourth Amend- 
ment, should be relegated to the status of a poor relation.” Dolan 

v. City of Tigard, 512 U.S. 374, 392 (1994). 

The decision below takes the heart out of the Takings Clause. 
It allows the government to transform private land into a wildlife 
refuge by decree, and, even worse, to avoid compensating the 
landowner simply by leaving him a smidgeon of property to 
develop. That distortion of the Takings Clause, and of this Court’s 
takings cases, is an invitation to gamesmanship on the part of 
regulators and completely at odds with the constitutional guaran- 
tees of liberty and fairness on which our polity rests. 

A. Erasing Substantially All Of A Property’s Value 

Through Regulation May Be A Categorical Taking. 

The standard applied by the Rhode Island Supreme Court, 
requiring that a challenged regulation leave the subject property 
with no value whatsoever to be a candidate for a categorical 
taking, represents an extremist and unjustifiable reading of this 
Court’s precedents. In particular, the court below misread Lucas 

v. South Carolina Coastal Council, 505 U.S. 1003 (1992). In 
Lucas, this Court recognized that a regulation that deprives land of 
“all economically beneficial or productive use” may effect a 
categorical taking. The court below focused solely on the words 
all and use, ignoring this Court’s clear command that compensa- 
tion be paid unless the regulated property retains economically 

10 

beneficial or productive use. This Court has never required 
deprivation of “all use” or “all value” for a categorical takings 
claim, instead using such formulations as “economically viable 
use,”4 “economicallyfeasible use,”5 and “economicallybeneficial 
use.”6 By failing to give effect or meaning to the modifiers this 
Court has attached to “use,” the decision below deviated from this 
Court’s categorical taking standard and from the mandate of the 
Takings Clause. 

Those modifiers counsel a practical approach to measuring the 
deprivation of a property’s economic value. The holding 
below—that a categorical taking is always precluded unless all 
value is removed from every square inch of land—cannot be 
reconciled with this Court’s insistence that the categorical takings 
test comport with economic reality. Such a practical approach is 
reflected in Lucas, where this Court recognized that “requiring 
land to be left substantially in its natural state” may deprive the 
land of “all economicallybeneficial or productive use” and thus be 
a categorical taking. 505 U.S. at 1015 (emphasis added). See also 
Kaiser Aetna v. United States, 444 U.S. 164, 180 (1979) (compen- 
sation is appropriate where the impact of regulation is more than 
“an insubstantial devaluation of petitioners’ private property”). 
This emphasis on substantiality reflects this Court’s practical 
perspective and refusal to elevate form over substance when 

4 E.g., Del Monte Dunes, 526 U.S. at 720; Suitum, 520 U.S. at 736 

n.10; Dolan, 512 U .S. at 38 5; Pennell v. City of San Jose, 485 U.S. 
1, 18 (19 88); Nollan, 483 U .S. at 83 4; Keystone Bituminous Coal 
Ass’n v. DeBenedictis, 480 U.S. 470, 4 95 (1987). 

5 E.g., Lucas, 505 U.S. at 1016 n.7; Williamson County Reg’l 
Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 1 91 (1985). 

6 E.g, Dolan, 512 U.S. at 385 n.6; Concrete Pipe & Prods., Inc. v. 
Construction Laborers Pension Trust, 508 U.S. 602, 643 (1993); 
Lucas, 505 U.S. at 1 016; Hodel v. Indiana, 452 U.S. 314, 335 (19 81). 

11 

analyzing the economic impact of governmental regulations. See, 

e.g., First English Evangelical Lutheran Church v. County of Los 
Angeles, 482 U.S. 304, 318 (1987) (denying that temporary 
takings are “different in kind” from permanent takings). 

As Justice Holmes noted in Pennsylvania Coal Co. v. Mahon, 
260 U.S. 393, 414 (1922), when a regulation has so diminished a 
property right as to render its exercise “commercially impractica- 
ble,” the limitation “has very nearly the same effect for constitu- 
tional purposes as appropriating or destroying it.” Accordingly, an 
inquiry into whether purported uses are commercially practicable 
and purported value realistically attainable is antecedent to any 
determination that regulated land retains value. If they are not 
practicably attainable, a categorical bar to a categorical taking 
claim is unwarranted. See Florida Rock Indus., Inc. v. United 
States, 18 F.3d 1560, 1571 (Fed. Cir. 1994) (“alternative permitted 
activities” must be “economically realistic” and “realistically 
available”). This approach, amici believe, also would address the 
understandable concern expressed by Justice Stevens in Lucas 
about the risk of arbitrariness where “[a] landowner whose 
property is diminished in value 95% recovers nothing, while an 
owner whose property is diminished 100% recovers the land’s full 
value.” 505 U.S. at 1064 (Stevens, J., dissenting). 

The standard applied by the court below is hard-wired to 
automatically reject any claim that a property regulation is a 
categorical taking. A court can always find some conceivable use 
of property. In Lucas, Justice Blackmun in dissent described the 
majority’s conclusion that Lucas’ property had lost all economic 
value as “almost certainly erroneous” because Lucas could still 
“enjoy other attributes of ownership, such as the right to exclude 
others” or “to alienate the land,” and he could continue to “picnic, 
swim, camp in a tent, or live on the property in a moveable 
trailer.” 505 U.S. at 1043-1044. But the Court did not adopt Justice 
Blackmun’s suggestion that such de minimis or speculative uses 
are sufficient to defeat a categorical takings claim. Here, even if 

12 

Mr. Palazzolo can build and sell a house or erect an observation 
booth that attracts nature lovers, these are not reasonable economic 
uses of the 20 acre-plus parcel. At best, they create de minimis 
value that bears no comparison to the real commercial value of the 
land. See Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 
1181-1182 (Fed. Cir. 1994) (where permit denial left relevant 
parcel with only “de minimis” value, there was “a total taking”). 

The court below failed to recognize that leaving Mr. Palazzolo 
with “ownership” of land with little or no right to use it destroys 
his property interest. Ownership of property is a “bundle of rights” 
(Dolan, 512 U.S. at 393) that includes “the right to possess, use 
and dispose of it.” United States v. General Motors Corp., 323 
U.S. 373, 377-378 (1945); see also J. LEWIS, A TREATISE ON THE 

LAW OF EMINENT DOMAIN § 55, at 43 (1888) (“The dullest 
individual among the people knows and understands that his 
property in anything is a bundle of rights,” including “the right to 
use a thing in this way or that”). The Rhode Island Supreme 
Courts’ decision treats the abrogation of one stick in that bun- 
dle—petitioner’s choice as to how to use his land—as 
noncompensable. But the right to make “productive improve- 
ments” is an “essential use” of land. Lucas, 505 U.S. at 1031; see 
also Nollan, 483 U.S. at 833 n.2 (recognizing that “the right to 
build on one’s own property” is part of the property right). And 
abrogation of the use stick destroys, in economic terms, the entire 
bundle. By rendering Mr. Palazzolo’s property economically 
useless, the CRMC has destroyed the essence of his property 
rights. 

Based on the above principles, the CRMC has categorically 
taken Mr. Palazzolo’s land by preventing him from using all but 
a small and distinct piece of it and from using any of it in a viable 
economic sense. This case is the one forecast in Lucas: Rhode 
Island’s regulation of Mr. Palazzolo’s land unquestionably 
requires it “to be left substantially in its natural state.” 505 U.S. at 
1015. This Court should extinguish any lingering doubts about the 

13 

requirements for a categorical regulatory taking by, at a minimum, 
making clear that courts must engage in a realistic analysis of 
whether the government has effectively deprived an owner of 
economically beneficial and productive use of his property. 

B. As In Physical Takings Cases, A Partial Regulatory 

Taking Should Result In At Least Partial Compensa- 
tion. 

Based on the impact to the property owner, condemnation is 
condemnation whether it is traditional or inverse. If the CRMC 
had physically invaded Mr. Palazzolo’s land, the taking would be 
clear and categorical. See, e.g., United States v. Pewee Coal Co., 
341 U.S. 114 (1951). The result should be no different where the 
invasion is regulatory rather than physical. As this Court has 
“frequently recognized,” a “radical curtailment of a landowner's 
freedom to make use of or ability to derive income from his land 
may give rise to a taking within the meaning of the Fifth Amend- 
ment, even if the Government has not physicallyintruded upon the 
premises or acquired a legal interest in the property.” Kirby Forest 
Indus., Inc. v. United States, 467 U.S. 1, 14 (1984). 

Ever since Pumpelly v. Green Bay & Miss. Canal Co., 80 U.S. 
(13 Wall.) 166, 177-178 (1872), this Court has instructed that the 
government need not physically appropriate property to effect a 
taking so long as the practical effect is to deny the owner use of 
the property. Thus, regulatory impositions, if sufficiently severe, 
are the “equivalent of a physical appropriation” and may categori- 
cally warrant just compensation. Lucas, 505 U.S. at 1017; see also 
Franklin v. United States, 2000 WL 1665135, at *9 (Fed. Cir. 
Nov. 3, 2000) (regulations may have “the same effect as a physical 
seizure and occupation of public purposes—leaving the owner 
with essentially no viable economic uses whatever and no rights 
except bare legal title”). As Justice Brennan explained, it makes 
little difference to the property owner “whether his land is 
condemned or flooded, or whether it is restricted by regulation to 

14 

use in its natural state, if the effect in both cases is to deprive him 
of all beneficial use of it.” San Diego Gas & Elec. Co. v. City of 
San Diego, 450 U.S. 621, 652 (1981) (Brennan, J., dissenting). 

Thus, even though the CRMC would have been obliged to 
compensate Mr. Palazzolo if it had formally condemned his 
property, and even though to all intents and purposes it has 
condemned 18 acres of Mr. Palazzolo’s land for use as a wildlife 
refuge, the Rhode Island Supreme Court says he gets no compen- 
sation. Yet his land is little or no more valuable to him now than 
if it had been condemned outright. Rhode Island should not be 
able to circumvent its obligation to pay just compensation by 
relying on wetlands instead of condemnation statutes. 

The fact that the agency left Mr. Palazzolo with a dry spot on 
which to build a solitary house should not alter the legal analysis. 
In a formal condemnation, the government could not avoid paying 
compensation by seizing all of a house except the bathroom. The 
law should be no different when the government seizes most of an 
owner’s land by regulation. The lack of any requirement in the 
Fifth Amendment that the government eradicatethe owner’s entire 
property interest before paying compensation was not an over- 
sight. Everyone at the time, including the Framers, knew that if the 
government were to take a portion of Mt. Vernon to build a 
military barracks, George Washington would be entitled to 
compensation for the value of the portion taken. See Bauman v. 
Ross, 167 U.S. 548, 573, 575-582 (1897) (discussing states’ 
historical practice of providing compensation “for taking part of 
a parcel of land” by eminent domain). The result should not differ 
simply because the governmental purpose is protecting wildlife 
and the government wields its regulatory rather than formal 
condemnation power. 

Traditional property concepts illuminate the substance of the 
governmental encroachment here. By refusing to permit Mr. 
Palazzolo to make any reasonable economic use of his property, 

15 

the CRMC has effectively imposed a negative easement on it. See 
Dolan, 512 U.S. at 394 (requirement to dedicate public greenway 
space amounted to “a permanent recreational easement”); Lucas, 
505 U.S. at 1019 (recognizing “the practical equivalence [of] 
negative regulation and appropriation”); Nollan, 483 U.S. at 831 
(if government “wants an easement across the Nollans’ property, 
it must pay for it”). The Takings Clause compels Rhode Island to 
fully compensate Mr. Palazzolo for that negative easement. If a 
one-half-inch cable across a property owner’s roof is a compensa- 
ble taking (Loretto v. Teleprompter Manhattan CATV Corp., 458 
U.S. 419, 438 (1982)), and the same is true of a narrow public 
easement across beachfront property(Nollan, 483 U.S. at 841) and 
of government flights over chicken farms (United States v. 
Causby, 328 U.S. 256, 261-262 (1946)), denying compensation 
where regulation has rendered land almost completely useless for 
all practical purposes defies both common sense and basic justice. 

C. The Consequences Of The Decision Below Are Ab- 
surd And Carry Heavy Social Costs. 

The absolutist position of the Rhode Island Supreme Court 
would lead to absurd results. Lucas provides a ready illustration. 
This Court held that South Carolina’s refusal to allow Mr. Lucas 
to build single-family homes deprived his beachfront property of 
all economic value and categorically effected a taking. But what 
if the government had left him free to place a souvenir stand on a 
tiny corner of his land? Based on the Rhode Island Supreme 
Court’s decision in this case, Mr. Lucas’ property would have 
retained some economic value and he would not have suffered a 
categorical taking. That cannot be right. If the Lucas decision 
hinged on whether he could set up a souvenir stand, government 
agencies could too easily circumvent the compensation require- 
ment by leaving a small spot on a targeted property free from 
otherwise confiscatory regulation. 

16 

Or suppose that Smith owns 10 acres of land adjacent to Jones’ 
11 acres, and that a state agency requires 20 acres of wetlands (10 
each from Smith and Jones) to remain undeveloped because it 
provides habitat for wildlife and includes wetlands. Smith and 
Jones each have had 10 acres of land rendered worthless. But if the 
Rhode Island Supreme Court is right, the agency categorically 
took Smith’s 10 acres but not Jones’ 10 acres. That cannot be the 
law if compensation is to be “just,” as the Constitution requires. 

The unfairness of the decision below is compounded by the 
strategic gamesmanshipthat it is certain to engender, which would 
harm not only individual landowners like Mr. Palazzolo but the 
public as a whole. This Court in Lucas recognized that permit 
denials of the type at issue are often based on hidden agendas and 
not the public good, noting that regulations “requiring land to be 
left substantially in its natural state [suggest] that private property 
is being pressed into some form of public service under the guise 
of mitigating serious public harm.” 505 U.S. at 1018. A rule that 
allows government to regulate almost all the value out of an 
owner’s land without paying compensation is bound to encourage 
strategicbehavior and regulatory overreaching. A city could obtain 
parks for free under that approach simply by leaving burdened 
owners with tiny remnants of their land. Or an agency seeking to 
transform private residentially zoned land into a wildlife refuge, 
but unable to obtain voter approval for the large expenditure 
required to purchase or formally condemn the land, could accom- 
plish its purpose by regulatory fiat, avoiding compensation by 
leaving the owner with control over a fragment. If an agency were 
free to ride roughshod over the will of the voting public in such 
fashion, the Takings Clause would be rendered toothless and 
democracy meaningless. 

Such a regime also would enable government bureaucrats to 
curry favor among propertyowners by disproportionately directing 
the impact of regulations to less favored sectors of the citizenry 
without incurring the costs mandated by the Constitution. Govern- 

17 

ments could reward favored voters by providing amenities without 
raising taxes, simply by targeting land use regulations to portions 
of the properties of less favored landowners. “[A]djusting the 
benefits and burdens of economic life” is one thing (Penn Central 
Transp. Co. v. New York City, 438 U.S. 104, 124 (1978)), but 
seizing from one and bestowing on another is something else 
again. See United States v. Security Indus. Bank, 459 U.S. 70, 78 
(1982) (Takings Clause protects against “a general economic 
regulation which in effect transfers the property interest from a 
private [party] to a private [party]”). In this case, the decision of 
the Rhode Island courts that Mr. Palazzolo’s right to compensation 
is defeated by the presence of a supposedly developable dry spot 
on his land exemplifies the risk of reckless regulation inherent in 
its approach. 

The holding below, that only 100 percent devaluations can be 
categorical takings, also would encourage property owners to 
engage in costly and unproductive transactional ploys. For 
example, if Mr. Palazzolo had sold off the uplands on his property 
to a confederate—or had bought the upland and wetland parcels 
separately, with ownership held in separatecorporate vehicles—he 
would presumably have been eligible, if the Rhode Island 
Supreme Court is right, to prosecute a categorical taking claim. 
Such transactional maneuvering would be socially costly as well 
as individually unjust. See Rose, Mahon Reconstructed: Why the 
Takings Issue is Still a Muddle, 57 S. CAL. L. REV. 561, 568 
(1984) (warning that misapplication of the Takings Clause “may 
cause owners to make elaborate and socially useless splits of their 
property rights”). The Framers did not intend, when they gave 
constitutional protection to the ownership of property, to encour- 
age games subject to manipulation by the government or property 
owners. 

To the contrary, the Takings Clause was intended both to guard 
against unfair and discriminatory conduct and to discourage 
governments from treating private property as a free good and 

18 

thereby wasting resources. If Rhode Island knows it must pay for 
the land it covets for wildlife and flood control, it will have to fully 
account for its own resources and those of all its citizens and 
property owners. Such accountable decisionmaking, in addition to 
its more general benefits, would comport with the Constitution. 

The Takings Clause, after all, subjects governmental regulation 
“to the dictates of ‘justice and fairness.’” Andrus v. Allard, 444 
U.S. 51, 65-66 (1979). However much the government may desire 
to leave Mr. Palazzolo’s land wet and undeveloped, there are 
“outer limits” to how “laudable” goals may be achieved. Dolan, 
512 U.S. at 396. Even “a strong public desire to improve the 
public condition is not enough to warrant achieving the desire by 
a shorter cut than the constitutional way of paying for the change.” 
Pennsylvania Coal, 260 U.S. at 415-416; see also Kaiser Aetna, 
444 U.S. at 180 (government’s plan to make private pond into 
“public aquatic park” required just compensation to pond owner). 
In this case, forcing Mr. Palazzolo to forfeit all or almost all the 
value of his property to benefit the environment would unconstitu- 
tionally force him “alone to bear public burdens which, in all 
fairness and justice, should be borne by the public as a whole.” 
Armstrong v. United States, 364 U.S. 40, 49 (1960). Reversing the 
decision below will permit the Takings Clause to continue to 
“stand as a shield against the arbitrary use of governmental 
power.” Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 
155, 164 (1980). 

D. Even If The State’s Taking Was Not Categorical, The 

Severe Economic Impact On Mr. Palazzolo Entitles 
Him To Just Compensation. 

Based on its faulty “reasonable expectations” ruling (see supra 
Part I), the Rhode Island Supreme Court never analyzed the 
economic impact on Mr. Palazzolo of the CRMC’s permit denial. 
But even if the record were sufficient to establish that Mr. 
Palazzolo’s land retains enough value to preclude a categorical 

19 

taking, the government’s action sufficiently diminished its value 
to constitute a taking under this court’s ad hoc approach to takings 
analysis, in which economic impact is a critical factor. See, e.g., 
Eastern Enters. v. Apfel, 524 U.S. 498, 523 (1998). 

The economic impact on Mr. Palazzolo from being forced to 
leave almost all of his land undeveloped is, by any token, signifi- 
cant. Before the permit denial, he expected to earn $3,150,000 in 
profits from developing his long-subdivided land. After the denial, 
he can obtain (at most, based on the speculative opinion below) 
$357,000. That loss of at least $2.79 million—some 89% of his 
projected return—represents an economic impact more than 
sufficient to trigger the just compensation requirement.See Dolan, 
512 U.S. at 380 (city’s forced dedication of 10 per cent of peti- 
tioner’s land for public recreational use was a taking); Hodel v. 
Irving, 481 U.S. 704, 714 (1987) (taking of property interests 
worth less than $2000 may have “substantial” economic impact 
because “[t]hese are not trivial sums”); Florida Rock, 18 F.3d at 
1567-1569 (60% reduction in value of land was enough for a 
taking); Yancey v. United States, 915 F.2d 1534, 1543 (Fed. Cir. 
1990) (77% diminution in value). 

And even if the proper measure of economic impact would 
compare any residual value of his land to its fair market value if 
filled and awaiting development, the economic impact still would 
plainly be very substantial, although determining the precise 
amount would require further proceedings below. 

Mr. Palazzolo has been trying to develop his property for over 
40 years, and he filed this case well over 12 years ago. The slow 
pace of takings cases, generally to the advantage of (if not caused 
by) the government defendants, unduly obstructs the prosecution 
of many valid claims. The authors of the Takings Clause certainly 
did not intend the denial of justice by delay, and amici submit that 
this case presents an appropriate opportunityfor this Court to draw 
attention to this widespread problem. Mr. Palazzolo, unlike Mr. 

20 

Carstone in the Jarndyce case, should obtain any just compensa- 
tion to which he is entitled in this lifetime, not “through disposi- 
tion by the Lord.” Scales v. United States, 360 U.S. 924, 926 
(1959) (Jackson, J.). 

CONCLUSION 

For the foregoing reasons, the judgment of the Rhode Island 
Supreme Court should be reversed. 

Respectfully submitted. 

JOHN J. RADEMACHER 
TIMOTHY S. BISHOP 

General Counsel 

Counsel of Record 

American Farm Bureau 
JEFFREY W. SARLES 

Federation STEFFEN N. JOHNSON 
225 Touhy Avenue 

Mayer, Brown & Platt 
Park Ridge, Illinois 60068 
190 South LaSalle Street 

(847) 685-8600 

Chicago, Illinois 60603 

(312) 782-0600 

JOHN J. KUPA 
The Meadows Professional 

Office Building 
1130 Ten Rod Road 
North Kingstown, 
Rhode Island 02852 
(401) 294-5566 

Counsel for the Amici Curiae 

NOVEMBER 2000