Palazzolo v. Rhode Island

Facts

In 1959, Petitioner and associates formed Shore Gardens, Inc. (SGI) and purchased parcels of land, which bordered a pond and other houses, but the land was salt marsh subject to tidal flooding. After trying to gain approval from the Rhode Island Division of Harbors and Rivers (DHR) for two development projects, which were not approved, the land was designated by the Council, an agency charged with the duty of protecting the state’s coastal properties, as protected “coastal wetlands.” Then, in 1983, Petitioner succeeded to ownership of the property by virtue of the dissolution of SGI. Then Petitioner made an application to the Council requesting permission to build a wooden bulkhead along the shore of the pond and to fill the entire marsh area. The Council rejected the application because it was vague and inadequate for a project of that size. The agency also found that proposal would have significant impacts on the waters and wetlands of the pond, and that the proposal would c onflict with the Coastal Resources Management Plan currently in effect. Then, in 1985, Petitioner made a new design, hiring counsel and preparing a more specific and limited proposal for the use of the property. The new plan resembled one of the early SGI plans which were not approved and called for the construction of a private beach club, which would be accomplished by filling 11 acres with gravel to accommodate 50 cars with boat trailers a dumpster, port-a-johns, picnic tables and other trash containers. The Council denied this application also. Under the Council’s regulations a landowner needed a “special exception” to fill salt marsh on the pond. In order to get a “special exception” the proposed use must serve a compelling public purpose, which provides benefits to the public as a whole. Unlike previous attempts to gain approval for proposals to use the land, this time the Petitioner appealed the agency’s decision to the Rhode Island courts. The Council’s decision was affirmed. Then Petitioner filed an inverse condemnation suit asserting that the St ate’s wetlands regulations, as applied, had taken the property without just compensation under the Fifth Amendment, made applicable to the states by the Fourteenth Amendment. The suit alleged total deprivation of economic value, and sought damages of $3,150,000, which was the value alleged if the property was used as a 74-lot subdivision. The trial court and the Rhode Island Supreme Court ruled against Petitioner, who appealed.