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ANTHONY PALAZZOLO, Petitioner, v. THE STATE OF RHODE ISLAND ex rel. PAUL J. TAVARES, General Treasurer, and COASTAL RESOURCES MANAGEMENT COUNCIL, Respondents.

No. 99-2047

1999 U.S. Briefs 2047

January 3, 2001

On Writ Of Certiorari To The Supreme Court Of Rhode Island.

BRIEF FOR RESPONDENTS

SHELDON WHITEHOUSE, Attorney General, MICHAEL RUBIN, Counsel of Record, Assistant Attorney General, Department of the Attorney General, 150 South Main Street, Providence, RI 02903, (401) 274-4400 Ex. 2297.

BRIAN A. GOLDMAN, ESQ., GOLDMAN & BIAFORE, 101 Dyer Street, No. 301, Providence, RI 02903, (401) 274-1300.

RICHARD J. LAZARUS, GEORGETOWN UNIVERSITY LAW CENTER, 600 New Jersey Avenue, N.W., Washington, DC 20001, Of Counsel..

[*i] QUESTIONS PRESENTED

1. Whether an as-applied regulatory takings claim is ripe even when the land owner has: (1) never applied to undertake any activity on the buildable less-regulated, more-valuable portion of the property; (2) never applied to obtain any approval from the agency having initial jurisdiction over the development plan that serves as the basis of his claim of value; (3) nor applied to obtain any approval from the defendant agency for such development.

2. Whether a takings claimant has established deprivation of all economically viable use of his parcel when the claimant can build at least one residence on the property, thereby giving the property itself a fair market value of at least $ 200,000 (1986 dollars), far in excess of his monetary investment, and when, furthermore, the denied use was not itself economically viable.

3. Whether a land owner possesses the inherent right to fill coastal marshland, regardless of the severity of the adverse environmental and health effects on neighboring property owners and on his own successors, even when a comprehensive state regulatory program substantially restricting such filling in that very kind of coastal marshland predated the land owner's acquisition of the property. [*ii]

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[*1] STATEMENT OF THE CASE n1

n1 The undersigned provide this key to record citations: Tr.=trial transcript; PA=Appendix to the Petition for Writ of Certiorari; JA=Joint Appendix; JL1=Joint Lodging Number 1; JL2=Joint Lodging Number 2; RA=Respondents' Appendix (attached herein); Ex.=Exhibit. Plaintiff's exhibits are numbered while the defendants' exhibits are lettered. Unless otherwise indicated by the context, all citations to the Rhode Island General Laws are to the version of the General Laws in effect in 1983, when Palazzolo first applied to the Coastal Council for permission to fill a portion of Winnapaug Pond.

This is a regulatory takings claim brought by Anthony Palazzolo ("Palazzolo") based upon the Rhode Island Coastal Resources Management Council's ("the Coastal Council's") denial of his application to fill all or most of eighteen acres of coastal inter-tidal marshland on a larger piece of property that also includes buildable upland. The State and its Coastal Council defend on ripeness grounds that, inter alia, he compromised the record by completely evading the jurisdiction of state public health agencies, he failed to file an application for the whole parcel, and he never filed a true and meaningful application. Palazzolo's challenge also fails substantively since he retains substantial beneficial use and economic value in his property, and the forbidden uses are barred by background principles of state law and would not have been economically viable in any event.

I. THE LAND

The nature of the Palazzolo parcel must be understood for a proper decision. The Atlantic Ocean, beating against the New England shore beyond the shelter of Long Island, has raised up beaches of sand [*2] and a spine of buildable upland running along the shoreline. Behind the barrier of beach and upland are salt marshes and coastal ponds, n2 such as Winnapaug Pond. n3 The nature of the soil, a mucky peat, and tidal inundation render salt marshes unbuildable without massive alteration. n4 Behind the marshes and coastal ponds, the ground rises again to solid upland.

n2 The contrast between the beach area and the marsh is particularly apparent on the 1939 and 1963 aerial photographs. JL1, tabs 1 & 2. See also Annicelli v. Town of South Kingstown, 463 A.2d 133, 137 (R.I. 1983) (describing the significance of Rhode Island's barrier beaches); Mark D. Bertness, The Ecology of Atlantic Shorelines (1999).

n3 Winnapaug Pond is comprised of 446 acres of open water plus 146 acres of salt marsh, including the eighteen acres that occupy most of the Palazzolo parcel. See Test. of Biologist Reis, Tr. 495; Engineer's 1985 Field Report at 3, RA 68; Biologist's 1985 Field Report at 2, RA 55.

n4 See Engineer's 1985 Report, JA 23 ("The highly compressible nature of mucky peat (among other poor engineering characteristics) makes the soil complex undesirable for a . . . base . . ."); see also Test. of Appraiser Andolfo, JA 104 ("The development costs are extraordinary . . . Not . . . financially feasible . . . ."); see also color photographs, JL1, tab 8 (depicting inundation of the site with Atlantic Avenue cottages in the background).

Development in the vicinity of Palazzolo's parcel reflects these natural conditions. The upland ridge between the Misquamicut beachfront and the marshes is readily buildable. Atlantic Avenue runs along this ridge, and private lots with summer cottages radiate from both sides of the roadway. See Ex. FF to JJ, S, Tr. 394-95, 659-60. See also Test. of Council Director Fugate, RA 36 (development "confined pretty well exclusively to the upland portion or the dry land portion that [*3] immediately abuts [the road]."). n5 Aside from some very minor encroachments, n6 the Winnapaug marshlands on all the pond-side properties remain in their natural unfilled condition. n7

n5 See also aerial photographs at JL2, items 2-7 (showing that the vacation homes are virtually all built on the uplands along Atlantic Avenue).

n6 See Test. of Council Director Fugate, RA 36 ("the development that has occurred in that area, except for two remnant structures or several remnant structures... has been all along the dry land area immediately abutting Atlantic Avenue.").

n7 Palazzolo's Statement of the Case suggests that Palazzolo's fill plans were consistent with neighborhood patterns: "Like the neighboring homes, the only way to develop Palazzolo's site is to raise the grade with fill." Pet. Br. 3. In fact, at most, only three out of the scores of homes in the vicinity were possibly built on fill in the marshlands and even these examples were uncertain. See Tr. 201, 204-05, 249-54. See also aerial photographs at JL2, items 2-7 (showing that the vacation homes are virtually all built on the uplands along Atlantic Avenue). As Palazzolo himself acknowledges, RA 79, there is no instance of fill for intensive subdivision ever being permitted in Winnapaug Pond's coastal marshlands.

The Palazzolo site begins on the spine of upland and descends northward from Atlantic Avenue into the salt marshes. The disparity between upland and marsh is evident: Palazzolo's upland acreage n8 is high and dry; by contrast, his marshland is subject to twice-daily tidal flooding and includes substantial portions below mean [*4] high tide. n9 See PA A-3; n. 39, infra. Ponding in small pools occurs throughout these marshes. PA A-3.

n8 Palazzolo's submissions to this Court ignore the fact that two pieces of upland area were identified at trial. The existence of the second area of upland within Palazzolo's territory is discussed further at Statement of the Case V.C, infra.

n9 We discuss infra at nn. 59, 60 the title issues presented by Palazzolo's ownership of the marshland acreage.

Winnapaug Pond with its marshland serves as a common amenity to all the surrounding upland properties, providing scenic and recreational qualities that underpin premium real estate values for the buildable upland. Test. of Appraiser Coyle, Tr. 382, 389-93; JL1, tab 1 (aerial photograph); CRMP § 330; R.I. Gen. Laws § 46-23-1 (1980 Reenactment). The Pond's salt marshes absorb wastes that would otherwise overwhelm the pond; provide food and shelter n10 for an abundance of recreational and commercial fish and shellfish, which add to the attraction of pond-side living; and, by biologic and chemical processes too complicated to detail here, nourish and balance the pond. n11 More directly, the marshes protect the upland portions of the abutting properties from storm damage and absorb and contain tidal inundation. See 1985 Engineer's Report at 4, 6, 7, RA 68.

n10 Sheltered from the rough Atlantic seashore, the marshes are a natural nursery for sea fauna. Test. of Biologist Reis, JA 80-81, 84. See also William J. Mitsch & James G. Gosselink, Wetlands 539 (1986) ("Wetlands are among the most productive ecosystems that are found anywhere on the planet. In terms of gross and net primary productivity, salt marshes rank high . . . .").

n11 Test. of Biologist Reis, JA 82 ("the salt marshes provide primary production. They provide nutrients and lock up organic carbon into plant matter which then provides the basis for the food chain . . . up to the smaller fish, and then of course the larger fish. They are very important habitat . . . for those species, which are at the top of the food chain which provide commercial and recreational importance.").

[*5] II. THE POTENTIAL HARM

Salt ponds are fragile mechanisms, with limited ability to absorb wastes. n12 Large areas of the salt ponds are poorly flushed, which makes them valuable as fish and shellfish nurseries, but also particularly susceptible to the twin threats of bacterial contamination and eutrophication. n13

n12 See Virginia Lee & Stephen Olsen, Eutrophication and Management Initiatives for the Control of Nutrient Inputs to Rhode Island Coastal Lagoons, 8 Estuaries 191 (1985); Eutrophic Shallow Estuaries and Lagoons (Arthur J. McComb ed., 1995).

n13 See Boyce Thorne-Miller et al., Variations in the Distribution and Biomass of Submerged Macrophytes in Five Coastal Lagoons in Rhode Island, USA, 26 Botanica Marina 231 (1985); nn. 11 & 12, supra.; Br. Amici Curiae Dr. John Teal et al. See also Frank Postma et al., Nutrient and Microbial Movement from Seasonally-used Septic Systems, 55 J. Envtl. Health 5 (1992).

Bacterial contamination, such as from failing septic systems, has obvious impacts on public health. Eutrophication can kill a pond. n14 Both bacterial [*6] contamination and eutrophication are hazardous to the high-quality economically productive and attractive resources of Winnapaug Pond. n15 Palazzolo's proposals put the Pond at serious risk. n16

n14 Eutrophication, largely caused by septic systems, occurs when nitrogen causes oxygen levels to fall below the minimum required by fish and shellfish to survive. Eventually, waters become weed-choked and murky, the bottom becomes coated with black organic sediments, and anoxic conditions occur that can lead to the generation of toxic levels of malodiferous hydrogen sulfide. Test. of Biologist Reis, JA 83 ("Eutrophication is a condition where nutrients cause excess growth within the pond . . . causing anoxia, which is a lack of oxygen. The shellfish at the bottom of the pond, and many of the fish in the water column, would be killed."). See also Scott W. Nixon, Nutrients and Coastal Waters: Too Much of a Good Thing?, 36 Oceanus 38 (1993); Nat'l Ass'n of Science, Clean Coastal Waters: Understanding and Reducing the Effects of Nutrient Pollution (2000).

n15 See Glenn D. Anderson & Steven F. Edwards, Protecting Rhode Island's Coastal Salt Ponds: An Economic Assessment of Downzoning to Protect These Coastal Amenities, 14 Coastal Zone Mgmt. J. 67 (1986).

n16 Individual sewage disposal systems, ISDS, are the largest contributor of "nitrogen" in the salt ponds. Test. of Biologist Reis, JA 86-87, 89 ("Q. Above and beyond the filling itself, did you consider what impact 74 ISDS or septic systems would have? A. I did perform some nutrient loading calculations. . . . That high level of loading would cause the eutrophication in the pond and the symptoms that go along with that."). The Superior Court found the proposal a public nuisance in part because of nitrate contamination. PA B-11.

It was to safeguard against such harms, as well as health hazards, flooding n17 and direct habitat destruction, that Rhode Island developed its environmental programs.

n17 Another problem with development of the Palazzolo marshland is that it is a "high hazard area for construction" on a federally designated flood-plain. Test. of Council Director Fugate, Tr. 179; see also Test. of Engineer Caito, Tr. 311-12. Filling such an area displaces excess water and forces flooding elsewhere, Test. of Engineer Caito, Tr. 312-13, and the fill is inherently less stable than natural upland in flood conditions. Test. of Council Director Fugate, Tr. 180 ("subject to movement"); Test. of Engineer Clarke, Tr. 567-68 ("we'd have leach fields all over the place."). There are strict federal flood control regulations regarding the filling of land in such zones (whether wetland or otherwise). Test. of Engineer Caito, Tr. 312; Test. of Engineer Clarke, Tr. 566-68; see also FEMA Flood Control Manual, Ex. DDD, Tr. 645-46. Palazzolo has obtained none of these approvals.

[*7] III. RHODE ISLAND'S REGULATORY PROGRAMS

From colonial times, by common law and constitution, Rhode Island has protected public rights to tidal wetlands and private property interests long dependant upon these wetlands. Protections included the law of nuisance, see, e.g., Payne & Butler v. Providence Gas Co., 77 A. 145, 152-531 (R.I. 1910) (destruction of shell-fish bed by pollution constitutes nuisance), the public trust doctrine, see, e.g., Dawson v. Broome, 53 A. 151, 154-58 (R.I. 1902), and "the right of fishery, and the privileges of the shore." R.I. Const. art. 1 § 17; Jackvony v. Powel, 21 A.2d 554, 554-58 (R.I. 1941). More recently, comprehensive regulatory programs codify and derive from these longstanding public protections.

A. Sewage Regulation

1. At the time of Palazzolo's applications. Since 1977, the Rhode Island Department of Environmental Management ("DEM") has reviewed applications for individual sewage disposal systems ("ISDS") (generally, septic tanks) to protect public natural resources and public health. n18 At the time Palazzolo applied to fill the pond, as well as today, an ISDS system could be installed only upon DEM issuance of an ISDS permit, and then only upon DEM inspection. n19 [*8] Obviously, an ISDS is necessary for a habitable dwelling in any area not served by a municipal sewer system.

n18 See 1977 R.I. Pub. Laws ch. 182, § § 2, 3, 16 (originally codified in relevant part as R.I. Gen. Laws § 42-17.1-2(l) (1977 Reenactment & Supp. 1978) and R.I. Gen. Laws § § 46-12-3(j), 46-12-3(k), 46-12-3(m) (1970 Reenactment & Supp. 1978)).

n19 See R.I. Gen. Laws § § 46-12-3(j), 46-12-3(k), 46-12-3(l) (1980 Reenactment & Supp. 1983); Deposition Test. of ISDS Chief Chateauneuf, at 10-12, 23-24, 32-33, Ex. W, Tr. 429-30; see also Rules & Regulations Establishing Minimum Standards Relating to Location, Design, Constr. & Maint. of Individual Sewage Disposal Sys. § SD 2.16 (1980), Ex. W-3, Tr. 429-30, 620. The relevant provisions of § 46-12-3 were slightly amended and redesignated as § § 46-12-3(j), -3(k), and -3(l) in 1983. See 1983 R.I. Pub. Laws ch. 149, § 1. These provisions remained unchanged through 1985, when Palazzolo renewed his Coastal Council application. See R.I. Gen. Laws § 46-12-3 (1980 Reenactment & Supp. 1985).

2. Historical background. Prior to the transfer of regulatory power to the DEM, see 1977 R.I. Pub. Laws ch. 182, § § 2, 16, the Rhode Island Department of Health ("RIDOH") had similar authority over septic systems. 1966 R.I. Pub. Laws ch. 261, § 4 (enacting R.I. Gen. Laws § § 46-12-3(j) to 46-12-3(k)); see Annicelli v. Town of South Kingstown, 463 A.2d 133, 136 (R.I. 1983) (property owner obtaining ISDS permit from RIDOH prior to applying for municipal building permit).

This enactment was, in turn, preceded by a series of regulatory regimes, dating back to the early years of the last century, regulating sewage disposal. n20 See, e.g., Bd. of Purification of Waters v. City of East Providence, 133 A. 812, 814 (R.I. 1926). Due to public health concerns, sewage disposal requirements have not been found to constitute takings by the State or by municipal regulation. See, e.g., Milardo v. Coastal Res. [*9] Mgmt. Council, 434 A.2d 266, 269 (R.I. 1981) (state denial of ISDS permit not a taking); Sundin v. Zoning Bd. of Review, 200 A.2d 459, 461 (R.I. 1964) (delay of development due to lack of adequate sewage disposal not a confiscation).

n20 See 1920 R.I. Pub. Laws ch. 1914, § 2 (creating Board of Purification of Waters ("BPW")); 1921 R.I. Pub. Laws ch. 2090 (expanding BPW and its powers); 1935 R.I. Pub. Laws ch. 2250, § § 110, 115 (transferring functions of BPW to Division of Purification of Waters within RIDOH); R.I. Gen. Laws § 46-12-2 & compiler's note (1956) (substituting term "Division of Sanitary Engineering" for "Division of Purification of Waters" "in accordance with present usage"); 1963 R.I. Pub. Laws ch. 89, § 2 (creating Division of Water Pollution Control within RIDOH).

B. Coastal Regulation

1. At the time of Palazzolo's applications. The Coastal Council was created in 1971, 1971 R.I. Pub. Laws ch. 279 (enacting R.I. Gen. Laws § § 46-23-1 to 46-23-12), as "the principal mechanism for management of the state's coastal resources." R.I. Gen. Laws § 46-23-1 (1970 Reenactment & Supp. 1971). From the start, Rhode Island singled out the coastal zone for comprehensive and coordinated long-range planning and management, R.I. Gen. Laws § § 46-23-1, 42-23-6(A) (1970 Reenactment & Supp. 1971); see Santini v. Lyons 448 A.2d 124, 127 (R.I. 1982), and established the Coastal Council as the final arbiter of development in or adjacent to the coastal zone, after other agencies provided any necessary preliminary permits. n21

n21 The "Coastal Council goes last" policy is quite strong, finding expression in the Coastal Council's procedural rules, see Management Procedures § 4.2(4), RA 22-23, and in the Coastal Council's substantive regulations as well. See CRMP § 300.1(2); see also id. § 300.3(B), RA 19-20. Simply put, one cannot even approach the Coastal Council for a non-sewered subdivision unless one has in hand ISDS approvals from DEM. See CRMP § 300.6, "Sewage Treatment and Disposal." RA 20. In addition to the Coastal Council assent and ISDS approval, Palazzolo would need an approval letter from the municipality confirming that the subdivision met municipal zoning and subdivision code requirements. Management Procedures § 4.2(4), RA 22-23. He would also need water quality certification approval from DEM pursuant to the requirements of sections 401 and 404 of the Federal Water Pollution Control Act Amendments of 1972 (as amended), 33 U.S.C. § § 1341, 1344 (1982). See R.I. Gen. Laws § § 46-12-1(n), 46-12-2(b), 46-12-5 (1980 Reenactment & Supp. 1983) (authorizing DEM to implement federal clean water laws); PUD No. 1 of Jefferson County v. Washington Dep't of Ecology, 511 U.S. 700, 704-08 (1994) (discussing application of § 401); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 123 (1985) (discussing application of § 404, 33 U.S.C. § 1344). In addition, Palazzolo would need to obtain approval from the Army Corps of Engineers and other federal agencies under both section 404, 33 U.S.C. § 1344, and section 10 of the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. § 403 (1982). See PUD No. 1, 511 U.S. at 722-23 (concerning § 10 permits); see also Test. of Council Director Fugate, JA 66-67. Thus, even had the Coastal Council assented, Palazzolo was still a long way from putting dirt into these marshlands.

[*10] The Coastal Resources Management Program ("CRMP" or "the Plan") provides that all alterations and projects proposed for tidal waters or areas contiguous to shoreline features shall require a Coastal Council assent (i.e., permit). CRMP § 100.1. Under the Plan, filling in the coastal wetlands themselves is generally prohibited absent a "special exception." See CRMP § § 100, 110 & Table 1, 130. Residential construction is not the basis of such a "special exception." See CRMP § 130; JA 72-73. Upland areas within 200 feet of coastal wetlands, however, are not similarly subject to a prohibition on filling and residential construction. CRMP § § 100.1(A), Table 1A, 110.1. A landowner may apply for a "variance", which is more freely available. See CRMP § 120.

2. Historical background. The General Assembly enacted earlier protections for the "coastal wetlands" of the State in 1965. See 1965 R.I. Pub. Laws ch. 140, § 1 (enacting R.I. Gen. Laws § 2-1-13 (repealed effective [*11] 1993, see 1992 R.I. Pub. Laws ch. 133, art. 14, § 3)). The Department of Agriculture & Conservation n22 was the permitting body for activities in such areas. A coastal wetland was defined as "any salt marsh bordering on the tidal waters of [Rhode Island], whether or not the tide water reach the littoral areas through natural or artificial water courses, and such uplands contiguous thereto, but extending no more than fifty (50) yards inland therefrom." 1965 R.I. Pub. Laws ch. 140, § 1 (enacting R.I. Gen. Laws § 2-1-14, (repealed effective 1993, see 1992 R.I. Pub. Laws ch. 133, art. 14, § 3)). Uses were restricted to activity that would not be detrimental to the salt marsh. Id. § 1 (enacting R.I. Gen. Laws § 2-1-13). The legislature also enacted the "Intertidal Salt Marshes Act," subjecting to criminal penalties any person who "dumps or deposits mud, dirt, or rubbish upon, or who excavates and disturbs the ecology of, intertidal salt marshes or any part of one, without first obtaining a permit." 1965 R.I. Pub. Laws ch. 26, § 1 (paragraph enacting R.I. Gen. Laws § 11-46.1-1).

n22 These functions were transferred to the Department of Natural Resources in 1965, see 1965 R.I. Pub. Laws ch. 137, § 1, and the Department of Natural Resources was renamed the Department of Environmental Management in 1977. 1977 R.I. Pub. Laws ch. 182, § 2.

Even in 1965, coastal regulation was not new to Rhode Island. Enactments dating back to 1876 (and supplanted by the Coastal Council enabling act only in 1971) controlled and managed "the public tide-waters." 1876 R.I. Acts & Resolves ch. 556, § § 3-4, 7. See also, e.g., R.I. Gen. Laws ch. 118, § § 3-6, 10-12, 14 (1896); 1918 R.I. Pub. Laws ch. 1669, § 2; 1935 R.I. Pub. Laws ch. 2250, § § 60, 64; 1939 R.I. Pub. Laws ch. 660, § § 100, 101. [*12] Although the administering authority varied in these successive statutes, each granted to the respective agency the authority to permit encroachments into the public tide-waters, and prohibited all filling not so permitted. n23 For example, more than a century ago, the Board of Harbor Commissioners was given the "general care and supervision of all the . . . tide-waters within the state, with authority to prosecute for and to cause to be removed all unauthorized obstructions and encroachments therein," R.I. Gen. Laws ch. 118, § 10 (1896), including "the depositing of mud, dirt, and other substances" into the public tide-waters, id. § 11, and any such unauthorized encroachment upon the public tide waters was "deemed to be a public nuisance." Id. § 14. "Tide-waters" included "flats," id. § 7, as well as open water areas. Cf. R.I. Gen. Laws ch. 112, § § 1, 8-11, 13 (1938), RA 1-3.

n23 Dawson v. Broome, 53 A. 151, 152 (R.I. 1902), chronicles an applicant's request for permission to fill tidal wetlands.

Nor did this type of control originate with the advent of the Board of Harbor Commissioners in 1876. Authority over lands lying below the mean high tide line had been actively exercised by the State (or colony) from its earliest settlement. n24 The ultimate foundation of the State's authority over tide-waters is the long [*13] established principle of Rhode Island law that the State holds a fee interest in such lands. See Dawson, 53 A. at 156, 157.

n24 See generally Dennis W. Nixon, Evolution of Public and Private Rights to Rhode Island's Shore, 24 Suffolk U.L. Rev. 313, 313 (1990) ("From the earliest days of the Colony of Rhode Island and Providence Plantations, the shore has maintained this unique legal status, with colonial and now state officials charged with balancing the rights of the public and private property owners."); Joseph K. Angell, A Treatise on the Right of Property in Tide Waters and in the Soil and Shores Thereof 162 (photo. reprint 1983) (1826).

IV. OWNERSHIP AND DEVELOPMENT OF THE PARCEL

Palazzolo became owner of the site in 1978. The parcel was owned before then by Shore Gardens, Inc. ("SGI"), which acquired the property in 1959. n25 Almost immediately, SGI recorded with the Town of Westerly a subdivision plat representing eighty individual lots, some of these platted "under the waters of Winnapaug Pond." PA A-3. SGI sold off eleven lots, in six transactions, yielding at least three or four fully built residences. n26 "These [developed] lots were apparently in the upland area of the parcel and could be built upon with little alteration to the land." PA A-2. In 1969, SGI reacquired five of the eleven lots previously deeded out. Id. Palazzolo succeeded in ownership to all of SGI's remaining properties in 1978.

n25 Palazzolo now concedes that he did not become the "owner" of the property under state law until SGI's corporate charter was revoked in 1978. See Pet. Br. 5, 23, 24, 43, 48.

n26 The trial court stated that Palazzolo "sold six parcels to various parties who constructed homes on them." PA B-2. Palazzolo admits to "three or four at least." JA 79.

V. APPLICATIONS WITH RESPECT TO THE PARCEL

A. The "Harbors & Rivers" Applications

In 1962, 1963, and 1966, SGI made three separate applications to the State Division of Harbors and Rivers for its assent to filling what is now the Palazzolo site. [*14] Tr. 60-61, 124, 182-83. The 1962 and 1963 SGI applications contemplated a general filling of the entire wetlands section of the parcel. See Application of March 29, 1962, Ex. M, Tr. 191-93, 196; Application of May 16, 1963, Ex. 14, Tr. 142-43. The earlier SGI application proposed off-shore dredging in the open waters of Winnapaug Pond for the fill material, see Ex. M, Tr. 191-93, 196, while the second proposed dredging much closer to shore, if not completely within the marshlands themselves. See 1963 Application Ex. 14, Tr. 142-43. The 1966 SGI application contemplated filling in the area closest to Winnapaug Pond for the purported purpose of establishing a beach. n27 Application of April 29, 1966, Ex. 14, Tr. 142-43. The state Department of Natural Resources originally assented to, then, based on their adverse impacts, denied these applications on November 17, 1971. See Ex. 14, Tr. 142-43. The Army Corps of Engineers followed suit with respect to SGI's parallel application for a federal permit on November 23, 1971, based largely on adverse environmental impacts. See RA 47.

n27 During this time period, the matter took a brief detour to the Rhode Island Superior Court. See Palazzolo v. Lees, RA 6-8.

B. The Coastal Council Applications

Palazzolo made two applications to fill the property. These are the subject of this dispute. The 1983 application sought permission to construct a bulkhead on the shore of the pond and to fill the entire eighteen-acre wetlands portion of the parcel. See JL1, tab 5; see also Tr. 144; Tr. of Hr'g Regarding Coastal Council Applic. File No. 83-3-55 (Aug. 18, 1983), at 23, Ex. DD, Tr. 443-44. The application did not seek to alter the [*15] upland areas, n28 and did not state any purpose for the filling. n29

n28 At the administrative hearing Palazzolo testified:

Q. No doubt you propose to sell those lots?

A. No, . . . you said that.

Q. And you don't propose to sell lots off this subdivision?

A. Not necessarily.

Q. Do you propose to build on this property?

A. Not necessarily.

Q. What is the purpose of filling it, then?

A. Because it's my right to do if I want to to [sic] look at it it [sic] is my business.

. . .

Q. Do you know whether it would pass a perk test [a percolation test necessary for septic tanks]?

A. It is not necessary at this time. It would be necessary if I said I wanted to build houses. I am not saying that.

JA 11, RA 24. Thus, "the Council just had a vague notion that Palazzolo wanted to fill the area." JA 63.

n29 The application said "proposal to restore property line, protect and prevent further erosion, to fill property to elvation [sic] 6.5 Ft., to prepare property for use as designated by zoning regulations." JL1, tab 5.

The 1983 application, "nearly identical to the application submitted in 1963," PA A-5, was rejected by the Coastal Council. JA 18. A 1985 application to fill the marsh for a beach club, "nearly identical to the 1966 application," PA A-5, was denied by the Coastal Council. See JA 24. Palazzolo appealed this denial pursuant to the state administrative procedures act, R.I. Gen. Laws § § 42-35-1 to 42-35-18 (1984 Reenactment & Supp. 1986), and that appeal was denied by the Superior Court. JA 31-42.

[*16] C. Development Potential

1. Buildable upland. There was uncontradicted testimony, accepted by both courts below, that a particular portion of the parcel would have been approved as "at least" a single home-site, PA A-11; PA B-11, with a value (as of 1986) close to $ 200,000. PA A-13; PA B-9. Moreover, the State's appraisal expert showed that this would have netted greater proceeds, at less risk, than the $ 55,000 to be realistically hoped for by attempting the expensive and uncertain process of filling and subdividing. n30

n30 Compare Test. of Appraiser Andolfo, JA. 101, appraising Palazzolo's parcel for subdivision purposes at $ 55,000 with Test. of Appraiser Andolfo, JA 103-04, appraising Palazzolo's parcel for single house purposes at $ 194,000. This testimony leaves no doubt that the appraisal and the court decisions crediting that appraisal were based on the underlying value of the parcel--not, as intimated by Palazzolo, see Pet. Br. 38, 40-41, the gross sale price of the house once built.

2. Possibility of approval for more. The record shows that another upland area on the parcel might also have been amenable to development with a variance as well. Test. of Council Director Fugate, RA 36-39; Test. of Engineer Clarke, RA 42; supported by maps in evidence showing a rise, see Ex. AA, Tr. 471-72, and high elevations in the area, see Ex. EEE, Tr. 650-51. It remains unclear how many lots the Coastal Council would have approved if Palazzolo had submitted a proper application incorporating the upland sections of his parcel.

VI. THE DECISIONS BELOW

In the 1980s, Palazzolo filed two separate civil actions challenging the State's denials. First, Palazzolo [*17] appealed under the State administrative procedures act resulting in a superior court decision upholding the agency. JA 31-42. Next, Palazzolo brought the instant takings claim in two successive complaints.

A. Superior Court. Presented with Palazzolo's seventy-four-unit residential development scheme, the trial court found that the filling and septic contamination resulting from the plan would constitute a public nuisance, PA B-11, and further ruled that the home-site's land value of $ 200,000 in 1986 dollars provided "beneficial use of the subject property." PA B-10, see also PA B-12 ("plaintiff has not lost all or even a substantial use of the subject property"). Although Palazzolo proceeded solely under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), the superior court also found that Palazzolo did not meet the "investment-backed expectations test" of Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), due to pervasive wetlands regulation known to him when he acquired the property. PA B-12.

B. Supreme Court. The Rhode Island Supreme Court held Palazzolo's claim lacked ripeness because he had failed ever to explore the possibility of developing the upland portions of his parcel. PA A-11. Although the court deemed its ripeness ruling "dispositive of the case," the court also "briefly" discussed the merits. PA A-12. The court explicitly endorsed the finding that the property retained economically viable use, noting that "at least one single-family home" could be built. PA A-11 (emphasis supplied). The court found Palazzolo's denominator assertion--that the seventy-four-lot proposal would [*18] yield $ 3,150,000--to be "grandiose," PA A-11, "speculative," PA A-13, and "unrealistically optimistic." PA A-13 n.7. The decision was silent on the trial court's nuisance finding. The court also upheld the finding that Palazzolo's knowledge of the regulatory limitations on his property deprived him of Penn Central's "reasonable investment-backed expectations" for such a development scheme. PA A-18.

SUMMARY OF ARGUMENT

Palazzolo's regulatory takings claim suffers from a multiplicity of dispositive defects. The Rhode Island Supreme Court correctly held that his complaint lacks ripeness on two separate grounds, and accurately explained why, even if ripe, Palazzolo had failed to prove a valid takings claim under this Court's decisions in Lucas or Penn Central. Moreover, the trial judge's undisturbed finding, not addressed by the Rhode Island Supreme Court, that Palazzolo's development proposal would have constituted a public nuisance, and the existence of other similarly dispositive defenses raised by the State below but not reached by the courts (i.e., state public trust doctrine), confirm the justness and correctness of the judgment of the state courts.

1. Palazzolo's as-applied takings claim lacks ripeness. The minimum requirement for an as-applied takings claim is a "meaningful application" for development that provides the relevant governmental authority with a record for determining both the extent to which development is permitted and the site-specific reasons why any further development would be barred under existing law. See MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340, 352 n.8 (1986). Palazzolo's [*19] evasive, vague, incomplete, redundant, and grandiose applications fall far short of that standard. He has created a record that leaves unexplored the full extent of residential development permissible on his entire parcel, and that fails to establish the economic viability of the uses that he claims he was denied. Indeed, never before in the annals of this Court's takings law has a landowner demanded compensation for the government's denial of an application to engage in an activity that was not the subject of his claim for just compensation.

2. Equally lacking in merit is Palazzolo's claim that he has been denied all "economically viable use" of his property, within the meaning of this Court's per se takings test set forth in Lucas. The undisputed factual finding of the lower courts is that Palazzolo's parcel retains substantial economic value for residential use of at least $ 200,000. See PA A-12 to 13; PA B-5, B-9. Palazzolo failed to make the applications necessary to determine whether additional upland areas within his parcel may be susceptible to residential development, so the lower courts' judgment is very conservative. The state supreme court also correctly disputed Palazzolo's exaggerated allegations of lost profits of $ 3,150,000, which were wholly untethered to any realistic assessment of the actual costs of developing the parcel in the manner he proposed. See PA A-13 n.7. For that same reason, Palazzolo has failed to establish that any of the specific uses he was denied were themselves "economically viable."

3. The Rhode Island Supreme Court correctly concluded that when Palazzolo acquired the parcel in 1978, an absolute "right to fill wetlands was not part of the title he acquired." PA A-15. Any such inherent [*20] right to fill coastal marshland property is denied by background principles of state law, as expressed in Rhode Island's comprehensive Coastal Resources Management Program ("CRMP"), longstanding common law and constitutional principles regarding public rights in tidal areas, and a series of antecedent regulatory programs. For this reason, Rhode Island's restrictions on Palazzolo's development would not be a taking under Lucas even if they had deprived him of all economically viable use of his property.

4. Finally, Palazzolo's newly-discovered reliance on Penn Central is misplaced. Not only did Palazzolo fail to raise this argument in the lower courts, but the state courts also correctly explained why, in all events, any such argument would lack merit. Palazzolo lacks the "interference with reasonable investment-backed expectations" needed to sustain such a takings claim. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984). When Palazzolo acquired his property in 1978, he could not possibly have harbored any reasonable expectation that he could develop the property in the manner he subsequently proposed. Not only did the pre-existing law clearly and precisely bar massive filling activities for such purposes, but the State had previously denied virtually identical applications filed by a preceding owner with which Palazzolo was closely affiliated.

ARGUMENT

I. PALAZZOLO'S AS-APPLIED REGULATORY TAKINGS CLAIM WAS NOT RIPE

The threshold premise of Palazzolo's claim of state court error in its ruling is his contention that "'the [*21] type and intensity of development legally permitted' on [his] 18-plus acres of land is perfectly clear: one single-family home and nothing more." Pet. Br. 11 (citation omitted). Palazzolo's premise is simply wrong. Although Palazzolo and affiliated entities have made multiple applications to fill coastal wetlands portions of his parcel, see Argument I.C., infra, the intensity of legally permitted development on his parcel is not known, let alone "perfectly clear." The failure to file a true and meaningful application n31 is what has compromised this record. The faults in Palazzolo's applications are that they (1) do not ask for permission to build the project he claims he was denied (and thereby evade state procedures and omit essential information), (2) do not contemplate the "whole parcel" of his land, and (3) are redundant and grandiose.

n31 To be "meaningful an application . . . must be essentially complete, must realistically describe the desired use, and must be reasonably current." Gilbert v. City of Cambridge, 932 F.2d 51, 63 n.15 (1st Cir. 1991). See, e.g., S. Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 504 (9th Cir. 1990) (a property owner must give "indication . . . of how [it] might intend to develop the property if permitted to do so."); Unity Ventures v. County of Lake, 841 F.2d 770, 776 (7th Cir. 1988) ("a formal application . . . with adequate documentation about the density of the proposed development."). See also MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340, 352 n.8 (1986) ("The implication is not that future applications would be futile, but that a meaningful application has not yet been made.").

A. Palazzolo Failed to Apply for the Subdivision Proposal He Claims to Have Been Denied

Palazzolo failed to ripen his claim by deliberately obscuring the reasons why he sought to fill the coastal wetlands on his parcel. The applications for [*22] development made by Palazzolo presumed no residential development at all. The first (1983) application was just for permission to fill the entire eighteen-acre wetland of parcel with fill. JA 10. At the Coastal Council, Palazzolo specifically denied any intent to try to construct the very seventy-four-unit residential development that is now the basis of his takings claim. See n. 28, supra. The second (1985) application was to fill most of the wetland (approximately twelve acres) for what was vaguely described as a project to construct a "beach." JA 25.

Hiding his purpose allowed Palazzolo to achieve four strategic advantages. First, Palazzolo dodged the necessary applications for ISDS and other permits required by state law prior to seeking the Coastal Council's permission to fill the coastal wetlands on his parcel. The permit process for septic systems in coastal wetlands would have clarified the costs of constructing the necessary septic systems (sharply contested at trial, JA 51-55) and removed any lingering doubt as to the "grandiose," PA A-11, "speculative," PA A-13, and "unrealistically optimistic," PA A-13 n.7, nature of his subdivision proposal. Second, an administrative record on sewage would have allowed even better documentation of the adverse environmental spillover effects, such as the effects which led to the trial court's undisturbed finding that the proposal would constitute a "public nuisance." PA B-11. Palazzolo would be hard pressed to allege a taking for a permit denial based on sewage hazard to public waters and public health. See Bd. of Purification of Waters v. City of East Providence, 133 A. 812, 814 (R.I. 1926) (no property right exists to discharge sewage into public waters). Third, not seeking permission for the subdivision allowed him to [*23] finesse the "public trust" issue of on whose land he was actually proposing to build. See nn. 59, 60, infra. Fourth, by leaving the uplands out of his application, but retaining them in the proposal that he claims as his value, Palazzolo is able to imply that the uplands themselves have adequate economic value only as part of a seventy-four lot parcel-wide subdivision scheme. Argument I.B, infra. (Here the "whole parcel," id., and "meaningful application" problems converge.)

This maneuver also allowed Palazzolo to claim in the lower courts, and before this Court, "lost value" of $ 3.15 million, Pet. Br. 41, that is fanciful and unfounded. n32 Now Palazzolo characterizes his takings claim as relying only on the denial of the 1985 "beach" application and not on the 1983 application at all. Pet. Br. 8 n.3-4, 15 n.7. However, in the lower courts, the only subject of his claim of economic deprivation was his plan to fill the entire eighteen acres for an intensive residential subdivision development, n33 and it remains [*24] the central basis of his financial allegations before this Court. Palazzolo has made no record whatsoever as to any economic value of the "beach." n34

n32 Palazzolo's assertion of a $ 3,150,000 value to his development scheme is close to imaginary. No one outside his litigation team has ever given it any credence whatsoever. It was found by the Rhode Island Supreme Court to be grandiose, speculative and unrealistically optimistic, Statement of the Case VI.B, supra; the superior court thought so little of the $ 3,150,000 price tag that it ignored it outright; the government's witness found the project a "great folly," Test. of Appraiser Andolfo, JA 101; much of it would be constructed on state land, see nn. 59, 60 & public trust discussion in text, infra; its numerous assumptions, see JL1, tab 7, 22-23 are untested by the refiner's fire of a true application process, and there is no reason to believe it would have received necessary federal approvals. See n. 21, supra.

n33 See, e.g., Test. of Palazzolo, RA 81 (Q. "But your claim [of a taking] before this Court today is based on residences and not a beach club, isn't that correct? A. Correct.").

n34 Nor is this surprising. As described by a government expert witness at trial, that proposal suffered from a total lack of practical purpose and logical link to the amount of contemplated fill. See Test. of Engineer Clarke, Tr. 650 ("In order to get into the water, you'd have to walk across the gravel fill, but then work your way through approximately 70, 75 feet of marsh land or conservation grasses to get to the water. And that's why I call it a so-called beach, because I have never experienced that on a beach before."). With the natural seashore of Misquamicut Beach across the road, this hardly seems like much of an attraction, and Palazzolo has never argued it had economic viability. The filling alone would likely cost in the millions of dollars. JL1, tab 9.

It does not seem unreasonable for the Rhode Island Supreme Court to require that Palazzolo must have at least applied for the development that serves as the subject of his as-applied takings claim. n35

n35 Rhode Island courts are not ordinarily confined to ripeness rules developed by this Court, whether constitutional or prudential in derivation. This Court's Article III precedent is controlling only in federal court and cannot compel the assertion of jurisdiction by state courts. See Michael G. Collins, Article III Cases, State Court Duties, and the Madisonian Compromise, 1995 Wis. L. Rev. 39, 135-70. Cf. Village of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 262 n.8 (1977) ("Illinois may choose to close its courts", suggesting that state and federal judiciaries operate independently in fashioning such rules). Nor did the Rhode Island court limit its analysis to this Court's precedent and federal law. The court repeatedly relied on its own state supreme court precedent in several respects, stressing "the principle that the Court 'will not render advisory opinions or function in the abstract.'" PA A-9 (quoting R.I. Ophthalmological Soc'y v. Cannon, 317 A.2d 124, 130-31 (R.I. 1974)). The court further relied on Palazzolo's failure to comply with state administrative law requirements. PA A-12 n.6.

[*25] B. Palazzolo's Applications Exclude His Whole Parcel's Valuable, Dry Upland Areas

"The relevant question . . . is whether the property taken is all, or only a portion of the parcel in question." Concrete Pipe & Prods. of Cal., Inc. v. Construction Laborers Pension Trust, 508 U.S. 602, 644 (1993). Palazzolo's applications only address the wetlands portion of his site. n36 See JL1, tab 5 (1983 application); Ex. 8, Tr. 67, 330-31 (1985 application). His parcel does not consist only of coastal wetlands, but upland areas as well, and the state wetlands restrictions complained of do not [*26] prevent building on upland portions of his parcel. n37 Not only does Palazzolo fail to encompass the whole parcel, but its limit to his highly-regulated wetlands suggests strategic behavior. n38

n36 Palazzolo's 1983 application to the Coastal Council was clearly limited to the alteration (filling) of the wetland portion of his parcel. See 1983 Application, JL1, tab 5 ("proposal to restore property line, protect and prevent further erosion [&] to fill property to elvation [sic] 6.5 Ft., to prepare property for use as designated by zoning regulations"). As this application makes no reference to the construction of any "residential buildings . . . for human habitation," CRMP § 300.3, Palazzolo limited the Council's scope of review to a request for approval under § 300.10. See CRMP § 300.10, "Filling in Tidal Waters" (requiring a water quality certification from the Department of Environmental Management and assent from the Army Corps of Engineers as a prerequisite to receiving the Coastal Council's permission to fill below the mean high water mark). Again, Palazzolo's 1985 application was limited to the depositing of fill in the wetland portion of his parcel. See 1985 Application, Ex. 8, Tr. 67, 330-31 ("To place . . . fill . . . to establish a private beach club."). For the same reasons as above, Palazzolo necessarily was seeking approval under § 300.10. See CRMP § 300.10, "Filling in Tidal Waters." Palazzolo specifically was not seeking approval for any proposed activity with respect to the upland portion of his land. See 1985 Application, Ex. 8, Tr. 67, 330-31 ("There will be no filling of the existing high areas (roadway and small island to the west side of the area.)").

n37 See Statement of the Case III.B.1.

n38 See Tabb Lakes, Ltd., v. United States, 10 F.3d 796, 802 (Fed. Cir. 1993) (limiting quantum of land considered to be wetlands creates "ipso facto" taking).

Palazzolo made two applications to fill all or substantially all of his coastal wetlands, yet we still do not know the extent of upland, dry portions of his property. n39 Palazzolo acknowledges that at least one portion of his property includes upland, allowing him to build "one single-family home." Pet. Br. 14-15, 18. The record is not sufficient to support Palazzolo's further contention that the Coastal Council would permit "one single-family home and nothing more." Pet. Br. 13. The Supreme Court left open the possibility of more. PA A-11 ("at least" one single family home). Trial court testimony revealed that there might be additional upland portions on Palazzolo's eighteen [*27] acres that would support three or four additional lots. n40 Indeed, the State even proposed an offer of judgment at trial based on testimony suggesting that as many as eight of the lots on the parcel contained developable uplands. See Tr. 209-10, 258-60.

n39 The wetland boundary of Palazzolo's site is also obscure; there is "a substantial amount of land" under the waters of Winnapaug Pond, PA A-3, and "additional land is subject to daily tidal inundation and ponding." Id. Indeed, the record strongly suggests that the majority of the acreage is below the mean high water mark. JL2, item 1 (showing elevations; all elevations below 1.72 are below mean high tide line). See also n.9, supra. Mean high water mark is significant both because it is indicative of the aquatic nature of the property--and therefore the adverse spillover effects associated with its development--and because it means that Palazzolo's title in the property is limited by state ownership. See nn. 59, 60, infra.

n40 Government witnesses at trial testified both to the possibility of further upland portions of the property for which a "special exception" was not required for residential development, and to how Palazzolo's lack of a survey for that purpose precluded the Coastal Council from knowing for sure. See, e.g., Test. of Council Director Fugate, RA 36 ("There may, and again, because we don't have an accurate or detailed survey, there may be other upland portions that are immediately adjacent to Atlantic Avenue, but that can't be determined."); Tr. 209 ("there may be other upland areas on the backside of those houses along Atlantic Avenue that might have sufficient upland. . . ."); Test. of Engineer Clarke, RA 42, 44 ("the site has two upland areas" and "realistic to apply for those locations").

What the Coastal Council would conclude if it had an application that allowed it to consider upland portions of the acreage is not, of course, clear. But the very purpose of the judicial ripeness requirement is to allow for those determinations to be made in the first instance by the regulatory agency and not based on judicial speculation. Williamson County Reg'l Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 186, 190-191 (1985).

C. Palazzolo's Filings Were "Exceedingly Grandiose" and Redundant

"Rejection of exceedingly grandiose development plans does not logically imply that less ambitious plans will receive similarly unfavorable reviews." MacDonald, Sommer, & Frates v. Yolo County, 477 U.S. 340, 353 n.9 (1986). Despite Palazzolo's suggestions that he has exhausted himself in applications to the point of [*28] futility, in point of fact he applied only for his "beach" and "erosion control," hiding the seventy-four-lot subdivision proposal. Even though Palazzolo never applied for any intermediate use, and even though he avoided any application including his buildable uplands, nevertheless, the record we have just discussed supports the likelihood of some less grandiose beneficial use. Before the possibility of some intermediate use is ruled out, applicants should meet some burden of coming forward in good faith, candidly disclosing their intentions, and using the whole parcel of their property. n41

n41 The paucity of the record is due to the applicant's stratagems, and should not be held against the State, lest strategic filing behavior be encouraged. This problem is emerging since Lucas. See, e.g., Forest Properties, Inc. v. United States, 39 Fed. Cl. 56, 72-75 (1997), aff'd, 177 F.3d 1360 (Fed. Cir.), cert. denied sub nom. RCK Properties, Inc. v. United States, 528 U.S. 951 (1999).

To the extent that Palazzolo references or relies on SGI's applications from the 1960s, they add little to his case, having been found to be "nearly identical" with his 1980s applications. Statement of the Case ("Statement") V.B, supra. As found by the courts below, the application denials predating his ownership of the property are not proof of futility, but of dramatically inhibited reasonable investment-backed expectations. See PA B-12 ("he knew"); PA A-18 ("he had no reasonable investment-backed expectations that he could develop a 74-lot subdivision"); See Argument IV, infra. Under Lucas, since the state supreme court "rested its judgment on ripeness grounds," Lucas, 505 U.S. at 1011, the fact that Palazzolo "may yet be able to secure permission to build on his property," id., should "preclude review." Id.

[*29] Our final observation on ripeness is that a court is entitled to congruity n42 between the issue presented on the merits and the issue presented for ripeness determination. If an applicant drastically narrows his argument to achieve a "ripe" question (for instance that mere refusal to allow him to fill wetlands is a taking), n43 that is the question he should address on the merits. Palazzolo tries to fly in under the ripeness radar with just such a narrow claim, and then once in, implicate numerous unripe issues. He cannot have it both ways.

n42 For this same reason, Palazzolo's reliance see Pet. Br. 18, on the Texas Supreme Court's decision in Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998), cert. denied, 526 U.S. 1144 (1999) is misplaced. In that case, the landowner's application coincided with his claim of value, and his ripeness question and his question on the merits converged "because the proper owners in Mayhew were willing in essence to concede that permission for less intensive development might be granted, while at the same time denying that such permission would avert a regulatory taking." Pet. 17. (emphasis removed). Palazzolo makes no such concession and cannot similarly claim ripeness.

n43 To the extent Palazzolo hints at a facial challenge to Rhode Island's Coastal Resources Management Plan, he would run squarely into a "rational basis" for the protection of coastal wetlands under the Due Process Clause, United States v. Carolene Prods. Co., 304 U.S. 144, 152 (1938), and a substantial advancement of legitimate state interests under Agins v. City of Tiburon, 447 U.S. 255, 260 (1980).

II. PALAZZOLO'S CLAIM THAT HE HAS BEEN DENIED ALL "ECONOMICALLY VIABLE USE" OF HIS PARCEL LACKS MERIT

Palazzolo's sole argument to the courts below was that the Coastal Council's denial amounted to a per se [*30] taking under Lucas. n44 Palazzolo, however, cannot establish what Lucas requires: that the Coastal Council deprived him of all "economically viable use of his land." 505 U.S. at 1016. First, he cannot show that there is no economically viable use remaining. The parcel was bought for a "total initial investment of $ 13,000," PA B-12, n45 has a minimum permitted value of $ 200,000 in 1986 dollars, PA B-5; PA A-12 to A-13, and may be amenable to further development. Statement V.C. That is not an elimination of all (or nearly all) value. Second, Palazzolo cannot show that his proposed uses were themselves "economically viable." Argument II.B, infra. A governmental agency cannot be fairly deemed to have denied a landowner [*31] economically viable use if the use denied is not economically viable in the first instance. n46

n44 Plaintiff's Post-Trial Mem. 6 ("This Court need not look beyond the Lucas case"); Br. of Appellant 5 (same). There are some key factual differences from Lucas Lucas's property went from $ 975,000 to "valueless," Lucas, 505 U.S. at 1006, 1007; Palazzolo's from $ 13,000 to at least $ 200,000. PA B-12, B-5. Lucas's regulation was imposed after acquisition, 505 U.S. at 1008; Palazzolo's preexisted his acquisition of the parcel. Statement III.B, IV, supra. Lucas's proposed use was a single-family residence, "what the owners of immediately adjacent parcels had already done," 505 U.S. at 1008; Palazzolo proposes an unprecedented incursion on the pond he and his neighbors share to install a seventy-four-lot subdivision. See n.7, supra.

n45 The record is once again less than crystal clear on this point, and once again Palazzolo is to blame. By only advancing a Lucas argument below, he avoided Penn Central's "economic impact" analysis and the relevant record as to his investment and return. We know that SGI owned the property at the times of the investment of $ 13,000, and sold off a number of lots, but the amount of the sales was never made a matter of record, and so the "total initial investment" calculated by the Superior Court did not offset any profits from lots sold. PA B-12.

n46 Non-viable uses should be a rarity, were it not for the incentive takings litigation provides landowners to engage in strategic behavior to manufacture a "taking." This problem dissipates when the proposed use is put through the refiner's fire of a true and meaningful development application for the whole parcel.

A. Palazzolo's Parcel Retains Substantial Economic Value for Residential Use

In Lucas, this Court announced a per se regulatory takings test applicable only in extreme and "relatively rare" circumstances, 505 U.S. at 1018, when the government by regulation "denies an owner economically viable use of his land." Id. at 1016 (citation and internal quotation marks omitted). The Court concluded that only "deprivation of all economically feasible use" is the constitutional equivalent of a physical appropriation of the property by the government. Id. at 1017 (emphasis supplied). "When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his parcel economically idle, he has suffered a taking." Id. at 1019 (emphasis supplied). n47 This accorded with earlier [*32] language that regulation can be a taking only when it "totally destroys the economic value of property." Pennell v. City of San Jose, 485 U.S. 1, 20 (1988) (Scalia, J., concurring in part and dissenting in part).

n47 The Court in Lucas specifically accepted the "all-or-nothing" character of the per se categorical takings test being adopted, 505 U.S. at 1019 n.8 ("it is true that in at least some cases the landowner with 95% loss will get nothing, while the landowner with total loss will recover in full"), nothing that the Lucas "categorical formulation" does not preclude a landowner from seeking to establish a taking under a different analysis, such as the multi-factor approach in Penn Central. Palazzolo expressly disavowed in the lower courts any reliance on any takings test other than the Lucas per se test. See note 44, infra.

By Palazzolo's own acknowledgment, he can make economically viable use of his parcel. Pet. Br. 13. "The uncontradicted evidence was that [the Coastal Council] . . . would not deny [Palazzolo] permission to build one single-family home" on his parcel. Id. (emphasis in original). This is certainly "one step short of a complete deprivation" of use, Lucas, 505 U.S. at 1019 n.8, indeed, a long step short.

Because of the ripeness problems, supra, the record can only suggest that the Coastal Council may permit as many as three or four more upland lots. See Argument I.B, supra. Having never formally pursued or been denied upland development, Palazzolo cannot fairly contend before this Court that it has been "taken." We have already discussed the "undisputed evidence . . . that had [Palazzolo] developed the upland portion of the site, its value would have been $ 200,000," PA A-12 to A-13; PA B-5 (trial court finding), and that this was a minimum value for the parcel. PA A-11 ("at least" one home site). It is this Court's long-established practice not to disturb such factual findings when upheld by both lower courts n48 and there is no reason here to doubt the validity of their findings. Whatever the upper limits of economically "productive," [*33] "beneficial," or "viable" use of Palazzolo's whole parcel may be, there is no serious issue that at least some residential development, possessing substantial value, would be permitted. n49

n48 See, e.g., NCAA v. Bd. of Regents of Univ. of Oklahoma, 468 U.S. 85, 97 n.15 (1984); Rogers v. Lane, 458 U.S. 613, 623 (1982); United States v. Dickinson, 331 U.S. 745, 751 (1947); United States v. Commercial Credit Co., 286 U.S. 63, 67 (1932); United States v. Chem. Found., 272 U.S. 1, 14 (1926); Baker v. Schofield, 243 U.S. 114, 118 (1917); Towson v. Moore, 173 U.S. 17, 24 (1899).

n49 Contrary to Palazzolo's characterization of the decision of the state supreme court, Pet. Br. 38-41, that court never intimated that so long as the parcel retains some market value above zero, it necessarily possesses economically viable use. The issue presented to the court in this case was whether use of the parcel, which would give the parcel at least a value of $ 200,000 (as of 1986), was a Lucas per se taking. The state supreme court nowhere intimated that it was assuming that Palazzolo could only receive some nominal value above zero.

To the extent the Court wishes to assess value in terms of a ratio rather than an absolute number, it should consider the problems with Palazzolo's improbable "denominator" of $ 3,150,000. See n.32, supra; n.50, infra. It may also wish to consider his "total initial investment" in this property of $ 13,000. PA B-12.

B. Palazzolo Failed to Establish That His Development Uses Were Themselves "Economically Viable"

As we have shown, Argument I.A; nn.32, 34 supra, there is also no plausible record to support that Palazzolo's speculative development proposals were "economically viable." The government's appraisal expert ultimately concluded that Palazzolo would have to expend "in excess of four million dollars in construction costs" n50 for a "net overall value of [*34] $ 55,000." JA 101. In what must be deemed an understatement, he described such an undertaking as a "great folly." JA 101. The "beach" proposal fares no better. See n.34 & accompanying text, supra. In short, no agency or court in these proceedings has ever given the economic viability of Palazzolo's projects the slightest credence, and the record underlying the judicial skepticism is equally damning.

n50 Government experts described the scope of the task of filling in approximately eighteen acres of coastal marshland with eight feet of fill. See Test. of Engineer Clarke, Tr. 554, 594-99; see also Preparation and Development Costs, JL1, tabs 9-10. With so much acreage below mean high water mark, the construction would have required at least 250,000 cubic yards of fill and the dredging out over 60,000 cubic yards of existing muck. See Test. of Engineer Clarke, Tr. 554, 594-599; see also Test. of Engineer Caito, Tr. 264, 274-77, 279-81. The engineering and appraisal experts considered the feasibility of various septic systems, the limitations imposed by local zoning laws, the requirement that construction, for the most part, would have to be on stilts, the type of infrastructure needed, and market prices prevailing at the time. See Test. of Engineer Clarke, Tr. 554, 562-77, 603, 606; Test. of Appraiser Andolfo, Tr. 661, 667-73; JL1, tabs 9 and 10.

Because Palazzolo has neither established that his property is valueless under the regulations, nor established an economically viable proposal, his claim lacks merit.

III. PALAZZOLO'S CLAIMS ARE BARRED BY RESTRICTIONS THAT PREDATE HIS ACQUISITION

Under Lucas, even a regulation that deprives a landowner of all economically viable use is not unconstitutional "if the logically antecedent inquiry into the nature of the owner's estate shows that the proscribed use interests were not part of his title to begin with." Lucas, 505 U.S. at 1027. This Court further stated, "any limitation so severe cannot be newly [*35] legislated or decreed (without compensation) but must inhere in the title itself, in the restrictions that background principles of the State's law of property and nui