Court Rules in Landowner Compensation Case

July 2, 2001

The American Farm Bureau Federation has hailed a Supreme Court decision that landowners are entitled to seek compensation when they are forbidden by government from realizing their property's full economic potential. AFBF and the Rhode Island Farm Bureau filed an amicus brief supporting landowner Anthony Palazzolo who was prevented from developing land by the state's Coastal Resources Management Council. Palazzolo bought 18 acres in 1959, with the long-term plan to build 74 homes. In 1978, Palazzolo changed title of his land from his single shareholder corporation to himself individually.

"The court's decision is a considerable victory for landowners and the fight many have been forced to wage against government attempts to block landowner takings claims," said American Farm Bureau Federation President Bob Stallman. "The court weakened troublesome obstacles to landowner takings claims and expressed dissatisfaction with existing rules that hinder 'partial takings' claims."

Despite several attempts to satisfy the council's rulings, the state repeatedly rejected Palazzolo's amended plans for more than four decades. When he ultimately sought compensation for his loss, the state court rejected his claim, citing the change of title, and claiming his property had not lost its entire value.

"Rejecting this landowner's best efforts to comply with the coastal council's changing demands clearly devalued the property," said Stallman. "The council's action effectively limited the use of the bulk of the land solely to a public wildlife refuge, without the public bearing any expense.

"Farm Bureau was also extremely troubled by the state's rules changes due to a 'paper change' in ownership. Such actions occur frequently when farm families transfer land ownership to assure that their land stays in farming and under their family's control. The Supreme Court rejected the state court's ruling that would have deprived heirs and successors of any right to file a compensation claim."

While the court remanded the case back to Rhode Island to determine whether there was a detrimental economic impact on Palazzolo's investment potential, Stallman said the organization will continue to monitor the case and support Palazzolo's right to fair compensation.

"Farm Bureau members hope the Rhode Island courts award a fair compensation to Mr. Palazollo, taking into account the four decades of expenses and frustrations he has endured in attempting to follow the council's procedures," Stallman said. "When government restricts the use of private property to create a public benefit, then the landowner should be compensated."

The court also ruled in Palazzolo's favor merely by considering the case because the state claimed he should have pursued other procedural options before litigation was necessary. According to Stallman, the council's constant delaying tactics resulted prevented the property owner from achieving his land's full economic potential.