Palazzolo v. Rhode Island: A Few Clear Answers and Many New Questions

The U.S. Supreme Court’s latest regulatory takings decision, Palazzolo v. Rhode Island, is significant for its rejection of what I term the positive notice rule. It also confirms the narrow scope of the categorical rule, developed in Lucas v. South Carolina Coastal Council, for government actions that work complete takings of property. Beyond that, Palazzolo evokes the potential for the enhanced recognition of property rights implicit in some of the Court’s earlier cases. In particular, it signals fresh life to the doctrine of partial regulatory takings and to the concept of the relevant parcel. On the other hand, a majority of the Justices indicated that a weaker form of the notice rule should have some bearing on landowners’ “reasonable investment-backed expectations.” The latter concept is crucial in partial takings analysis, and, arguably, applies to complete takings analysis as well. Given the open-ended possibilities of Palazzolo, it is not clear, especially in the initial round of analyses, whether the case’s intriguing potential, or dire threats, are implied by the Court or inferred by the commentators. Indeed, backing up a step, the lack of completeness in the record may have led the Justices themselves to infer facts based upon their conceptions of the Takings Clause. The reflections on the meaning of Palazzolo expressed here might usefully be juxtaposed with those of another Environmental Law Reporter (ELR) commentator, Prof. John Echeverria, whose perceptions of regulatory takings and environmental issues have diverged from my own. In his Dialogue on Palazzolo in a recent issue of ELR, Professor Echeverria reads out of (or into) the Court’s decision a somewhat different set of conclusions than I reach here. Although I am less willing to see the Court’s 5-4 division in starkly partisan terms, I agree that they reflect important differences on the relative roles of the police power and individual liberty. Professor Echeverria concluded that Palazzolo “represents another incremental step by an activist Court in the direction of a new, libertarian rewrite of the Takings Clause.” As an initial matter, I am not persuaded that the term “judicial activism” is very helpful. Also, while the Court has in recent decades shifted its emphasis in the protection of property rights from the Due Process Clause to the Takings Clause, it has vindicated property rights at many