A Supreme Court ruling upholding the right of a Rhode Island man to challenge the government’s refusal to allow him to build on his land is being hailed nationally by home builders and private property rights advocates as a major victory for the protection of property rights under the Fifth Amendment of the U.S. Constitution.

“The real story in this case is not whether a property owner won or lost, but simply that the highest court in the land said the property rights and takings claims of private land owners can and must be heard in courtrooms across America and in a timely manner,” said National Association of Home Builders (NAHB) President Bruce Smith.

What impact it will have locally is seemingly open to interpretation, depending on you talk to. Local private property rights advocates say it will curtail what they feel is the county’s plan to severely restrict land use, including using the Endangered Species Act (ESA) and the state’s Growth Management Act (GMA) to do so. County officials deny any intent to restrict land use, and say the ruling may not have much local impact.

What led up to this was a Rhode Island man, Anthony Palazzolo, filed a takings claim against the Rhode Island Coastal Resource Council, asserting that his ability to develop his land was constrained by state wetlands regulations. The Rhode Island state government, in turn, argued that Palazzolo knew of the wetlands restrictions when he bought the land, that his case was not “ripe” or ready for judicial review, and that he was not eligible for a takings claim since he would be able to build a residence on a small portion of his property and thus recoup some of his investment.

In it’s majority ruling, the Supreme Court decreed:

• Palazzolo was not required to submit multiple applications to develop his land to ripen his takings claim, as Rhode Island courts had ruled. In the land use regulatory process, once the extent of development that a land use authority will permit is “known to a reasonable degree of certainty,” a takings claim is ripe for review. Government authorities “may not burden property owners by imposition of repetitive or unfair land use procedures in order to avoid a final decision.”

• Government cannot put an expiration date on a takings claim. Rhode Island’s argument that landowners who purchase property after a regulation has been passed cannot bring takings claims is invalid. The state had argued that property owners are put on notice that their land is regulated and, hence, can have no reasonable expectation to develop it. The Supreme Court rejected that theory saying that “a state would be allowed, in effect, to put an expiration date on the takings clause. This ought not to be the rule.”

• Partial takings claims are possible. The court rejected Palazzolo’s claim that he suffered a “total taking.” But it did send the issue back to the Rhode Island courts, to determine whether compensation should be for less than a 100 percent total taking.

Important in the ruling was the Court’s guidance on when a takings claim is ripe.

Under the U.S. Supreme Court’s 1985 decision in Willamson County Regional Planning Commission v. Hamilton Bank, a takings claim only becomes ripe after land use regulators have issued a “final decision” and explained the extent of uses on the property that will be permitted.

In its Palazzolo decision, the Court added that when “...the state agency charged with enforcing a challenged land use regulation entertains an application from it’s owner and the denial makes clear the extent of development permitted, ....federal ripeness rules do not require the submission of further and futile applications with other agencies.”

The Court’s decision supports the view of property rights advocates that landowners should not have to subject themselves to endless rounds of negotiations with land use and environmental agencies to determine when their takings claim can be heard in a courtroom.

So, how does all this impact Kitsap County and its ongoing land use battles?

“Not at all in the short term,” according to Poulsbo land use attorney Jim Tracy. Although he noted the effect over a longer period of time, and the number of people willing to pursue the takings issue is quite another matter.

“The finding of the court that you can challenge on this issue may serve to create a critical mass of property owners that want to challenge cities and counties that have adopted regulations that may have taken property without compensation. It’s just hard to know when that critical mass of public awareness will result in the investment of time and money into legal action,” said Tracy.

Vivian Henderson, executive director of the Kitsap Alliance of Property Owners, a vigilant, local private property rights group, saw it a little differently.

“Saying that the US Supreme Court decision in Palazzolo v Rhode Island sends a shot across the bow of government is an understatement. We won’t know the entire ramifications of the case until it goes back through the lower courts, but the U.S. Supreme Court has sent a powerful message to government to be careful of their total disregard for property rights.”

“I was present when the prosecutors’ office gave a briefing to the County Commissioners on this decision,” added Henderson. “Deputy Prosecutor Shelley Knieps reported to the Commissioners saying of the U.S. Supreme Court’s finding, ‘It hasn’t said anything new.’ I was stunned when she said that. I would say if county government ignores this significant ruling they do so at their own peril.”

County Commissioner Jan Angel also views it pragmatically, but obviously leans towards preserving property rights. “This ruling will effect people all over the country not in just Kitsap County,” she commented. “Our people here are environmentally conscious people, but they do have a very real fear of an unjustified taking. Hopefully, with this ruling, the courts will take a hard line where government is concerned and send the message that an unjustified taking is unacceptable. In my view, this ruling says the courts are going to back up our constitution in protecting the rights of property owners.”

Commissioner Tim Botkin, an attorney who served as the county’s land use Hearing Examiner before being elected to office, didn’t see a lot of danger for the county in the ruling.

“As I understand it, the significance of the case is that it says that a change in local law may not be a grounds for determination that a taking did not occur,” said Botkin. “In Rhode Island, the owner had the land for an extended period of time, the law changed and that new law was applied to avoid the taking. The Court said no, go back to the original.”

He added, “Also significant is what the case did not do. It did not rule on whether this was or was not a taking because it merely remanded the case back down for a determination under the original rules. It did not decide what amount of restriction is legal or that compensation was due. In short, the procedural ‘substantive due process’ element is important, but we have to wait and see if it means a change in the way the substance of the taking rule is applied. Thus its application to us is somewhat limited, at least for now.”

The county’s Department of Community Development chief, Bruce Freeland, basically concurred with Botkin, saying, “The Rhode Island case clarified an important, but narrow, point of the law. The Court’s ruling means that a government may not be able to successfully defend a challenge that it has caused a “ taking” of land by arguing that the rules that caused the “taking” were already in place when someone purchased the property. The case was sent back to the state court to decide whether there has, in fact, been a taking of land and whether damages are due. The case has not changed the basic analysis used by lower courts to determine whether a taking of land has actually occurred.”

He added, We are watching developments in the case with interest.”

That jived somewhat with an opinion by Tracy. “The other important thing about the Palazzolo ruling is that the court didn’t find that the property had been completely taken, therefore subject to compensation under the Lucus v. South Carolina case. What they did say, was that because there was an uncontested $200,000 residual value in part of the property, that the entire case needed to be remanded to the Supreme Court of Rhode Island, to determine whether Palazzolo could assert the takings claim under the more general test of Penn Central Transportation Company vs. New York City.

In referring to a local case where an Olalla couple is looking to explore this issue in depth and possibly be a test case under the ruling, Henderson said, “I believe Kitsap County government is asking for trouble when they determine a property’s developability is based on the amount of money the owner paid for it.”

This refers to a statement Botkin made in a commission meeting where the Olalla couple’s application for a “reasonable use” zoning variance to develop a piece of waterfront property was denied. The couple in question paid an arguably below market price for the land — although they have paid an enormous amount of money to consultants trying to get a permit to build a home on the property. So far, all they’ve succeeded in doing is get permission to park their RV there.

Botkin stated in the meeting that they should have known they would have permitting problems based on the price they paid for the land.

“I think the Palazzolo decision tells us quite plainly parking an RV on your land is not ‘reasonable use,’ said Henderson. “The decision also makes it pretty clear a property owner can challenge regulations even if they were on the books when the property was purchased.”

Also referring to the Olalla couple, as well as an Illahee couple who have fought the county for the past several years, spending more than they paid for their land to comply with county rules — and were still denied a building permit in spite of several favorable court rulings, Henderson added, “A property owner doesn’t have to spend thousands of dollars turning the property every which-way for continual denial of some reasonable development. ‘Ripeness’ was a big issue in this decision.”

So, what does this case really mean for Kitsap County? Basically that the jury is still out, but that the rules of the development game are once again in play. If a large number of property owners who have been denied building permits or have been forced to spend more than their property is worth to try and develop it, start challenging the county, it could get expensive — and as usual, the taxpayers will be footing the bill.