Won: Supreme Court rules government cannot put an expiration date on property rights

Anthony Palazzolo was a tow truck business owner in Rhode Island in 1959, when he decided to buy and develop a few acres of land into residential homes.

He instead spent the next 40 years fighting against a state government so determined to stop him that it tried to rewrite the law of property ownership. The battle ended in 2001 at the U.S. Supreme Court.

The battle began when Anthony applied for a construction permit. State officials denied the permit, citing environmental regulations that had gone on the books years earlier. Undaunted, he spent the next several decades trying to get permits to use his property but was denied at every turn.

Unable to use his property, Anthony watched its value plummet. But because the regulations predated his ownership, the state refused to compensate him for his land’s lost value.

When he sued to be paid what he was justly owed (Palazzolo v. Rhode Island), he lost in state courts. The Rhode Island Supreme Court even claimed he had no right to be in court in the first place.

Faced with the decision to simply accept the reduced value to his property or fight back, Anthony asked PLF to take his case to the Supreme Court. The Justices heard oral argument in Palazzolo v. Rhode Island in March 2001, with Anthony represented by PLF and Rhode Island represented by then-State Attorney General (and now-Senator) Sheldon Whitehouse.

Anthony won the case four months later in a decision recognizing that states cannot extinguish property rights when the property changes hands. The Palazzolo v. Rhode Island decision also affirmed landowners’ rights to sue when their property is taken without just compensation—no matter when they acquired their property.

Palazzolo v. Rhode Island set an important property rights precedent that has been cited in hundreds of cases since. Without it, government agencies would have nearly unfettered power to regulate land, as long as regulations were on the books before a landowner purchased their property. Now, because of Palazzolo v. Rhode Island, regulators can’t simply run out the clock on property owners’ rights.

Palazzolo v. Rhode Island represents an important check on government and a powerful protection of property rights. Government might have the power to regulate private property, but it must pay property owners for any land it takes—regardless of when it takes a property owner’s land.

What’s At Stake?

  • The Constitution protects property owners’ right to be compensated if the government takes away the value of their land. Property owners should be allowed to defend those property rights in court regardless of when any regulation was put in place.
  • States cannot extinguish property rights by simply enacting a law that puts an expiration date on the Constitution’s Takings Clause.

Case Timeline

June 28, 2001