Whether a property owner may be deemed to lack investment-backed expectations, and thus be barred from challenging a land use restriction as a regulatory taking, solely because the challenged restriction was enacted before he acquired the property

QUESTIONS PRESENTED In 1999, Denis and Carol Kelleher purchased an undeveloped lot in an_ established residential neighborhood with the intention of building a small summer home. After receiving local permit approvals, a New York agency denied the permits upon a determination that the creekside lot would provide more public benefits if it was kept in its undeveloped state. The Kellehers sued for a regulatory taking, presenting a “text book” and “persuasive” claim showing a 98 percent reduction in value. But a longstanding New York court rule holds that a landowner cannot, as a matter of law, establish a reasonable investment-backed expectation when a regulation in effect at the time of purchase requires the owner to secure a discretionary land use permit. Matter of Gazza v. New York State Dep’ of Envtl. Conservation, 89 N.Y.2d 603, 615, cert. denied, 522 U.S. 813 (1997)). According to the New York courts, the existence of agency discretion “is dispositive” of a regulatory takings claim without regard to any of the other factors required by Penn Central Transportation Co. v. New York City, 438 U.S. 104, 124 (1978). Gazza, 89 N.Y.2d at 616. The questions presented are: 1. Whether a property owner may be deemed to lack investment-backed expectations, and thus be barred from challenging a land use restriction as a regulatory taking, solely because the challenged restriction was enacted before he acquired the property notwithstanding this Court’s contrary ruling in Palazzolo v. Rhode Island, 533 U.S. 606, 626 (2001); and ii 2. Whether any one factor of Penn Central’s multifactorial regulatory takings test set is dispositive of a property owner’s regulatory taking claim without regard to the remaining factors.