The Coronavirus and the Takings Clause

Anyone following the news about the coronavirus knows about the vocal opposition by libertarians and other right-wing extremists to government measures designed to control the pandemic. On television, the coverage has focused on angry, gun-toting protesters. But there's another avenue of opposition to the virus-related safeguards, one that's less photogenic but no less divorced from reality. In recent weeks, a number of land and business owners have filed lawsuits claiming stay-at-home orders and business closings represent “takings” of private property under the Fifth Amendment to the U.S. Constitution. These takings claims should be – and likely will be – rejected based on firm U.S. Supreme Court precedent.

In the absence of clear direction from the Trump administration, states have been left largely to themselves to devise emergency rules designed to “flatten the curve’” of new coronavirus cases and reduce the toll of sickness and death. Most states have adopted some subset of now-familiar restrictions, including stay-at- home directives, requirements that “non-essential” businesses shut down, and bans on owners traveling to and using vacation homes. In response to these measures, property owners have filed takings lawsuits in more than half a dozen states across the country, ranging from California to Florida, from Connecticut to Michigan.

Most of these cases are still at an early stage, and the terms of state rules continue to evolve based on new scientific data and officials’ efforts to balance public health with economic activity. However, the Pennsylvania Supreme Court, exercising its exceptional power to decide in the first instance cases requiring “timely intervention” by the high court, has already spoken.

On April 13, in the case of Friends of Danny DeVito v. Wolf (no, not Danny DeVito the actor; Danny DeVito the lawyer running for the state legislature), the court considered and rejected takings (and other legal challenges) to an order issued by Gov. Tom Wolf requiring all “non-life-sustaining businesses” to shut down. The plaintiffs subsequently filed a petition for certitorari in the U.S. Supreme Court, along with an application for a stay of the governor’s order pending disposition of the petition. The U.S. Supreme Court denied the application for a stay on May 6.

These takings lawsuits, if ultimately successful, could hobble the ability of government to effectively combat the coronavirus pandemic by enforcing social distancing in order to slow and hopefully stop community transmission. The so-called "takings project," invented by noted academic Richard Epstein and popularized by ideologues in the administration of President Ronald Reagan, seeks to impose an obligation on government to pay every time it restricts use of private property. The Supreme Court has never adopted this understanding of the Takings Clause or anything like it. In the words of distinguished Harvard Law School professor Charles Fried, if the courts were ever to adopt this reading of the Takings Clause, “there would be, to say the least, much less regulation.”

For several independent reasons, all or most of the pending coronavirus takings cases should fail, just as the lawsuit already failed in Pennsylvania. First, the Supreme Court has recognized that temporary restrictions on the use of private property will rarely rise to the level of a compensable taking. Under the established approach for assessing the economic impact of government actions, courts look to the impact of the action in the context of the claimant’s “whole parcel.” In the landmark 2002 case of Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, the Court recognized that the relevant parcel has a temporal as well as a geographic dimension. A multi-year moratorium on development did not result in a taking, the Court ruled, because the affected properties could be expected to regain all or most of their value once the moratorium was lifted.

Applying the teaching of Tahoe-Sierra to the coronavirus takings cases, the claims should fail because they are based on stop-gap measures which, by design, are temporary. While the rules may vary in how explicitly they identify the projected end date, the essential purpose of shutdown orders is to suppress the spread of the disease and allow the shutdown to be lifted. Moreover, as the Pennsylvania Supreme Court recognized, it is implicit that shutdowns will only endure, at the outside, pending “the development of a vaccine to prevent future outbreaks, the development of an immunity in individuals previously infected and the availability of widespread testing and contact tracing.”

Furthermore, the Court has long recognized that when the government acts to address a serious threat to public health and safety, a compensable taking will rarely result. In Pennsylvania Coal Co, v. Mahon, in which the Supreme Court nearly 100 years ago launched its regulatory takings doctrine, Justice Oliver Wendell Holmes emphasized that the case might have come out differently if it had involved safety issues, pointing to a prior Court case rejecting a takings claim involving a regulation designed to protect “employee safety.”

To point to another example, the Supreme Court long ago held that the government, “in cases of actual necessity,” to arrest a wildfire, “or to forestall other grave threats to the lives and property of others” may even destroy private property without triggering takings liability.

In light of these precedents, courts should reject takings challenges aimed at regulations that, according to public health experts, offer an effective remedy to one of the gravest threats to public health and safety in U.S. history.