Here’s the latest order in one of the various challenges to coronavirus-related shut down orders. (See here, here, here, here and here, for example.)

In Xponential Fitness v. Arizona, No. CV-20-01310 (July 14, 2020) (unpub.), the U.S. District Court for the District of Arizona denied preliminary relief in a case which sought an injunction against the Arizona governor’s orders. The complaint including a takings claim among others (contracts clause, due process, equal protection, as well as state law claims). The only relief sought for the taking was an injunction, not just compensation. 

[Sidebar: interestingly, there’s no mention of the Eleventh Amendment, despite the State of Arizona being the lead defendant in the case; we haven’t taken a dive into the docket to see if the State consented, or objected elsewhere to being haled into federal court.]

To the court, that was fatal to the likelihood of the plaintiffs’ success on the merits. Here’s the entirety of the court’s takings analysis:

Plaintiffs’ Fifth Amendment takings claim cannot support their request for injunction relief. See Knick v. Twp. of Scott, Pennsylvania, 139 S. Ct. 2162, 2176 (2019) (“As long as an adequate provision for obtaining just compensation exists, there is no basis to enjoin the government’s action effecting a taking.”). “The Fifth Amendment does not proscribe the taking of property; it proscribes taking without just compensation.” Williamson Cty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194 (1985), overruled on other grounds by Knick, 139 S. Ct. 2162. Thus, even if the June 29, 2020 Executive Order did violate Plaintiffs’ Fifth Amendment rights, Plaintiffs would not be entitled to injunctive relief because damages are the proper remedy for a taking. See Bridge Aina Le’a, LLC v. State of Hawaii Land Use Comm’n, 125 F. Supp. 3d 1051, 1066 (D. Haw. 2015), aff’d sub nom. Bridge Aina Le’a, LLC v. Land Use Comm’n, 950 F.3d 610 (9th Cir. 2020).

Slip op. at 16.

Before we move on, a comment. We’re not sure that just compensation should be considered the only remedy for a taking. First, we’ve seen cases in which the Supreme Court has recognized that an award of just compensation is not the sole way to raise a takings claim. You can raise it as a defense to some government action (“you can’t do X, government, because to do X without compensation would be an unconstitutional taking” – this is more like a rule that government cannot act except in conformity with the constitution than an actual “takings” claim for compensation). The raisin case (Horne v. USDA) is a good example. Another is Kaiser Aetna v. United States, 444 U.S. 164 (1970), where the property owner raised a similar argument in response to the Corps of Engineers’ district court lawsuit under the Rivers and Harbors Act.

Or, you might raise a takings argument affirmatively by declaratory judgment:

MR. JUSTICE REHNQUIST suggests that appellees’ “taking” claim will not support jurisdiction under § 1331(a), but instead that such a claim can be adjudicated only in the Court of Claims under the Tucker Act, 28 U.S.C. § 1491 (1976 ed.). We disagree. Appellees are not seeking compensation for a taking, a claim properly brought in the Court of Claims, but are now requesting a declaratory judgment that, since the Price-Anderson Act does not provide advance assurance of adequate compensation in the event of a taking, it is unconstitutional. As such, appellees’ claim tracks quite closely that of the petitioners in the Regional Rail Reorganization Act Cases, 419 U. S. 102 (1974), which were brought under § 1331 as well as the Declaratory Judgment Act. See App. in Regional Rail Reorganization Act Cases, O.T. 1974, Nos. 74-165, 74-166, 74-167, 74-168, p. 161. While the Declaratory Judgment Act does not expand our jurisdiction, it expands the scope of available remedies. Here, it allows individuals threatened with a taking to seek a declaration of the constitutionality of the disputed governmental action before potentially uncompensable damages are sustained.

Duke Power Co v. Carolina Env. Study Group, Inc., 438 U.S. 60, 71 n.15 (1979). We get that just compensation is the usual remedy, and the most common. But the sole remedy? Jury’s still out on that one, in our opinion.

Want more on the theory and practice of challenging these type of emergency orders? Please plan on joining us next week, Wednesday, July 22, 2020, at 1pm ET (10am PT) for a long-form program on “Emergency and Police Power: Property Claims in Times of Crisis,” sponsored by the ABA Section of State and Local Government Law. Our speakers are Professors Craig Konnoth (Colorado) and John Nolon (Pace), and one of the lawyers on the forefront of the nationwide legal challenges, Harmeet Dhillon (San Francisco). I’ll be moderating, along with Professor Sarah Adams-Schoen (Oregon).

Would you like a deeper dive into takings and these type of emergency orders? Check out our soon-to-be-published article, “Evaluating Emergency Takings: Flattening the Economic Curve” (forthcoming 2020).

Xponential Fitness v. Arizona, No. CV-20-01310 (D. Ariz. July 14, 2020) (unpub.)

Continue Reading Federal Court: No Takings Claim To Enjoin COVID Shut-Down Order