Is “personal” property (as contrasted with real estate), or property that is used in commercial dealings, not “private property” is protected from uncompensated takings by the Fifth Amendment?
That’s what the U.S. Court of Appeals for the Tenth Circuit appeared to conclude in Green Room LLC v. State of Wyoming, No. 24-853 (Oct. 27, 2025).
There, the court was faced with (inter alia) a takings claim which asserted that when the Wyoming legislature amended a statute, the effect of which was to make what had been a legal market in hemp products illegal. “In addition to the claims brought in their complaint, Plaintiffs’ brief in support of their motion argued that SEA 24 constituted an unconstitutional regulatory taking of their personal property.” Slip op. at 9.
We won’t go into detail about how the Tenth Circuit analyzed the federal preemption and dormant commerce clause claims, except to note that the court rejected these claims. Skip down to page 20 of the opinion for the court’s regulatory takings analysis. Here’s how the court framed the issue:
Plaintiffs argue that “SEA 24 is an unconstitutional regulatory taking” of their property without just compensation.6 Aplt. Br. at 27. They assert that they reasonably “rel[ied] on the federal definition of hemp” and “similar language” in the 2019 Wyoming hemp law in developing their businesses. Id. at 28. SEA 24’s new restrictions on the production and sale of certain hemp products, they say, impermissibly “interfere[] with their investment-backed expectations.” Id. They assert that “moving the goal posts in the middle of the game” by “[c]hanging the definition of hemp” constitutes a “regulatory taking.” Id. at 31. We cannot agree.
Slip op. at 20-21.
The court noted that if it were to determine whether this is a taking, it would do so by applying the ad hoc Penn Central test. But, the court held, it didn’t need to here because the plaintiffs do not own “private property.” The court noted that the takings cases relied upon by the plaintiffs involved real property, and
Plaintiffs do not cite, and we are not aware of any, Supreme Court cases in which this framework has been applied to regulation of personal property, such as the goods of Plaintiffs at issue here. In particular, Plaintiffs have not pointed to a case in which a law restricting commercial uses of personal property was held to be an unconstitutional regulatory taking.
Slip op. at 22.
The Tenth Circuit noted language from Lucas that suggests that this type of property is something different:
And in the case of personal property, by reason of the State’s traditionally high degree of control over commercial dealings, [the property owner] ought to be aware of the possibility that new regulation might even render his property economically worthless (at least if the property’s only economically productive use is sale or manufacture for sale).
Id. (quoting Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1027 (1992)).
And that may be especially true where things like alcohol and hemp are involved. See slip op. at 22-23, where the Tenth Circuit set out several Supreme Court decisions which held that when government changes the rules regarding this type of property, the courts will give it a relatively free hand. This goes all the way back to Mugler v. Kansas, 123 U.S. 623, 668–69 (1887), where the Court held no taking when Kansas banned alcohol production without a license:
No later decisions of the Supreme Court have placed in question this long-standing law, and it continues to be applied by the lower courts. In the case of a “heavily regulated and highly contentious activity such as video poker” (or the production and sale of cannabis products), “[t]he pendulum of politics swings periodically between restriction and permission in such matters, and prudent investors understand the risk.” Holliday Amusement Co. of Charleston v. South Carolina, 493 F.3d 404, 411 (4th Cir. 2007) (South Carolina statute outlawing the possession of video gaming machines was not a taking even though it allegedly destroyed plaintiffs’ business and interfered with their business expectations based on South Carolina’s prior regulatory regime). Plaintiffs should have been well aware that the Wyoming legislature might not continue to look as favorably upon hemp and hemp products. The State need not provide just compensation every time it adjusts its regulatory scheme, even if those changes incidentally impair or even destroy the businesses of some.
We affirm the district court’s dismissal of Plaintiffs’ regulatory-takings claim.
Slip op. at 23-24.
We think the court’s decision turned more on the nature of the property involved here, not merely that it was “personal” property, or property used for “commercial” purposes. In our view, this case falls within the category of decisions like Mugler, where reasonable minds can differ about the problems a product creates — and thus the public’s view of that product often changes.
Green Room LLC v. State of Wyoming, No. 24-8053 (10th Cir. Oct. 27, 2025)