Here's the latest in a case we've been following since it was filed just a couple of weeks ago.
This is the one where "Friends of Danny Devito" (no, not that Danny Devito) sued the Pennsylvania governor challenging shut down orders under a variety of theories. Including a takings claim, of course.
Well, the Pennsylvania Supreme Court acted quickly, and just a couple of days ago issued an opinion that came out pretty much the way we expected, especially on the takings claim. We recommend you read it (not only for your virtual cocktail parties, since nonlawyers will ask about this stuff even if it isn't your bag), but because we think the court make a good point when it rejected the state's argument that the shut down orders are an exercise of the Commonwealth's "police powers" and not its eminent domain power. Therefore, the Commonwealth argued, it cannot be liable for a taking. If you want to cut to the takings chase, start at page 32 of the slip opinion.
The court was dealing with a regulatory Lucas claim (not a physical occupation taking) that the regulation deprived the owners of all economically beneficial or productive use of their properties. Slip op. at 33. The government asserted that because it is unquestionably exercising its police power, any resulting injury cannot be a "taking."
That argument often works. The most well-known example is in a case in which -- just today -- we filed an amicus brief on that very point: the Tenth Circuit case in which the court held that a municipality could not be held liable for a taking even though its police officers destroyed a home in order to dislodge a fleeing criminal, because doing so was an exercise of the police power. Our brief argues that an invocation of "police power" is but one of the factors a court should consider when it makes a takings determination (in Penn Central terms, "the character of the government action"), and by no means is the dispositive factor as Pennsylvania urged.
The Pennsylvania Supreme Court agreed, and rejected the idea that "police power" is necessarily a get-out-of-takings-jail-free. See slip op. at 35. Yes, it is a factor (and in this case a really compelling factor), but it isn't the only thing a court looks at. Check out page 37 of the slip opinion, where the court emphasized the public health rationale for the shut down (relying on an earlier Third Circuit case we wrote up here), and the temporary nature of the ban (relying on Tahoe-Sierra). That seems a much more satisfactory analysis of the takings question than other courts that simply accept the invocation of "police power" and stop there.
One caution, however, in leaning too heavily on Tahoe-Sierra for the proposition that temporary bars on use -- even those that result in a total loss of use that normally would trigger a Lucas claim -- are just fine. In Tahoe-Sierra, the majority placed special emphasis on the idea that the temporary total ban was ok because, you know, when the restriction is eventually lifted, the market value will bounce right back along with the permissible uses. So no long-term harm -- no foul, in the Court's thinking. (As far as we recall, this economic theory was not supported by evidence in the record of that case.) We're not sure there's any evidence of that in the Pennsylvania case, either. Some businesses may bounce back once the restrictions are lifted. Some may not. But in our thinking, that should be the focus of the Tahoe-Sierra inquiry in these kinds of cases, not the "temporary" nature of the restrictions standing alone.
On to the next case (and there will be more).
Friends of Danny Devito v. Wolf, No. 68 MM 2020 (Pa. Apr. 13, 2020)
