Another takings challenge to a Co-19 shutdown, another "no taking" result.
This time, it is from the Florida District Court of Appeal (Fifth District). In Orlando Bar Group, LLC v. Desantis, No.5D21-1248 (Apr. 8, 2022), the court affirmed dismissal of takings challenges to the governor's emergency order that barred certain alcohol sales, and limited the service in bars. Orlando-area bar owners sued for inverse condemnation.
The Fifth District concluded that this did not result in a taking. First, the court held that it would not apply a categorical physical rule, because Cedar Point Nursery is not applicable. In that case, the owners were asserting their right to exclude the public, but here the bar owners claimed that the restrictions abrogated their right to include patrons and others. Slip op. at 7 ("The COVID orders at issue here did not permit third parties to access Appellants’ property; they did the opposite by preventing Appellants from having patrons on their premises and temporarily prohibiting Appellants from selling alcohol for on-premises consumption. As such, the COVID orders did not result in a physical appropriation and per se taking of Appellants’ property; rather, the COVID orders regulated Appellants’ use of their property."
Next, the court rejected the categorical Lucas claim, because even though "significant," the "impact of the orders amounted to a complete prohibition on the sale of alcoholic beverages for only seventeen days, following which Appellants’ businesses were incrementally permitted to return to limited sales and operation before being allowed to return to their pre-pandemic mode in approximately six months." Slip op. at 9. No loss of beneficial and productive use, it seems.
Finally, the court considered a Penn Central ad hoc takings claim (what the court unfortunately labeled "as-applied regulatory taking" even though we all know that an "as-applied" challenge is a description of a claim's procedural posture, and not of its substance). Here's how the court evaluated the three ad hoc factors:
Applying the Penn Central factors to the case at hand, it is clear that the COVID orders did not constitute a taking. For the first factor, it is undisputed that Appellants, along with numerous other businesses, were financially impacted by the COVID orders. For the second factor, just like firework sellers, sellers of alcohol are also in a highly regulated business. See generally Ch. 561-568, Fla. Stat. (2021). For example, one of the emergency powers granted to the Governor by statute is the ability to halt the sale of alcohol during an emergency. See § 252.36(6)(h), Fla. Stat. (2021) (granting governor ability to suspend or limit the “sale, dispensing, or transportation of alcoholic beverages”). Thus, Appellants should have also been on notice that further regulations could be enacted. Lastly, in consideration of the third factor, the COVID orders represented a valid use of the state’s police power to protect the general welfare, as noted by the trial court with citations to several other contemporary COVID decisions. If the state can use its police power to temporarily prohibit the sale of fireworks to prevent wildfires during an exceptionally dry period in Florida, it stands to reason that the state can also use its police powers in an effort to limit the spread of a highly infectious and deadly virus.
Slip op. at 11-12.
In short, the "economic impact" factor cut in favor of the bar owners. "Significant" impact. But the "investment-backed expectations" cut against them because the bar industry is highly regulated because the governor's emergency powers include the power to "halt the sale of alcohol." Now hold on a minute -- that seems like a bit of bootstrap logic: the governor's power to stop alcohol sales during an emergency isn't a taking because the governor has the power to stop alcohol sales during an emergency and thus owners don't have any expectations of selling alcohol during an emergency. Call us skeptical that this is the right way to analyze this. Finally, the court seems to have equated the character inquiry with the due process test (does the government have a really good reason for doing what it did?). As we wrote here, and as the Fourth Circuit got right in this case, the character of the government action question is about the nature of the restriction, and its impact on the owner’s property rights, and does not mean the government’s reasons. It merely asks the nature of the action: Is it a regulation of property use? Does it result in a transfer of title to private property? Does the owner retain title, but is nevertheless being required to open up their property to others? Does it require the owner to destroy their property for the public good? Are the owner’s rights being interfered with temporarily, permanently, or indefinitely? So invoking the police power as the reason this isn't a taking doesn't get you anywhere.
But there it is. Will this go further up the chain? If so, will this meet with more success than other similar challenges?
Orlando Bar Group, LLC v. Desantis, No. 5D21-1248 (Fla. Dist. Ct. App. Apr. 8, 2022)