You remember, don't you? In the early days of the Co-19 epidemic, government and public health authorities were scrambling to do something ... sometimes anything! ... to respond.
Dare County, North Carolina might have been one of those local governments that went maybe just a bit too far in the precaution vs effectiveness departments: it banned nonresident property owners from entering the county (and apparently didn't ban anyone else from coming and going, only outsiders).
Dare County announced the restrictions on March 16 and implemented them over three phases. Phase one, which took effect immediately, declared a state of emergency and prohibited mass gatherings. Phase two, which took effect one day later, prohibited non-resident visitors from entering the county. Phase three, which took effect four days after the restrictions were announced, prohibited non-resident property owners from entering the county. In effect, Dare County told non-resident property owners: “If you want to quarantine at your beach house, get there by March 20.” This gave non-resident property owners four days to travel to the county.
Seems a bit over-the-top and not really a measure that had much effect, especially in retrospect.
But no matter, we know that courts are generally very hesitant to seriously entertain challenges to these type of police power actions as arbitrary or capricious, and won't do much if anything to say "hang on, this doesn't seem like an approach that's really going to work, or even do much."
But there are other ways to challenge these, such as state law, Contracts Clause, Equal Protection, or maybe takings, right? As we explained in an article on emergency takings last year, ("Evaluating Emergency Takings: Flattening the Economic Curve," 29 Wm & Mary Bill of Rights J. 1145 (2021)), takings claims are not a sure-fire winner (even where the cost-spreading rationale of takings is accounted for).
The U.S. Court of Appeals' recent opinion in Blackburn v. Dare County, No. 20-2056 (Jan. 25, 2023), confirms. There, the court held that Dare County's extreme reaction to Co-19, which prohibited the plaintiffs from "reach[ing] their beach house for forty-five days[,]" was not any kind of taking. Slip op. at 3.
The court first rejected the physical takings claim. The stay-out order "did not physically appropriate anything from them." Slip op. at 7. The County didn't authorize government agents or third parties to come onto the plaintiffs' property. The court rejected the argument that the County keeping an owner from accessing his or her own property is a physical appropriation. "This, they say, makes the order a physical appropriation, because the Supreme Court has repeatedly held that an appropriation occurs when the government eliminates a property owner’s right to exclude. But temporarily excluding an owner from their own property differs from eliminating the owner’s right to exclude." Id.
Next, the court made short work of the Lucas wipeout claim:
But Lucas’s per se rule does not apply here. Accepting the allegations in the complaint as true, Dare County’s order did not deprive the Blackburns’ property of all economic value. The restriction was enacted under the County’s State of Emergency declaration and so would only be operative while that state of emergency persisted. And it lasted only forty-five days. This “temporary prohibition” could not have rendered the Blackburns’ property valueless. See Tahoe-Sierra, 535 U.S. at 332. Moreover, the Blackburns could have lived in their house so long as they arrived before the ban took effect. And even during the forty-five days that the ban lasted, they were still able to rent their property to someone within the County or certain adjoining counties. So the order was not a per se taking under the Lucas framework.
Slip op. at 8.
Finally, the court did not address the merits of the Penn Central claim, but affirmed the dismissal of that theory for failure to plead it correctly. The complaint did not allege facts which show a "substantial" diminution of value caused by the restriction. See slip op. at 9. All the complaint alleged was that the plaintiffs "suffered damage" and lost the "fair market rental value and value of use of said property by governmental regulations for 45 days." Id. The court held this is a legal conclusion. We're not sure what the court suggests the plaintiffs could have alleged to make it more clear. The before-and-after? A specific amount of rent allegedly lost? Use the magic word "substantial?" To us, this seems like a too-technical and crabbed reading of the pleading requirements.
On the "expectations" Penn Central factor, the court seemed to be evaluating it on the merits when it concluded that "the non-resident property order did not deny the Blackburns the use of their vacation home. It simply requied them to be at their home by March 20, 2020, if they wanted to use it personally. And the Blackburns remained free to rent the house to those within the county, or to sell it." Slip op. at 10-11.
And finally, "[t]he third Penn Central factor favors Dare County." Slip op. at 11. The court's analysis starts off with this intriguing note: "This factor requires courts to examine 'the character' of the use restriction. Penn Cent., 438 U.S. at 124. Exactly what this factor refers to is, admittedly, a little fuzzy." Id. The court settled on this requiring an inquiry into whether the regulation results in the "functional equivalent" of a classic taking. Slip op. at 12.
Applying this principle suggests that the order is not a taking. Based on the allegations in the Blackburns’ complaint, the order is not “functionally equivalent” to a government appropriation of private property. See Clayland Farms, 987 F.3d at 355. The Blackburns controlled their home during the entire time the order was in effect, and could have personally used it had they arrived in Dare County by March 20, 2020. Cf. Horne, 576 U.S. at 361–62 (holding that a physical appropriation occurred when a regulation physically transferred raisins from farmers to the government).Nor is the order “functionally equivalent” to an ouster. See Clayland Farms, 978 F.3d at 355. The Blackburns were not dispossessed of their vacation home. And they were never forced to leave Dare County. In fact, just the opposite. Despite promulgating the order on March 16 and implementing the non-resident visitor ban a day later, Dare County delayed implementing this order until March 20 to give homeowners like the Blackburns a chance to travel to the County. This is a far cry from an ouster. See Ouster, Black’s Law Dictionary (11th ed. 2019) (“The wrongful dispossession or exclusion of someone (esp. a cotenant) from property.”).
Slip op. at 12-13.
Dismissal affirmed.
Blackburn v. Dare County, No. 20-2056 (4th Cir. Jan. 25, 2023)
