Check out the U.S. Court of Appeals for the Eighth Circuit's opinion in Pharmaceutical Research and Manufacturers of America v. Williams, No. 21-1731 (Apr. 3, 2023), where the court reinstated a complaint dismissed by the district court for lack of standing.
The Eighth Circuit held that even though the "usual" remedy for a regulatory taking is just compensation, where a state's just compensation remedy would be inadequate, the property owner may seek equitable relief such as a declaratory judgment or an injunction. [Disclosure: our law firm filed an amicus brief in support of the plaintiffs, arguing that equitable is available in takings claims.]
The complaint challenged Minnesota’s Insulin Affordability Act, which requires insulin manufacturers to provide insulin at no charge to eligible Minnesotans in 90-day increments for up to one year. The manufacturers argued that the Act works a taking, and sought to enjoin its enforcement. Note that the complaint was brought in federal court, against state officials in their official capacities. So the real battle here was over the forum: if compensation is the only available relief, then the Eleventh Amendment means the suit cannot be brought in federal court (at least as the current state of 11th Amendment law stands). But if declaratory or prospective injunctive relief is okay, then the Ex parte Young exception applies and green light to federal court action.
The District of Minnesota held that equitable relief was unavailable, based on its misreading of Knick v. Township of Scott, which suggested that "equitable relief is generally unavailable" for a takings claim "[a]s long as an adequate provision for obtaining just compensation exists." The District Court held that the plaintiffs could have obtained just compensation in an inverse condemnation action in the Minnesota courts (yes, Minnesota uses the mandamus remedy which is not, technically speaking, "inverse condemnation," but close enough - the court held that property owners can get money in Minnesota courts for takings).
The Eighth Circuit, however, recognized the issue was the adequacy of this remedy -- not merely its existence -- because "Knick does not hold that every state’s compensation remedy is adequate in a particular situation; implicit in Knick is the requirement that just compensation must be available to petitioners seeking a remedy." Slip op. at 11. To determine adequacy, the remedy must be "practical and efficient." Slip op. at 12.
And that's where the district court's analysis fell short. Because the Act requires indefinite periodic donations of private property, the repetitive nature of the taking would require the plaintiffs to keep on suing for just compensation claims, ad infinitum. The Eighth Circuit held that state court compensation would not be an adequate remedy, given the endless and repetitive nature of the taking:
An inverse condemnation action to reimburse a manufacturer for each discrete alleged taking is incapable of compensating the manufacturers for the repetitive, future takings that will occur under the Act’s requirements. By contrast, equitable relief would protect manufacturers from those future harms.Slip op. 18.
The court also rejected Minnesota's arguments that the Eleventh Amendment barred jurisdiction, and that Ex parte Young does not apply to takings claims because of the state’s "special sovereignty interest" in eminent domain. The court held that where there is no adequate remedy at law, and where a takings claimant seeks a prospective injunction that will not result in payment from the state’s treasury, the Ex parte Young exception applies and the Eleventh Amendment is no bar to a federal court action.