A class-action lawsuit filed in the Eastern District of Pennsylvania late last week alleges that Governor Wolf’s orders closing non-life sustaining business constitute a taking requiring just compensation under the Fifth Amendment, and that they violate due process. Given the extreme nature of the COVID-19 pandemic and the breadth of relief sought, the case raises profound implications about the scope of the government’s police power. Because this case arises under federal law and many other governors have issued similar orders, it could have implications beyond Pennsylvania.
The plaintiffs acknowledge that the shutdown orders are justified by a legitimate public purpose. But they claim the orders amount to a regulatory taking because they deprive the businesses of any economically beneficial use of their property, and that the Fifth Amendment entitles them to just compensation. The representative of the business class is Schulmerich Bells, LLC (Bells), the “oldest manufacturer of orchestral quality musical hand bells and hand chimes in the United States.” Bells claims it is unable to carry out its business because it has been denied access to its manufacturing and repair space in the midst of its busy season.
The plaintiffs’ takings claim faces many obstacles. First and foremost, requiring the government to compensate individual businesses would impose massive financial liability and seriously impede the exercise of the government’s police power as it faces a once-in-a-century pandemic. Second, courts have held that temporary obstruction of access to private property is not compensable under the Fifth Amendment. Third, the plaintiffs will have to show that their damages are special and peculiar, a requirement of a regulatory takings claim. Fourth, it may be difficult for plaintiffs to certify a class given the wide array of businesses they seek to represent.
The case is Schulmerich Bells, LLC et al. v. Wolf, Case 2:20-cv-01637 (E.D. Pa. March 26, 2020).
The Ballard Spahr Eminent Domain practice group will continue to track this and similar cases.