Somin vs. Guerra-Pujol, round 2

Subtitle: “A rumble in the takings jungle” (by F. E. Guerra-Pujol)

In my previous post, we reviewed Ilya Somin’s contention that the police power is generally exempt from the Takings Clause. I quickly rebutted this argument by citing a recent case in which the Takings Clause was, in fact, held to apply to the police power. Here, I shall present (and respond to) Prof Somin’s additional arguments why the Takings Clause does not require compensation for coronavirus shutdowns.

First, according to Somin, even if my rebuttal were correct (i.e. even if coronavirus shutdowns were subject to the Takings Clause in principle), anyone demanding just compensation for being forced to stay at home would lose their case under existing Supreme Court caselaw. Specifically, Prof Somin cites the leading case of Penn Central Transportation Co. vs. New York City. This is a leading takings case because the Supreme Court set forth a three-part test that lower courts must follow to determine whether a government action constitutes a “taking” under the Takings Clause of the Fifth Amendment. Under this three-part test, a government action is a “taking” depending on the following factors: (1) the severity of the economic impact of the action in question; (2) whether and to what extent the owner suffered the loss of “investment-backed expectations” when the government acted; and (3) the “character” of the government action (i.e. did the government physically occupy or damage the property right in question?).

According to Prof Somin, however, coronavirus shutdowns would not pass the Penn Central test as a matter of law, but I respectfully beg to differ. To begin with, the economic impact of a city- or statewide quarantine or “shelter in place” order is, by definition, severe if you lose your job and livelihood as a result of the order. Secondly, such “shelter in place” orders will adversely affect (to the say the least) the expectations of “non-essential” workers and firms subject to the order. Lastly, the third factor is most likely irrelevant, since the interest being deprived is liberty (freedom of movement), not physical property.

To sum up, although I agree with Prof Somin that the Penn Central test (like all balancing tests) “is a mess,” a strong argument can still be made that coronavirus shutdowns are takings under this admittedly messy test. At the same time, however, I have to acknowledge that neither Somin nor myself has yet to score a decisive blow, let alone knock the other down. But Somin still has an “ace” up his proverbial sleeve–a formidable argument inspired by the “legal realist” school of jurisprudence. Stay tuned, I will turn to (and try to refute) Somin’s third and final argument in my next post …

E&WE 1 “Sophistical and Abstruse Formulas” Made Simple, or ...

Credit: William W. Wade

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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5 Responses to Somin vs. Guerra-Pujol, round 2

  1. Art Macomber says:

    I would like to see the Penn Central elements with the fact pattern being a small business forced to close. Governor Inslee closed all “non-essential“ businesses in the State of Washington in late March by proclamation. It is literally illegal to open those businesses at the present time. And so, the investment-backed expectations of a small business owner have been completely disrupted, if not destroyed, especially in the cases of small businesses that cannot maintain viability during the period of the government-mandated shut down. I believe this is why the SBA stepped in to arrange bridge loans for small businesses, because the federal government recognized that there was a valid takings argument against the State governments. This is why so much of the “stimulus“ package is funneled into States that have complete business shut downs.

    • Good points! The stimulus package might make my takings framework moot as a practical matter, but my larger point still stands: those so-called “non-essential” business owners are entitled to full compensation as of right …

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