Thursday, March 12, 2009

Fed Cir Decision in Rose Acre Farms

The Federal Circuit issued a decision in the long-running Rose Acre Farms case.  Here are the first paragraphs:

In 1992, Rose Acre Farms, Inc. (“Rose Acre”) filed the present action in the United States Court of Federal Claims, claiming that United States Department of Agriculture (“USDA” or “the government”) regulations that restricted egg sales from its farms and caused the loss of egg-laying chickens that tested positive for the presence of salmonella bacteria effected a taking requiring compensation under the Fifth Amendment. In 2003, the trial court held that Rose Acre was entitled to compensation for a taking of the eggs affected by the regulations as well as for hens seized for testing.

In our previous appeal, we held that the court misapplied the standards governing regulatory takings claims under Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978). We vacated and remanded for appropriate reconsideration.  We must again decide whether the trial court correctly held that the government’s regulations, which restricted the sale of certain of Rose Acre’s eggs during the approximately two-year period, constituted a taking for which just compensation is due. As explained below, we hold that, upon a proper assessment of the Penn Central factors, the USDA did not commit a compensable taking. We therefore reverse the judgment of the Court of Federal Claims.

I need to spend more time with the opinion, but I think I disagree with the Court's discussion of the impact of Lingle on the character of the government act prong of the Penn Central test.  In any event, a very interesting opinion that really engages in Lingle's impact on takings law.

Ben Barros

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While I have enjoyed going back and forth with Professor Barros on this issue, I think the Federal Circuit got it exactly right in ruling that, after Lingle, the fact that a regulation is harm preventing is highly relevant in assessing the character of the regulation under Penn Central. See John D. Echeverria, Making Sense of Penn Central, 23 UCLA J Envtl L. and Policy 171 (2005) and the brief I filed in this case on behalf of the Hoosier Environmental Council (avilable on the gelpi page on the GULC website)

John Echeverria

Posted by: John Echeverria | Mar 13, 2009 8:14:03 AM

Thanks Ben, very interesting opinion. While none of the Penn Central factors have ever been precisely defined, the “character” analysis, as John Echeverria and others have suggested in many fine articles, is the most confusing feature of regulatory takings doctrine. While Lingle professes its consistence with Penn Central’s discussion of the “character of the government action," I am not convinced much remains of the factor, and Rose Acre’s struggle with it only supports that skepticism. This most recent Rose Acre decision seems to castigate a means-ends analysis under the takings clause.....and then contradicts itself by engaging in that very means-ends analysis (and arguably an equal protection analysis as well) of the harm-preventing nature of the regulation at issue. Post-Lingle, it seems that any citations to Miller and Mugler in the takings context are questionable moving forward.

Posted by: Tim Mulvaney | Mar 13, 2009 3:11:50 PM

Unsurprisingly, I tend to agree with Tim and disagree with John. But I note that John's position is very well thought out, and he has had a lot more success in convincing courts that he's right than I have.

Posted by: Ben Barros | Mar 19, 2009 11:15:58 AM

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