Eminent Domain Report

As first reported by our good friends at inversecondemnation.com, a lawsuit has been filed in California alleging that the response by state and county agencies to the COVID-19 situation violates the state and federal Constitutions, and results in a partial or complete taking in violation of the Fifth Amendment to the U.S. Constitution. The named defendants include Governor Newsom, Attorney General Xavier Becerra, the State Public Health Officer, county Public Health Officers, and county representatives throughout Southern California. The complaint alleges:

• The “stay at home and shut down” orders unlawfully interfere with the federal constitutional right to travel;
• The orders violate plaintiffs’ substantive due process rights, because they deprive plaintiffs of their rights and liberties in lawfully operating their businesses;
• The orders violate plaintiffs’ procedural due process rights, because they were not provided with a constitutionally adequate hearing to present their case before being shut down;
• The orders violate the equal protection clause because they intentionally and arbitrarily categorize California businesses as “essential” or “non-essential,” and require those categorized as “non-essential” to shut down;
• The orders and enforcement thereof have caused both a complete and total regulatory and physical taking of plaintiffs’ property, or at least a partial taking without just compensation in violation of the Fifth Amendment’s takings clause;
• The orders violate plaintiffs’ right to liberty as guaranteed by the California Constitution; and
• The orders by Governor Newsom have commandeered plaintiffs’ “non-essential” businesses, requiring compensation under California Government Code section 8572.

The lawsuit was filed in the United State District Court for the Central District of California. (Click here if you want to read about some of the significant hurdles associated with pursuing a takings claim based on government mandates surrounding COVID-19.) Given the breadth of the claims and the impact COVID-19 has had on the federal courts, it will be interesting to see how quickly this case moves forward, and the State’s response to being sued in federal court. Generally, the State or an arm of the State cannot be sued in federal court unless there is an express waiver of sovereign immunity or the plaintiff is simply pursuing injunctive relief (the Ex Parte Young exception to sovereign immunity). In this case, no express waiver of sovereign immunity is alleged, and while the Ex Parte Young exception could potentially be invoked with respect to many of plaintiffs’ claims, the courts have almost uniformly held that the Ex Parte Young exception does not apply to takings claims.

It is possible that the plaintiffs intend to rely on the U.S. Supreme Court’s decision in Knick v. Township of Scott (2019) 139 S.Ct. 2162 to argue that sovereign immunity is no longer a viable defense to a Fifth Amendment takings claim against the State. (Click here to see our prior discussion of Knick.) In Knick the Supreme Court held that a property owner can bring a Fifth Amendment takings claim in federal court without first having to exhaust state judicial remedies. However, Knick did not contain any discussion of eliminating a state’s sovereign immunity, and at least two courts have expressly held that Knick did nothing to abrogate a state’s sovereign immunity in the takings context. (See Williams v. Utah Dep’t of Corrections (10th Cir. July 8, 2019) F.3d 1209; Bear Crest Ltd. LLC v. Idaho (D. Idaho July 17, 2019) 2019 U.S. Dist. LEXIS 120404.)

Be sure to check back as we will continue to follow this case as it progresses.