The District Court’s bottom line in Lukes Catering Service, LLC v. Cuomo, No. 20-CV-1086 (Sep. 10, 2020)? The New York governor’s emergency orders aimed at coronavirus “imposing quarantines, mandating workforce reductions, closing schools, requiring face-coverings, and restricting activities of all types,” are not takings of the businesses of event, banquet, and catering services that have been shut down as a result. The specific emergency measure challenged was the order limiting gatherings to no more than 50 people.
The controlling authority? You guessed it, Jacobson v. Massachusetts, 197 U.S. 11 (1905). That’s the case in which the Court defined “real liberty,” and which has been most prominently applied in emergency order cases to reject due process challenges. But if you want the court’s takings analysis, jump to page 24. The court rejected the categorical (Lucas) claim:
Plaintiffs allege a categorical regulatory taking in their complaint. (Complaint, ¶¶ 104-117.) They maintain that Governor Cuomo’s Executive Orders “have resulted in Plaintiffs losing all economically viable use of their businesses and property.” (Id. ¶ 111.) Yet Plaintiffs elsewhere concede that the Executive Orders do not preclude them from hosting events of 50 or fewer people, and in fact, several Plaintiffs admit that they are scheduled to host such events. (Id. ¶¶ 45, 53, 112; Clark Reply Decl., ¶ 14 (six conforming events scheduled); Reply Declaration of Joseph Kloc, Docket No. 33-13, ¶ 11 (four conforming events scheduled).) Any categorical claim would therefore fail, since Plaintiffs admit that they are not precluded from all economically beneficial uses of their property. See Tahoe-Sierra, 535 U.S. at 330 (providing that a plaintiff must show no productive or economically beneficial use of his or her property to sustain a categorical regulatory takings claim).
Slip op. at 26.
Same result for the regulatory (Penn Central) claim:
First, the Executive Orders are temporary and do not preclude all economic use of Plaintiffs’ property. See Buffalo Teachers Fed’n, 464 F.3d at 375 (finding that temporary and partial nature of wage freeze weighed against finding a taking); Kabrovski v. City of Rochester, N.Y., 149 F. Supp. 3d 413, 425 (W.D.N.Y. 2015) (“[I]t is well settled that a ‘taking’ does not occur merely because a property owner is prevented from making the most financially beneficial use of a property.”) (citation omitted). Second, although Plaintiffs’ investment-backed expectations are surely disrupted by the 50-person limitation, the Executive Orders are “a negative restriction rather than an affirmative exploitation by the state,” which also weighs against a taking. See Buffalo Teachers Fed’n, 464 F.3d at 375. Third, and perhaps most importantly, the State “does not physically invade or permanently appropriate any of [Plaintiffs’] assets for its own use.” Connolly, 475 U.S. at 225. Rather, the character of the government action here is a temporary and proper exercise of the police power to protect the health and safety of the community, which weighs against a taking. See id. (noting that “interference with the property rights of an employer aris[ing] from a public program that adjusts the benefits and burdens of economic life to promote the common good” does not constitute a compensable taking under Supreme Court precedents); see also Lebanon Valley Auto Racing Corp. v. Cuomo, 1:20-CV-804 (LEK/TWD), 2020 WL 4596921, at *8 (N.D.N.Y. Aug. 11, 2020) (finding that the character of COVID-related Executive Orders strongly favors the State defendants). The Penn Central analysis therefore weighs against finding a non-categorical regulatory taking.
Slip op. at 27.
Anyone surprised by this result?