Here’s the pending cert petition asking the Supreme Court to take up (pun intended) a case involving a Penn Central taking.

This is another one of the cases from the big auto bailout/takeover. The plaintiffs are (former) Chrysler dealers whose dealership franchise contracts were sloughed off as part of the $38 billion federal bailout of the auto manufacturers. As part of the deal, the companies were required to cancel many of their franchise agreements, forcing the dealerships to close.

Everyone agrees that these franchise agreements are “property,” and that the dealerships were profitable. But the Federal Circuit held that under Penn Central‘s “economic impact” factor, none of that mattered because the court concluded the franchises would have been worthless if the feds had not prevented Chrysler from failing. So to save Chrysler, it was ok to throw the dealers under the bus, so to speak.  

Here are the Questions Presented:

At the time the Government required Petitioners to cease doing business under their Chrysler dealer franchises, which are compensable property interests under the Fifth Amendment, each was profitable. But the courts below held that the government-caused shutoff of Petitioners’ streams of income did not satisfy Penn Central‘s economic impact element—and thus did not constitute a Fifth Amendment taking for which just compensation was due.

The Questions Presented Are:

1. Does the fact that the property is generating profits on the date of taking satisfy the economic impact requirement to find a regulatory taking under Penn Central?

2. Does Penn Central provide an adequate rule of law to guide federal and state courts in determining whether a compensable Fifth Amendment regulatory taking has occurred?

Eminent domain lawyers might look at this through a “project influence” lens and ask aren’t we supposed to ignore the influence of the project on valuation? In other words, condemnors take property as they find it, and in the “before” condition cannot value the property in its “after” condition. And besides, this looks more like a necessity defense than a question of the actual economic impact (unless, like the Federal Circuit did here, we’re just going to fold all questions into that factor).  

Stay tuned here, or follow along on the e-docket.

Petition for a Writ of Certiorari, Taylor & Sons v. United States, No. 21-244 (Aug. 18, 2021)