by Elizabeth Wydra, Chief Counsel, Constitutional Accountability Center

Let’s say the government discovers that there is a salmonella outbreak traceable to a certain egg producer. Wishing to prevent further cases of salmonella, which can be fatal in some circumstances, the government issues emergency health regulations temporarily restricting the egg producer’s contaminated eggs from entering the market. That’s good, right? Who wants to spoil their omelette florentine with a side of salmonella?

Well, the government may have saved you from a post-brunch trip to the ER, but in the process it also committed an unconstitutional taking of the egg producer’s profits, at least according to the Court of Federal Claims in Rose Acre Farms v. United States. The Takings Clause of the Fifth Amendment provides that private property shall not “be taken for public use, without just compensation.” Considering whether there was a compensable taking with respect to those contaminated eggs, the lower court in this case concluded that, “[o]n balance, plaintiff’s severe economic loss and reasonable investment expectation outweigh government’s attempt to prevent the spread of salmonella.” The plaintiff-egg producer was awarded $5.4 million in interest in taxpayer dollars for lost profits (which begs the question of just how much salmonella-contaminated eggs are worth—apparently a lot). Note that Rose Acre Farms was allowed to continue selling its eggs during the time it was complying with the government’s emergency regulations, just in the less-profitable liquid form. In other words, a company that was deemed to be the source of repeated salmonella outbreaks that sickened hundreds of people in multiple states was awarded millions of dollars for complying with the law by cleaning up its contaminated facilities and selling its eggs in a less-profitable form while these regulations remained in effect.

The Court of Appeals for the Federal Circuit will take up this issue tomorrow morning when it hears oral argument in the Rose Acre case. CAC’s predecessor organization, Community Rights Counsel, filed an amicus brief in the case on behalf of a broad coalition of organizations that promote public health and safety: the Center for Science in the Public Interest, the American Public Health Association, the Consumer Federation of America, the National Consumers League, Safe Tables Our Priority, the Government Accountability Project, Food & Water Watch, and the Center for Foodborne Illness Research & Prevention. As our amicus brief argued, no court has ever found a taking of commercial products based on restrictions on the sale of those goods to protect the public health. A century of case law holds that no taking occurs when public officials restrict commercial goods or divert them to a different market in order to protect public health or otherwise promote the public good.

The Court of Claims’ decision does not simply defy common sense—it is out of step with the text and history of the Takings Clause. The text of the Takings Clause is actually quite narrow, applying only when property is “taken” by the government, and does not readily suggest application to restrictions on the use of property. Indeed, even Justice Scalia, generally a friend to takings claims, has recognized that the ratifying generation and several succeeding generations read the Clause as applying only to actual dispossessions of property. In other words, in the Founders’ view, the Takings Clause would more readily apply had the government actually seized Rose Acres Farms’ eggs, rather than regulated the manner in which the eggs were produced and the form in which they were sold. Neither the text nor the history of the Takings Clause supports the notion that profits lost as a result of a necessary public safety regulation limiting the use of a commercial product rises to the level of an unconstitutional taking.

We certainly hope the Federal Circuit will reverse the lower court’s ruling that the United States must compensate Rose Acre Farms under the Takings Clause to the tune of $5.4 million plus interest. According to the lower court’s opinion, the government officials charged with protecting public health should have been thinking more about Rose Acre’s business interests and less about how to keep your Sunday brunch from including a dose of deadly food poisoning. It will be interesting to see at argument tomorrow whether the Federal Circuit appears inclined to weigh public health interests against business interests in the same manner. We hope that the panel also weighs the harms to public safety if the government must face compensation claims every time it limits economic activity in response to an emergency, whether it is a public health crisis, a natural disaster, or even a terrorist attack.