United States District Judge Karin J. Immergut rejected a request made by the Oregon Restaurant and Lodging Association and the Restaurant Law Association for a temporary restraining order against Kate Brown and her executive order 20-65. In an opinion, Judge Immergut said "On November 24, 2020, this Court held oral argument. After considering the pleadings, declarations, exhibits, and arguments of counsel, this Court finds Plaintiffs have failed to show sufficient facts and adequate legal support to warrant an order enjoining the enforcement of Executive Order 20-65."

Judge Immergut discusses various technical objections raised by the Restaurant Association, then addresses the issue of an unlawful taking of private property by the state.

"Plaintiffs further claim that Executive Order 20-65 constitutes a statutory taking under Oregon law and a regulatory taking under the Fifth Amendment.

As for the Fifth Amendment takings claim, Plaintiffs cannot establish a likelihood of success on the merits. First, even if Plaintiffs were able to establish that Executive Order 20-65 resulted in a regulatory taking under the Fifth Amendment, the appropriate remedy would be “just compensation” in the form of damages, not the injunctive relief sought here. See Knick v. Township of Scott, Pennsylvania (“As long as an adequate provision for obtaining just compensation exists, there is no basis to enjoin the government’s action effecting a taking.”).

Second, Plaintiffs cannot establish that Executive Order 20-65 is a taking under the Fifth Amendment. Regulatory takings are analyzed under the three-pronged Penn Central test. “Penn Central instructs [courts] to consider [1] the regulation’s economic impact on the claimant, [2] the extent to which the regulation interferes with distinct investment-backed expectations, and [3] the character of the government action.” Colony Cove Props., LLC v. City of Carson. These three “factual inquiries” are used “to determine whether regulatory actions are functionally equivalent to the classic taking in which government directly appropriates property.”

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In assessing a regulation’s economic impact on a claimant, courts compare “the total value of the affected property before and after the government action.” While a decrease in income produced by a property is a relevant consideration, “the severity of the loss can be determined only by comparing the post-deprivation value to pre-deprivation value” of the property. Ninth Circuit cases have held that “diminution in property value[s] because of governmental regulation ranging from 75% to 92.5% do[] not constitute...taking[s].” Under this high standard, Plaintiffs have not shown that the profits they will lose as a result of the two-week ban on on-site dining will be severe enough to constitute a taking.

The second Penn Central factor, disruption of distinct investment-backed expectations, also weighs against finding a taking. “To form the basis for a taking claim, a purported distinct investment-backed expectation must be objectively reasonable.” Colony Cove Props, LLC. Executive Order 20-65 was issued in an effort to protect the public against a deadly, contagious disease that has already killed hundreds of Oregon citizens in a matter of months. There is no reasonable, investment-backed expectation that the state would not act in the face of a historic public health crisis. The Governor’s emergency authorities to protect the public are long-standing and have been used based on the current understanding of COVID-19 and its prevalence in Oregon.

The third factor, the character of the government action, also militates against finding a taking. “A ‘taking’ may more readily be found when the interference with property can be characterized as a physical invasion by government than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good.” Penn Central Transp. Co. v. City of New York. Here, Executive Order 20-65 is not a physical invasion of property by the government but an emergency regulation promulgated to combat a worsening pandemic. Recognizing such government action as “functionally equivalent to the classic taking in which government directly appropriates property” would exceed the scope of the Takings Clause and interfere with the state’s ability to protect the public health."

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Despite a lengthy, three-pronged argument that the restaurants have not suffered a "taking" in the legal sense, Judge Immeregut does acknowledge that the restaurants have suffered a loss at the hands of the government.

"Plaintiffs argue that, given the substantial harm already suffered by Oregon restaurants due to the COVID-19 pandemic, a two-week ban on on-site dining will create irreparable harm to many of these businesses. This Court acknowledges the significant hardship that businesses like those represented by Plaintiffs have endured in the wake of COVID-19. This Court further recognizes that these restrictions cause significant hardships for employees who work for Plaintiffs’ restaurants. Restaurants and other businesses that rely on in-person customers have been especially hard-hit by the pandemic, and this Court does not seek to diminish the challenges they continue to face. "

Said one attorney who was not involved in the case, but following it, "It was especially dishonest to claim that 'there is no reasonable, investment-backed expectation that the state would not act in the face of a historic public health crisis'. They had a whole plan to act, by quarantining the sick. It was reasonable to expect that the State would do that instead of going berserk and quarantining the healthy, so to speak."

Photo by Marco Bianchetti on Unsplash.com


--Staff Reports

Post Date: 2020-11-24 18:46:16

Last Update: 2020-11-24 20:02:07