Amicus Curiae Brief — Richard Devillier, et al., Petitioners v. Texas

No. 22-913

In the Supreme Court of the United States

RICHARD DEVILLIER, ET AL., PETITIONERS,

v.

STATE OF TEXAS, RESPONDENT.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

BRIEF OF THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS

AMICUS CURIAE IN SUPPORT OF

PETITIONERS

ANDREW R. VARCOE

JONATHAN D. URICK

U.S. CHAMBER

LITIGATION CENTER

1615 H Street, NW

Washington, DC 20062

JEREMY C. MARWELL

Counsel of Record

VINSON & ELKINS LLP

2200 Pennsylvania Ave.,

NW, Suite 500 West

Washington, DC 20037

(202) 639-6500

jmarwell@velaw.com

Counsel for Amicus Curiae

(Additional counsel listed inside cover)

PARKER J. CRAGG

VINSON & ELKINS LLP

845 Texas Ave.,

Suite 4700

Houston, TX 77002

Counsel for Amicus Curiae

TABLE OF CONTENTS

Page

Table of Authorities .................................................... II

Interest of Amicus Curiae ........................................... 1

Introduction and Summary of Argument ................... 2

Argument ..................................................................... 4

I.

Property Owners Must Have a Meaningful

Remedy to Seek Just Compensation Under the

Takings Clause. ..................................................... 4

II. Depriving Property Owners of a Cause of

Action to Enforce the Federal JustCompensation Guarantee Against States

Would Create Profound Uncertainty and

Undermine Private Property Protections. ........... 9

III. The Fifth Circuit’s Rule Would Have

Significant Negative Consequences. .................. 13

A. The Fifth Circuit’s Rule Jeopardizes Just

Compensation

for

Direct

Physical

Expropriations of Private Property. ............ 14

B. The Fifth Circuit’s Rule Jeopardizes Just

Compensation for the Infringement,

Minimization, or Denial of Property

Rights. ........................................................... 17

C. The Fifth Circuit’s Rule Jeopardizes Just

Compensation for Regulatory Takings. ....... 19

Conclusion.................................................................. 23

(I)

II

TABLE OF AUTHORITIES

Cases:

Page(s)

Armstrong v. United States,

364 U.S. 40 (1960) .................................................. 16

Brown v. Duchesne,

60 U.S. (19 How.) 183 (1856) ................................. 17

Chicago, Burlington & Quincy R.R. v. Chicago,

166 U.S. 226 (1897) .................................................. 6

Consolidated Fruit–Jar Co. v. Wright,

94 U.S. 92 (1876) .................................................... 17

Creegan v. Kansas,

391 P.3d 36 (Kan. 2017)................................... 20, 21

Davis v. Burke,

179 U.S. 399 (1900) .................................................. 7

First English Evangelical Lutheran Church of

Glendale v. Los Angeles County,

482 U.S. 304 (1987) ............................................... 7-8

Florida Prepaid Postsecondary Education

Expense Bd. v. College Savings Bank,

527 U.S. 627 (1999) ................................................ 18

Hawaii Housing Authority v. Midkiff,

467 U.S. 229 (1984) ................................................ 14

Horne v. Department of Agriculture,

576 U.S. 350 (2015) ................................... 4-5, 15, 19

Innovair Aviation, Ltd. v. United States,

632 F.3d 1336 (Fed. Cir. 2011) .............................. 15

III

Cases—Continued:

Page(s)

Innovair Aviation, Ltd. v. United States,

72 Fed. Cl. 415 (2006) ............................................ 15

Jacobs v. United States,

290 U.S. 13 (1933) .................................................... 8

James v. Campbell,

104 U.S. 356 (1882) ................................................ 17

Knick v. Township of Scott, Pennsylvania,

139 S. Ct. 2162 (2019) .................................... 7, 9, 12

Landgraf v. USI Film Prods.,

511 U.S. 244 (1994) ................................................ 10

Lucas v. South Carolina Coastal Council,

505 U.S. 1003 (1992) .............................................. 14

Milwaukee & Suburban Transport Corp. v.

Milwaukee Cnty.,

263 N.W.2d 503 (Wis. 1978) .................................. 15

Nixon v. United States,

978 F.2d 1269 (D.C. Cir. 1992) .............................. 15

Nollan v. California Coastal Comm’n,

483 U.S. 825 (1987) ................................................ 14

Northwest Landowners Association v. North

Dakota, 978 N.W.2d 679 (N.D. 2022) .................... 19

Palazzolo v. Rhode Island,

533 U.S. 606 (2001) ................................................ 14

Pennsylvania Coal Co. v. Mahon,

260 U.S. 393 (1922) .................................................. 7

Pennsylvania Professional Liability Joint

Underwriting Ass’n v. Wolf,

324 F. Supp. 3d 519 (M.D. Pa. 2018)..................... 21

IV

Cases—Continued:

Page(s)

Pennsylvania Professional Liability Joint

Underwriting Ass’n v. Wolf,

509 F. Supp. 3d 212 (M.D. Pa. 2020)..................... 21

Pharmaceutical Research & Manufacturers of

America v. Williams,

525 F. Supp. 3d 946 (D. Minn. 2021) .................... 16

Pharmaceutical Research & Manufacturers of

America v. Williams,

64 F.4th 932 (8th Cir. 2023) .................................. 16

Phelps v. United States,

274 U.S. 341 (1927) .................................................. 9

PruneYard Shopping Ctr. v. Robins,

447 U.S. 74 (1980) .................................................. 10

Ruckelshaus v. Monsanto Co.,

467 U.S. 986 (1984) ................................................ 18

State ex rel. R.T.G., Inc. v. Ohio,

780 N.E.2d 998 (Ohio 2002)................................... 20

Stop the Beach Renourishment, Inc. v. Florida

Department of Environmental Protection,

560 U.S. 702 (2010) ............................................. 9-10

United States v. Causby,

328 U.S. 256 (1946) ............................................... 8-9

Williamson County Regional Planning Comm’n

v. Hamilton Bank of Johnson City,

473 U.S. 172 (1985) ................................................ 11

Constitutional Provisions:

U.S. Const. amend. V .................................................. 6

V

Statutes:

Page(s)

28 U.S.C. § 1441 .......................................................... 3

Pennsylvania P.L. 725, No. 44 (2017) ....................... 21

Other Authorities:

Blackstone, William, 1 Commentaries on the

Laws of England ...................................................... 4

Complaint, Pharmaceutical Research &

Manufacturers of America v. Williams,

No. 0:20-cv-1497 (D. Minn. June 30, 2020),

ECF No. 71 ............................................................. 16

Fallon, Richard H. et al., Hart & Wechsler’s

Federal Courts and the Federal

System (7th ed. 2015) ............................................... 7

Locke, John, Fundamental Constitutions of

Carolina art. 44 (1669) ............................................ 5

Magna Carta art. XXVIII (1215)................................. 4

Massachusetts Body of Liberties art. 8 (1641) ............ 5

Pound, Roscoe, Interpretations of Legal History

(Peter Smith 1967) (1923) ..................................... 10

Story, Joseph, 3 Commentaries on the

Constitution of the United States § 1784

(1833) ........................................................................ 6

The Federalist No. 62 (James Madison) (Clinton

Rossiter ed., 1961).................................................. 10

Treanor, William Michael, The Original

Understanding of the Takings Clause and

the Political Process, 95 Colum. L. Rev. 782

(1995) ........................................................................ 5

INTEREST OF AMICUS CURIAE 1

The Chamber of Commerce of the United States of

America is the world’s largest business federation. It

represents approximately 300,000 direct members and

indirectly represents the interests of more than 3 million companies and professional organizations of every

size, in every industry sector, and from every region of

the country. An important function of the Chamber is

to represent the interests of its members in matters

before Congress, the Executive Branch, and the courts.

To that end, the Chamber regularly files amicus curiae

briefs in cases, like this one, that raise issues of concern to the nation’s business community.

The Chamber is particularly interested in maintaining durable constitutional protections for private

property rights, and promoting the stability, fairness,

and predictability of the legal regime governing property rights in the United States. In this case, the

rights of businesses and private parties across the

country, including those of many Chamber members,

would be imperiled if this Court were to affirm the

Fifth Circuit’s judgment. The court of appeals’ ruling

jeopardizes the federal Constitution’s guarantee of

just compensation as a predictable and meaningful

protection for private property. As Texas did here,

states that prefer not to pay compensation could remove federal Takings claims to federal court and

promptly move to dismiss for failure to state a claim.

1 Pursuant to Supreme Court Rule 37.6, amicus curiae states

that no counsel for any party authored this brief in whole or in

part and no entity or person, aside from amicus curiae, its

members, or its counsel, made any monetary contribution

intended to fund the preparation or submission of this brief.

(1)

2

And states may, or may not, provide an equivalent

just-compensation guarantee as a matter of state law.

See Pet. Br. 43-44.

American businesses routinely make investments

and other economic decisions in reasonable reliance on

the protections that the Just Compensation Clause

provides against the uncompensated expropriation of,

or regulatory infringement on, private property by

various government entities, including states. Property owners benefit from the confidence and predictability of being able to assert a federal claim for just

compensation, in a federal forum, that does not depend

on available state remedies or procedural gamesmanship. Upholding the Fifth Circuit’s decision, by contrast, would sharply undermine the predictability and

stability of private property protections nationwide,

with sweeping negative effects on investment and economic development.

INTRODUCTION AND

SUMMARY OF ARGUMENT

1. The basic principle that just compensation is

owed to those whose property has been taken for a

public use predates the Republic. The right to just

compensation, enshrined in the Fifth Amendment’s

Takings Clause, protected the new American citizenry

from arbitrary and tyrannical actions by the government. Furthermore, the right to just compensation

sets the Takings Clause in a textual category of its own

within the Bill of Rights; no other provision dictates a

particular remedy when it is violated. This Court has

long characterized the Takings Clause as “self-executing.”

3

2. Texas, facing a federal inverse condemnation

claim related to state action intended to flood private

property, has circumvented this Court’s precedents

and the very purpose of the Takings Clause. The State

removed the case to federal court pursuant to 28

U.S.C. § 1441, then moved to dismiss on the basis that

Congress has not provided a statutory cause of action.

The district court rejected this reasoning out of hand,

concluding that the State’s argument “eviscerates

hundreds of years of Constitutional law in one fell

swoop, and flies in the face of commonsense.” Pet.

App. 15a, 34a.

With scant explanation or effort to reconcile its position with decades of precedent, the Fifth Circuit disagreed, accepting the State’s argument that a federal

court must dismiss a federal just compensation claim

for want of a statutory cause of action. Pet. App. 2a.

This merits ruling, as cursory as it is remarkable, appears to bar Petitioners from future adjudication of

their federal Takings claim in any court. The Fifth

Circuit’s decision thus gives states an easy roadmap

for dismissing federal claims for just compensation at

the outset of a case, thereby evading this core constitutional protection for private property rights.

3. If allowed to stand, the Fifth Circuit’s ruling

would undermine the reasonable, investment-backed

expectations of property owners across every sector of

the U.S. economy, from individual homeowners and

small businesses to the largest corporations whose enterprises depend on protection for physical, intellectual, and other forms of property. Free from any federal-law obligation to pay just compensation for

(among other things) outright appropriations of

4

property, patent infringement, or regulatory takings,

state entities will have a pathway to externalize the

costs of government operations by taking private property, rather than raising funds through taxes or other

means. A survey of federal Takings Clause jurisprudence illustrates the practical importance of a federal

just-compensation guarantee, across a wide variety of

economic sectors. The Fifth Circuit’s unsupported,

ahistorical, and destabilizing decision cannot stand.

ARGUMENT

I. Property Owners Must Have a Meaningful

Remedy to Seek Just Compensation Under

the Takings Clause.

Governments have long provided means of obtaining compensation for property that has been appropriated for public use. The Magna Carta itself expressly

prohibited the King’s officers from taking the corn or

other goods of any individual without immediately

paying money for them. Magna Carta art. XXVIII

(1215); accord Pet. Br. 19-22. In the eighteenth century, William Blackstone noted that while the government “can, and indeed frequently does, interpose, and

compel the individual to acquiesce” to the seizure of

property for the common good, the government must

do so “not by absolutely stripping the subject of his

property in an arbitrary manner; but by giving him a

full indemnification and equivalent for the injury

thereby sustained.” 1 William Blackstone, Commentaries on the Laws of England *139.

The prohibition against uncompensated taking of

personal property influenced early American practice.

See Horne v. Dep’t of Agric., 576 U.S. 350, 358 (2015)

5

(“The colonists brought the principles of Magna Carta

with them to the New World, including that charter’s

protection against uncompensated takings of personal

property.”) In 1641, the Massachusetts Body of Liberties—the first legal code established in New England

and the first modern bill of rights—established a compensation requirement for the seizure of personal

property:

No mans Cattel or goods of what kinde soever

shall be pressed or taken for any publique use

or service, unlesse it be by warrant grounded

upon some act of the generall Court, nor without such reasonable prices and hire as the ordinarie rates of the Countrie do afford. And if

his Cattle or goods shall perish or suffer damage in such service, the owner shall be suffitiently recompenced.

Massachusetts Body of Liberties art. 8 (1641).

Likewise, the Fundamental Constitutions of Carolina, drafted by John Locke in 1669, contained a provision mandating compensation for the seizure of real

property. See Fundamental Constitutions of Carolina

art. 44 (1669). Specifically, that document provided

that “[t]he damage the owner of such lands (on or

through which any such public things shall be made)

shall receive thereby shall be valued, and satisfaction

made by such ways as the grand council shall appoint.”

Ibid. Scholars agree that “compensation was the norm

when the state took private property.” William Michael Treanor, The Original Understanding of the

Takings Clause and the Political Process, 95 Colum. L.

Rev. 782, 787 (1995).

6

2. The Takings Clause codifies this practice of protection by providing that “private property [shall not]

be taken for public use, without just compensation.”

U.S. Const. amend. V. This provision reflected a deepseated concern for the defense of property rights and

individual liberties in the nascent American Republic.

Justice Story would later explain the rationale behind

the Takings Clause as follows:

It is founded in natural equity, and is laid

down by jurists as a principle of universal

law. Indeed, in a free government, almost all

other rights would become utterly worthless,

if the government possessed an uncontrollable power over the private fortune of every citizen. One of the fundamental objects of every

good government must be the due administration of justice; and how vain it would be to

speak of such an administration, when all

property is subject to the will or caprice of the

legislature, and the rulers.

3 Joseph Story, Commentaries on the Constitution of

the United States § 1784 (1833).

After the ratification of the Fourteenth Amendment, the Takings Clause became the first right to be

incorporated against the states. See Chicago, Burlington & Quincy R.R. v. Chicago, 166 U.S. 226, 241 (1897)

(concluding that private property taken by state without just compensation to owner is “wanting in the due

process of law required by the fourteenth amendment

of the constitution of the united states”). And over

time, this Court has correctly recognized that the Takings Clause protects not only against outright physical

takings of property, but against regulations that “go[]

7

too far.” Pennsylvania Coal Co. v. Mahon, 260 U.S.

393, 415 (1922).

3. The Takings Clause is one of only two constitutional clauses that specify a particular remedy. See

Richard H. Fallon et al., Hart & Wechsler’s Federal

Courts and the Federal System 330 (7th ed. 2015) (Just

Compensation Clause and Suspension Clause for the

remedy of habeas corpus). And this Court has described the Takings Clause as “self-executing”—in the

sense that the Clause itself provides the remedy of just

compensation for takings. See Knick v. Twp. of Scott,

Pennsylvania, 139 S. Ct. 2162, 2172 (2019) (“[A] taking

without compensation violates the self-executing Fifth

Amendment at the time of the taking . . . .”). As this

Court has explained, “[a] constitutional provision may

be said to be self-executing if it supplies a sufficient

rule by means of which the right given may be enjoyed

and protected, or the duty imposed may be enforced;

and it is not self-executing when it merely indicates

principles, without laying down rules by means of

which those principles may be given the force of law.”

Davis v. Burke, 179 U.S. 399, 403 (1900).

This Court has time and again affirmed the selfexecuting character of the Takings Clause. In First

English Evangelical Lutheran Church of Glendale v.

Los Angeles County, this Court noted that it has “frequently repeated the view that, in the event of a taking, the compensation remedy is required by the Constitution.” 482 U.S. 304, 316 (1987). In response to

the Solicitor General’s argument that “the Constitution does not, of its own force, furnish a basis for a

court to award money damages against the government,” this Court emphasized that “it is the

8

Constitution that dictates the remedy for interference

with property rights amounting to a taking.” Id. at

316 n.9.

In Jacobs v. United States, landowners brought an

inverse condemnation suit against the United States

to recover just compensation after the construction of

a congressionally authorized dam caused periodic

flooding on their farms. 290 U.S. 13, 16 (1933). The

question in Jacobs concerned whether the interest on

the compensation was awardable. Ibid. The court of

appeals held that inverse condemnation suits were

akin to suits on an implied contract with the government, wherein interest could not be recovered. Ibid.

In reversing, the Court explained that the landowners’

suit arose under the Constitution itself:

The suits were based on the right to recover

just compensation for property taken by the

United States for public use in the exercise of

its power of eminent domain. That right was

guaranteed by the Constitution. The fact that

condemnation proceedings were not instituted and that the right was asserted in suits

by the owners did not change the essential nature of the claim. The form of the remedy did

not qualify the right. It rested upon the Fifth

Amendment. Statutory recognition was not

necessary. A promise to pay was not necessary. Such a promise was implied because of

the duty to pay imposed by the amendment.

The suits were thus founded upon the Constitution of the United States.

Ibid. See also United States v. Causby, 328 U.S. 256,

267 (1946) (“If there is a taking, the claim is founded

9

upon the Constitution.”) (internal quotation marks

omitted); Phelps v. United States, 274 U.S. 341, 343

(1927) (“Under the Fifth Amendment plaintiffs were

entitled to just compensation . . . the claim is one

founded on the Constitution.”).

As this Court held in Knick, “because a taking without compensation violates the self-executing Fifth

Amendment at the time of the taking, the property

owner can bring a federal suit at that time.” 139 S. Ct.

at 2172. The property owners in Knick were suing a

municipality under Section 1983; thus, this Court did

not reach the question whether owners suing states

have a similar right of access to federal court at the

time of taking. Confirming that federal courts are

open to property owners seeking just compensation for

takings by state governments is essential to fostering

and restoring confidence in the sanctity of private

property rights—confidence that has been shaken by

the Fifth Circuit’s flawed decision below.

II. Depriving Property Owners of a Cause of

Action to Enforce the Federal JustCompensation Guarantee Against States

Would Create Profound Uncertainty and

Undermine Private Property Protections.

1. Ex ante certainty and clarity about the availability of a federal cause of action to seek just compensation from states or state entities is critical to encouraging investment and development. “The Takings

Clause is an essential part of the constitutional structure, for it protects private property from expropriation without just compensation; and the right to own

and hold property is necessary to the exercise and

preservation of freedom.”

Stop the Beach

10

Renourishment, Inc. v. Florida Dep’t of Env’t Prot., 560

U.S. 702, 734 (2010) (Kennedy, J., concurring).

When it comes to property rights, “predictability

and stability are of prime importance.” Landgraf v.

USI Film Prods., 511 U.S. 244, 271 (1994); see also

Roscoe Pound, Interpretations of Legal History 154

(Peter Smith 1967) (1923) (“In matters of property and

commercial law,” “security of acquisitions and security

of transactions” have “controlling” importance). Here,

however, the Fifth Circuit held that (absent action by

Congress) there is no federal cause of action to assert

Takings claims against states or state entities. The

Fifth Circuit’s rule risks depriving property owners of

any judicial forum for a federal just-compensation

claim, and indeed invites states to extinguish federal

Takings claims without ever paying just compensation

(subject only to whatever compensation is available

under state law). That rule, if adopted by this Court,

poses a significant threat to property owners’ investment-backed expectations. See PruneYard Shopping

Ctr. v. Robins, 447 U.S. 74, 83 (1980). As James Madison recognized, “What farmer or manufacturer will

lay himself out for the encouragement given to any

particular cultivation or establishment, when he can

have no assurance that his preparatory labors and advances will not render him a victim to an inconstant

government?” The Federalist No. 62, at 381-382

(James Madison) (Clinton Rossiter ed., 1961).

2. The Fifth Circuit, however, has provided a roadmap for states to extinguish federal just-compensation

claims, and diminish the value of private property itself. In Judge Oldham’s view, “[t]he panel decision reduces the Takings Clause to nothing.” Pet. Supp. App.

11

78a (Oldham, J., dissenting from denial of rehearing

en banc). Under the Fifth Circuit’s rule (which the

Ninth Circuit also employs), a landowner whose property is taken by the state has two options in seeking

compensation under the federal Constitution: “The

landowner can try to bring a federal takings claim in

state court; the State removes; the federal court must

assert jurisdiction and dismiss the claim with prejudice under the panel’s published decision in this case.

Likewise if the landowner tries to bring suit originally

in federal district court.” Ibid. “So the landowner now

has only two choices—both of which render the Takings Clause a dead letter.” Ibid.

This “heads I win, tails you lose” scenario mirrors

the conundrum once faced by property owners seeking

just compensation from local governments—a problem

this Court remedied in Knick. In Williamson County

Regional Planning Comm’n v. Hamilton Bank of Johnson City, this Court held that a property owner could

not bring a Fifth Amendment Takings claims in federal court until a state court had denied the claim for

just compensation under state law. 473 U.S. 172, 200

(1985). The unintended consequences of this decision

were stark:

[A] state court’s resolution of a claim for just

compensation under state law generally has

preclusive effect in any subsequent federal

suit. The takings plaintiff thus finds himself

in a Catch-22: He cannot go to federal court

without going to state court first; but if he

goes to state court and loses, his claim will be

barred in federal court. The federal claim dies

aborning.

12

Knick, 139 S. Ct. at 2167.

Citing the “preclusion trap” created by the statelitigation requirement, this Court recently overruled

Williamson County, thereby allowing property owners

seeking just compensation from local governments to

bring their claims directly in federal court. Id. at 21672168. The Fifth Circuit’s rule creates a more pernicious trap for federal Takings claims against states

than existed for claims against local governments preKnick; after all, under Williamson County, property

owners could at least have their federal Takings

claims adjudicated on the merits in state court. Under

the Fifth Circuit’s rule, state entities can apparently

remove federal Takings claims to federal court at the

outset of a case, then move for a merits dismissal of

the federal claims, with future preclusive effect. As

the district court recognized, this “pretzel logic” would

“eviscerate[] hundreds of years of Constitutional law

in one fell swoop.” Pet. App. 15a, 34a. And, as Petitioners explain, if this Court were to agree with the

Fifth Circuit that a federal just-compensation claim

cannot be asserted without a legislative cause of action, states might follow suit, and decline to entertain

federal just-compensation claims in state court, either.

See Pet. Br. 10, 42-43.

If allowed to stand, the Fifth Circuit’s rule gives

states a roadmap to escape accountability for federal

Takings claims. The financial and practical incentives

to avoid paying for infringements on private property

would be irresistible, for even the most well-intentioned state officials. And, at minimum, the Fifth Circuit’s decision deprives property owners of a certain,

predictable federal forum in which to pursue those

13

claims. The legal and practical consequences of accepting those propositions—for property owners specifically and for market stability generally—would be

devastating.

III. The Fifth Circuit’s Rule Would

Significant Negative Consequences.

Have

If the Fifth Circuit’s ruling here were affirmed,

states would have an overwhelming incentive to employ Texas’s procedure for avoiding payment of federal

just compensation claims to private property owners.

The financial and practical incentives for elected officials to do so would be too strong to expect any other

outcome.2

Even just a few examples from federal Takings jurisprudence illustrate the magnitude of the incentives

at issue, the wide range of factual and legal circumstances in which the Takings Clause provides an essential bulwark for private property rights against

state action, and the political, practical, and regulatory windfall that states would enjoy if they are effectively immune from federal inverse-condemnation liability. Indeed, several cases that have been fundamental in shaping this Court’s own modern Takings jurisprudence involved state action. It is far from clear

whether the claims in those cases could have survived

2 If this Court were to affirm the Fifth Circuit’s ruling here,

municipal and other governments would have a strong incentive

to reframe and centralize programs under a state umbrella, given

the availability of § 1983 liability against municipal actors, and

states’ ability to externalize costs onto private property owners

without paying just compensation.

14

under the Fifth Circuit’s rule.3 Going forward, there

is no telling what actions states would take if the federal Takings Clause effectively no longer applies to

them. While the textual, historical, and doctrinal

flaws of the decision below provide ample basis for reversal, the decision’s serious adverse practical consequences for vast portions of the U.S. economy provide

additional support for that outcome.

A.

The Fifth Circuit’s Rule Jeopardizes

Just Compensation for Direct Physical

Expropriations of Private Property.

Modern Takings Clause jurisprudence illustrates

the striking diversity and breadth of government actions and regulations that can infringe on core private

property rights, implicating the federal Just Compensation guarantee. But one critical (and unfortunately

oft-recurring) strand of Takings doctrine deals with

perhaps the most obvious kind of state action requiring just compensation: outright physical appropriation of private property.

3 See, e.g., Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229 (1984)

(addressing Hawaii’s Land Reform Act of 1967, which allowed the

state to transfer title from lessors to lessees in the name of achieving a more equitable distribution of land ownership); Nollan v.

California Coastal Comm’n, 483 U.S. 825 (1987) (finding that a

state’s imposition of a development permit condition lacking any

nexus to permissible regulatory purposes constitutes a taking);

Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)

(holding that a state’s complete deprivation of property’s economic use constitutes a taking); Palazzolo v. Rhode Island, 533

U.S. 606 (2001) (finding that a Takings claim is not barred by

acquisition of title subsequent to the effective date of regulation).

15

Case reporters are replete with reminders that the

federal Takings Clause plays a critical and ongoing

role in protecting private property against direct expropriation in government programs of every stripe.

E.g., Horne v. Dep’t of Agric., 576 U.S. 350, 354 (2015)

(government price-control program, under which “a

percentage of a grower’s [raisin] crop must be physically set aside in certain years for the account of the

Government, free of charge” and without just compensation); Milwaukee & Suburban Transport Corp. v.

Milwaukee Cnty., 263 N.W.2d 503, 508 (Wis. 1978)

(government seized private bus system and began operating it under public ownership); Innovair Aviation,

Ltd. v. United States, 72 Fed. Cl. 415 (2006), rev’d on

other grounds, 632 F.3d 1336 (Fed. Cir. 2011) (government seized airplanes that were under contract to Air

Columbia); Nixon v. United States, 978 F.2d 1269

(D.C. Cir. 1992) (law depriving former President of his

presidential papers was a per se, compensable taking).

To take just one more example, a recent Minnesota

statute requires certain pharmaceutical manufacturers to provide free insulin to patients who meet eligibility criteria, with no assurance of compensation for

the manufacturer. Under one branch of this state

scheme, eligible individuals can obtain free insulin for

up to one year; manufacturers are legally compelled to

provide insulin to such patients (through a participating pharmacy) at no charge, and with no assurance of

reimbursement.

Under another branch of that

scheme, manufacturers must provide a 30-day supply

of free insulin to eligible individuals; pharmacies dispense the insulin directly to qualifying patients, and

then have a legal right to require the manufacturer

16

either to reimburse the pharmacy for its out-of-pocket

costs, or to send a (free) replacement drug supply.

Manufacturers challenged the Minnesota law, arguing that it unconstitutionally compels them to give

away their property to the program, without compensation, in violation of the Takings Clause. See Pharm.

Rsch. & Mfrs. of Am. v. Williams, 525 F. Supp. 3d 946,

949 (D. Minn. 2021), rev’d and remanded, 64 F.4th 932

(8th Cir. 2023). The manufacturers filed their claims

in federal district court and asserted a cause of action

under the Takings Clause. As the complaint explained, “if a state’s compulsory appropriation of medicine is permissible, there is no reason a state cannot

commandeer other products for its residents as the

state sees fit to advance its public policy goals.” Complaint at ¶ 7, Pharm. Rsch. & Mfrs. of Am. v. Williams,

No. 0:20-cv-1497 (D. Minn. June 30, 2020), ECF No. 1.

No matter how well-intentioned a state’s policy

goal may be (for Minnesota, a laudable desire of ensuring that patients have affordable access to life-saving

medications), those goals must be achieved via constitutional means. Expropriating private property allows a state to fund public programs at low (or even

no) cost to taxpayers, forcing “some people alone to

bear public burdens which, in all fairness and justice,

should be borne by the public as a whole.” Armstrong

v. United States, 364 U.S. 40, 49 (1960).

The Fifth Circuit’s rule gives state governments a

pathway to avoid paying federal just-compensation

claims for property directly seized in the context of any

manner of programs, from housing to transportation,

and from nutrition and public health to energy and beyond. In each instance, the state could simply seize

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the property, or infringe or eliminate its value through

regulation, and frustrate claims for just compensation

under the federal Takings Clause through procedural

gamesmanship.

B.

The Fifth Circuit’s Rule Jeopardizes

Just Compensation for the Infringement, Minimization, or Denial of Property Rights.

The negative impacts of the Fifth Circuit’s rule are

not limited to instances where the government directly

appropriates property. That rule would subject virtually every form of property (and each stick in the bundle of property rights) to the threat of infringement,

reduction, or outright appropriation. Such a threat

would chill invention and innovation on a national

scale.

For example, this Court has long held that intellectual property enjoys protection under the Takings

Clause. In 1882, this Court held that patents “confer[]

upon the patentee an exclusive property in the patented invention which cannot be appropriated or used

by the government itself, without just compensation.”

James v. Campbell, 104 U.S. 356, 358 (1882). Likewise, “[a] patent for an invention is as much property

as a patent for land.” Consolidated Fruit–Jar Co. v.

Wright, 94 U.S. 92, 96 (1876); see also Brown v. Duchesne, 60 U.S. (19 How.) 183, 197 (1856) (“For, by the

laws of the United States, the rights of a party under

a patent are his private property[.]”). Similarly, the

Takings Clause protects trade secrets recognized under state law. Ruckelshaus v. Monsanto Co., 467 U.S.

986, 1003-1004 (1984). Intellectual property rights, no

less than real property or chattels, cannot be

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appropriated or modified by the government without

providing just compensation.

Private parties have relied on the federal Just

Compensation guarantee to protect intellectual and

other property rights against infringement (without

just compensation) by states or state agencies in a

range of circumstances. For example, in Florida Prepaid Postsecondary Educ. Expense Bd. v. College Sav.

Bank, 527 U.S. 627 (1999), a bank alleged patent infringement when a state entity appropriated the

bank’s financing methodology for a prepaid-tuition

product that the state entity offered to Florida residents. Although the primary issue in this Court concerned the abrogation of state sovereign immunity,

this Court pointedly noted that “where the State provides no remedy, or only inadequate remedies, to injured patent owners for its infringement of their patent,” “a deprivation of property without due process

[could] result.” Id. at 643.

The Fifth Circuit’s rule is hard to square with Florida Prepaid. Under that rule, states can eliminate the

federal remedy for expropriation of intellectual property by removing the federal-law claim to federal court

and moving to dismiss. It is not difficult to imagine

hard-fought disputes under a wide range of state substantive laws—and state efforts to regulate various industry sectors more generally—transitioning into

state efforts to achieve public-policy or other goals via

direct expropriation or infringement of intellectual

and other property. That risk is particularly acute

given the strong financial incentive that states would

have to act with disregard for private property rights,

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knowing they are effectively immune from federal inverse condemnation liability.

C.

The Fifth Circuit’s Rule Jeopardizes

Just Compensation for Regulatory

Takings.

The Fifth Circuit’s rule similarly threatens private

property rights in a wide range of regulatory takings

scenarios, potentially affecting virtually every sector

of the U.S. economy, from the energy industry to manufacturing, and from services industries to finance and

beyond.

Just a few examples highlight the range of circumstances in which federal just-compensation claims

may be raised for regulatory takings. In Northwest

Landowners Association v. North Dakota, 978 N.W.2d

679 (2022), the North Dakota Supreme Court affirmed

that surface owners retain property rights in subsurface pore spaces. At issue in the case was a state law

granting certain companies access to these spaces for

carbon sequestration activities. Federal and state

clean energy policies, including the tax incentives in

the Inflation Reduction Act, have resulted in increased

demand for such pore spaces. Landowners challenged

the law as a federal taking without just compensation.

The North Dakota court agreed, finding that while

“[p]roperty owners necessarily expect their use of

property may be regulated through the exercise of a

State’s police powers, [] they do not take title subject

to the possibility that their property can be ‘actually

occupied or taken away’ without just compensation.”

Id. at 694 (quoting Horne, 576 U.S. at 361). But if this

Court were to accept the Fifth Circuit’s ruling here, it

is unclear whether federal just-compensation claims

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like those in Northwest Landowners would remain viable.

In State ex rel. R.T.G., Inc. v. Ohio, 780 N.E.2d 998

(2002), the Ohio Supreme Court held that the State’s

designation of hundreds of acres of property as being

unsuitable for mining constituted a categorical taking

of the owner’s mineral rights, requiring just compensation. The State’s unsuitable-for-mining designation

had occurred only after the landowner invested time

and capital by purchasing the property and mineral

rights, conducting extensive test-drilling, filing mine

permit applications, and preparing sites for operations. The Fifth Circuit’s rule, however, undermines

the landowner’s substantial investment-backed expectations, given the state’s ability to frustrate a federal

just-compensation claim via the procedural mechanism used by Texas here.

To take another example, in Creegan v. Kansas,

391 P.3d 36, 38-39 (Kan. 2017), certain homeowners

whose property was subject to single-family-use covenants sued the Kansas Department of Transportation.

The Department had purchased 20 lots in a residential

subdivision, on which it installed trailers and constructed various non-residential features (e.g., bridges

and pavements). The homeowners asserted an inverse

condemnation claim under the federal Takings

Clause. The Kansas Supreme Court ultimately ruled

for the landowners, confirming that state actions

breaching restrictive property covenants (even for the

state’s own land) could serve as the basis of Takings

liability given the negative effect on neighboring landowners. Id. at 46. But under the Fifth Circuit’s rule

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here, Kansas may well have litigated those claims differently, with outcome-determinative effect.

Nor is the concern limited to real property. An ongoing dispute over Pennsylvania’s efforts to seize hundreds of millions of dollars from the Pennsylvania Professional Liability Joint Underwriting Association is a

case in point. The Underwriting Association (involved

in medical malpractice insurance) has accumulated

significant contingency funds, in excess of required

capital ratios. Perceiving a financial opportunity, the

Commonwealth of Pennsylvania enacted a statute

purporting to transfer $200 million from the Association to the Commonwealth’s General Fund. Pa. P.L.

725, No. 44 (2017). The Association sued in federal

district court, which enjoined the law as a per se taking. Pennsylvania Pro. Liab. Joint Underwriting Ass’n

v. Wolf, 324 F. Supp. 3d 519, 540 (M.D. Pa. 2018), appeal docketed, No. 18-2323 (3d Cir. June 13, 2018).

Pennsylvania then enacted another law that sought to

restrict the Association from receiving funding, other

than through appropriations from the General Assembly. A federal district court again enjoined the state’s

actions as an unlawful regulatory taking. Pennsylvania Pro. Liab. Joint Underwriting Ass’n v. Wolf, 509

F. Supp. 3d 212 (M.D. Pa. 2020), appeal docketed, No.

21-1112 (3d Cir. Jan. 22, 2021); see also 2023 WL

2421665 (3d Cir. Jan. 19, 2023) (order in consolidated

appeals certifying state-law question to Supreme

Court of Pennsylvania). Under the Fifth Circuit’s rule,

Pennsylvania presumably could have moved to dismiss the initial federal-law claims with preclusive effect—leaving the private entity to whatever state-law

remedies existed.

Cf. Pet. Supp. App. 78a-79a

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(Oldham, J., dissenting from denial of rehearing en

banc) (noting that Louisiana “does not afford its citizens a state-law takings remedy”).

As even these few examples make clear, the absence of federal constitutional guardrails on states requiring payment of just compensation—and the lack

of an assured and straightforward federal forum in

which to litigate such claims—could create profound

and sweeping uncertainty for private property owners

in a wide range of circumstances. And affirming the

judgment here seems likely to unleash states to regulate aggressively, without the accountability and discipline imposed by an assured federal Just Compensation guarantee. The Fifth Circuit’s rule would frustrate this salutary check on government power, and

disserve the investment-backed expectations of property owners nationwide. The Fifth Circuit’s novel and

deeply troubling rule cannot stand.

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CONCLUSION

For the foregoing reasons, and those set forth in the

Petitioners’ brief, the Fifth Circuit’s judgment should

be reversed.

Respectfully submitted.

ANDREW R. VARCOE

JONATHAN D. URICK

U.S. CHAMBER

LITIGATION CENTER

1615 H Street, NW

Washington, DC 20062

JEREMY C. MARWELL

Counsel of Record

VINSON & ELKINS LLP

2200 Pennsylvania Ave.,

NW, Suite 500 West

Washington, DC 20037

(202) 639-6500

jmarwell@velaw.com

PARKER J. CRAGG

VINSON & ELKINS LLP

845 Texas Ave.,

Suite 4700

Houston, TX 77002

Counsel for Amicus Curiae

NOVEMBER 2023