# Petition for Writ of Certiorari — Huntleigh USA USA Corp. v. United States (No. 08-198) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0184%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2008 ## Text 0 (\) Supreme Court, U.S. FILED No.08 98-198 WG-13 2008 Intue OFFICE OF THE CLERK Supreme Court of the United States HUNTLEIGH USA CORPORATION, Petitioner, v. THE UNITED STATES, Respondent. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT PETITION FOR A WRIT OF CERTIORARI JONATHAN J. LERNER Counsel of Record LAUREN E. AGUIAR SARAH H. YARDENI SKADDEN, ARPS, SLATE, MEAGHER & FLom LLP Four Times Square New York, New York 10036 (212) 735-3000 Counsel for Petitioner 217492 cr COUNSEL PRESS (800) 274-3321 » (800) 359-4859 1 QUESTIONS PRESENTED Whether the Court of Appeals for the Federal Circuit erred in holding that Petitioner was not entitled, as a matter of law, to “just compensation” for a “taking” of its property pursuant to the Fifth Amendment where the Aviation and Transportation Security Act, enacted by Congress in the wake of the terrorist attacks on the United States on September 11, 2001, (1) nationalized the entire domestic airport passenger and baggage screening industry in which Petitioner had operated for decades; (2) expressly made it illegal for private screening companies, including Petitioner’s company, to continue providing these services in the face of a newly mandated governmental monopoly over provision of such services; and (3) provided for the take-over by the government of existing private screening contracts, including Petitioner’s contracts, pursuant to which these services were provided. Whether the Court of Appeals for the Federal Circuit erred in holding that this Court’s decision in Kimball Laundry Co. v United States, 338 U.S. 1 (1949), precludes compensation under the Fifth Amendment for a “taking” of goodwill and going-concern value, where those property interests have been permanently, rather than temporarily, destroyed by governmental action. ia STATEMENT PURSUANT TO RULE 29.6 Petitioner Huntleigh USA Corporation is wholly owned subsidiary of ICTS International N.V.,, a publicly- held limited liability company whose shares are traded on the NASDAQ. a ili TABLE OF CONTENTS QUESTIONS PRESENTED ................ STATEMENT PURSUANT TO RULE 29.6... BRRMP ESE GP GAPRUREBITEE ccccccccccccsescoves TABLE OF APPENDICES .................. TABLE OF CITED AUTHORITIES ......... Sica s Spek ge svouse candies EY CD CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED ................ EE Mah odes ccke ned ekcnnssdeusees EN ee Ee Be PME oo cc cess ccccceccenwe Ae ee ee 2. Trial Court Judgment ............. 3. Federal Circuit Decision ........... 10 1] iv Contents REASONS FOR GRANTING THE PETITION A. The Decision Below Conflicts With This Court’s Takings Jurisprudence ........ 15 1. The Federal Circuit’s Restrictive Application of Omnia Contravenes The Reasoning Of That Case and The Court’s Subsequent Takings BPE cocci vib eveeteassesesnens 16 2. The Federal Circuit’s Assault on the Fifth Amendment Mistakenly Limits This Court’s Decision in Kimball Sado ob baGu vakde obese vines 19 B. The Decision Below Creates an Intra- Circuit Conflict in the Federal Circuit Having Exclusive Jurisdiction Over Similar Claims, Thus Necessitating This Court’s Review Without Further Percolation in the Federal Courts of ! Gin Soe Cie Sa be tae e ed euie es 21 C. The Issue Presented By This Case Is Important, Recurring, and Has Far- Reaching Ramifications ............... 26 EE ke 6806660506 ¢i nc eevesaunevess 29 v TABLE OF APPENDICES Appendix A — Opinion Of The United States Court Of Appeals For The Federal Circuit EB EE. er ba cc uccweceéedneneseens Appendix B — Opinion Of The United States Court Of Federal Claims Dated March 15, 2007 Appendix C — Denial Of Motion For Summary Judgment And Order Dated October 12, 2006 Appendix D — Opinion Of The United States Court Of Federal Claims Dated April 21, 2005 Appendix E — Opinion Of The United States Court Of Federal Claims Dated January 7, 2005 Appendix F — Aviation And Transportation BOGE Gt once vccccess UT CC vi Page TABLE OF CITED AUTHORITIES " CASES Air Pegasus of D.C., Inc. v. United States, 424 F:3d 1206 (Fed Cir. 2005) ........... 12, 18, 19 Armstrong v. United States, ee ccc escccceceesececes 16, 17 Cardinal Chem. Co. v. Morton Int’l Inc., oe weceees 15, 22 Cienega Gardens v. United States, 331 F.3d 1319 (Fed. Cir 2003) ............. passim Cienega Gardens v. United States, 503 F.3d 1266 (Fed. Cir. 2007) .............. 24 Eastern Enters. v. Apfel, a os tate eo ceccevess 27 Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., I oo cc ceccterescesecee 16, 22 First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, Cal., EEE. Sccccccsccbesccsvcccesse 21 vii Cited Authorities Goldblatt v. Hempstead, 369 U.S. 590 (1962) ..........cecceeees Huntleigh USA Corp. v. United States, 63 Fed. Cl. 440 (2005) ............-2.06. Huntleigh USA Corp. v. United States, GS Fed. Cl. 178 GQ0G6) .... 2c cccceions. Huntleigh USA Corp. v. United States, Be Hs Ss GOED co cccccccocescccs: Huntleigh USA Corp. v. United States, 525 F.3d 1370 (Fed. Cir. 2008) .......... KSR Int'l. Co. v. Teleflex Inc., Be Gy Gs ROT ED cs esecccccccccess Kaiser Aetna v. United States, Ge CE ETED sedi wdsvccevccvcees Kimball Laundry Co. v United States, MP BMD ob vcecwevoccessececnes Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992) ...............4.-. Maritrans Inc. v. United States, 342 F3d 1344 (Fed. Cir. 2003) .......... Omnia Commercial Co. v. United States, Be We GUND sh ccccceccwacceccece Page passim passim vili Cited Authorities Page Palazzolo v. Rhode Island, cee eesee 24 Penn Cent. Tran. Co. v. City of New York, ee en dec ccecenseeeses passim Ruckelshous v. Monsanto Co., er 27 Tahoe-Sierra Preservation Council, Inc. v. Tahoe Reg'l Planning Agency, ee a cnenetoees 24 Warner-Jenkinson Co. v. Hilton Davis Chem. Co., eee 22 STATUTES AND CONSTITUTIONAL PROVISION Be Ce OED ch dascccndovccwcesccusence 1 SP Me D MUEIUD Seco ccccccseusccencess 13, 21 Se ME ED 56h ce eves destscccnceods 13, 21 I EE DOS pawdedkerscwescsssvecnwes 5 49 U.S.C. § 44901 et seg. (2000) ............... 4 ix Cited Authorities Page Aviation and Transportation Security Act, Pub. L. No. 107-71, 115 Stat. 597 (2001) ... passim E,W voces ccctvaveecues' sds passim REGULATIONS 14 C.FR. pts 107-08 (2000) (superseded) ...... 4 OTHER MATERIALS Andrew E. Kramer, /n Dispute with BP, Kremlin’s Hand is Seen, NY Times, July 19, TET, EES RE Bee PEL epee baer oh SR do 9 SE 28 Simon Romero, Chavez Seizes Greater Economic Power, NY Times, May 18, 2008 ............ 28 1 Huntleigh USA Corporation (“Petitioner” or “Huntleigh”) respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Federal Circuit in this case. OPINIONS BELOW The opinion of the Court of Appeals for the Federal Circuit (Schall, J., joined by Newman and Mayer, JJ.) affirming judgment for the government, is published at 525 F.3d 1370 (Fed. Cir. 2008), and reprinted in the Petitioner’s Appendix (“Pet. App.”) at la-29a. The opinion of the Court of Federal Claims (Margolis, J.) granting judgment for the government is reported at 75 Fed. Cl. 642 (2007), and is reprinted in the Pet. App. at 30a-46a. The opinion of the Court of Federal Claims denying the government’s motion for summary judgment is unreported and is reprinted at Pet. App. 47a-49a. The opinion of the Court of Federal Claims denying the government’s motion for reconsideration is reported at 65 Fed. Cl. 178 (2005), and is reprinted at Pet. App. 50a-56a. The opinion of the Court of Federal Claims denying the government’s motion to dismiss the complaint is reported at 63 Fed. Cl. 440 (2005), and is reprinted at Pet. App. 57a-85a. JURISDICTION The judgment of the Court of Appeals for the Federal Circuit was entered on May 15, 2908. The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). 2 CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The Takings Clause of the Fifth Amendment provides, “nor shall private property be taken for public use, without just compensation.” U.S Const. amend V. Pertinent provisions of the Aviation and Transportation Security Act, Pub. L. No. 107-71, 115 Stat. 597 (2001), are reprinted in relevant part at Pet. App. 86a-134a. STATEMENT This case arises out of the nationalization by the United States Government of the private domestic airport passenger and baggage screening industry, including the business owned by Huntleigh, pursuant to the Aviation and Transportation Security Act (“ATSA” or the “Act”), enacted in the wake of the terrorist attacks on the United States on September 11, 2001. Pub. L. No. 107-71, 115 Stat. 597 (2001) (Pet. App. 86a- 134a). By its express terms, the Act was specifically designed to replace, at all domestic airports, private passenger and baggage screening companies like Huntleigh, which had provided screening for decades, with a government monopoly. On its face, the Act mandates that the government exclusively supply all such security screening services and expressly prohibits private companies like Huntleigh from doing so. See ATSA § 101(g)(1), 115 Stat. at 603 (Pet. App. 105a- 106a); § 110(b)(2), 115 Stat. at 614-615 (Pet. App. 111a- 112a). As provided for in the Act, Huntleigh’s contracts, pursuant to which it provided screening services, were 3 nullified when the Government stepped in to take over provision of these services. See ATSA § 101(g)(2)-(3), 115 Stat. at 603-604 (Pet. App. 106a-107a). The direct and intended impact of the Act on Huntleigh was to transfer its longstanding security screening business to a newly created government agency called the Transportation Security Administration (“TSA”). Huntleigh’s contracts, goodwill and going-concern value, which the Federal Circuit below acknowledged were cognizable property interests, were completely nullified, and it was precluded from performing under its existing contracts or entering into new contracts for the provision of passenger and baggage screening. Even though the intended purpose and effect of the Act was to preclude private screening companies like Huntleigh from continuing to perform screening services and to replace them with a federal monopoly, the Federal Circuit, which has exclusive jurisdiction over Fifth Amendment takings claims brought against the federal government, misconstrued this Court’s decision in Omnia Commercial Co. v. United States, 261 U.S. 502 (1923), to hold that Huntleigh’s loss was merely “indirect” and did not constitute a compensable “taking.” This erroneous decision directly conflicts with the relevant case law of this Court, creates a conflict within the Federal Circuit, and threatens to eviscerate the basic constitutional protection of property rights. Accordingly, this Petition presents an issue of)\ fundamental importance about the government’s power to seize private property without paying “just compensation” as constitutionally mandated. A. Background Before 2001, airlines were required to establish specific air transportation security programs to ensure the safety of airline passengers, which included the provision of screening passengers and property prior to their boarding on to an air craft. See 49 U.S.C. § 44901 et seq. (2000), amended by ATSA, Pub. L. No. 107-71 (2001) (Pet. App. 86a-134a); 14 C.F-R. pts. 107, 108 (2000) (superseded). Virtually without exception, individual air carriers discharged their passenger and baggage screening responsibilities by contracting with private airline security specialists like Huntleigh. Huntleigh furnished screening services pursuant to long-standing and continuously renewed contracts, and had an excellent reputation in the screening industry. These contracts were rarely, if ever, terminated, and indeed no major airline had terminated a Huntleigh contract since 1991. The tragic events of September 11, 2001 focused significant national attention on airport security screening, and the immediate impact on Huntleigh’s business was dramatic. In keeping with Federal Aviation Administration recommendations, Huntleigh determined to improve the quality of screening by decreasing turnover rates and attracting employees with the necessary skill level. It also recruited, hired, and trained thousands of new employees to meet the increased screening demands. Huntleigh’s actions reflected the prevailing view in the immediate aftermath of the terrorist attacks that screening would continue, as it had for approximately the past thirty years, to be performed by private companies providing screening on 5 behalf of air carriers but pursuant to heightened standards and screening requirements. Within a few months, on November 19, 2001, Congress enacted ATSA, which created the TSA, 49 U.S.C. § 114, and directed that “{n]Jot later than 3 months” after its enactment, “the Under Secretary of Transportation for Security shall assume civil aviation security functions and responsibilities.” ATSA § 101(g)(1), 115 Stat. at 603 (Pet. App. 105a). On its face, the Act made it zllegal for private companies to perform these services, reqviring instead that “[t]he Under Secretary of Transportation for Security shall provide for the screening of all passengers and property .. .” and that “/a/ll screening of passengers and property at airports in the United States .. . shall be supervised by uniformed Federal personnel of the Transportation Security Administration ...” ATSA § 110(b)(2), 115 Stat. at 614-615 (Pet. App. 11la-112a) (emphasis added). Recognizing that this mandate was inconsistent with existing private screening contracts, ATSA referred, in a section describing the transition from private to public security screening, specifically to the Act’s impact on “air carrier or foreign air carrier contract/s] for provision of passenger screening services at airports in the United States” and “any contract the air carrier has entered into with respect to carrying out” a screening or security function. See ATSA § 101(g)(2)- (3), 115 Stat. at 603-604 (Pet. App. 106a) (emphasis added). In light of the understood direct effect on screening contracts, the Act further provided that in certain circumstances, “adequate compensation” be paid to the parties to those contracts. ATSA § 101(g)(2), 6 115 Stat. at 603-604 (Pet. App. 106a). Internal government memoranda, as well as the government’s trial witnesses, confirmed that the Act required the take- over of private screening contracts. ATSA also required the airlines to continue paying for screening services, mandating that the money be paid to the government. Section 118 of ATSA instructs the TSA to levy fees on both passengers and airlines to pay the government’s costs for furnishing screening services. See 115 Stat at 625 (Pet. App. 127a-129a). Finally, ATSA did not decrease or eliminate the requirements for screening; it increased them by imposing more extensive screening requirements, including screening one hundred percent of checked baggage, heightened passenger screening requirements, and enhanced prerequisites, training, and supervision for screening personnel. See ATSA § 109, 115 Stat. at 613 (Pet. App. 108a-110a); ATSA § 110, 115 Stat. at 614 (Pet. App. 1lla-115a); ATSA § 111, 115 Stat. at 616-619 (Pet. App. 117a-125a). Once Congress enacted ATSA, Huntleigh’s private screening contracts were nullified. Beginning February 17, 2002, to implement ATSA, the TSA entered into interim contracts with Huntleigh and other private companies, pursuant to which the companies temporarily provided screening services on behalf of the government. Shortly thereafter, during the summer and fall of 2002, the government unilaterally removed Huntleigh’s screeners from security checkpoints and replaced them with TSA employees. By November 2002, the government had fully implemented its nation-wide screening monopoly, and every checkpoint for which 7 Huntleigh had a contract to provide screening services was staffed by federal employees, many of whom had been formerly employed by Huntleigh. As a direct result of ATSA, Huntleigh’s valuable screening business was assumed by the government, its employees were hired by the government, its long- standing contracts were nullified, and it was legally precluded from performing passenger and baggage screening at all domestic airports in this country. Those very same passenger and baggage screening functions are now being operated by the TSA — at the same check points, at the same airports, for the same air carriers, and in many instances by Huntleigh’s former employees, now wearing TSA uniforms. B. Proceedings Below 1. Pretrial Opinions On November 14, 2003, Huntleigh initiated this action against the United States in the Court of Federal Claims. (See Pet. App. 61a.) Huntleigh alleged that when the government enacted ATSA, it appropriated Huntleigh’s valuable business assets, including its contracts, goodwill and going-concern value, without compensating Huntleigh. Based on those allegations, Huntleigh asserted two causes of action, a takings claim under the Fifth Amendment of the United States Constitution, and a statutory claim under section 101(g) of ATSA, which requires the government to pay “adequate compensation” in the event it assumes “the rights and responsibilities” of a “contract for provision of passenger screening services.” ATSA § 101(g)(2), 115 8 Stat. at 603-04 (Pet. App. 106a). Huntleigh is not seeking review of the dismissal of that statutory claim. On March 24, 2004, the United States moved to dismiss Huntleigh’s Complaint pursuant to Rule 12(b)(6) of the Court of Federal Claims. By opinion and order dated January 7, 2005, the Court of Federal Claims rejected all of the government’s legal arguments and denied the motion to dismiss. (See Pet App. 57a (Huntleigh USA Corp. v. United States, 63 Fed. Cl. 440 (2005)).) Addressing the existence of property rights, the Court of Federal Claims held that “business assets,” including “contracts, goodwill, and going-concern value” plainly are compensable “property” under controlling Supreme Court and Federal Circuit precedent. (Pet. App. 65a.) The court also decisively rejected the government’s argument that Huntleigh’s loss of its business assets was “merely consequential” under Omnia Commercial Co. v. United States, 261 U.S. 502 (1923), and its progeny. (See Pet. App. 68a-69a.) The court explained that “(rjather than merely bringing the contract between Huntleigh and the airlines to an end, as the government suggests, the government has appropriated Huntleigh’s rights under the contract. The government has gone beyond merely taking over the subject matter of the contract, as was the case in Omnia.” (Pet. App. 74a.) Thus, the court determined that the case was controlled by the Federal Circuit’s opinion in Cienega Gardens v. United States, 331 F.3d 1319 (Fed. Cir 2003), and held: The present case is even more egregious. More than rewriting the contracts between 9 Huntleigh and the nation’s airlines, the government has taken over Huntleigh’s position as the contractor, and has created for itself a sweeping monopoly over the entire industry. (Pet. App. 73a-74a.) Having established that Huntleigh had alleged it possessed valid property rights compensable under the Takings Clause, the trial court then determined that Huntleigh had properly alleged a “taking” under the three-factor analysis set forth in Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 124 (1978). (Pet. App. 75a.) The government’s subsequent motion for reconsideration was denied, on the grounds that the government had “present[ed] no new facts [Jor arguments” in its reconsideration motion. (See Pet. App. 52a, 56a (Huntleigh USA Corp. v. United States, 65 Fed. Cl. 178 (2005)).) Following the close of fact and expert discovery, the government filed a motion for summary judgment. The Court of Federal Claims denied the government’s motion from the bench, once again rejecting the legal and factual arguments advanced by the government: Many of the legal and factual issues raised in Defendant’s motion for summary judgment were considered in this Court’s previous denial of Defendant’s motion to dismiss|[, 63 Fed. Cl. 440,]... and the motion to reconsider[, 65 Fed. Cl. 178].... 10 Defendant again raises many of the same issues in the present motion. For the same reasons previously stated in response to Defendant’s motions as to those issues, the motion for summary judgment is denied. (Pet. App. 47a-48a (Transcript and Order denying Defendant’s Motion for Summary Judgment, October 12, 2006).) 2. Trial Court Judgment On November 13, 2006, the case proceeded to a bench trial which lasted four days. Huntleigh presented extensive evidence of the direct and devastating impact of ATSA on its screening contracts, which were nullified as a result of the Act. (Pet. App. 6a-7a, 33a.) A once thriving business at the forefront of its industry (id.), ATSA prohibited Huntleigh from continuing performance under its screening contracts. (Pet. App. 32a (“The Act required virtually all passenger and baggage screening to be conducted by federal employees within one year.”).) There was no evidence presented to support any contention that ATSA merely decreased the need for Huntleigh’s services. To the contrary, the Act legally precluded Huntleigh from offering competing security screening services anywhere in the country. (/d.) At the end of December 2006, the parties filed post-trial briefs. The court heard final arguments on February 28, 2007. On March 15, 2007, the Court of Federal Claims issued its final opinion in this case. (See Pet. App. 30a (Huntleigh USA Corp. v. United States, 75 Fed. Cl. 642 11 (2007)).) In an abrupt and total reversal of its three prior decisions, the court concluded that “the property Huntleigh described in its evidence at trial [its contracts, goodwill or going-concern value] is not subject to compensation under the Fifth Amendment.” (Pet. App. 35a.) The opinion appeared to contain no analysis of whether a taking had occurred, and the court did not address what compensation might be due. Although the court suggested that the “evidence presented at trial” contributed to its about-face on the existence of legal property rights (Pet. App. 35a), the Court of Federal Claims included only two short paragraphs reciting the “Facts” (Pet. App. 32a-33a), and instead adopted purely legal positions that it had itself previously and decisively rejected on three separate occasions. The trial court jettisoned its own prior determination that Huntleigh’s claim was not “merely consequential” under Omnia, and inexplicably held that the government’s action had rendered Huntleigh’s private screening contracts “impossible to perform” which “does not amount to a taking.” (Pet. App. 37a.) The court concluded: “In summary, Huntleigh did not possess a compensable property interest under the Fifth Amendment, and the Court’s analysis ends there.” (Pet. App. 39a.) 3. Federal Circuit Decision On July 16, 2007, Huntleigh filed its appeal in the Federal Circuit, and on May 15, 2008, the Federal Circuit issued its opinion. (Pet. App. la (Huntleigh USA Corp. v. United States, 525 F.3d 1370 (Fed. Cir. 2008)).) The Federal Circuit rejected the lower court’s conclusion that Huntleigh had no property interest, holding that “it is undisputed that the property interests Huntleigh alleges were taken are, for purposes of the Fifth Amendment, cognizable property interests.” (Pet. App. 13a.) 12 Rather than proceeding to apply the “takings tests” set forth by this Court in Penn Central, 438 U.S. at 104 and Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), however, the Federal Circuit simply concluded that Huntleigh had not proven a compensable Fifth Amendment claim as a matter of law. The court found that because the government “did not actually assume [Huntleigh’s] contracts” (7.e., sign its name where Huntleigh’s name previously had been), Huntleigh’s takings claim could not be based on an actual taking of its contracts, but rather must be based on the argument that ATSA rendered those contracts, and the associated goodwill and going-concern value, “worthless.” (Pet. App. 16a.) Without any analysis of whether those contracts had in fact been rendered worthless (which they were), the court applied this Court’s ruling in Omnia Commercial Co. v. United States, 261 U.S. 502 (1923), and its own decision in Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206 (Fed Cir. 2005), to legally foreclose Huntleigh’s takings claim. (Pet. App. 17a-21a.) The Federal Circuit determined that the imposition of ATSA was “indistinguishable” from the regulatory circumstances in Omnia and Air Pegasus. (Pet. App. 21a.) It concluded that ATSA did not “take action with respect to any security screening contract to which Huntleigh was a party,” and instead merely “reduced the demand for Huntleigh’s services.” (Pet. App. 20a- 21a.) The court did not address ATSA’s explicit language that it is directed at air carrier contracts for provision of screening services (which indisputably include Huntleigh’s former contracts), ATSA § 101(g)(2)-(3), 115 Stat. at 603-604 (Pet. App. 106a), or ATSA’s legislative 13 preclusion of private screening companies (such as Huntleigh) from providing screening services, ATSA §§ 101(g)(1), 115 Stat. at 603 (Pet. App. 105a-106a); § 110(b)(2), 115 Stat. at 614-615 (Pet. App. 111la-112a). The Federal Circuit determined that Huntleigh’s claim that the government had arrogated it’s entire screening business, including its contract rights, which were rendered “worthless,” did not constitute a compensable taking. Finally, the Federal Circuit distinguished this Court’s analysis in Kimball Laundry Co. v. United States, 338 U.S. 1 (1949), concluding that goodwill and going-concern value are only compensable in the context of a temporary, not permanent, taking. (Pet. App. 24a.) REASONS FOR GRANTING THE PETITION Review by this Court of the Federal Circuit decision is necessary and important to re-align the Federal Circuit’s jurisprudence with that of this Court, harmonize conflicting decisions within the Federal Circuit on this issue, and to ensure that the government is not given a green light to enact legislation the ultimate effect — and avowed purpose —- of which is the seizure of private property without awarding constitutionally mandated compensation. It is especially important for this Court to review this incorrect decision because the Federal Circuit has exclusive jurisdiction over takings claims against the United States (28 U.S.C. § 1491(a)(1); 28 U.S.C. § 1295(a)(3)), and the erroneous holding of the Federal Circuit with regard to such claims can only be rectified by this Court’s intervention. 14 The Federal Circuit’s opinion misconstrues this Court’s decision in Omnia, 261 U.S. at 502, to deny Fifth Amendment protection to Petitioner’s claim as merely indirect or consequential even where Petitioner’s business and contracts were the avowed targets of the regulatory taking, not a remotely impacted incident of the “taking” of someone else’s property. To reach its result, the Federal Circuit circumvented this Court’s well-established takings jurisprudence and incorrectly extended Omnia to a plainly distinguishable factual situation where it was not intended to apply. At the same time, the Federal Circuit fundamentally undermined the Fifth Amendment’s protection of private property by denying “just compensation” to claimants who can establish a “taking” by unjustifiably narrowing this Court’s holding in Kimball Laundry, 338 U.S. at 1. The decision below also employs discredited legal analysis previously rejected by, and conflicting with, the Federal Circuit’s own prior case law. Indeed, in reaching its conclusion, the Federal Circuit was constrained to adopt two positions it had previously discarded in Cienega Gardens v. United States, 331 F.3d 1319 (Fed. Cir. 2003). Because the Federal Circuit provides the only venue for appellate review on these issues, a conflict within that circuit creates confusion over property rights throughout the country and can only be rectified by this Court’s intervention. Under the Federal Circuit’s opinion, the federal government is entirely free to nationalize private industries under its broad police power without the constitutional obligation to pay “just compensation.” The decision prevents a claimant whose property has 15 been rendered “worthless” by regulatory action specifically intended to prevent the claimant from pursuing its business or performing under its contracts from receiving “just compensation” under the Fifth Amendment as a matter of law. This holding has ramifications far beyond this case. The significant adverse effect on private property from this erroneous precedent is extremely far reaching, both nationally and internationally. If allowed to stand, the Federal Circuit’s extraordinary conclusion has the potential to eviscerate traditional concepts of private property rights by allowing the federal government to readily seize private property without complying with the Fifth Amendment’s mandate to pay “just compensation.” Internationally, this erroneous precedent would provide foreign governments with a justification for usurping the businesses of United States companies with impunity based on their claimed national interests — and without compensation. A. The Decision Below Conflicts With This Court’s Takings Jurisprudence This Court has recognized that given the Federal Circuit’s exclusive jurisdiction over certain matters, its rulings are of special importance “to the entire Nation.” Cardinal Chem. Co. v. Morton Int'l, Inc., 508 U.S. 83, 89 (1993). In keeping with this recognition, the Court grants review of cases emanating from the Federal Circuit, particularly where, as here, the court has departed from the course chartered by this Court. See, e.g., KSR Int'l. Co. v. Teleflex Inc., 127 S.Ct. 1727, 1735, 1743 (2007) (granting certiorari “[b]ecause the Court of Appeals addressed the question of obviousness , _ 7 16 in a manner contrary to [the relevant statute} and our precedents,” and holding that “the fundamental misunderstandings identified above led the Court of Appeals in this case to apply a test inconsistent with our [prior] decisions.”); Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 5385 U.S. 722, 727-28 (2002) (granting certiorari in part because the Federal Circuit departed from the Court’s past precedent). Here, the Federal Circuit has departed from this Court’s takings jurisprudence in two distinct ways. First, the court improperly invoked Omnia, a case barring claimants from recovery under the Fifth Amendment for remote or incidental injuries, to deny “just compensation” in a case that epitomizes a taking contemplated by the Fifth Amendment. Second, the court limited Kimball Laundry’s holding in an unsupportable manner that disregards this Court’s reasoning in that case. 1. The Federal Circuit's Restrictive Application of Omnia Contravenes The Reasoning Of That Case and The Court’s Subsequent Takings Decisions A bedrock principie enunciated by this Court’s takings jurisprudence is that the “Fifth Amendment’s guarantee ... [is] designed to bar Government from 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). In furtherance of this fundamental precept, the Court has developed certain “takings tests” based on factual inquiry to determine when “‘justice and fairness’ require that economic injuries caused by public action be compensated by the government, rather than 17 remain disproportionately concentrated on a few persons.” Penn Cent. Trans. Co. v. City of New York, 438 U.S. 104, 124 (1978) (citing Armstrong, 364 U.S. at 49; Goldblatt v. Hempstead, 369 U.S. 590, 594 (1962)); Lucas, 505 U.S. at 1015. Nevertheless, having acknowledged the existence of Petitioner’s property right, as the Federal Circuit explicitly did here, the Federal Circuit ignored completely the standards set forth in Penn Central, 438 U.S. at 104, or Lucas, 505 U.S. at 1003, which should have been applied to the direct usurpation of Petitioner’s property by governmental action. The Federal Circuit’s decision defies the guiding principles carefully laid down by this Court, and if left standing, would create an enormous loophole by which the government could use Omnia to justify direct regulatory taking of private property rights without the rigorous inquiry mandated by this Court. It is exactly this type of rigid detei mination that has generally been eschewed by the Court in this context. See Penn Central, 438 U.S. at 123; Lucas, 505 U.S. at 1015. To be sure, Omnia is applicable to situations in which injury resulting from governmental action is too indirect to fall within the Fifth Amendment’s scope. 261 U.S. at 508. But, Omnia does not - and should not — stand for the proposition that regulatory action to nationalize an industry, aimed directly at abrogating private contract rights, is not, as a matter of law, within the Fifth Amendment’s protection and exempt from a proper analysis pursuant to this Court’s takings jurisprudence. 18 In Omnia, the seminal case on consequential losses in the takings context, which this Court has not illuminated for eighty-five years, this Court held that a manufacturer, which had a contract to purchase steel from the producer of the steel, had no takings claim where the government, during wartime, appropriated the steel belonging to the steel producer before it had been delivered to the manufacturer. 261 U.S. at 511. Reasoning that the government had appropriated the subject matter of the contract (steel), and had not appropriated the contract itself, this Court applied the general principle that “for consequential loss or injury resulting from lawful governmental action[,] the law affords no remedy.” Jd. at 510. The Court acknowledged, however, that its reasoning did not apply to cases where the contract at issue is “an integral part of” the property taken. Omnia, 261 U.S. at 513 (citing Monongahela Navigation Co. v. United States, 148 U.S. 312 (1893)). It bears emphasis that in Omnia, the government’s objective was simply to obtain steel, not to eliminate, much less supplant, private manufacturers who used steel. Indeed, the statute did not even target property belonging to the manufacturer (the steel still resided with the steel producer), and therefore the injury was truly “consequential.” 7d. at 510. If ATSA had closed domestic airports or appropriated all domestic aircraft for military use, the effect on Petitioner from the absence of domestic passengers to screen would be incidental. See, e.g., Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206 (Fed Cir. 2005).' But that situation ' The Federal Circuit erroneously likened this case to Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206 (Cont'd) 19 is vastly different fror . the one created by the Act which was specifically designed to nationalize the entire baggage screening industry, replaced Petitioner’s business with a government monopoly, and made it illegal for Petitioner to perform under its existing contracts. It is hard to imagine a move direct, less “incidental,” impact on Petitioner. 2. The Federal Circuit’s Assault on the Fifth Amendment Mistakenly Limits This Court’s Decision in Kimbali Laundry While unduly expanding Omnia to constrict the Fifth Amendment’s protection of private property, the (Cont'd) (Fed Cir. 2005), which had applied Ommia to an injury that was ultimately derivative. In Air Pegasus, the lessee of a heliport brought a takings claim based on the government’s prohibition on the use of airspace above the heliport after September 11, 2001. 7d. at 1210. The Federal Circuit held that the plaintiff could not support such a claim, because as the plaintiff conceded, it was seeking recompense for a “derivative injury.’” Jd. at 1215. In assessing whether Air Pegasus suffered a taking, the Federal Circuit stated that “a claimant seeking compensation from the government for an alleged taking of private property must, at a minimum, assert that its property interest was actually taken by the government action.” Jd. at 1215. The court found Air Pegasus’s only property interest was in a leasehold, the Government had taken no action to regulate that interest, and the claimant thus “failed to assert a cognizable property interest for purposes of the Fifth Amendment.” /d. at 1217-18. In contrast, here, Petitioner’s property — made up of its contracts, goodwill, and going-concern value — were taken by ATSA, a statute whose direct and intended purpose was to replace private screening companies with a government monopoly and to eliminate Petitioner's property. 20 Federal Circuit’s opinion also erroneously narrows this Court’s decision in Kimball Laundry v. United States, 338 U.S. 1 (1949), to limit the compensation due those few claimants who could still survive its overly stringent “takings test.” The Federal Circuit held, “Moreover, going concern value is a property interest that has been held to be compensable in the context of a temporary, but not a permanent, taking.” (Pet. App. 24a (citing Kimball Laundry, 338 U.S. at 11).) This interpretation is clearly contrary to the decision in Kimball Laundry itself, is not supported by any Supreme Court precedent, and provides yet another reason to grant this Petition for Certiorari. As this Court explained in Kimball Laundry, there are two circumstances in which compensation clearly is due for goodwill and going-concern value: (1) when the taking of the physical assets is temporary (as in Kimball Laundry itself), see 338 U.S. at 15; and (2) when the government usurps the business and establishes a monopoly, “as where public-utility property has been taken over for continued operation by a governmental authority,” id. at 12. The latter kind of taking, which occurred here — unquestionably is permanent rather than temporary —- and gives rise to a right of compensation for lost goodwill and going-concern value because the government has precluded the takings claimant from realizing the value of its business. See id. at 12-13. The Federal Circuit’s flawed attempt to limit Kimball Laundry’s holding is also contrary to this Court’s determination that temporary takings are “not different in kind from permanent takings, for which the a 21 Constitution clearly requires compensation.” See First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, Cal., 482 U.S. 304, 318 (1987). Whether a property interest is compensable turns, not on the duration of the taking, but on state-law and other common-law concepts of property. See Maritrans Inc. v. United States, 342 F.3d 1344, 1352 (Fed. Cir. 2003) (citing Lucas, 505 U.S. at 1030). The Federal Circuit’s incorrect conclusion limiting the compensation due to claimants whose property has been permanently taken should be addressed so that its erroneous pronouncement in Kimball Laundry cannot be used to deny compensation intended by this Court’s jurisprudence. B. The Decision Below Creates an Intra-Circuit Conflict in the Federal Circuit Having Exclusive Jurisdiction Over Similar Claims, Thus Necessitating This Court’s Review Without Further Percolation in the Federal! Courts of Appeal Because the Federal Circuit has exclusive jurisdiction over takings claims brought against the federal government (28 U.S.C. § 1491(a)(1); 28 U.S.C. § 1295(a)(3)), there is no need to await further percolation of this issue. Here, the Federal Circuit’s decision, which conflicts with its own prior jurisprudence, engenders confusion tantamount to a conflict within the circuits on the vital issue of the scope of the Fifth Amendment’s protections in the context of regulatory takings impacting private contract rights. This Court has granted certiorari under the circumstances, recognizing that conflict among the circuits may never 22 arise. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 585 U.S. 722, 727 (2002) (granting certiorari in part where the Federal Circuit departed from its own past precedent); Cardinal Chem. Co. v. Morton Int'l, 508 U.S. 83, 88 (1993) (granting certiorari to resolve question within the Federal Circuit relating to patents); Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 21 (1997) (granting certiorari in light of “(t]he significant disagreement within the Court of Appeals for the Federal Circuit” and to endeavor to clarify the scope of the doctrine at issue). The Federal Circuit has distorted Omnia in varying and conflicting ways to justify its increasingly crabbed interpretation of when the Fifth Amendment requires the payment of “just compensation,” culminating in its extraordinary holding here. Apart from the obvious legal error of the Federal Circuit’s reasoning, the decision that this case is not controlled by its prior decision in Cienega Gardens v. United States, 331 F.3d 1319 (Fed. Cir 2003) (Pet. App. 21a, 23a), illuminates a conflict within the Federal Circuit, which has virtually complete jurisdiction over Fifth Amendment takings cases. The Federal Circuit’s holding here that Omnia precludes a finding that the Act constituted a “taking” of Petitioner’s property requiring the payment of “just compensation” (Pet App. 16a), is directly at odds with its conclusion in Cienega Gardens that legislation aimed at private contract rights amounts to more than the consequential effect described in Omnia 23 and requires that such compensation be paid, 331 F.3d at 1335.” In Cienega Gardens, the claim was brought by owners of real estate who had permitted their premises to be used as public housing for a period of twenty years, in return for favorable loan terms. See id. at 1325. Under the terms of the loans the owners had negotiated with private banks and in accordance with then existing regulations, the owners could pre-pay their forty-year mortgages at the end of the twenty-year term and thus free up the property for private use. /d. at 1325-26. Before twenty years had passed, the federal government enacted legislation prohibiting exercise of the twenty- year termination clause, precluding the owners from exiting the public housing program. See id. at 1326. The owners alleged this legislation constituted a taking of their contractual and other property rights. In dismissing the suit, the Court of Federal Claims held (among other things) that governmental interference with private contracts, as a matter of law, amounted only to frustration resulting in “consequential loss[es]” under Omnia - and not a taking. See Cienega Gardens, 331 F.3d at 1334-35. On appeal, the Federal Circuit disagreed, explaining that “[t]he proposition in Omnia about consequential loss or injury refers to legislation targeted at some public benefit, which incidentally affects contract rights, not, as in this case, legislation 2 Indeed, the Federal Circuit’s finding in Cienega Gardens that “Omnia is relevant to this case only because it confirms that contract rights can be property within the meaning of the Fifth Amendment and require compensation ‘if taken for public use,” 331 F.3d at 1335, is equally applicable here. 24 aimed at the contract rights themselves in order to nullify them.” Id. (emphasis added). Because the enactment of the offending legislation “directly and intentionally abrogated the contracts,” Omnia was inapplicable. Cienega Gardens, 331 F.3d at 1335. By its express terms, the Act was aimed directly at screening contracts, including Huntleigh’s contracts, in order to nullify them and to make way for federalization. * In Cienega Gardens v. United States , 503 F.3d 1266, 1278 (Fed. Cir. 2007), cert. dismissed, No. 07-1100, 2008 WL 512725 (Aug. 1, 2008), a specially convened panel of the Federal Circuit discussed the way in which the trial court should have assessed certain of the Penn Central factors in determining whether a taking had occurred. The court, however, did not alter its prior conclusions regarding Omnia. The court reiterated that: The focus of the regulatory takings analysis is on fundamental fairness — is it fair for the government to impose the cost of a regulation on private parties rather than on the public as a whole through public spending? To make this determination, there is no set formula. There simply is no bright line dividing compensable from noncompensable exercises of the Government’s power when a regulatory imposition causes partial loss to the property owner. What is necessary is a classic example of judicial balancing of competing values. Thus the regulatory takings analysis is characterized by an essentially ad hoc, factual inquiry .. . designed to allow careful examination and weighing of all the relevant circumstances. Id. (citing, inter alia, Palazzolo v. Rhode Island, 533 US. 606 (2001); Penn Central, 438 U.S. at 123; Tahoe-Sierra Pres Council, Ine. v. Tahoe Reg’l Planning Agency, 535 U.S. 302, 322 (2002) (internal alterations and quotation marks omitted).) 25 Indeed, the Act goes even further by requiring that the government be the exclusive provider of screening services and legally precluding Huntleigh from continuing to perform under its agreements or entering into any other contracts for the provision of these services. In direct conflict with its explicit holding in Cienega Gardens, that Omnia does not legally foreclose an action such as the one brought by Huntleigh, the Federal Circuit here reached the diametrically opposite conclusion that this type of claim “can not stand.” (Pet. App. 16a.) The Federal Circuit also adopted a second holding in direct conflict with Cienega Gardens. The Federal Circuit held that, “Huntleigh was not a party to any agreement or contract with the federal government that was later unilaterally altered by statute. Rather, Huntleigh’s contracts with various commercial airlines were frustrated by a shift in the government’s regulation of the airlines. Cienega Gardens therefore does not support Huntleigh’s takings claim.” (Pet. App. 23a.) In Cienega Gardens, the court stated just the opposite: “the trial court implied that, under Omnia, if the government is not a party to the contract, the effect of the legislation on a private contract can only be consequential and there can be no taking of a contract right. .. . Omnia does not support any such rule.” Cienega Gardens, 331 F:3d at 1335. The holdings of Cienega Gardens and Huntleigh cannot be reconciled and represent a clear conflict within the Federal Circuit necessitating this Court’s immediate intervention. Given the Federal Circuit’s exclusive jurisdiction over takings claims against the United 26 States Government, such a conflict amounts to a split between the circuits and should this conflict go unresolved, claimants with legitimate Fifth Amendment claims will be left unsure of their rights under the Fifth Amendment or worse, will conclude they cannot prevail under Federal Circuit precedent and will forego bringing such claims. C. The Issue Presented By This Case Is Important, Recurring, and Has Far-Reaching Ramifications If left standing, the Federal Circuit’s opinion will trample on the rights guaranteed to property owners by the very text of the Fifth Amendment. By holding that a claim based on regulation which, on its face, directly regulates private contractual rights, rendering that cognizable property interest “worthless [,] ... cannot stand” (Pet. App. 16a), the Federal Circuit’s opinion effectively undermines, if not eliminates, the crucial protections afforded by the Fifth Amendment, not only in this case, but in a wide array of potential contexts. It also will encourage the government to enact far-reaching regulations without the cost of providing corresponding and constitutionally mandated compensation. For example, the government could enact legislation requiring that the nation’s airline industry be operated exclusively by a federal agency using federal employees. Of course, such a regulation would render private airlines, many of which are publicly traded companies, worthless and all the equipment owned by them would have “fire sale” or salvage value as private airlines would no longer be permitted to operate their planes domestically. In such a situation, airline employees would have no real choice but to 27 become federal employees, if given the chance to do so. Under the Federal Circuit’s opinion, the private airline would have no recourse. Indeed, no industry would be safe from federalization, and the government could do it without paying for what it had taken and destroyed. This Court has not hesitated to intervene under these circumstances to prevent further erosion of these fundamental rights. See Kaiser Aetna v. United States, 444 U.S. 164, 177 (1979) (“There is no denying that the strict logic of the more recent cases limiting the Government’s liability to pay damages for riparian access, if carried to its ultimate conclusion, might completely swallow up any private claim for ‘just compensation’ under the Fifth Amendment ... .”) (emphasis added); see also Ruckelshous v. Monsanto Co., 467 U.S. 986, 1012 (1984) (“If Congress can ‘pre- empt’ state property law in the manner advocated by EPA, then the Taking Clause has lost all vitality. This Court has stated that a sovereign, ‘by ipse dixit, may not transform private property into public property without compensation. . . . This is the very kind of thing that the Taking Clause of the Fifth Amendment was meant to prevent.’”) (quoting Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155 (1980)); Eastern Enters. v. Apfel, 524 U.S. 498, 536 (1998) (“{T Jhe Constitution does not permit a solution to the problem of funding miner’ benefits that imposes such a disproportionate and severely retroactive burden upon Eastern.”). The potential implications of the Federal Circuit’s decision are by no means limited to domestic businesses. The profound potential international implications reinforce the need for this Court to correct the Federal 28 Circuit’s opinion. A decision upholding the government’s unfettered right to nationalize an entire private industry — without requiring compliance with the Fifth Amendment’s explicit mandate to pay “just compensation” — can only serve to embolden foreign governments to nationalize private businesses, including those belonging to United States’ companies, with impunity, invoking the Federal Circuit’s jurisprudence as justification. Indeed, if the Federal Circuit’s decision is allowec to stand, countries like Russia and Venezuela, which have increasingly nationalized private property without proper compensation will need only point to the rule of law in the United States to justify their actions in the face of international protest. See, e.g., Andrew E. Kramer, In Dispute with BP Kremlin’s Hand is Seen, NY Times, July 19, 2008; Simon Romero, Chavez Seizes Greater Economic Power, NY Times, May 18, 2008. This Court’s review of the decision below is warranted in light of the significant and far-reaching ramifications of this erroneous precedent which will lead to an erosion of the basic principles embodied in the Fifth Amendment. 29 CONCLUSION For the foregoing reasons, we respectfully request that Huntleigh’s petition for writ of certiorari be granted. Respectfully submitted, JONATHAN J. LERNER Counsel of Record LAUREN E. AGUIAR SARAH H. YARDENI SKADDEN, ARPS, SLATE, MEAGHER & FLom LLP Four Times Square New York, New York 10036 (212) 735-3000 Counsel for Petitioner la APPENDIX A — OPINION OF THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT DATED MAY 15, 2008 UNITED STATES COURT OF APPEALS FEDERAL CIRCUIT No. 2007-5118. HUNTLEIGH USA CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. May 15, 2008. Before NEWMAN, MAYER, and SCHALL, Circuit Judges. SCHALL, Circuit Judge. Huntleigh USA Corporation (“Huntleigh”) is a corporation in the business of providing passenger and baggage screening services at airports throughout the United States. During the period between 1989 and early 2002, airlines contracted with Huntleigh in order to meet their responsibilities for passenger and baggage screening under the Air Transportation Security Act of 2a Appendix A 1974, Pub.L. No. 93-366, 88 Stat. 415 (1974) (“Air Transportation Security Act”) (repealed 1994). Following the terrorist attacks of September 11, 2001, Congress enacted, and the President signed into law, the Aviation and Transportation Security Act, Pub.L. No. 107-171, 115 Stat. 597 (2001) (codified in scattered sections of 5 U.S.C. and 49 U.S.C.) (“ATSA”). Two of ATSA’s provisions are pertinent to this appeal. The first provision, section 101(g)(1), 49 U.S.C. § 44901 (note) (Supp. I 2001), provided that the Under Secretary of Transportation for Security was to assume all security and screening functions at United States airports. The second provision, section 101(g)(2), id., provided that the Under Secretary of Transportation could perform those functions by assuming the contracts of private companies that, at the time, provided security and screening functions at airports. If the government chose to accomplish its security and screening obligations via this route, the statute required that it pay adequate compensation to the private companies whose contracts were assumed. /d. ATSA’s transfer of responsibility for passenger and baggage screening from airlines to the federal government had the effect of bringing to an end Huntleigh’s security screening contracts with airlines. In November of 2003, Huntleigh filed suit in the United States Court of Federal Claims under the Tucker Act, 28 U.S.C. § 1491(a)(1) (2000). In its suit, Huntleigh alleged that ATSA’s transfer of responsibility for passenger and baggage screening resulted in a taking of its property without just compensation, in violation 3a Appendix A of the Fifth Amendment to the Constitution. Huntleigh also alleged that it was entitled to compensation under section 101(g)(2) of ATSA. In November of 2006, the Court of Federal Claims conducted a four-day trial on Huntleigh’s claims. Thereafter, on March 15, 2007, the court rendered a decision in which it rejected both of Huntleigh’s claims and ordered the dismissal of Huntleigh’s complaint. Huntleigh USA Corp. v. United States, 75 Fed.Cl. 642 (2007). The court ruled that Huntleigh’s takings claim failed because Huntleigh had failed to establish that its property had been taken by the government. /d. at 645-46. The court ruled against Huntleigh on its claim for compensation under section 101(g)(2) of ATSA on the ground that the government had not assumed any of Huntleigh’s contracts. Id. at 649. Huntleigh now appeals the decision of the Court of Federal Claims. Because we conclude that governmental action did not effect the taking of Huntleigh’s property under the Fifth Amendment and that the *1374 government did not assume Huntleigh’s security screening contracts so as to entitle Huntleigh to compensation under section 101(g)(2) of ATSA, we affirm the court’s decision. 4a Appendix A BACKGROUND I. The facts pertinent to this case are not in dispute. With the enactment of the Air Transportation Security Act in 1974, Congress directed the Federal Aviation Administration to require airlines to implement security programs to screen all passengers and luggage traveling in commercial aviation. Air Transportation Security Act, Pub.L. No. 93-366, § 315(a), 88 Stat. 415, 415 (1974) (“The Administrator shall prescribe . . . reasonable regulations requiring that all passengers and all property intended to be carried in the aircraft cabin in air transportation . .. be screened by weapon-detecting procedures or facilities employed or operated by employees or agents of the air carrier. . . .”). In order to meet their obligations under the statute, most airlines hired private security contractors to perform the required passenger and baggage screening. Huntleigh began offering passenger screening services in 1989, and it assumed baggage screening functions in 1999. As of November 19, 2001, when ATSA became law, Huntleigh had in place contracts with approximately 75 airlines. The contracts covered passenger and baggage screening at some 35 airports across the United States. The provisions of Huntleigh’s contracts varied. Some contracts contained set periods of performance, whereas others simply continued indefinitely. Sa Appendix A All contracts, however, were terminable upon one party’s providing a certain number of days notice to the other party. Huntleigh contends, and the government does not dispute, that, as of 2001, Huntleigh had acquired an excellent reputation in the industry and that no major airline had terminated a contract with Huntleigh since 1991. IT. In the wake of the terrorist attacks of September llth, Congress reassessed the effectiveness of the screening regime created by the Air Transportation Security Act, wherein airlines were responsible for screening functions and generally met that responsibility by hiring private contractors such as Huntleigh. Specifically, Congress determined that the federal government, through a new federal agency, the Transportation Security Administration (“TSA”), could more effectively provide screening services at airports than could private contractors. See H.R.Rep. No. 107- 296, at 53-54 (2001), U.S.Code Cong. & Admin.News 2002, pp. 589, 590 (“The conferees . . . note the terrorist hijacking and crashes of passenger aircraft on September 11, 2001 .. . required a fundamental change in the way [the conferees] approach [ ] the task of ensuring the safety and security of the civil air transportation system. The Conferees expect that security functions at United States airports should become a Federal government responsibility. .. .”). Consequently, Congress enacted ATSA, thereby assigning all airport screening responsibilities to the TSA, rather than commercial airlines. 6a Appendix A ATSA imposed screening responsibilities upon the federal government and set forth a way in which the government could meet those responsibilities. Thus, section 101(a) of ATSA amended 49 U.S.C. § 114(d) to provide that the Under Secretary of Transportation “shall be responsible for security in all modes of transportation,” and ATSA section 101(g)(1) stated that, not later than three months after the enactment of ATSA, the Under Secretary of Transportation “shall assume civil aviation security functions and responsibilities.” ATSA section 101(g)(2), in turn, provided that, in order to meet the government’s responsibilities, the Under Secretary of Transportation “may assume the rights and responsibilities of an air carrier or foreign air carrier contract for provision of passenger screening services at airports in the United States.” If the Under Secretary of Transportation chose to meet the government’s obligations under ATSA by assuming a contract that existed between an airline and a private screening contractor, section 101(g)(2) required the “payment of adequate compensation to parties to the contract.” Though ATSA nowhere expressly forbade Huntleigh or other private contractors from continuing to provide airport screening functions, it effectively eliminated the market for such services, given that it concentrated all screening functions in the federal government. Thus, although no airline other than American Airlines specifically sent a termination notice to Huntleigh, Huntleigh and the other airlines with which it had contracts treated their contracts as 7a Appendix A terminated upo* the government’s full assumption of screening functions at airports, resulting in a considerable loss of business to Huntleigh. IT]. As noted above, Huntleigh filed suit in the Court of Federal Claims under the Tucker Act, alleging that ATSA’s transfer of responsibility for security screening from airlines to the federal government resulted in a taking of its property without just compensation in violation of the Fifth Amendment. Huntleigh also alleged that it was entitled to compensation under section 101(g)(2) of ATSA. Following a trial, the Court of Federal Claims rendered a decision rejecting both of Huntleigh’s claims and ordering the dismissal of Huntleigh’s complaint. See generally Huntleigh. The Court of Federal Claims began by addressing Huntleigh’s takings claim. Huntleigh alleged the taking of several property interests. Huntleigh contended first that the government had appropriated its contracts with the airlines. Though Huntleigh conceded that the government had not actually substituted itself as a party to any of its contracts, it argued that the government had effectively appropriated the contracts insofar as it had taken upon itself the responsibility of performing precisely the functions formerly performed by Huntleigh. /d. at 645. Huntleigh relied upon Cienega Gardens v. United States, 331 F.3d 1319 (Fed.Cir.2003), to establish entitlement to compensation for the taking of its contractual rights. Huntleigh, 75 Fed.Cl. at 646. 8a Appendix A Second, Huntleigh argued that the government had effected a taking by destroying the going concern value and goodwill associated with its security screening business. /d. In advancing this argument, Huntleigh relied upon Kimball Laundry Co. v. United States, 338 U.S. 1, 69 S.Ct. 1434, 93 L.Ed. 1765 (1949), to establish the compensability of going concern value and goodwill, ' see id. at 10-11, 69 S.Ct. 1434. Huntleigh, 75 Fed.Cl. at 646. Turning first to the alleged taking of Huntleigh’s security screening contracts, the Court of Federal Claims determined that the contracts were not taken by the government. /d. at 645-46. The court noted that all the contracts between Huntleigh and the airlines contained termination clauses, generally requiring from 30-90 days advance notice, thus permitting either party to terminate a contract. ij? «t 646. The court further noted that, except for American Airlines, none of the airlines with which Huntleigh had contracts had terminated their contracts. Jd. Rather, following the enactment of ATSA, they had allowed the contracts to expire pursuant to their terms. /d. Under these circumstances, the court 1. Kimball Laundry describes “going-concern value” as the inertia associated with the clientele of any established business, as a result of which at least a certain percentage of the customers of a business can likely be expected to continue to patronize the business so long as it remains solvent. 338 U.S. at 10-11, 69 S.Ct. 1434. “Goodwill” consists of “{a] business's reputation, patronage, and other intangible assets that are considered when appraising the business.” Black’s Law Dictionary 715 (8th ed.2004). 9a Appendix A reasoned, Huntleigh could not properly contend that its contracts were taken by the government. /d. The court further reasoned that, despite the fact that ATSA was the reason for the expiration of Huntleigh’s contracts, the government could not be deemed to have committed a taking of Huntleigh’s property because ATSA did not regulate Huntleigh. Jd. Rather, by eliminating any screening obligations the airlines formerly possessed and transferring those obligations to the federal government, the statute embodied regulatory action with respect to the airlines. /d. Citing Omnia Commercial Co. v. United States, 261 U.S. 502, 43 S.Ct. 437, 67 L.Ed. 773 (1923), and Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206 (Fed.Cir.2005) (“Air Pegasus II”), the court determined that governmental action directed at third parties had frustrated Huntleigh’s expectations under its contracts, but that this circumstance did not provide the basis for a cognizable takings claim. Huntleigh, 75 Fed.Cl. at 646. The Court of Federal Claims also rejected Huntleigh’s claim for compensation based upon the alleged taking of going concern value and goodwill. The court reasoned that going concern value and goodwill could not be deemed to have been taken when, as in the case before it, there had not been a taking of the underlying business with which the going concern value and goodwill were associated. /d. Since the government did not appropriate Huntleigh’s business, but rather simply assumed many of the same functions Huntleigh had formerly performed, Huntleigh was unable to allege that the government actually took its business and 10a Appendix A therefore could not allege a taking of going concern value and goodwill. /d. Having disposed of Huntleigh’s takings claim, the Court of Federal Claims turned to Huntleigh’s second claim: that it was entitled to compensation under section 101(g)(2) of ATSA. In advancing this claim, Huntleigh acknowledged that the government had not actually stepped into its shoes under the various security screening contracts with the airlines, so as to be deemed to have assumed “the rights and responsibilities of an air carrier or foreign air carrier contract for provision of passenger screening services at airports,” as contemplated by section 101(g)(2). Jd. at 648. Rather, Huntleigh argued that the statute did not require a literal assumption of the contracts. /d. According to Huntleigh, the statute mandated compensation if, as in Huntleigh’s case, the government assumed the responsibilities formerly borne by a private contractor. Id. The Court of Federal Claims rejected Huntleigh’s argument, concluding that section 101(g)(2) of ATSA did not provide authority for awarding Huntleigh compensation for its lost business. /d. at 648-49. In reaching that conclusion, the court relied primarily upon a textual comparison between sections 101(g)(1) and 101(g)(2) of the statute. As seen, section 101(g)(1) provided that the government “shall” assume all screening functions at national airports. /d. at 647 (emphasis added). By contrast, section 101(g)(2) provided that the government “may” effect this lla Appendix A obligation by substituting itself as a party into contracts that formerly existed between the airlines and private screening contractors. Jd. (emphasis added). Were Huntleigh’s view of ATSA correct, the Court of Federal Claims reasoned, the statute, in section 101(g)(1), would have required the government to assume screening functions and then, in section 102(g)(2), would have provided that compensation be paid to former private screeners upon the assumption of such functions. The statute’s use of the permissive word “may” in section 101(g)(2), however, conveyed to the court that Congress did not intend for section 101(g)(2) to set forth the sole means by which the government could assume screening responsibilities under ATSA. /d. at 648. Thus, the court determined that the requirements of section 101(g)(2) only applied when the government actually assumed a contract between private parties, rather than when the government undertook to perform functions formerly performed by one of the parties. Jd. at 648-49. Since Huntleigh conceded that the government had not actually assumed any of its security screening contracts, the court determined that section 101(g)(2) did not require compensation. /d. at 649. Based upon its rulings, the Court of Federal Claims entered judgment in favor of the United States and dismissed Huntleigh’s complaint. Jd. This appeal followed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3). 12a Appendix A DISCUSSION On appeal, Huntleigh argues that the Court of Federal Claims erred in holding that the enactment of ATSA did not result in the taking of its security screening contracts, going concern value, and goodwill. Huntleigh also argues that the court erred in holding that it was not entitled to compensation under section 101(g)(2) of ATSA on account of what it alleges was the government’s de facto assumption of its security screening contracts. We address these contentions in turn. I. The issue of whether a taking has occurred is a question of law based on factual underpinnings. Stearns © Co. v. United States, 396 F.3d 1354, 1357 (Fed.Cir.2005); Maritrans, Inc. v. United States, 342 F.3d 1344, 1350- 51 (Fed.Cir.2003); Washoe County v. United States, 319 F.3d 1320, 1325 (Fed.Cir.2003). As noted above, in this case, the pertinent facts are not in dispute. Consequently, our consideration of Huntleigh’s takings claim reduces to a question of law. We review de novo a ruling by the Court of Federal Claims on a question of law. Columbia Gas Sys., Inc. v. United States, 70 F.3d 1244, 1246 (Fed.Cir.1995). The Takings Clause of the Fifth Amendment of the United States Constitution states that “private property {shall not] be taken for public use, without just compensation.” U.S. Const. amend. V. The purpose of 13a Appendix A the Takings Clause is to prevent “Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 123, 98 S.Ct. 2646, 2659, 57 L.Ed.2d 631 (1978). We have developed a two-part test for determining whether “fairness and justice” require compensation for burdens imposed by a particular governmental action. First, as a threshold matter, the court must determine whether the claimant has established a property interest for purposes of the Fifth Amendment. Am. Pelagic Fishing Co. v. United States, 379 F.3d 1363, 1372 (Fed.Cir.2004); see also Maritrans, 342 F.3d at 1351. That is because “only persons with a valid property interest at the time of the taking are entitled to compensation.” Wyatt v. United States, 271 F.3d 1090, 1096 (Fed.Cir.2001). The protections of the Takings Clause apply to real property, see Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019, 112 S.Ct. 2886, 2895, 120 L.Ed.2d 798 (1992), personal property, see Andrus v. Allard, 444 U.S. 51, 65, 100 S.Ct. 318, 327, 62 L.Ed.2d 210 (1979), and intangible property, see Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1003-04, 104 S.Ct. 2862, 2873, 81 L.Ed.2d 815 (1984). In this case, it is undisputed that the property interests Huntleigh alleges were taken are, for purposes of the Fifth Amendment, cognizable property interests. Second, “after having identified a valid property interest, the court must determine whether the government action at issue amounted to a compensable 14a Appendix A taking of that property interest.” Am. Pelagic, 379 F.3d at 1372; see also Maritrans, 342 F.3d at 1351. A compensable taking can occur not only through the government’s physical invasion or appropriation of private property, see Lucas, 505 U.S. at 1014-15, 112 S.Ct. 2886; Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 427, 102 S.Ct. 3164, 3171, 73 L.Ed.2d 868 (1982), but also by government regulations that unduly burden private property interests, see Pa. Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922).? 2. Regulatory takings are further subdivided into categorical and non-categorical takings. A categorical taking occurs when “all economically viable use, i.e., all economic value, has been taken by the regulatory imposition.” Rith Energy, Inc. v. United States, 247 F.3d 1355, 1362 (Fed.Cir.2001) (citation omitted); see also Am. Pelagic, 379 F.3d at 1372. Conversely, a non-categorical taking is a taking “that is the consequence of a regulatory imposition that prohibits or restricts only some of the uses that would otherwise be available to the property owner, but leaves the owner with substantial viable economic use.” Rith Energy, 247 F.3d at 1362 (citation omitted). Determining whether a non-categorical taking occurred involves the fact-based inquiry stated in Penn Central, under which a court considers (1) the character of the governmental action, (2) the economic impact of the action on the claimant, and (3) the effects of the governmental action on the reasonable investment-backed expectations of the claimant. Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 538-39, 125 S.Ct. 2074, 2081- 82, 161 L.Ed.2d 876 (2005); Am. Pelagic, 379 F.3d at 1372; Maritruns, 342 F.3d at 1351; Conti v. United States, 291 F.3d 1334, 1339 (Fed.Cir.2002); Rith Energy, 247 F.3d at 1362. 15a Appendix A II. A. Huntleigh argues that the Court of Federal Claims erred in holding that ATSA did not effect a taking of its security screening contracts and the going concern value and goodwill associated with its security screening business. Huntleigh contends that its business relationships were not merely “frustrated.” It argues that ATSA, by establishing the federal government as the only party allowed to perform security screening at national airports, specifically illegalized the subject matter of its contracts with the airlines. Huntleigh distinguishes both Omnia and Air Pegasus J] on the ground that the statute at issue in this case was far more direct in terms of its impact on Huntleigh than the governmental actions in Omnia and Air Pegasus I] were on the plaintiffs in those cases. Omnia and Air Pegasus JI, Huntleigh argues, involved governmental regulation applicable to one party that resulted in a loss to a third party. Huntleigh asserts that ATSA, by contrast, applied directly to the contracts between the airlines and Huntleigh, by illegalizing their subject matter. Huntleigh urges that Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S.Ct. 622, 37 L.Ed. 463 (1903), NL Industries, Inc. v. United States, 839 F.2d 1578 (Fed.Cir.1988), and Cienega Gardens, compel the conclusion that ATSA did effect a taking of its property. Finally, Huntleigh claims that the Court of Federal Claims erred in its application of Kimball Laundry to the alleged taking of the going concern value and goodwill associated with its security screening business. l6a Appendix A The government responds by asserting that Omnia and Air Pegasus II control the outcome of this case. The government notes that Congress created the airlines’ obligation to screen passengers and baggage with the enactment of the Air Transportation Security Act and then eliminated that obligation with the enactment of ATSA, mandating that the government assume the screening obligations formerly borne by the airlines. Thus, the government posits, the statutory mandate focused upon airlines, not upon private contractors, such as Huntleigh. The government states that, although ATSA undoubtedly diminished the demand for Huntleigh’s services and negatively impacted its business, such effects were indirect consequences of ATSA’s regulating the airlines and thereby comprised mere “frustration” of Huntleigh’s business interests. B. The Court of Federal Claims did not err in holding that Huntleigh had failed to establish a Fifth Amendment taking of its property. Huntleigh has conceded that the government did not actually assume its contracts. Instead, the government engaged in the functions formerly performed by Huntleigh under the contracts. Thus, any takings claim cannot be predicated upon a taking of the contracts. Rather, the argument must be that ATSA rendered the contracts and the going concern value and goodwill associated with Huntleigh’s security screening business worthless. Such a claim cannot stand, however, in the face of Omnia and Air Pegasus I]. 17a Appendix A In Omnia, the plaintiff Omnia Commercial Co. (“Omnia”) owned a contract entitling it to purchase a large quantity of steel plate from the Allegheny Steel Company (“Allegheny”) for an amount below the current market price. 261 U.S. at 507, 48 S.Ct. 427. Before any deliveries were made under the contract, however, the government, pursuant to statute and in order to meet needs caused by World War I, requisitioned Allegheny’s entire production of steel plate for 1918 and directed it not to comply with its contract with Omnia. Jd. In due course, Omnia filed suit in the Court of Claims, alleging that the government’s actions with respect to Allegheny and Allegheny’s contract with Omnia had effected a taking of Omnia’s right to priority to the steel plate Allegheny expected to produce. Omnia alleged that the government had therefore appropriated “for public use {[Omnia’s] property in the contract,” causing Omnia to suffer a large monetary loss as a consequence of its losing a lucrative contract. Jd. at 507-08, 43 S.Ct. 437. After the Court of Claims dismissed Omnia’s complaint, Omnia appealed to the Supreme Court. The Supreme Court affirmed the decision of the Court of Claims. /d. at 514, 43 S.Ct. 437. The Court started from the premise that Omnia’s contract with Allegheny was “property within the meaning of the Fifth Amendment” and that if the contract was “taken for public use the government would be liable.” Jd. at 508, 43 S.Ct. 437. The Court held, however, that Omnia’s contract with Allegheny had not been taken: In exercising the power to requisition, the government dealt only with the steel company, 18a Appendix A which company thereupon became liable to deliver its product to the government, by virtue of the statute and in response to the [requisition] order. As a result of this lawful governmental action the performance of the contract was rendered impossible. It was not appropriated, but ended. Td. at 511, 43 S.Ct. 437. In Air Pegasus I/, the plaintiff, Air Pegasus of D.C., Inc. (“Air Pegasus”) operated a heliport at property it leased in Washington, D.C. 424 F.3d at 1209. Following the terrorist attacks of September 11th, the Federal Aviation Administration (“FAA”) banned all commercial air travel within twenty-five nautical miles of Washington, D.C., except at a few select locations, such as Ronald Reagan Washington National Airport. /d. As a consequence, Air Pegasus was effectively unable to continue the operation of its business. It thus abandoned its lease and ceased operations at the heliport. /d. at 1210. Subsequently, Air Pegasus brought suit in the Court of Federal claims alleging that the FAA's flight ban had resulted in the regulatory taking of its heliport business. /d. Eventually, the court granted summary judgment in favor of the government and dismissed Air Pegasus’s complaint. Air Pegasus of D.C., Inc. v. United States, 60 Fed.Cl. 448, 459 (2004). The court did so after concluding that “although the FAA’s regulatory activity may have had an adverse impact on [Air Pegasus’s] heliport business,” there was not a taking of any cognizable property interest of Air Pegasus. /d. 19a Appendix A On appeal, we affirmed the decision of the Court of Federal Claims. Air Pegasus II, 424 F.3d at 1219. Noting that Air Pegasus did not own or operate any helicopters itself, we pointed out that Air Pegasus’s economic injury was “not the result of the government taking Air Pegasus’s property, but . . . the more attenuated result of the government’s purported taking of other people’s property. This circumstance does not form the basis for a viable takings claim.” /d. at 1215. After comparing Air Pegasus’s takings claim to that of the plaintiff in Omnia, we stated: Air Pegasus, which did not itself own or operate any helicopters, does not allege that the FAA’s restrictions regulated its operations under the lease. Instead, Air Pegasus basically alleges that the FAA, by regulating helicopters owned by third parties, frustrated its business expectations at the South Capitol Street heliport. Therefore, like the appellant in Omnia, Air Pegasus, while no doubt injured by reason of the government’s actions, has not alleged a taking of private property under the Fifth Amendment. Id. at 1216 (emphasis in original). As did the plaintiffs in Omnia and Air Pegasus 1], Huntleigh alleges that it suffered a loss of business as a result of the government’s regulation of a third party. The federal government imposed screening obligations upon commercial airlines in 1974. With the enactment 20a Appendix A of ATSA in 2001, however, Congress drastically reduced the demand for Huntleigh’s services. ATSA did not, however, regulate Huntleigh directly. Rather, it modified governmental regulation of the airlines, which resulted in adverse economic consequences for Huntleigh. Thus, any losses that Huntleigh suffered were indirect, arising only as a consequence of ATSA’s elimination of the airlines’ security screening obligations. In other words, ATSA had the effect of “frustrating” Huntleigh’s business expectations, which does not form the basis of a cognizable takings claim. See id.; Omnia, 261 U.S. at 510, 43 S.Ct. 437. As noted, Huntleigh argues that Omnia is distinguishable because, in that case, the government’s action was directed at a third party, Allegheny, resulting in only an indirect impact on Omnia. However, urges Huntleigh, in this case ATSA was directed squarely at providers of airport security screening functions, such as Huntleigh, by nationalizing their operations. Similarly, Huntleigh maintains that Air Pegasus 1] is distinguishable because any effect that the FAA’s flight ban had on Air Pegasus, which owned neither the heliport nor the helicopters, was indirect, as it arose from governmental regulation of third parties. We are not persuaded by Huntleigh’s efforts to distinguish Omnia and Air Pegasus II. As far as Omnia is concerned, the facts of that case were more favorable to the plaintiff, Omnia, than the facts of this case are to Huntleigh. As seen, in Omnia, the government’s actions were directed squarely at the contractual relationship that existed between Allegheny and Omnia. The government a 2la Appendix A requisitioned the steel plate that was meant for Omnia and directed Allegheny not to comply with its contract with Omnia. Omnia, 261 U.S. at 507, 43 S.Ct. 437. Yet, the Court held, there was no taking because, “[a]s a result of this lawful governmental action the performance of the contract was rendered impossible. It was not appropriated, but ended.” Jd. at 511, 43 S.Ct. 437. In this case, the purpose of ATSA was not to take action with respect to any security screening contract to which Huntleigh was a party. Rather, its purpose was to transfer security screening responsibilities from the airlines to the federal government. This action, directed at the airlines, frustrated Huntleigh’s business interests. Air Pegasus II, which cited Omnia, is indistinguishable from this case because in both Air Pegasus II and this case the party alleging a taking, rather than having its own property taken, saw its business interests frustrated by governmental regulation of third parties (the FAA's flight ban in Air Pegasus IIT, and ATSA’s transfer of screening responsibility here). Finally, Huntleigh’s reliance upon Monongahela, Cienega Gardens, and NL Industries is misplaced. None of these cases speaks to the situation presented here. In Monongahela, a private company spent considerable sums of money on the improvement of the Monongahela River by means of locks and dams. 148 U.S. at 324, 13 S.Ct. 622. The United States government later condemned and appropriated the 22a Appendix A locks and dams. Jd. In the condemnation proceeding, the government conceded liability for the reasonable value of the appropriated property but disputed the amount of compensation due. /d. at 314, 13 S.Ct. 622. After reaffirming that takings law clearly established that the United States was liable for the appropriation of the property, id. at 324, 13 S.Ct. 622, the Court devoted the bulk of its opinion to determining the proper measure of damages, id. at 324-45, 13 S.Ct. 622. The facts of Monongahela clearly differ from the facts of the present case in that the government has not appropriated for its own use any property owned by Huntleigh. Rather, the government has merely relieved commercial airlines of a duty they formerly possessed, which action indirectly resulted in the elimination of the market for Huntleigh’s business. In Cienega Gardens, various property owners entered into regulatory agreements with the Department of Housing and Urban Development (“HUD”). 331 F.3d at 1325. The agreements provided that the property owners could prepay their forty-year mortgages after twenty years. Jd. As the twenty year prepayment eligibility date approached, however, Congress determined that permitting prepayment would undermine efforts to provide low-cost housing. As aresult, Congress temporarily suspended, and then later eliminated, the prepayment provisions through the enactment of statutes that required HUD approval for prepayment. /d. at 1326. We determined that Congress’s enactment of such statutes effected a taking that 23a Appendix A entitled certain of the property owners to just compensation. /d. at 1353. The facts of Cienega Gardens, however, differ significantly from those of this case. Here, Huntleigh was not a party to any agreement or contract with the federal government that was later unilaterally altered by statute. Rather, Huntleigh’s contracts with various commercial airlines *1382 were frustrated by a shift in the government’s regulation of the airlines. Cienega Gardens therefore does not support Huntleigh’s takings claim. Neither does NL Industries support Huntleigh. In that case, NL Industries (“NL’) invested considerable resources in developing a fleet of vehicles to transport spent nuclear fuel rods for reprocessing. NL Indus., 839 F.2d at 1579. NUs investment became valueless, however, when the President determined not to allow the plant that was to provide the spent fuel rods to operate. Jd. Holding that.NL had failed to establish a compensable taking, we stated: “The trial court, ... rightly, we think, thought that Omnia . . . was, by itself, authority enough to support its holding that frustration of a business by loss of a customer was not a taking.” Id. We believe that the facts of NL Industries are materially indistinguishable from the facts of the present case: a governmental action (ATSA) directed at a third party (airlines) resulting in the loss of business to a claimant (Huntleigh) who alleges a compensable taking. We concluded in NL Industries that Omnia foreclosed 24a Appendix A the existence of a compensable taking, and we conclude the same with respect to Huntleigh’s claim.* ITI. A. We turn next to Huntleigh’s claim under section 101(g)(2) of ATSA. As already seen, section 101(g)(2) provided that, if the Under Secretary of Transportation for Security chose to meet the government’s obligations under ATSA by assuming a contract to provide security screening services, the government was required to pay adequate compensation to parties to the contract. In alleging entitlement to compensation under section 101(g)(2), Huntleigh, as it did in the Court of Federal Claims, argues first that the clause “assume the 3. Our reasoning applies to all property interests possessed by Huntleigh, including its contracts and any going concern value or goodwill associated with its security screening business. Thus, the authority of Kimball Laundry does not alter our holding. Though going concern value and goodwill are indeed compensable property interests, Kimball Laundry, 338 US. at 11, 69 S.Ct. 1434, those property interests, like Huntleigh’s contracts, were merely “frustrated” by the government’s enactment of ATSA. They were not taken. Moreover, going concern value is a property interest that has been held to be compensable in the context of a temporary, but not a permanent, taking. See id. at 15,69 S.Ct. 1434; Cooper v. United States, 827 F.2d 762, 763 (Fed.Cir.1987); Fla. Rock Indus. Inc. v. United States, 791 F.2d 893, 903 (Fed.Cir. 1986). 25a Appendix A rights and responsibilities of an air carrier . .. contract,” describing the conditions under which compensation is required, suggests that Congress intended that compensation be provided even when, as in this case, contracts were not actually assumed. According to Huntleigh, had Congress intended that compensation be provided only when contracts were actually assumed, it would have used the word “contracts” rather than the phrase “rights and responsibilities of . . . contract[s].” Noting the canon of statutory interpretation that the words of a statute are not to be rendered superfluous if such a construction can be avoided, Walther v. Sec’y of Health & Human Servs., 485 F.3d 1146, 1150 (Fed.Cir.2007) (“ ‘[A] statute should be interpreted so as not to render one part inoperative.’ ” (quoting Colautti v. Franklin, 4389 U.S. 379, 392, 99 S.Ct. 675, 684, 58 L.Ed.2d 596 (1979))), Huntleigh urges that section 101(g)(2) should be read to require compensation any time the government assumed the functions formerly performed by private parties under security screening contracts. Second, Huntleigh argues that, in any event, the government, for all intents and purposes, did effectively assume Huntleigh’s contracts even if it did not literally insert itself as a party into any existing contract. In support of this argument, Huntleigh cites various statements by government officials speaking of “assuming” air carrier contracts. The government responds to Huntleigh’s arguments by reiterating the Court of Federal Claims’ distinction between sections 101(g)(1) and 101(g)(2) of ATSA. The government argues that, in contrast to section 101(g)(1), 26a Appendix A section 101(g)(2), upon which Huntleigh relies, imparted discretion to the Under Secretary of Transportation and created no enforceable rights. The government notes that section 101(g)(2) provided that, “[aJs of the date specified in paragraph (1),” i.e., February 19, 2002, “the Under Secretary may assume the rights and responsibilities of an air carrier or foreign air carrier contract for provision of passenger screening services at airports in the United States described in [49 U.S.C. § ] 44903(c), subject to payment of adequate compensation to the parties to the contract, if any” (emphases added). The government takes the position that the purpose of section 101(g)(2) was to authorize, but not require, TSA to assume existing screening contracts, in order to meet the three-month deadline established by section 101(g)(1). In the event that TSA did assume an existing contract, the obligation to pay compensation arose. The government argues that Huntleigh’s reading of the statute creates an illogical result. According to the government, that is because if, under the statute, the government was required to compensate Huntleigh even when it did not actually assume a contract-which is what Huntleigh urges-it would mean that section 101(g)(2) was essentially superfluous. The reason is that section 101(g)(1) specifically mandated that the government assume all screening functions at national airports. Section 101(g)(2) then provided that one way the government could perform that obligation was to assume the “rights and responsibilities” of contracts between airlines and screening service providers. If assuming “rights and responsibilities” is read to mean solely that the y 27a Appendix A government would provide screening services at national airports, as Huntleigh argues, then section 101(g)(2) served merely to reemphasize the obligation that section 101(g)(1) had already created. Under these circumstances, the provision would be redundant, which would be an illogical result. Accordingly, like the Court of Federal Claims, the government concludes that the only reading of the statute that preserves the distinction in language between the two sub-sections is that in which the government was required to pay compensation only when it actually assumed the contracts of private contractors. The government emphasizes that Huntleigh concedes that there was no such assumption of any of Huntleigh’s security screening contracts. B. The Court of Federal Claims did not err in holding that Huntleigh was not entitled to compensation under ATSA section 101(g)(2). The language of section 101(g)(2) is clear. The obligation to pay compensation only arose if TSA “assume|[d] the rights and responsibilities of an air carrier or foreign air carrier contract.” The way one assumes the “rights and responsibilities” of a contract is to step into the shoes of the parties to the contract. In other words, section 101(g)(2) required compensation only when TSA actually stepped into the shoes of a party providing security screening services to an airline under a contract. Huntleigh concedes that TSA never did that in the case of any of its contracts. In addition, we agree with the 28a Appendix A government that Huntleigh’s reading of the statute- under which compensation was due when TSA took over security at airports but did not step into Huntleigh’s shoes under any of its contracts-renders section 101(g)(2) redundant. The reading of a statute that produces such a result is disfavored. See Clark v. United States, 322 F.3d 1358, 1365 (Fed.Cir.2003); see also United States v. Alaska, 521 U.S. 1, 59, 117 S.Ct. 1888, 1918, 188 L.Ed.2d 231 (1997). In sum, section 101(g)(2) did not require that the government compensate Huntleigh for its assumption of screening functions at national airports. We also are not persuaded by Huntleigh’s alternative argument that the government effectively assumed Huntleigh’s contracts. Huntleigh notes that internal TSA memoranda speak of “assuming” screening contracts and that the Under Secretary of Transportation himself referred to “assuming” contracts in testimony before Congress. However, such isolated instances, wherein agency representatives may have inadvertently used the term “assume” without contemplating its legal significance, do not give us a reason to adopt a reading of ATSA that is inconsistent with its proper construction. 29a Appendix A ran CONCLUSION Because ATSA did not effect the taking of Huntleigh’s property, but merely frustrated its business interests, and because Huntleigh is not entitled to compensation under section 101(g)(2) of ATSA, we affirm the decision of the Court of Federal Claims. AFFIRMED COSTS Each party shall bear its own costs. aa 30a APPENDIX B — OPINION OF THE UNITED STATES COURT OF FEDERAL CLAIMS DATED MARCH 15, 2007 UNITED STATES COURT OF FEDERAL CLAIMS No. 03-2670C. HUNTLEIGH USA CORPORATION, Plaintiff, We The UNITED STATES, Defendant. March 15, 2007. OPINION MARGOLIS, Senior Judge. This case is before the Court following a four-day trial in November 2006. After post-trial briefing, the Court heard closing arguments on February 27, 2007. Plaintiff Huntleigh USA Corporation (“Huntleigh”) performed passenger and baggage screening at airports across the country before those functions were federalized in 2002 pursuant to the Aviation and Transportation Security Act, Pub.L. No. 107-71, 115 Stat. 597 (2001), (“ATSA” or “the Act”). Huntleigh filed suit against the defendant, the United States, on two 3la Appendix B claims. Count I alleges that when the Transportation Security Administration (“TSA”) federalized airport screening, the government violated the Fifth Amendment’s Takings Clause by taking Huntleigh’s screening contracts, as well as the goodwill and going- concern value of its security screening business, without just compensation.’ Complaint at 1 44. Count II alleges that defendant violated ATSA § 101(g) by failing to pay “adequate compensation” for Huntleigh’s security screening contracts. Complaint at 7 46. Huntleigh claims damages totaling between $151,117,026 and $201,252,328. The facts are discussed in detail in the Court’s previous decisions in this case, Huntleigh USA Corp. v. United States, 63 Fed.Cl. 440 (2005) (“Huntleigh I’) and 65 Fed.Cl. 178 (2005) (“Huntleigh IT”), and they are summarized below. In Huntleigh I and Huntleigh II, the Court made preliminary determinations as to both fact and law. Takings cases, however, are highly fact-intensive, and the Court stated that it was necessary to develop a full factual record before making an ultimate decision. With the benefit of a complete record and a review of the applicable law, the Court has reached some different 1. Although Huntleigh at times made reference to tangible, personal property (such as office furniture and uniforms) that also might have been taken, these items were not mentioned in Huntleigh’s post-trial brief, Huntleigh offered no evidence at trial as to their value, and they are the subject of a separate, administrative action between Huntleigh and the defendant. Trial Transcript (“Tr.”) 192. As such, the Court will not consider such property in the instant litigation. 32a Appendix B conclusions than in the previous opinions. After careful consideration of the evidence presented at trial, as well as the post-trial briefs and oral arguments, the Court finds for the defendant on both counts. FACTS The U.S. Congress passed the Aviation and Transportation Security Act in response to the terrorist attacks of September 11, 2001, and the President signed the Act into law on November 19, 2001. It created the new Transportation Security Administration to oversee civil aviation security. The Act required virtually all passenger and baggage screening to be conducted by federal employees within one year. In the interim, ATSA required the new Under Secretary of Transportation for Security (and head of TSA) to take over responsibility for security screening within three months. The Act listed two approaches for transitioning from private to federal screeners: (1) on or after three months from the date of enactment, the Under Secretary could assume the rights and responsibilities of airline contracts for passenger and baggage screening; and (2) not more than 90 days after enactment, an airline could, at the Under Secretary’s request, transfer screening contracts to the Under Secretary. Instead of these methods, the TSA negotiated new contracts directly with the screening companies to cover the interim period from February 19, 2002, until federalization was complete on November 19, 2002. 33a Appendix B Since 1973, the airlines had been responsible for passenger and baggage screening, pursuant to regulations and guidelines established by the Federal Aviation Administration. Tr. 426. Most airlines met their security responsibilities by contracting with private companies to conduct screening. Tr. 427. Huntleigh had been providing passenger screening services since at least 1989 and checked baggage screening since 1999. Tr. 30-31, 34. By November 2001, Huntleigh had screening contracts with approximately 75 airlines in about 35 cities. Tr. 85. As a result of ATSA, the airlines terminated their screening contracts with Huntleigh on or about February 17, 2002, and Huntleigh signed interim letter contracts with the TSA to continue providing passenger and baggage screening at locations where Huntleigh already operated until federal employees took over the function. Tr. 84-85, 380, 382- 83. Huntleigh earned $235,112,000 from screening revenues in 2002, a significant increase from its $68,983,000 in screening revenues in 2001. Plaintiff’s Exhibit Admitted at Trial (“PX”) 113-010. DISCUSSION I. Takings Claim The Takings Clause of the Fifth Amendment states, “nor shall private property be taken for public use, without just compensation.” U.S. Const. Amend. V. The Supreme Court has expanded on these 12 words to declare that the “Fifth Amendment’s guarantee . . . [is] designed to bar Government from forcing some people 34a Appendix B 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, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960). Beyond this simple principle, however, there is no formula for determining when a taking has occurred, only “ad hoc, factual inquiries” for each case. Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978). With regard to regulatory takings, the framework for these inquiries has been defined by the analysis in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982), Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), and Penn Central, Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 538-39, 125 S.Ct. 2074, 161 L.Ed.2d 876 (2005). Before a court can reach any of these analyses as to whether a compensable taking of private property occurred, however, it must first address the threshold issue of whether the claimant possessed a legally protected property interest at the time of the alleged taking. Air Pegasus of D.C., Inc. v. United States, 424 F3d 1206, 1212-13 (Fed.Cir.2005). Although Huntleigh may have been injured, it has not alleged a taking of private property under the Fifth Amendment. In Huntleigh I, this Court held that “mere engagement in a particular business activity is not property protected by the Fifth Amendment,” and Huntleigh cannot recover for damage to “its right to engage in the business of passenger and baggage screening.” 63 Fed.Cl. at 444 (emphasis in original). 35a Appendix B Huntleigh argues that it is not claiming a taking of its right to operate its screening business. Instead, it alternatively describes the relevant property as its “business assets, including its regularly renewed screening contracts, goodwill and going concern value” and its “entire screening business.” £.g., Pl. Brief at 1 104, 109. Regardless of the label, the property Huntleigh described in its evidence at trial is not subject to compensation under the Fifth Amendment. Huntleigh’s claim is similar to that in NL Industries, Inc. v. United States. In that case, the plaintiff did not have a compensable property interest in the physical plant and systems it had developed for transporting spent nuclear fuel, which were rendered valueless when a change in U.S. policy resulted in a moratorium on the license application of the reprocessing plant with which the plaintiff had contracted. 12 Cl.Ct. 391, 398 (1987), aff’d 839 F.2d 1578 (Fed.Cir.1988), cert. denied 488 U.S. 820, 109 S.Ct. 63, 102 L.Ed.2d 41 (1988). The Court found in NL Industries that the regulatory scheme that allowed the agency to deny the license to the reprocessing plant was in place before the plaintiff entered the market. /d. Whether the plaintiff could have or should have anticipated the particular regulatory decisions at issue was irrelevant. Jd. Likewise, when Huntleigh entered the security screening business, it contracted with the airlines pursuant to security regulations issued by the government. Plaintiff’s own aviation security expert admitted at trial] that the federal government retained the right to change those regulations. Tr. 492. Before the Fall of 2001, both the 36a Appendix B Congress and executive branch entities had publicly discussed the possibility of changing the aviation screening paradigm, to include federalizing the screening functions and workforce. See generally, PX 359 (discussing the history of federal aviation security studies). It is immaterial] that Huntleigh did not anticipate the specific policy shifts that occurred after the terrorist attacks of September 11, 2001, or deem federalization likely, because the regulatory scheme allowing those changes was already in place. In another license case, the Federal Circuit’s recent decision in Colvin Cattle Co. v. United States also is instructive. The court declined to find a constitutionally- protected property interest when the only beneficial use of the property was destroyed by the government’s refusal to grant cattle grazing rights to a ranch owner. 468 F.3d 803, 808 (2006). Because the ranch never possessed grazing rights as a stick in the bundle of property rights it had, the fact that the denial of grazing rights rendered its water rights worthless and diminished the value of its ranch, did not support a takings claim. /d. Similarly, Huntleigh is attempting to claim a taking of its contracts and screening business based on the government’s interference with its right to engage in the screening business-a right that Huntleigh never possessed because its contracts with the airlines were always subject to the security regulations the government imposed on the airlines. See Tr. 130-31, 151-52. Huntleigh’s value may have been diminished after ATSA was enacted, but as these cases demonstrate, not every loss of value triggers constitutionally-mandated compensation. 37a Appendix B With regard to Huntleigh’s screening contracts, the government’s actions amount, at most, to frustration of purpose rather than a taking. Lawful government action that renders a contract impossible to perform does not amount to a taking of the contract. Omnia Commercial Co. v. United States, 261 U.S. 502, 511, 43 S.Ct. 437, 67 L.Ed. 773 (1923) (government requisition of steel, preventing the steel producer from honoring its contract, frustrated customer’s contract with the steel producer, but was not a taking). Huntleigh’s former and current presidents and Chief Executive Officers testified at trial that all of Huntleigh’s screening contracts with the airlines contained a clause that gave either party the right to terminate the contract in compliance with its specified notice provisions. Tr. 54, 199-200, 228. They testified that the notice requirements were usually 30, 60, or 90 days, Tr. 196, 228, with the vast majority requiring 30 days notice. PX 13-59. The airlines terminated these contracts with Huntleigh as a result of ATSA, Tr. 84, but Huntleigh did not consider the terminations to be a breach and did not sue any of the air carriers for breach of contract. Tr. 186-87. The airlines were within their rights to terminate the screening contracts at any time, for any reason or no reason. Tr. 199-200. The government did not interfere with these contracts. The airlines terminated the contracts because they no longer needed Huntleigh’s services when the federal government took over the screening functions covered by the contracts. Huntleigh no longer had a customer 38a Appendix B for its services. Relying on Omnia, the Federal Circuit has declared that “frustration of a business by loss of a customer was not a taking” of private contracts. NL Industries, Inc. v. United States, 839 F:2d 1578, 1579 (Fed.Cir.1988). Like the airlines in Huntleigh, a contracting party in NL /ndustries was unable to fulfill its contract obligations because of a government policy decision. /d. The Federal Circuit also found frustration of purpose rather than a taking when aviation restrictions in response to the terrorist attacks of September 11, 2001, interfered with the operation of a business. Specifically, a heliport operator in Washington, D.C., was forced to close the only business permitted under its lease when the Federal] Aviation Administration banned commercial aircraft from the area that included the heliport. Air Pegasus, 424 F.3d at 1209-10. The regulations merely frustrated the plaintiff’s business because they did not apply to the heliport itself, but to the third parties who sought to fly in and out of the facility. Jd. at 1216. Likewise, ATSA did not address Huntleigh or the other screening companies; it merely moved the responsibility for aviation security from the airlines to the newly-created TSA. Huntleigh relies heavily on Cienega Gardens v. United States to rebut the government’s argument on frustration of purpose. However, ATSA was “legislation targeted at some public benefit, which incidentally affect{[ed] contract rights, not, as in [Cienega Gardens], legislation aimed at the contract rights themselves in order to nullify them.” See 331 F.3d 1319, 1335 (Fed Cir.2003) (legislation 39a Appendix B preventing property owners from pre-paying mortgages in accordance with their contract terms to keep the property within federal, low-cost housing programs resulted in a taking because it kept the contracts alive for the government’s benefit). Finally, Huntleigh seeks compensation under Kimball Laundry Co. v. United States for damage to its goodwill and going-concern value. In that case, the Supreme Court held that the property owners could recover going-concern value as an element of the just compensation awarded for the government’s temporary takeover of their business during World War II. 338 U.S. 1, 8, 16, 69 S.Ct. 1434, 93 L.Ed. 1765 (1949). There was never a question of whether a taking had occurred, but only the amount and method for determining just compensation. /d. at 3, 8, 69 S.Ct. 1434. In contrast, the government in the instant case has not taken Huntleigh’s underlying property, the screening contracts, so there is no basis for awarding damages for the associated goodwill or going-concern value. In summary, Huntleigh did not possess a compensable property interest under the Fifth Amendment, and the Court’s analysis ends there. Without a property interest, there can be no taking, and the Court need not address the Lucas or Penn Central requirements. 40a Appendix B IT. Statutory Claim Huntleigh also asserts that, aside from its takings claim, it is entitled to “adequate compensation” under the Aviation and Transportation Security Act. It argues that “adequate compensation” in the Act can be interchangeable with “just compensation” in the Fifth Amendment context, and Congress therefore intended the phrase “adequate compensation” to create a statutory right to takings compensation without the traditional, common law takings requirements. P]. Brief at 1147. The Court turns to traditional rules of statutory interpretation to determine if Huntleigh is entitled to compensation under § 101(g) of ATSA.” 2. (g) TRANSITION PROVISIONS. (1) SCHEDULE FOR ASSUMPTION OF CIVIL AVIATION SECURITY FUNCTIONS.-Not later than 3 months after the date of enactment of this Act, the Under Secretary of Transportation for Security shall assume civil aviation security functions and responsibilities under chapter 449 of title 49, United States Code, as amended by this Act, in accordance with a schedule to be developed by the Secretary of Transportation, in consultation with air carriers, foreign air carriers, and the Administrator of the Federai Aviation Administration. The Under Secretary shall publish an appropriate notice of the transfer of such security functions and responsibilities before assuming the functions and responsibilities. (Cont’d) 4la Appendix B (Cont'd) (2) ASSUMPTION OF CONTRACTS.-As of the date specified in paragraph (1), the Under Secretary may assume the rights and responsibilities of an air carrier or foreign air carrier contract for provision of passenger screening services at airports in the United States described in section 44903, subject to payment of adequate compensation to parties to the contract, if any. (3) ASSIGNMENT OF CONTRACTS.- (A) IN GENERAL.-Upon request of the Under Secretary, an air carrier or foreign air carrier carrying out a screening or security function under chapter 449 of title 49, United States Code, may enter into an agreement with the Under Secretary to transfer any contract the carrier has entered into with respect to carrying out the function, before the Under Secretary assumes responsibility for the function. (B) SCHEDULE.-The Under Secretary may enter into an agreement under subparagraph (A) as soon as possible, but not later than 90 days after the date of enactment of this Act. The Under Secretary may enter into such an agreement for one 180-day period and may extend such agreement for one 90-day period if the Under Secretary determines it necessary. (4) TRANSFER OF OWNERSHIP-In recognition of the assumption of the financial costs of security screening of passengers and property at airports, and as soon as practica! after the date of enactment of this Act, air carriers may enter into agreements (Cont'd) 42a Appendix B Section 101(g)(1), “SCHEDULE FOR ASSUMPTION OF CIVIL AVIATION SECURITY FUNCTIONS,” states that the new Under Secretary for Transportation Security “ shall assume civil aviation security functions and responsibilities” within three months of the Act’s November 19, 2001, enactment date. § 101(g)(1), 115 Stat. 603 (emphasis added). The next section, “ASSUMPTION OF CONTRACTS,” declares that “the Under Secretary may assume the rights and responsibilities of an air carrier or foreign air carrier contract for provision of passenger screening services at airports.” Jd. at § 101(g)(2) (emphasis added). This assumption could occur “as of” the date in § 101(g)(1), meaning at or on February 19, 2002. See 115 Stat. 603; Webster’s Third New International Dictionary (Unabridged) 129 (2002). Finally, “not later than 90 days” after the November 19, 2001, enactment date, —— -—- — —— (Cont’d) with the Under Secretary to transfer the ownership, at no cost to the United States Government, of any personal property, equipment, supplies, or other material associated with such screening, regardless of the source of funds used to acquire the property, that the Secretary determines to be useful for the performance of security screening of passengers and property at airports. (5) PERFORMANCE OF UNDER SECRETARY’S FUNCTIONS DURING INTERIM PERIOD.-Until the Under Secretary takes office, the functions of the Under Secretary that relate to aviation security may be carried out by the Secretary or the Secretary's designee. 43a Appendix B § 101(g)(3), “ASSIGNMENT OF CONTRACTS,” states that an air carrier may, at the request of the Under Secretary, make an agreement to transfer to the Under Secretary any contract for passenger and baggage screening. See 115 Stat. 604. By using both “shall” and “may,” the clear implication of these provisions is that the Under Secretary was required to take over responsibility for passenger and baggage screening within three months, but the assumption or assignment of contracts was discretionary-i.e., it was a possible means for accomplishing the mandate of the Act. See Huston v. United States, 956 F.2d 259, 262 (Fed.Cir.1992). Plaintiff cites the legislative history to argue that the Under Secretary was required to assume Huntleigh’s screening contracts. Pl. Brief at 1 62. Yet, on this particular point, the Act’s language is clear and unambiguous. As such, examination of legislative history is unnecessary and inappropriate, and the Court will not stray from the plain language of the statute. Messick ex rel. Estate of Kangas v. United States, 70 Fed.Cl. 319, 324 (2006); Fluor Enters., Inc. v. United States, 64 Fed.Cl. 461, 479 (2005) (citing Bob Jones Univ. v. United States, 461 U.S. 574, 586, 103 S.Ct. 2017, 76 L.Ed.2d 157 (1983)). In Huntleigh J, this Court assumed as true for the purposes of determining jurisdiction, plaintiff's allegations that the contracts had been assumed, thereby triggering the Act’s “adequate compensation” requirement. See 63 Fed.Cl. at 450-51; Huntleigh 11, 44a Appendix B 65 Fed.Cl. at 180. In contrast, the current analysis centers on whether the government actually assumed the contracts as a matter of law, as allowed under the statute. The issue fundamentally turns on the meaning of “assume” in the Act. Black’s Law Dictionary defines “assumption” as “[t]he act of taking (esp. someone else’s debt or other obligation) for or on oneself; the agreement to so take.” Black’s Law Dictionary (8th ed.2004). The TSA did not assume Huntleigh’s contracts by taking on the airlines’ obligations because, among other reasons, the contracts differed greatly and contained provisions that were inappropriate for federal government contracts. PX 292; Tr. 345-47. Instead, the airlines terminated their contracts with Huntleigh and the other screening companies on or about February 17, 2002, and the TSA entered into new contr..ts with the screening companies for the interim period before complete federalization occurred. /d. When making its legal conclusions, the Court will not be swayed by agency statements, however official they might be. The TSA’s March 2003 report to the Congress on compliance with ATSA stated that it had “assumed the airlines’ passenger screening company contracts.” PX 298-010. The Under Secretary of Transportation for Security had made a similar statement in January 2002, when informing the Congress about the TSA’s plans for following the Act. PX 297-003. Huntleigh relies on these official pronouncements, as well internal TSA memoranda from jate 2001 and early 2002, to argue that the TSA assumed the contracts. Pl. Brief at {| 63-66. Whether the TSA 45a Appendix B assuined the contracts is a matter of law for the Court to decide, however, and a statement, even by a party, that something “is so” does not make it legally true. Huntleigh argues that the TSA’s eventual takeover of Huntleigh’s screening responsibilities amounts to an assumption of its contracts under the Act, even though the government did not assume Huntleigh’s contracts with the airlines in the strict, legal sense. The language of the Act undermines this assertion. Section 101(g)(1) requires the assumption of “civil aviation security functions and responsibilities.” 115 Stat. at 603 (emphasis added). In contrast, § 101(g)(2), “ASSUMPTION OF CONTRACTS,” allows the Under Secretary to “assume the rights and responsibilities of an air carrier . . . contract for provision of passenger screening services . . . subject to payment of adequate compensation to parties to the contract, if any.” Id. at 603-04 (emphasis added). In interpreting a statute, a court must attempt to give effect to every word and clause. Mudge v. United States, 308 F.3d 1220, 1228 (Fed.Cir.2002); Perez v. Merit Sys. Prot. Bd., 85 F.3d 591, 594 (Fed.Cir.1996). The court also must avoid interpretations that make a word or clause “inconsistent, meaningless, or superfluous.” Messick, 70 Fed.Cl. at 324; “RW Inc. v. Andrews, 534 U.S. 19, 31, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001). Following these tenets, this Court must give significance to the Congress’ use of the word “contract” in § 101(g)(2), and the absence of that word in § 101(g)(1). In the first section, the Act requires assumption of 46a Appendix B “functions and responsibilities,” but not necessarily contracts. In the second, it specifically permits assumption of contracts for adequate compensation of the contract parties. To adopt Huntleigh’s interpretation would ignore the Congress’ deliberate insertion of “contract” in § 101(g)(2) and render the word superfluous. As a result, this Court must conclude that the Congress intended § 101(g)(2) to apply only if the government chose to assume screening company contracts as defined by Black’s Law Dictionary-taking the airlines’ contract obligations onto itself. That did not happen, and Huntleigh has not asserted that it did. Plaintiff’s counsel even admitted at the post-trial hearing that the government “did not directly assume those contracts.” Tr. Feb. 27, 2007 at 25. The language of § 101(g)(3) alss does not apply because the airlines never entered into any agreements to transfer contracts to the government. The government did not assume Huntleigh’s contracts under the Act, and Huntleigh therefore is not entitled to compensation. CONCLUSION For the reasons stated above, it is hereby ORDERED that the Clerk of the Court shall dismiss the complaint and enter judgment in favor of the defendant. Each side to pay its own costs. 47a APPENDIX C — DENIAL OF MOTION FOR SUMMARY JUDGMENT AND ORDER DATED OCTOBER 12, 2006 IN THE UNITED STATES COURT OF [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0184%3A1. Public record. Not legal advice.