The Coronavirus pandemic has propelled this nation and world into unprecedented times. In an attempt to reduce the spread of the virus, many states have imposed mandated shutdowns of nonessential businesses. Are these shutdowns considered compensable takings under eminent domain law? How this question is answered determines whether these business owners are entitled to just compensation as a matter of law. This article summarizes a couple of the recent cases in this area.

In Friends of Devito v. Wolf, 227 A.3d 872, 876 (Pa. 2020), the Supreme Court of Pennsylvania addressed a case against the Governor of Pennsylvania and the Secretary of Pennsylvania’s Department of Health. The petitioners sought relief from an executive order implemented in March 2020 mandating the closure of the physical operations of all “non-life-sustaining” businesses to help limit the spread of the coronavirus. Id. With the case involving an issue of such public significance, the Supreme Court of Pennsylvania invokved its King’s Bench powers and took the case. Id. at 884-85. The court determined that the order only resulted in a temporary loss of use in the Petitioner’s businesses and that the Governor was operating fully within the state’s police power to protect its citizens. Id. The Pennsylvania Supreme Court has defined police power as the power “to promote the public health, morals or safety and the general well-being of the community.” Id. at 886. Thus, the order did not constitute a regulatory taking, and an exercise of a state’s police power does not require just compensation. See id. at 893, 895-96.

In McCarthy v. Cuomo, the plaintiff, a gentleman’s club owner, sued the Governor of New York seeking preliminary relief and claiming, inter alia, that the Coronavirus induced executive order was a regulatory taking. McCarthy v. Cuomo, 2020 U.S. Dist. Lexis 107195, *7, *12-*13 (E.D.N.Y. June 18, 2020). The court held that the executive order did not deny the plaintiff of “all economically beneficial use of his property,” he could pursue alternative methods for his business while still complying with the mandate, and his claim is unlikely to succeed on the merits, ultimately denying his request for preliminary relief. Id. at *13-*14, *17.

These claims are likely to be the cause célèbre in the world of eminent domain law for the foreseeable future. Even though most of the claims will likely fail on reasoning similar to the two cases discussed above, some may well succeed depending on the specific facts of the case, differences in certain state just compensation laws, and just how far the states go in their efforts.

Diamond Royster is a summer associate with Pender & Coward for the summer of 2020.