The COVID-19 pandemic has caused substantial uncertainty for businesses. As of March 24, 2020, the President has declared an emergency under the Stafford Act and the Minnesota Governor has declared a peacetime emergency. Given the situation, the government may order businesses to close or take goods, equipment and space that may be needed for the government’s response. While the government has the power to take such extraordinary actions, that may not eliminate the Constitutional protections for private property owners. The Fifth Amendment to the United States Constitution provides that, “private property [shall not] be taken for public use without just compensation.” The Minnesota Constitution similarly provides that, “private property shall not be taken for public use without just compensation therefore, first paid or secured.”
If the government issues an order that shuts down businesses in order to “flatten the curve,” it is unlikely that such action will provide a successful takings claim against the government. On the other hand, taking private property or acquiring space —such as condemning a motel to use in isolating coronavirus patients as recently happened in the State of Washington or acquiring privately-owned medical equipment needed to respond to the emergency —may present successful claims for just compensation under the U.S. and Minnesota Constitutions. A practical approach is required as we expect courts to recognize that the government must respond promptly to this emergency. While the COVID-19 pandemic presents unique questions, we have experience protecting private property rights during emergency situations.
For example, when the 35-W bridge collapsed, Fredrikson lawyers were called into action by private property owners near the disaster site. Working swiftly, we negotiated early access rights to nearby private property, while preserving claims for compensation. This protected the public interest by allowing a timely government response, but it also ensured that the private property owner would be treated fairly.
If you have questions about your rights with respect to the government’s acquisition of property in response to the COVID-19 pandemic, please call or email us. We can respond quickly and pragmatically.