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What legislators can do about Cooper’s regulatory takings

John Trump writes in Carolina Journal about the judge in Waldron v. Cooper struggling to make sense of Gov. Roy Cooper’s arbitrary distinctions penalizing some business owners more than he is penalizing others:

A ruling against Cooper would free private bars to reopen under the same health and safety restrictions that apply to bars open now in restaurants, breweries, wineries, and other alcohol-serving businesses.

“What is there inherently different about a bar than a restaurant that justifies the distinction?” Judge James Gale asked an attorney representing Cooper. “Don’t keep telling me, ‘Bars in general.’ I’m asking you: Can you tell me — can you isolate something about bars specifically. … I’m begging you — if you’ve got it — to give me the evidence.”

Recall that Cooper’s Jan. 27 executive order included laughable justifications, including — and I am not kidding — that “people traditionally engage in activities in Bars that result in increased respiratory effort.”

Nevertheless, Cooper is still penalizing business owners with his restrictions. My research brief today explains that this amounts to a “taking” akin to an eminent domain taking:

In state law, government can take part of your property “for the public use or benefit” to do such things as build roads, build sidewalks, establish storm drainage systems, build public parks, and many other things. It is the power of eminent domain, and property owners victimized by eminent domain takings are required by law to be compensated.

The governor’s executive orders shutting down untold businesses statewide over COVID-19 and also greatly restricting the normal operations of businesses amount to a regulatory taking. Its effects are not unlike an eminent domain taking. The government has deprived business owners use of their property ostensibly for a public purpose. …

The Locke Foundation has long advocated eminent domain reform, including stronger definitions of “public use” and “just compensation.” As Cooper has harmed businesses with his abuse of the EMA, however, we have realized that eminent domain reform needs to include protections against regulatory takings.

For that reason, in our Carolina Rebound study of critical post-Covid reforms for a stronger economic recovery, we recommended the following:

Provide clear and fair guidelines for compensating business and property owners victimized by regulatory takings such as executive shutdown orders.
State policymakers have been seeking to reform eminent domain in North Carolina to ensure takings are for true public uses and are fully compensated. Due to COVID-19, it has become clear that policymakers should also provide clear and fair guidelines for compensating property owners victimized by regulatory takings.

Read here for more discussion and why legislators need to act not just to amend the EMA, but also eminent domain, to prevent future governors from abusing emergency powers the way Cooper has, acting as if they give him a loophole out of the constitutional restraints against his authority.

Jon Sanders / Research Editor and Senior Fellow, Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...