Orlando Bar Grp., LLC v. DeSantis
| Decision Date | 03 June 2022 |
| Docket Number | Case No. 5D21-1248 |
| Parties | ORLANDO BAR GROUP, LLC d/b/a The Basement, The Attic and The Treehouse, Appellants, v. Ron DESANTIS, in his Official Capacity as the Governor of the State of Florida, Florida Department of Business and Professional Regulation, Orange County, et al., Appellees. |
| Court | Florida District Court of Appeals |
David H. Simmons, Deborah I. Mitchell, and Caitlin N. Emling, of de Beaubien, Simmons, Knight, Mantzaris & Neal, LLP, Orlando, and Spencer R. Munns, Joseph C. Shoemaker, and Jonathan G. Dulaney, of Bogin, Munns & Munns, P.A., Orlando for Appellants.
Raymond F. Treadwell, of Executive Office of the Governor, Tallahassee, for Appellee, Ron DeSantis.
David Axelman and Joseph Yauger Whealdon, III, of Department of Business and Professional Regulation, Tallahassee, for Appellee, for Department of Business and Professional Regulation.
Scott Robert McHenry, of Orange County Attorney's Office, Orlando, for Appellee, Orange County, Florida.
No Appearance for Remaining Appellees.
ON MOTION FOR REHEARING, REHEARING EN BANC, AND CERTIFICATION
We deny Appellants’ motions for rehearing, rehearing en banc, and for certification. However, we substitute the following revised opinion in place of the original opinion.
In early response to the COVID-19 pandemic, various state and local officials issued executive orders, some of which closed or severely restricted the operation of bars. Appellants, Orlando Bar Group, LLC d/b/a The Basement, The Attic, and The Treehouse, sued Appellees, Governor Ron DeSantis, in his official capacity as the governor of the State of Florida, the Florida Department of Business and Professional Regulations ("DBPR"), and Orange County, Florida, seeking money damages for inverse condemnation. Here, Appellants appeal the trial court's order which granted Appellees’ motions to dismiss with prejudice. Appellants raise multiple issues on appeal; several merit discussion, whereas others do not. Based on existing law, we affirm as explained below and as to all other issues as well.
In March of 2020, Governor DeSantis, employing executive orders, declared a state of emergency and temporarily suspended all sales of alcoholic beverages for vendors who derived more than fifty percent of their gross revenue from the sale of alcoholic beverages. Three days later, the Governor issued another executive order that suspended the sale of alcoholic beverages for on-premises consumption but allowed bars and restaurants to sell sealed, unopened, alcoholic beverages for off-premises consumption. Later-issued orders limited the operation of bars to seated service and reduced permissible operational capacity to half the normal occupancy previously permitted by law. The DBPR and Orange County's mayor issued other orders which temporarily prohibited or limited the normal operation of bars. After a period of time, bars were allowed to resume normal operation. Appellants’ complaint alleged that they were among the bars whose business operations were adversely affected by the various executive orders.
In their complaint, Appellants claimed that the temporary closure and later restrictions of their businesses constituted governmental takings that amounted to inverse condemnation entitling them to compensation. Appellees responded with motions to dismiss. Following a hearing, the trial court entered a lengthy order dismissing Appellants’ complaint with prejudice.1 Appellants did not move to amend their complaint, nor did they move for rehearing. They did timely appeal the trial court's order.
Under the Florida Constitution, private property cannot be taken by the government unless it is for public use and the owner of the property is fully compensated. Art. X, § 6, Fla. Const.2 "Inverse condemnation is a cause of action by a property owner to recover the value of property that has been de facto taken by an agency having the power of eminent domain where no formal exercise of that power has been undertaken." Ocean Palm Golf Club P'ship v. City of Flagler Beach , 139 So. 3d 463, 471 (Fla. 5th DCA 2014) (quoting Osceola Cnty. v. Best Diversified, Inc., 936 So. 2d 55, 59–60 (Fla. 5th DCA 2006) ).
As explained by the Supreme Court, there are two categories of governmental takings: physical and regulatory. See Cedar Point Nursery v. Hassid , ––– U.S. ––––, 141 S. Ct. 2063, 2071, 210 L.Ed.2d 369 (2021). "The government commits a physical taking when it uses its power of eminent domain to formally condemn property." Id . (citing United States v. Gen. Motors Corp ., 323 U.S. 373, 374–75, 65 S.Ct. 357, 89 L.Ed. 311 (1945) ; U.S. ex rel. TVA v. Powelson , 319 U.S. 266, 270–71, 63 S.Ct. 1047, 87 L.Ed. 1390 (1943) ). The government also commits a physical taking where it "takes possession of property without acquiring title to it." Id . (citing United States v. Pewee Coal Co ., 341 U.S. 114, 115–17, 71 S.Ct. 670, 95 L.Ed. 809 (1951) ). When a physical taking has occurred, the rule is simple: "The government must pay for what it takes." Id .
On the other hand, a regulatory taking may occur when the government "imposes regulations that restrict an owner's ability to use his own property ...." Id . (citing Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Plan. Agency , 535 U.S. 302, 321–22, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002) ). "To determine whether a use restriction effects a taking, this Court has generally applied the flexible test developed in Penn Central,3 balancing factors such as the economic impact of the regulation, its interference with reasonable investment-backed expectations, and the character of the government action." Id . at 2072. However, "[w]henever a regulation results in a physical appropriation of property, a per se taking has occurred, and Penn Central has no place." Id .
Appellants contend that they sufficiently alleged that the COVID executive orders complained of constituted a per se taking because the orders deprived them of their right to regulate access to their businesses. Thus, Appellants argue that the Penn Central test, employed by the trial court, does not apply to their claim and that the simple per se rule—the government must pay for what it takes—applies to the COVID orders.
Appellants’ initial argument is that the trial court should have denied Appellees’ motion to dismiss based upon the Supreme Court's recent Cedar Point decision. In Cedar Point , a California regulation allowed labor organizations the right to access an agricultural employer's property in order to petition support for unionization. Id . at 2069. Specifically, the regulation mandated that agricultural employers allow union organizers onto their property for up to three hours a day for 120 days a year. Id . The Court held that this regulation "appropriate[d] a right to invade the growers’ property and therefore constitute[d] a per se physical taking." Id . at 2072. Significantly, the Supreme Court reasoned that the California regulation violated " ‘one of the most treasured’ rights of property ownership": the right to exclude. Id . (citation omitted).
Here, Appellants do not allege that the COVID orders violated their right to exclude; rather, they argue the opposite and claim that the orders violated "the right of property owners to allow others access to their properties." The Supreme Court's holding in Cedar Point did not address and does not support this alleged right.
The COVID orders at issue here did not permit third parties to access Appellants’ property; they did the opposite by preventing Appellants from having patrons on their premises and temporarily prohibiting Appellants from selling alcohol for on-premises consumption. As such, the COVID orders did not result in a physical appropriation and per se taking of Appellants’ property; rather, the COVID orders regulated Appellants’ use of their property. Consequently, Appellants are incorrect that the simple per se rule governs their takings claims. Since the COVID orders were regulations affecting Appellants’ ability to use their property, the Penn Central test was appropriate to employ in determining whether the COVID orders amounted to a taking. Thus, Appellants’ argument that the trial court erred in employing the Penn Central test rather than the Cedar Point test is unavailing.
Appellants next argue that their inverse condemnation claim should have survived based upon Lucas v. South Carolina Coastal Council , 505 U.S. 1003, 1015, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992). The Supreme Court found a categorical regulatory taking in Lucas because the "[governmental] regulation denies all economically beneficial or productive use of land." Id . In Lucas , a landowner purchased property and intended to build homes on the property. Id . at 1006–07, 112 S.Ct. 2886. Before the landowner could build any homes, South Carolina passed legislation which barred him from erecting any permanent and habitable structures on the property. Id . at 1007, 112 S.Ct. 2886. The Supreme Court held that "when the owner of real property has been called upon to sacrifice all economically beneficial uses ... he has suffered a taking." Id . at 1019, 112 S.Ct. 2886.4
As the Court later explained in Tahoe, Lucas ’ holding was "limited to ‘the extraordinary circumstance when no productive or economically beneficial use of land is permitted.’ " 535 U.S. at 330, 122 S.Ct. 1465 (quoting Lucas , 505 U.S. at 1017, 112 S.Ct. 2886 ). "The emphasis on the word ‘no’ in the text of the opinion was, in effect, reiterated in a footnote explaining that the categorical rule would not apply if the diminution in value were 95% instead of 100%." Id . (citing Lucas , 505 U.S. at 1019 n.8, 112 S.Ct. 2886 ).
Taking Appellants’ allegations in their complaint to be true, the economic impact of the COVID orders on their business was significant. However, the impact of...
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