Opinion ID: 209137
Heading Depth: 2
Heading Rank: 4

Heading: Rose Acre's Legal Challenges

Text: Shortly after its operations became subject to the federal and state restrictions, Rose Acre filed an action in the United States District Court for the Southern District of Indiana seeking a declaration that the interim regulations were invalid. In that action, Rose Acre contended that (1) the interim and final regulations deprived Rose Acre of due process, (2) the interim regulations were not promulgated in accordance with the Administrative Procedure Act, (3) both sets of regulations exceeded USDA's statutory authority, (4) the final regulations could not be applied retroactively, (5) both sets of regulations unlawfully delegated authority to state officials, (6) the application of certain monitoring provisions was invalid, and (7) it was entitled to compensation for eggs diverted to breaker plants. Rose Acre Farms, Inc. v. Madigan, No. NA 90-175-C, 1991 U.S. Dist. LEXIS 8691, at -4 (S.D. Ind. June 5, 1991). Ultimately, the United States Court of Appeals for the Seventh Circuit held that the regulations were neither arbitrary nor capricious and were promulgated within the authority of the Secretary of Agriculture. Rose Acre I, 956 F.2d at 675-77. It further held that [i]t is to the claims court that Rose Acre must go to pursue any claim for compensation. Id. at 674. Rose Acre filed the present action in the Court of Federal Claims on October 13, 1992, alleging an uncompensated taking of its eggs and hens and violations of 21 U.S.C. §§ 114a [3] and 134a [4] (2000). The trial court granted the government's motion to dismiss Rose Acre's section 114a claim for failure to state a claim, Rose Acre III, 55 Fed.Cl. at 653, and held, after a two-week trial, that section 134a provides Rose Acre no relief beyond that available under the Fifth Amendment, Id. at 662. The trial court awarded Rose Acre compensation in the amount of $6,165,297.72 for what it concluded was a regulatory taking of eggs diverted to breaker plants and a categorical taking of the hens confiscated for internal-organ testing. Id. at 665. The court also awarded Rose Acre $2,414,744.81 in attorney fees and expenses. Id. at 670. The government appealed, challenging the trial court's holding that the government actions at issue here constituted a regulatory taking and a categorical taking and the award of fees and expenses (as based on an erroneous judgment that takings occurred). In our prior decision, we (1) vacated the trial court's finding with respect to the economic impact prong and instructed the court to reassess this factor; (2) affirmed the trial court's conclusion with respect to Rose Acre's reasonable investment-backed expectations; (3) reversed the trial court's conclusion that the character of the regulatory action favored Rose Acre; and (4) instructed the trial court to reweigh the Penn Central factors to determine whether a compensable taking had occurred. Rose Acre IV, 373 F.3d at 1196. On remand, the trial court conducted a two-day trial in late 2006, consisting mainly of expert testimony relevant to the Penn Central factors. Rose Acre V, 2007 WL 5177409, at . After considering the evidence, the trial court ruled that the severity of the economic impact favored Rose Acre because it suffered a diminution in profit of 219%. Id. at . Based on our earlier opinion, the trial court ruled that the character of governmental action favored the government despite Rose Acre's contention that an intervening Supreme Court decision necessitated the reassessment of this factor. Id. at . The court had no reason to reanalyze Rose Acre's reasonable investment-backed expectations. Id. In reweighing all three Penn Central factors, the trial court again held that Rose Acre suffered a taking and awarded Rose Acre about $5.4 million as just compensation, plus interest, attorney fees, expert fees, and expenses, for a total of about $8.7 million. Id. at , . The government timely appealed, and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).