No.

In the Supreme Court of the United States

____________________
M OUNT C LEMENS R ECREATIONAL B OWL , I NC .,
K.M.I., I NC ., AND M IRAGE C ATERING , INC .,
Petitioners,
v.
E LIZABETH H ERTEL , IN HER OFFICIAL CAPACITY AS
D IRECTOR OF THE M ICHIGAN D EPARTMENT OF
H EALTH AND H UMAN S ERVICES , P ATRICK
G AGLIARDI , IN HIS OFFICIAL CAPACITY AS C HAIR OF
THE M ICHIGAN L IQUOR C ONTROL C OMMISSION , AND
G RETCHEN W HITMER , IN HER OFFICIAL CAPACITY AS
G OVERNOR OF THE S TATE OF M ICHIGAN ,
Respondents.
____________________
On Petition For Writ Of Certiorari To
The Michigan Court Of Appeals
____________________

PETITION FOR A WRIT OF CERTIORARI

____________________
ALBERT B. ADDIS JONATHAN M. HOUGHTON
Michigan Justice, PLLC Counsel of Record
18 First Street DEBORAH J. LA FETRA
Mt. Clemens MI 48043 Pacific Legal Foundation
3100 Clarendon Boulevard,
Suite 1000
Arlington, VA 22201
(202) 888-6881
[email protected]
Counsel for Petitioners
 i

QUESTION PRESENTED
In this Fifth Amendment regulatory takings case,
Michigan’s Executive Orders and Administrative
Orders took dominion and control of the use of
Petitioners’ property; first, by barring all customers
from the premises and, then, by imposing severe use
restrictions that substantially idled the
property. Both caused economic devastation and
destroyed Petitioners’ reasonable investment-backed
expectations to benefit the general public. However,
Michigan courts dismissed Petitioners’ case at the
pleadings stage, generating three conflicting
interpretations of Penn Central Transp. Co. v. City of
New York, 438 U.S. 104 (1978). The result
demonstrates Penn Central’s inability to protect
fundamental property rights and to provide a clear,
consistent, and uniform determination of “how far is
too far.”
The question presented is:
Whether Penn Central Transp. Co. v. City of New
York, 438 U.S. 104 (1978), should be clarified or
overruled?
 ii

PARTIES TO THE PROCEEDINGS

AND RULE 29.6 STATEMENT
Petitioners Mount Clemens Recreational Bowl,
Inc., K.M.I., Inc., and Mirage Catering, Inc. were
plaintiffs-appellants in all proceedings below. All are
S-type corporations organized under the laws of the
State of Michigan, have no parent corporations, and
issue no shares.
Respondents Elizabeth Hertel, in her official
Capacity as Director of the Michigan Department of
Health and Human Services, Patrick Gagliardi, in his
official capacity as Chair of the Michigan Liquor
Control Commission, and Gretchen Whitmer, in her
official capacity as Governor of the State of Michigan,
were defendants-appellees in all proceedings below.
STATEMENT OF RELATED CASES
These proceedings are directly related to the above-
captioned case under Rule 14.1(b)(iii):
Mount Clemens Recreational Bowl, Inc. v. Dir. of
Dep’t of Health & Hum. Servs., No. 165169 (Mich.
Aug. 30, 2024).
Mount Clemens Recreational Bowl, Inc. v. Dir. of
Dep’t of Health & Hum. Servs., No. 358755 (Mich. App.
Nov. 17, 2022).
Mount Clemens Recreational Bowl, Inc. v. Hertel,
No. 21-000126-MZ (Mich. Ct. Cl. Sept. 14, 2021).
 iii

TABLE OF CONTENTS
Petition for a Writ of Certiorari ................................. 1
Opinions Below ........................................................... 4
Jurisdiction ................................................................. 5
Constitutional Provision
and Orders Involved ................................................... 6
Statement of the Case ................................................ 8
A. Michigan’s Shut-Down Order and the
Resulting Confiscation of Petitioners’
Property ......................................................... 8
B. The Proceedings Below ............................... 10
Reasons for Granting the Petition ........................... 12
I. Certiorari Is Needed to Bring Uniformity and
Clarity to Regulatory Takings Cases ............ 12
A. Penn Central’s persistent difficulties ......... 12
B. This case offers an excellent vehicle to
provide clarity, consistency, and uniformity
to the regulatory takings test ..................... 22
C. A viable solution based on the traditional
adjudication of property rights ................... 28
Conclusion ................................................................. 34
Appendix
Opinion of the Michigan State Court of Appeals,
November 17, 2022 .............................................. 1a
Order of the Michigan State Supreme Court, denying
application for leave to appeal,
August 30, 2024 ................................................. 23a
Opinion and Order of the Michigan State Court of
Claims, Ingham County,
September 14, 2021 ........................................... 29a
 iv

Michigan Executive Order 2020-09,

March 16, 2020 .................................................. 42a
Michigan Department of Health and Human
Services, Emergency Order under MCL 333.2253
– Gathering Prohibition and Face Covering
Order, October 9, 2020 ...................................... 47a
Complaint, filed in Michigan State Court of Claims,
Ingham County, May 25, 2021 .......................... 66a
 v

TABLE OF AUTHORITIES
Page(s)
Cases
74 Pinehurst LLC v. New York,
59 F.4th 557 (2d Cir. 2023) ............................... 20
Allied Credit Corp. v. Davis (In re Davis),
989 F.2d 208 (6th Cir. 1993) ............................. 31
Armstrong v. United States,
364 U.S. 40 (1960) ............................................... 1
Baxter v. Brand, 36 Ky. 296 (1838) ........................ 30
Blackburn v. Dare Cnty.,
58 F.4th 807 (4th Cir. 2023) .................. 14, 19, 21
Bordelon v. Baldwin Cnty.,
No. CV 20-0057-C, 2022 WL 16543269
(S.D. Ala. Oct. 28, 2022), aff’d No. 22-
13958, 2024 WL 302382 (11th Cir. Jan.
26, 2024) ............................................................. 17
Brewer v. Alaska,
341 P.3d 1107 (Alaska 2014) ............................. 20
Bridge Aina Le‘a, LLC v. Hawaii Land Use
Comm’n, 141 S. Ct. 731 (2021) .................. 4, 9, 21
CCA Assocs. v. United States,
667 F.3d 1239 (Fed. Cir. 2011) .......................... 17
Cedar Point Nursery v. Hassid,
594 U.S. 139 (2021) ............................... 12, 17, 19
In re Certified Questions from United States
Dist. Ct., W. Dist. of Michigan, S. Div.,
506 Mich. 332 (2020) ........................................... 9
Cienega Gardens v. United States,
331 F.3d 1319 (Fed. Cir. 2003) ........ 16, 18, 20, 29
City of Belleville v. St. Clair Cnty. Turnpike
Co., 84 N.E. 1049 (Ill. 1908) .............................. 32
 vi

Cmty. Housing Improvement Program v.

City of New York,
492 F. Supp. 3d 33 (E.D.N.Y. 2020) .................. 16
Colony Cove Properties, LLC v. City of
Carson, 888 F.3d 445 (9th Cir. 2018)................ 16
Committee for Reasonable Regulation of
Lake Tahoe v. Tahoe Regional Planning
Agency,
311 F. Supp. 2d 972 (D. Nev. 2004) .................. 16
Covington & L. Turnp. Road Co. v.
Sandford, 164 U.S. 578 (1896) .......................... 31
Dep’t of Agriculture & Consumer Services v.
Mid-Florida Growers, Inc.,
521 So. 2d 101 (Fla. 1988) ................................. 20
Dist. Intown Properties Ltd. P’ship v. D.C.,
198 F.3d 874 (D.C. Cir. 1999) ........................... 13
Duquesne Light Co. v. Barasch,
488 U.S. 299 (1989) ........................................... 31
E. Enterprises v. Apfel,
524 U.S. 498 (1998) ..................................... 17, 22
Eaton v. Bos., C. & M.R.R.,
51 N.H. 504 (1872) ............................................. 30
Englewood Hospital & Med. Ctr. v.
New Jersey,
478 N.J. Super. 626 (App. Div. 2024) ............... 18
First Eng. Evangelical Lutheran Church of
Glendale v. Los Angeles Cnty.,
482 U.S. 304 (1987) ........................................... 22
Fla. Rock Indus., Inc. v. United States,
18 F.3d 1560 (Fed. Cir. 1994) ................ 15, 19, 29
Fla. Rock Indus., Inc. v. United States,
45 Fed. Cl. 21 (1999).................................... 16, 29
 vii

Fla. v. Powell,
559 U.S. 50 (2010) ............................................... 5
FLCT, Ltd. v. City of Frisco,
493 S.W.3d 238 (Tex. App. 2016) ...................... 16
Formanek v. United States,
26 Cl. Ct. 332 (1992) .......................................... 16
Goldblatt v. Town of Hempstead,
369 U.S. 590 (1962) ........................................... 32
Greater Chautauqua Fed. Credit Union v.
Marks,
No. 1:22-CV-2753 (MKV), 2023 WL
2744499 (S.D.N.Y. Mar. 31, 2023) .................... 16
Green v. Biddle,
21 U.S. 1 (1823) ................................................. 29
Heights Apartments, LLC v. Walz,
30 F.4th 720 (8th Cir. 2022) .............................. 16
Heinlen v. Martin,
53 Cal. 321 (1879) .............................................. 30
Kafka v. Montana Dep’t of Fish, Wildlife
and Parks, 348 Mont. 80 (2008) ........................ 20
Kirby Forest Indus., Inc. v. United States,
467 U.S. 1 (1984) ............................................... 29
Koontz v. St. Johns River Water Mgmt.
Dist., 570 U.S. 595 (2013).................................. 21
Lingle v. Chevron U.S.A. Inc.,
544 U.S. 528 (2005) ............................... 17, 19, 25
Loper Bright Enterprises v. Raimondo,
144 S. Ct. 2244 (2024) ......................................... 3
Loretto v. Teleprompter Manhattan CATV
Corp., 458 U.S. 419 (1982) ................................ 19
Los Angeles Gas & Elec. Corp. v. R.R.
Comm’n of Cal., 289 U.S. 287 (1933) ................ 31
 viii

Lucas v. S.C. Coastal Council,

505 U.S. 1003 (1992) ......................................... 17
Lynch v. Household Fin. Corp.,
405 U.S. 538 (1972) ........................................... 12
MacDonald, Sommer & Frates v. Yolo Cnty.,
477 U.S. 340 (1986) ........................................... 29
Maine Educ. Ass’n Benefits Trust v. Cioppa,
695 F.3d 145 (1st Cir. 2012) .............................. 18
Marbury v. Madison,
5 U.S. 137 (1803) ................................................. 3
McNulty v. Town of Indialantic,
727 F. Supp. 604 (M.D. Fla 1989) ..................... 18
Michigan v. Long,
463 U.S. 1032 (1983) ........................................... 5
Monongahela Nav. Co. v. United States,
148 U.S. 312 (1893) ........................................... 14
Mount Clemens Recreation Bowl, Inc. v.
Hertel, 2021 WL 9870147
(Mich. Ct. Cl. July 23, 2021) ............................... 4
Mount Clemens Recreational Bowl, Inc. v.
Dir. of Dep’t of Health & Hum. Servs.,
10 N.W.3d 453 (Mich. 2024) ................................ 5
Mount Clemens Recreational Bowl, Inc. v.
Dir. of Dep’t of Health & Hum. Servs.,
344 Mich. App. 227 (2022)................................... 4
Murr v. Wisconsin,
582 U.S. 383 (2017) ........................................... 19
Nekrilov v. City of Jersey City,
45 F.4th 662 (3d Cir. 2022) ......................... 14, 21
Nemmers v. City of Dubuque,
764 F.2d 502 (8th Cir. 1985) ............................. 29
Ohio v. Robinette,
519 U.S. 33 (1996) ............................................... 5
 ix

Penn Central Transp. Co. v. City of

New York,
438 U.S. 104 (1978) ........... 1, 2, 13, 17, 18, 19, 28
Pennell v. City of San Jose,
485 U.S. 1 (1988) ............................................... 29
Pennsylvania Coal Co. v. Mahon,
260 U.S. 393 (1922) ........................... 1, 13, 21, 32
Philip Morris, Inc. v. Reilly,
312 F.3d 24 (1st Cir. 2002) ................................ 18
Rancho de Calistoga v. City of Calistoga,
800 F.3d 1083 (9th Cir. 2015) ........................... 18
Sansotta v. Town of Nags Head,
97 F. Supp. 3d 713 (E.D.N.C. 2014) .................. 21
Stackpole v. Healy,
16 Mass. 33 (1819) ............................................. 30
Stevens v. Worrill,
73 S.E. 366 (Ga. 1911) ....................................... 31
Stone v. Farmers’ Loan & Tr. Co.,
116 U.S. 307 (1886) ........................................... 31
Missouri ex rel. Sw. Bell Tel. Co. v. Pub.
Serv. Comm’n of Missouri,
262 U.S. 276 (1923) ........................................... 31
Tahoe-Sierra Preservation Council v. Tahoe-
Sierra Regional Planning Agency,
535 U.S. 302 (2002) ........................................... 17
The Gym 24/7 Fitness, LLC v. Michigan,
No. 20-000132-MM, 2020 WL 6050543
(Mich. Ct. Cl. Sept. 24, 2020) ............................ 25
The Gym 24/7 Fitness, LLC v. Michigan,
10 N.W.3d 443 (Mich. 2024) ................. 23, 26, 27
The Gym 24/7 Fitness, LLC v. Michigan,
989 N.W.2d 844 (2022) ........................ 3, 5, 25, 27
 x

United States v. Gen. Motors Corp.,

323 U.S. 373 (1945) ........................................... 12
Verizon Commc’ns, Inc. v. F.C.C.,
535 U.S. 467 (2002) ........................................... 31
Wensmann Realty, Inc. v. City of Eagan,
734 N.W.2d 623 (Minn. 2007) ........................... 21
Wheeler v. City of Pleasant Grove,
833 F.2d 267 (11th Cir. 1987) ........................... 29
Woodruff v. Neal,
28 Conn. 165 (1859) ........................................... 30
Yancey v. United States,
915 F.2d 1534 (Fed. Cir. 1990) .......................... 16
Constitutional Provisions
Mich. Const. art. X, § 2 ........................................... 10
U.S. Const. amend. V................................................ 6
Statute
28 U.S.C. § 1257(a) ................................................... 5
Rule
MCR 7.305(H)(1) ..................................................... 12
Other Authorities
Barros, D. Benjamin, At Last, Some Clarity:
The Potential Long-Term Impact of
Lingle v. Chevron and the Separation of
Takings and Substantive Due Process,
69 Alb. L. Rev. 343 (2006) ................................. 20
Berger, Michael M., Whither Regulatory
Takings?, 51 Urb. Law. 171 (2021) ................... 14
Coke, Edward, 1 Institutes, ch. 1, § 1 (1st
Am. ed. 1812) ..................................................... 29
Cooley, Thomas M., A Treatise on the
Constitutional Limitations Which Rest
upon the Legislative Power of the States
of the American Union (8th ed. 1927) ............... 30
 xi

Cordes, Mark W., Takings Jurisprudence as

Three-Tiered Review, 20 J. Nat.
Resources & Envtl. L. 1 (2006) ......................... 17
Eagle, Steven J., The Four-Factor Penn
Central Regulatory Takings Test, 118
Penn. St. L. Rev. 601 (2014) .............................. 13
Eagle, Steven J., Penn Central and Its
Reluctant Muftis, 66 Baylor L. Rev. 1
(2014) ................................................................. 18
Echeverria, John D., Making Sense of Penn
Central, 39 Envtl. L. Rep. News &
Analysis 10471 (2009) ....................................... 19
Epstein, Richard A., From Penn Central to
Lingle: The Long Backwards Road, 40 J.
Marshall L. Rev. 593 (2007) .............................. 17
Groen, John M., Takings, Original
Meaning, and Applying Property Law
Principles to Fix, 39 Touro L. Rev. 973
(2024) ................................................................. 30
Kanner, Gideon, Hunting the Snark, Not the
Quark: Has the U.S. Supreme Court
Been Competent in Its Effort to
Formulate Coherent Regulatory Takings
Law?, 30 Urb. Law. 307 (1998) ......................... 18
Meltz, Robert, Takings Law Today: A
Primer for the Perplexed, 34 Ecology L.Q.
307 (2007) .......................................................... 17
Merrill, Thomas W., The Character of the
Governmental Action, 36 Vt. L. Rev. 649
(2012) ................................................................... 2
Michigan Department of Health and
Human Services Emergency Order
(Oct. 9, 2020) ........................................................ 6
 xii

Michigan Department of Health and

Human Services Emergency Order
(Jan. 22, 2021) ..................................................... 8
Michigan Department of Health and
Human Services Emergency Order
(Feb. 4, 2021) ....................................................... 8
Michigan Department of Health and
Human Services Emergency Order
(Mar. 2, 2021)....................................................... 8
Michigan Department of Health and
Human Services Emergency Order
(Mar. 19, 2021)..................................................... 8
Michigan Department of Health and
Human Services Emergency Order
(April 16, 2021) .................................................... 8
Michigan Department of Health and
Human Services Emergency Order
(May 4, 2021) ....................................................... 8
Michigan Department of Health and
Human Services Emergency Order
(May 24, 2021) ..................................................... 8
Michigan Department of Health and
Human Services Emergency Order
(June 17, 2021) .................................................... 8
Michigan Executive Order 2020-09
(March 16, 2020) .................................................. 7
Michigan Executive Order 2020-176
(Sept. 3, 2020) ...................................................... 7
Oakes, James L., “Property Rights” in
Constitutional Analysis Today, 56 Wash.
L. Rev. 583 (1981) .............................................. 14
 xiii

Pomeroy, Adam R., Penn Central After 35

Years: A Three Part Balancing Test or A
One Strike Rule?, 22 Fed. Circuit B.J.
677 (2013) .......................................................... 15
Radford, R.S. & Wake, Luke A., Deciphering
and Extrapolating: Searching for Sense
in Penn Central, 38 Ecology L.Q. 731
(2011) ................................................................... 2
Scalia, Antonin, The Rule of Law As a Law
of Rules, 56 U. Chi. L. Rev. 1175 (1989) ........... 33
Thomas, Robert H., Evaluating Emergency
Takings: Flattening the Economic Curve,
29 Wm. & Mary Bill Rts. J. 1145 (2021)........... 19
Wade, William W., Sources of Regulatory
Takings Economic Confusion Subsequent
to Penn Central, 41 Envtl. L. Rep. News
& Analysis 10936 (2011) ................................... 29
Whitman, Dale A., Deconstructing Lingle:
Implications for Takings Doctrine,
40 J. Marshall L. Rev. 573 (2007) ....................... 2
 1

PETITION FOR A WRIT OF CERTIORARI

It is undisputed that Petitioners’ properties, a
bowling alley and two banquet halls, were pressed
into public service. By both Executive Order and
Administrative Order, the Respondents 1
commandeered their use. They forcibly closed the
Petitioners’ businesses and idled all of the property
within, and then restricted the properties to such a
degree that they could not be used in any economically
viable way. The State also claimed the exclusive right
to determine if, when, and how, it would someday
allow Petitioners to use their private property.
The State did not compel everyone to shoulder this
burden. But for those, like Petitioners, that were
stripped of their property rights by government
decree, the impact was severe: economic use was
nullified and Petitioners’ reasonable investment-
backed expectations were destroyed.
The very purpose of the Fifth Amendment’s
Takings Clause is to protect owners from “bear[ing]
public burdens which, in all fairness and justice,
should be borne by the public as a whole.” Armstrong
v. United States, 364 U.S. 40, 49 (1960). However,
when the court below dismissed Petitioners’ regula-
tory takings lawsuit at the pleadings stage, it left
Petitioners without a remedy for the clear confiscation
of their fundamental property rights.
The Michigan Supreme Court denied review over
the strong dissent of two Justices, whose opinion
revealed the larger and deeper flaws in Penn Central.
The challenge in regulatory takings cases is to
determine “how far is too far?” Pennsylvania Coal Co.

1 Collectively referred to herein as the “State.”

 2

v. Mahon, 260 U.S. 393, 415 (1922). For decades, the

answer to that question has been buried within Penn
Central’s ad hoc, multi-factor test, particularly its
three indeterminate primary factors—economic
impact, interference with reasonable investment-
backed expectations, and the regulation’s character.
Penn Central Transp. Co. v. City of New York, 438 U.S.
104, 124-25 (1978).
The enduring problem is that no one—courts
included—know what these factors really mean,
collectively or individually. Nor how to apply them,
nor how, or even if, to weigh them. At this point, it is
axiomatic that Penn Central is simply not capable of
predictably, consistently, and uniformly determining
“how far is too far?” The economic impact factor is “a
dilemma” with no guidelines; the investment-backed
expectations factor is “problematic” and “circular” and
incapable of being a basis for determination; character
is “the most mysterious of all”; and altogether “each of
the factors [] has created great difficulty for the lower
courts.” Thomas W. Merrill, The Character of the
Governmental Action, 36 Vt. L. Rev. 649, 651 (2012);
Dale A. Whitman, Deconstructing Lingle: Implications
for Takings Doctrine, 40 J. Marshall L. Rev. 573, 576-
78 (2007) (Penn Central is “a disaster in terms of
clarity and predictability. None of the test’s three
prongs can be calculated by landowners or
government officials with any certainty[.]”); R.S.
Radford & Luke A. Wake, Deciphering and
Extrapolating: Searching for Sense in Penn Central,
38 Ecology L.Q. 731, 732 (2011) (the Penn Central test
is an “unworkable, if not incomprehensible,
standard”).
It is no small problem. If courts do not understand
how Penn Central works, or what it means, or how to
 3

apply its factors, the result is conflict and chaos, not

justice. Conflicting decisions amongst the lower
courts undermine stare decisis, leaving both property
owners and government regulators uncertain of their
rights and responsibilities. The lack of uniformity
also diminishes the equal treatment of litigants under
law and functionally extinguishes the meaning of a
property owner’s fundamental right to economic use.
See Loper Bright Enterprises v. Raimondo, 144 S. Ct.
2244, 2270-71 (2024) (“A rule of law that is so wholly
‘in the eye of the beholder’ [and] invites different
results in like cases” is “arbitrary” “impressionistic”
and “malleable” and it “cannot stand as an everyday
test[.]”).
In addition, the lack of concrete guidance both
incentivizes questionable litigation outside of the
reasonable boundaries of the Takings Clause’s
protection and, at the same time, virtually guarantees
that the Penn Central test will be systemically under-
protective. Simply put, constitutional rights cannot
be protected if the courts do not know how to protect
them. Marbury v. Madison, 5 U.S. 137, 178 (1803)
(determining whether government action “be in
opposition to the constitution” is “the very essence of
judicial duty”).
The case below reflects the inevitable conflict. The
three opinions generated by the Michigan Court of
Claims, the Michigan Court of Appeals, and the two-
Justice dissent of the Michigan Supreme Court,
respectively, applied the same facts to the same law
and yet agreed on nothing. Moreover, when coupled
with the fact that the Michigan Court of Appeals
based its decision on, but also diverted from, The Gym
24/7 Fitness, LLC v. Michigan, 989 N.W.2d 844
(2022), an additional conflicting interpretation is
 4

added to the mix. Collectively, these courts disagreed

on: (a) the definitions of different Penn Central
factors; (b) what facts were relevant for the court to
consider; (c) which factors had primacy; (d) how to
balance them; and (e) the role of the court in
evaluating them at the pleadings stage.
It is thus a clear window into what Justice Thomas
called a “standardless standard,” resulting in “starkly
different outcomes based on the application of the
same law. . . . A know-it-when-you-see-it test is no
good if one court sees it and another does not.” Bridge
Aina Le‘a, LLC v. Hawaii Land Use Comm’n, 141 S.
Ct. 731, 731-32 (2021) (Thomas, J., dissenting from
denial of certiorari). With Penn Central as the
muddled polestar, the boundaries of the Fifth Amend-
ment’s protection are a mystery. This Court should
therefore grant certiorari to determine whether Penn
Central should be clarified or overruled in order to
provide a clear, consistent, and uniform rule of law for
determining “how far is too far.” 2
OPINIONS BELOW
The decision of the Michigan Court of Claims (App.
29a-41a) is unpublished but available at Mount
Clemens Recreation Bowl, Inc. v. Hertel, 2021 WL
9870147 (Mich. Ct. Cl. July 23, 2021). The Michigan
Court of Appeals decision (App. 1a-22a) is published
at Mount Clemens Recreational Bowl, Inc. v. Dir. of

2 A Petition for Writ of Certiorari is filed concurrently in The

Gym 24/7 Fitness, LLC v. State of Michigan. The Court of
Appeals below treated the Court of Appeals decision in Gym 24/7
as precedent. And the dissent of the Michigan Supreme Court
order denying review adopted and incorporated its dissent in
Gym 24/7.
 5

Dep’t of Health & Hum. Servs., 344 Mich. App. 227

(2022). The decision of the Michigan Supreme Court
denying review (App. 23a-28a) is published at Mount
Clemens Recreational Bowl, Inc. v. Dir. of Dep’t of
Health & Hum. Servs., 10 N.W.3d 453 (Mich. 2024).
JURISDICTION
This Court has jurisdiction pursuant to 28 U.S.C.
§ 1257(a). The Michigan Court of Appeals entered
Judgment on November 17, 2022. The Michigan
Supreme Court denied review on August 30, 2024.
Petitioners received an extension of time to file this
Petition to and including January 15, 2025. See No.
24A435.
Petitioners’ complaint alleged state constitutional
violations. App. 85a-86a. As the Michigan Court of
Claims held, the takings clause of the state
constitution is to be interpreted coextensively with the
federal Takings Clause; and its decision was based
exclusively upon federal law. App. 35a. The Court of
Appeals and Michigan Supreme Court likewise
evaluated this matter under federal law. App. 11a,
25a. Both also explicitly followed the reasoning of
Gym 24/7 Fitness, LLC v. Michigan, in which the
property owners filed a Fifth Amendment takings
claim under similar facts and identical legal issues;
and that the courts resolved under federal law. App.
12a-19a, 25a-28a. Therefore, this Court has
jurisdiction to consider the federal question
presented. Fla. v. Powell, 559 U.S. 50, 56-57 (2010);
Ohio v. Robinette, 519 U.S. 33, 36-37 (1996); Michigan
v. Long, 463 U.S. 1032, 1040-41 (1983).
 6

CONSTITUTIONAL PROVISION
AND ORDERS INVOLVED
The Fifth Amendment to the U.S. Constitution
provides in relevant part, “nor shall private property
be taken for public use, without just compensation.”
Michigan’s Executive Order (EO) 2020-09
(March 16, 2020) provides, in relevant part: 3
To mitigate the spread of COVID-19, protect the
public health, and provide essential protections
to vulnerable Michiganders, it is reasonable and
necessary to impose limited and temporary
restrictions on the use of places of public
accommodation.
Acting under the Michigan Constitution of 1963
and Michigan law, I order the following:
Beginning as soon as possible but no later than
March 16, 2020 at 3:00 pm, and continuing until
March 30, 2020 at 11:59 pm, the following places
of public accommodation are closed to ingress,
egress, use, and occupancy by members of the
public:
(a) Restaurants, food courts, cafes, coffeehouses,
and other places of public accommodation
offering food or beverage for on-premises
consumption;
(b) Bars, taverns, brew pubs, breweries,
microbreweries, distilleries, wineries, tasting
rooms, special licensees, clubs, and other places
of public accommodation offering alcoholic
beverages for on-premises consumption;…

3 The Executive Order is reprinted in full at App. 42a-46a.

 7

(f) Gymnasiums, fitness centers, recreation

centers, indoor sports facilities, indoor exercise
facilities, exercise studios, and spas;
(h) Places of public amusement not otherwise
listed above. 4
The State of Michigan Department of Health and
Human Services (MDHSS) Emergency Order Under
MCL 333.2253 of October 9, 2020, provides, in
relevant part: 5
Attendance limitations at gatherings.
(a) The restrictions imposed by this section do
not apply to the incidental gathering of persons
in a shared space, including an airport, bus
station, factory floor, food service establish-
ment, shopping mall, public pool, or workplace.
(b) Gatherings are permitted only as follows:
(1) Indoor gatherings of up to 10 persons
occurring at a residence are permitted (face
coverings are strongly recommended for such
gatherings);
(2) Indoor gatherings of up to 10 persons
occurring at a non-residential venue are permit-
ted provided each person at the gathering wears
a face covering except as provided in section 6 of
this order;
(3) Indoor gatherings of more than 10 and up to
500 persons occurring at a non-residential

4 Executive Order 2020-09 was extended by subsequent orders

and ultimately terminated on September 3, 2020, by Executive

Order 2020-176.
5 The MDHHS Order is reprinted in full at App. 47a-65a.
 8

venue are permitted only to the extent that the

organizers and venue:
(A) In venues with fixed seating, limit
attendance to 20% of seating capacity of the
venue, provided however that gatherings at up
to 25% of seating capacity are permitted in
Region 6;
(B) In venues without fixed seating, limit
attendance to 20 persons per 1,000 square feet
in each occupied room, provided however that
gatherings of up to 25 persons per 1,000 square
feet in each occupied room are permitted in
Region 6. 6
STATEMENT OF THE CASE
A. Michigan’s Shut-Down Order and the
Resulting Confiscation of Petitioners’
Property
Petitioner Mount Clemens Recreational Bowl is a
bowling alley and restaurant in Macomb Township,
Michigan. App. 30a, 67a. Petitioner KMI, Inc. owns
Kings Mill, a combined 40-seat restaurant and 180-
seat banquet hall. Ibid. And Petitioner Mirage
Catering owned a 29,000-square-foot banquet-
wedding hall. Ibid. All were subject to the Executive
Order and MDHSS Order reprinted above.
On March 10, 2020, Michigan Governor Gretchen
Whitmer declared a state of emergency in response to

6 This Order was extended by subsequent MDHHS Orders of

January 22, 2021; February 4, 2021; March 2, 2021; March 19,
2021; April 16, 2021; May 4, 2021; and May 24, 2021. It was
rescinded on June 22, 2021, by MDHHS Order dated June 17,
2021.
 9

the COVID-19 pandemic. App. 42a. Thereafter, Gov.

Whitmer issued Executive Order 2020-09. Ibid. It
decreed that multiple different businesses of public
accommodation were to be “closed to ingress, egress,
use, and occupancy by members of the public.” App.
43a-44a (emphasis added). Originally intended to
expire after two weeks, the shutdown order was
repeatedly extended. See Executive Orders 2020-20,
2020-43, 2020-69.
The Executive Order as applicable to these
properties was lifted in June 2020, but the businesses
were not free to resume operations. The State then
imposed capacity restrictions that limited the number
of customers permitted in Petitioners’ businesses to
50% of their otherwise legal capacity. See Executive
Orders 2020-97 and 2020-110.
In October 2020, the Michigan Supreme Court held
the bulk of the Executive Orders to be ultra vires and
contrary to its constitution. In re Certified Questions
from United States Dist. Ct., W. Dist. of Michigan, S.
Div., 506 Mich. 332, 385 (2020). Following that
decision, the Michigan Department of Health and
Human Services enacted the functional equivalent of
the stricken Executive Orders, but this time restric-
ting capacity to a mere 20% or 20 people per 1,000
feet. 7 App. 52a.
The net effect of these Executive and MDHHS
Orders was the substantial destruction of the use of
Petitioners’ properties. App. 79a-81a. As noted above,

7 The MDDHS Order had seemingly inconsistent restrictions.

While the referenced section limited venues, including food
service establishments, to the 20%/20 people per 1,000 feet
restriction (App. 52a), a different section limited food service
establishments to a 50% capacity limit. App. 60a.
 10

Petitioners are specialty properties with a primary

commercial purpose of providing an indoor space for
public gathering and ill-suited for outdoor dining or
take-out. As such, the regulations prohibited all
Petitioners from utilizing their business property in
any economically viable way. App. 81a. With certain
expenses continuing regardless of the substantial
restriction of the property’s use, the businesses
suffered continuing losses until the regulations
rendered them largely valueless. App. 85a. Four
years later, Petitioners have yet to fully recover.
B. The Proceedings Below
In July 2021, Petitioners sued Elizabeth Hertel, in
her official capacity as Director of the Michigan
Department of Health and Human Services, Patrick
Gagliardi, acting in his official capacity as Chair-
person of the Michigan Liquor Control Commission,
and Michigan Governor Gretchen Whitmer, acting in
her official capacity, alleging that the Executive
Orders violated the Michigan Constitution’s prohi-
bition on takings without just compensation, Mich.
Const. art. X, § 2, and state tort theories not at issue
here. App. 66a, et seq.
The takings claim alleged that “the operation of
bars, restaurants, and banquet halls in Michigan
necessarily requires an interest in real property in
order to function, either through ownership or lease-
hold interests,” and the shutdown orders “interfered
with and regulated that property and the use of that
property substantially to the point that these proper-
ties have become valueless or largely valueless.” App.
85a. They sought relief of “[j]ust compensation in the
form of monetary damages to Plaintiffs’ businesses for
 11

the regulatory takings perpetrated by Defendants,

including business expenses and lost profits.” Ibid.
The trial court dismissed the takings claims on
summary disposition. App. 29a, et seq. Conflating the
question of whether the government has the police
power to issue regulations with the potential takings
effect of those regulations, the trial court held that,
under federal law, there was no need to discuss the
factors that establish a regulatory taking under Penn
Central. App. 37a (“‘Takings’ jurisprudence instructs
that valid regulations promoting public health, safety
and welfare are not compensable.”). The court
elaborated that “the restrictions put in place . . . were
designed to stop the spread of COVID-19. The orders
advanced legitimate state interests flowing from
traditional police powers and did not result in a taking
under the Michigan Constitution.” App. 39a.
The Court of Appeals of Michigan affirmed the
summary disposition in a per curiam opinion that
explicitly followed the rationale of a companion case,
The Gym 24/7 Fitness, LLC v. Michigan. App. 13a-
19a. Like the trial court, the appellate panel focused
on the government’s purpose in enacting the orders
and emphasized that Petitioners, “for purposes of the
regulatory-takings claim, are not arguing on appeal
that the EOs were imprudent.” App. 19a. And again,
the court viewed that position as dispositive for the
Petitioners. The court concluded: “The upshot is that
Gym 24/7 Fitness is not distinguishable from the
present case. Even if . . . Gym 24/7 Fitness inter-
mingled, to some extent, concepts of taking and
governmental necessity, Gym 24/7 Fitness is binding
caselaw regarding how to view the COVID-19
regulations in Michigan.” Ibid. The court also held
that there was “no fair likelihood that further
 12

discovery would yield support” to the Petitioners’

claims and therefore declined to remand. Ibid.
Petitioners sought leave to appeal to the Michigan
Supreme Court. The parties submitted briefs and
conducted oral argument on the application, simul-
taneously with argument on Gym 24/7’s application
for leave to appeal, after which the court could have
chosen to render a decision on the merits. See MCR
7.305(H)(1). However, on August 30, 2024, the court
denied leave to appeal for both cases. Justices Viviano
and Bernstein dissented, incorporating by reference
their dissent in Gym 24/7. App. 23a-28a.
REASONS FOR GRANTING THE PETITION
I. Certiorari Is Needed to Bring Uniformity and
Clarity to Regulatory Takings Cases
A. Penn Central’s persistent difficulties
Property ownership comes with certain funda-
mental and well-established rights: the right to
exclude, the right to use property for your economic
benefit, and the right to alienate your property as you
wish. United States v. Gen. Motors Corp., 323 U.S.
373, 378 (1945). This Court protects property rights
vigilantly because they are “indispensable to the
promotion of individual freedom” and empower people
“to shape and to plan their own destiny in a world
where governments are always eager to do so for
them.” Cedar Point Nursery v. Hassid, 594 U.S. 139,
147 (2021); Lynch v. Household Fin. Corp., 405 U.S.
538, 544, 552 (1972) (property rights are “an essential
pre-condition to the realization of other basic civil
rights and liberties”).
However, for one of these property rights, its
safeguarding has proven difficult. For over a century,
 13

this Court has recognized that the regulatory taking

of a property owner’s fundamental right to use is just
as much a taking as the exercise of eminent domain.
Mahon, 260 U.S. at 415. Yet determining when a
regulation has crossed the threshold and gone “too
far” has been a nebulous exercise. Ibid. (“The general
rule, at least, is that, while property may be regulated
to a certain extent, if regulation goes too far, it will be
recognized as a taking.”).
Courts try to answer that question with the Penn
Central test. It is an “ad hoc test,” based on all
relevant facts and circumstances, with three factors
warranting “particular significance:” (1) “the econo-
mic impact of the regulation on the claimant;” (2) “the
extent to which the regulation has interfered with
distinct investment-backed expectations;” and (3) “the
character of the governmental action.” Penn Cent., 438
U.S. at 124-25.
But still, what counts as “too far?” Unfortunately,
the test lacks clear boundaries, guidance, or explana-
tion. Neither courts nor litigants know what any of
those factors are supposed to mean or how to evaluate
them. Steven J. Eagle, The Four-Factor Penn Central
Regulatory Takings Test, 118 Penn. St. L. Rev. 601,
602 (2014) (it is “a compilation of moving parts that
are neither individually coherent nor collectively
compatible”). Nor do courts understand how to weigh
the three factors against “other relevant facts and
circumstances.”
Thus, Penn Central vaguely tells courts some of
what to look at, but not how to determine how far is
too far. It is a “nearly vacuous test.” Dist. Intown
Properties Ltd. P’ship v. D.C., 198 F.3d 874, 886 (D.C.
Cir. 1999) (Williams, J., concurring). Its detractors
 14

emerged quickly and the drumbeat of criticism has

continued steadily ever since. See, e.g., James L.
Oakes, “Property Rights” in Constitutional Analysis
Today, 56 Wash. L. Rev. 583, 613 (1981); Michael M.
Berger, Whither Regulatory Takings?, 51 Urb. Law.
171, 201 (2021).
The passage of time has not provided clarity.
Because each of its three factors remain a definitional
mystery, as is the method to apply them, it is not
hyperbole to suppose that if the same set of facts were
presented to ten different courts, the likely output
would be contrasting decisions with ten different
reasons as to why. Consequently, the constitutional
boundaries are no more than guesswork because this
Court’s regulatory takings jurisprudence has been
unable to “prevent[]the public from loading upon one
individual more than his just share of the burdens of
government.” Monongahela Nav. Co. v. United States,
148 U.S. 312, 325 (1893).
For example, lower courts remain conflicted about
whether to consider all the Penn Central factors or
just some of them; and how to weigh the considered
factors against each other. See, e.g., Blackburn v.
Dare Cnty., 58 F.4th 807, 815 (4th Cir. 2023) (“Just as
there is no clear guidance on what exactly the Penn
Central factors encompass, there is no hard and fast
way to weigh them.”); Nekrilov v. City of Jersey City,
45 F.4th 662, 683 (3d Cir. 2022) (Bibas, J., concurring)
(“Applying Penn Central can be hard [because] we do
not know how much weight to give each factor. Courts
often knock out regulatory-takings claims for lacking
one factor. . . . This one-strike-you’re-out practice is
especially troubling because Penn Central overlaps
with per se regulatory takings claims.”).
 15

In 2013, an empirical study of 491 federal cases

found that only 22% of appellate cases and 13% of trial
cases considered and balanced all three factors.
Adam R. Pomeroy, Penn Central After 35 Years: A
Three Part Balancing Test or A One Strike Rule?, 22
Fed. Circuit B.J. 677, 690 (2013). The study also
showed that no two courts apply Penn Central in the
same way. There is no uniformity within trial courts
of the same circuit, within appellate courts of the same
circuit, as between trial courts and appellate courts in
the same circuit, or as between these groups across
circuit boundaries. Id. at 689-90.
The gross disparity in answering the predicate
questions of how many of the Penn Central factors
should be considered and how, or even whether, the
court should weigh them, reflects that the Penn
Central test is incapable of predictably determining
when a regulation of use is contrary to the Fifth
Amendment’s Takings Clause. When courts cannot
agree on even the framework of the test to be applied,
then stare decisis and the equal treatment of litigants
becomes an impossibility. Courts are thus resigned to
casting about in the dark, “with little direct case law
guidance,” Fla. Rock Indus., Inc. v. United States, 18
F.3d 1560, 1570 (Fed. Cir. 1994), hoping only that
“[o]ver time, . . . enough cases will be decided with
sufficient care and clarity that the line will more
clearly emerge.” Id. at 1571. Nearly five decades after
Penn Central, the lower courts are still waiting.
Digging down into the specific factors also yields no
consensus. With regard to economic impact, how
much is enough to weigh this factor in the property
owner’s favor? There is a substantial conflict in how
the lower courts answer that question.
 16

Some courts do not require any particular percen-

tage of economic loss. See, e.g., Heights Apartments,
LLC v. Walz, 30 F.4th 720, 734 (8th Cir. 2022) (in the
context of a COVID-related regulation); Cienega
Gardens v. United States, 331 F.3d 1319, 1340 (Fed.
Cir. 2003) (the threshold is “serious financial loss”);
Yancey v. United States, 915 F.2d 1534, 1541 (Fed.
Cir. 1990) (there is no “automatic numerical barrier
preventing compensation, as a matter of law, in cases
involving a smaller percentage diminution in value”).
Others, however, treat the percentage loss as a
material—and sometimes dispositive—factor, yet
they conflict as to what that percentage loss should be.
See, e.g., Colony Cove Properties, LLC v. City of
Carson, 888 F.3d 445, 451 (9th Cir. 2018) (a 92.5%
diminution in value is not enough to constitute a
taking); Formanek v. United States, 26 Cl. Ct. 332, 340
(1992) (an 87% loss in value satisfies the economic
impact factor); Florida Rock Indus., Inc. v. United
States, 45 Fed. Cl. 21, 36 (1999) (73% loss is
sufficient); Committee for Reasonable Regulation of
Lake Tahoe v. Tahoe Regional Planning Agency, 311
F. Supp. 2d 972, 994 (D. Nev. 2004) (50% loss in value
“stated an economic impact”); FLCT, Ltd. v. City of
Frisco, 493 S.W.3d 238, 273 (Tex. App. 2016) (46%
decline satisfied the “economic impact” factor); Cmty.
Housing Improvement Program v. City of New York,
492 F. Supp. 3d 33, 49-50 (E.D.N.Y. 2020) (a 20%-40%
loss is sufficient to state a claim). And at least one
court held that the economic impact factor is satisfied
only if the owner can show a taking of all economic
use. Greater Chautauqua Fed. Credit Union v. Marks,
No. 1:22-CV-2753 (MKV), 2023 WL 2744499, at *12
(S.D.N.Y. Mar. 31, 2023).
 17

Nor do courts agree as to whether economic impact

measures lost profit or lost property value. Compare
Bordelon v. Baldwin Cnty., No. CV 20-0057-C, 2022
WL 16543269 (S.D. Ala. Oct. 28, 2022) (finding a
taking where the owner was deprived of $600,000 in
lost rent, which equated to approximately 18% of
property value), aff’d No. 22-13958, 2024 WL 302382
(11th Cir. Jan. 26, 2024); with CCA Assocs. v. United
States, 667 F.3d 1239, 1246 (Fed. Cir. 2011) ($700,000
loss in net income, representing 18% of property
value, was not enough to support a taking).
In short, “[n]o one knows how much diminution in
value is required.” Richard A. Epstein, From Penn
Central to Lingle: The Long Backwards Road, 40 J.
Marshall L. Rev. 593, 604 (2007); Robert Meltz,
Takings Law Today: A Primer for the Perplexed, 34
Ecology L.Q. 307, 334 (2007) (noting that “the
Supreme Court has never given us definite numbers”
or “a specified percentage” or any “threshold”).
The second factor—investment-backed expecta-
tions—is equally undefined. Indeed, even this Court
alternatively describes the relevant expectations as
being either “reasonable,” see, e.g., Cedar Point, 594
U.S. at 148; Tahoe-Sierra Preservation Council v.
Tahoe-Sierra Regional Planning Agency, 535 U.S.
302, 342 (2002); E. Enterprises v. Apfel, 524 U.S. 498,
523-24 (1998), or “distinct.” See, e.g., Penn Cent., 438
U.S. at 124; Lingle v. Chevron U.S.A. Inc., 544 U.S.
528, 539 (2005); Lucas v. S.C. Coastal Council, 505
U.S. 1003, 1019 n.8 (1992).
But regardless of nomenclature, no one knows
what the prototypical investment-backed expectation
is. Mark W. Cordes, Takings Jurisprudence as Three-
Tiered Review, 20 J. Nat. Resources & Envtl. L. 1, 35
 18

(2006) (“courts and commentators have often puzzled

over what ‘interference with investments-backed
expectations’ means”); Gideon Kanner, Hunting the
Snark, Not the Quark: Has the U.S. Supreme Court
Been Competent in Its Effort to Formulate Coherent
Regulatory Takings Law?, 30 Urb. Law. 307, 337-38
(1998) (although the “reasonable expectations” consid-
eration often plays a critical role in Penn Central
analysis . . . “no one really knows what [it] . . . means”).
Lacking concrete guidance, “courts have struggled
to adequately define this term” and “beyond the gen-
eral landscape, there is a paucity of clear landmarks
that can be used to navigate the terrain” with “many
areas [] still uncharted.” Philip Morris, Inc. v. Reilly,
312 F.3d 24, 36-37 (1st Cir. 2002); Maine Educ. Ass’n
Benefits Trust v. Cioppa, 695 F.3d 145, 154 (1st Cir.
2012) (“reasonable investment-backed expectations is
a concept that can be difficult to define more
concretely”); Steven J. Eagle, Penn Central and Its
Reluctant Muftis, 66 Baylor L. Rev. 1, 48 (2014) (it is
“woefully unclear”).
Some courts focus on the owner’s investment in the
property after purchase. McNulty v. Town of India-
lantic, 727 F. Supp. 604, 611 (M.D. Fla 1989). Some
focus on whether the owner should have anticipated
specific, but then nonexistent, regulations, to be
enacted in the future. See Rancho de Calistoga v. City
of Calistoga, 800 F.3d 1083, 1091 (9th Cir. 2015);
Englewood Hospital & Med. Ctr. v. New Jersey, 478
N.J. Super. 626, 648 (App. Div. 2024) (property
owners’ expectations “must consider the laws in effect
at that time as well as those which may be adopted by
our Legislature”). Some attempt to discern what an
objective market participant would have expected.
Cienega Gardens, 331 F.3d at 1346. And others
 19

loosely link reasonable investment-backed expecta-

tions to arbitrary and capricious government conduct.
Fla. Rock Indus., 18 F.3d at 1571.
Penn Central’s character prong is similarly
amorphous. Blackburn, 58 F.4th at 813 (“exactly
what this factor refers to is, admittedly, a little
fuzzy”); John D. Echeverria, Making Sense of Penn
Central, 39 Envtl. L. Rep. News & Analysis 10471,
10477 (2009) (“the definition of the term ‘character’ is
a veritable mess” with nine different and often
conflicting definitions). Penn Central linked character
to an “interference” that “can be characterized as a
physical invasion by government.” 438 U.S. at 124.
But thereafter, the Court identified physical invasions
as a separate category of taking; one that is not
dependent on individual facts and circumstances.
Cedar Point, 594 U.S. 139; Loretto v. Teleprompter
Manhattan CATV Corp., 458 U.S. 419, 434 (1982).
Lingle discussed the character prong briefly,
positing examples such as “whether it amounts to a
physical invasion” or instead merely affects property
interests through “some public program adjusting the
benefits and burdens of economic life to promote the
common good.” 544 U.S. at 539. But the Court held
that the examination of the regulation’s means and
ends was irrelevant to takings claims because it
“reveals nothing about the magnitude or character of
the burden a particular regulation imposes upon
private property rights.” Id. at 542; Robert H.
Thomas, Evaluating Emergency Takings: Flattening
the Economic Curve, 29 Wm. & Mary Bill Rts. J. 1145,
1153 (2021) (“The character of the governmental
action does not mean the government’s reasons. It is
not a substitute for a due process or rational basis
test.”) (citation omitted); see also Murr v. Wisconsin,
 20

582 U.S. 383, 414 (2017) (Roberts, C.J., dissenting)

(“The widespread benefits of a regulation will often
appear far weightier than the isolated losses suffered
by individuals.”). The Court offered no guidance on
how to evaluate a regulation’s character as it “adjusts
the benefits and burdens of economic life” without
some sort of “substantially advances” inquiry. That
is, the Court removed one methodological approach
and replaced it with nothing.
The result is jurisprudential turmoil. When
decoupled from physical invasions and the means and
the ends of the regulation, this factor becomes the
source of skepticism. D. Benjamin Barros, At Last,
Some Clarity: The Potential Long-Term Impact of
Lingle v. Chevron and the Separation of Takings and
Substantive Due Process, 69 Alb. L. Rev. 343, 353
(2006) (“the analysis in Lingle illustrates why the
character of the government act generally should have
no role”).
Despite Lingle, many courts continue to focus on
the government’s reasons for the regulation. See 74
Pinehurst LLC v. New York, 59 F.4th 557, 568 (2d Cir.
2023); Brewer v. Alaska, 341 P.3d 1107, 1109 (Alaska
2014). Others more sensibly shift their analysis from
the government’s perspective to that of the property
owner, focusing on whether the claimant was singled
out to bear a public burden. See Cienega Gardens, 331
F.3d at 1340; Kafka v. Montana Dep’t of Fish, Wildlife
and Parks, 348 Mont. 80, 107 (2008) (“The rejection of
the ‘substantially advances’ formula with respect to
the character of the governmental action prong was
simply meant to ensure that courts correctly quantify
the effect of the regulation in terms of actual property
rights and the magnitude of the infringement on those
rights.”); Dep’t of Agriculture & Consumer Services v.
 21

Mid-Florida Growers, Inc., 521 So. 2d 101, 103 (Fla.

1988) (the character of the governmental action asks
about the nature of the action and its effect, not its
intent). And some courts view character as related to
a reciprocity of advantage. Wensmann Realty, Inc. v.
City of Eagan, 734 N.W.2d 623, 640-41 (Minn. 2007)
(“character” prong favors property owner who bears a
“disproportionate” burden of a comprehensive
regulation); Sansotta v. Town of Nags Head, 97 F.
Supp. 3d 713, 735 (E.D.N.C. 2014).
In sum, Penn Central cannot predictably and
consistently determine when regulatory impinge-
ments on property rights have gone “too far” and
violated the Constitution’s prohibition of taking
private property for public use without payment of
just compensation. Lower courts are searching for
clarity. Blackburn, 58 F.4th at 813 (Penn Central “is
a veritable mess. But we must do our best.”) (citation
omitted); Nekrilov, 45 F.4th at 683 (Bibas, J.,
concurring) (discussing the “notoriously hard to
apply” Penn Central test and observing that “though I
am bound by Supreme Court precedent, I can still take
up part of Justice Thomas’s challenge” and suggest a
replacement).
This Court is also keenly aware of Penn Central’s
problems. It should not further delay review of this
troubled area of constitutional law. See Bridge Aina
Le‘a, LLC, 141 S. Ct. at 732 (Thomas, J., dissenting
from denial of certiorari) (“Next year [2022] will mark
a century since Mahon, during which this Court for
the most part has refrained from providing definitive
rules. It is time to give more than just ‘some, but not
too specific, guidance.’”) (cleaned up); Koontz v. St.
Johns River Water Mgmt. Dist., 570 U.S. 595, 614
(2013) (characterizing Penn Central as an “already
 22

difficult and uncertain rule”); E. Enterprises, 524 U.S.

at 540-41 (Kennedy, J., concurring in the judgment
and dissenting in part) (Regulatory takings are
“difficult to explain in theory and to implement in
practice. Cases attempting to decide when a regula-
tion becomes a taking are among the most litigated
and perplexing in current law.”); First Eng. Evangel-
ical Lutheran Church of Glendale v. Los Angeles Cnty.,
482 U.S. 304, 341 n.17 (1987) (Stevens, J., dissenting)
(regulatory takings jurisprudence is “open-ended and
standardless”).
B. This case offers an excellent vehicle to
provide clarity, consistency, and
uniformity to the regulatory takings test
This case highlights the many problems of Penn
Central. But at the same time, it does not implicate
the reliance interests of more typical regulatory
takings claims, such as rent control. Consequently, it
presents a uniquely contained opportunity for this
Court to provide constitutional clarity.
The court below should not have dismissed
Petitioners’ regulatory takings claim as a matter of
law at the pleadings stage. The State prohibited, and
then severely restricted, the use of the Petitioners’
properties, due to no fault of the Petitioners; a
confiscatory action that deprived the Petitioners of the
economic use of their property and destroyed their
reasonable investment-backed expectations. While
the government has the police power to single out
private property to bear the cost of public use, the
Takings Clause ensures that such burdens are spread
across the general public by compensating the
targeted property owners.
 23

The protection of fundamental property rights

remains out of reach. The problem with a hopelessly
indeterminate regulatory takings test is that mean-
ingful appellate review becomes an impossibility.
Herein, the two dissenting Justices from the Michigan
Supreme Court adopted their dissent from Gym 24/7
(App. 26a-27a), in which they repeatedly discussed
Penn Central’s lack of guidance and direction and
noted that these deficiencies have “left courts to
struggle” in evaluating regulatory takings claims. The
Gym 24/7 Fitness, LLC v. Michigan, 10 N.W.3d 443,
448 (Mich. 2024) (Viviano, J., dissenting). They found
this lack of clarity to be so pronounced that despite the
dissent’s disagreement with the legal determinations
made by the Court of Appeals, “given the lack of
guidance from the Supreme Court on the proper
application of the Penn Central factors, it may be
unfair to fault the Court of Appeals for its cursory
application of the factors.” Ibid. Consequently, they
opined that it was their judicial duty to provide clearer
and better guidance to the lower courts. Id. at 452
(“By denying leave we not only fail to provide guidance
to lower courts on how to analyze claims under Penn
Central, but we also damage the credibility of the
judiciary to serve as a bulwark of our liberty and
ensure that the government does not take private
property without just compensation[.]”); App. 28a
(same).
The dissenters also expanded on their Gym 24/7
opinion, noting that “[Petitioners] in this case have an
even stronger argument that the Court of Appeals
erred in its Penn Central analysis.” App. 27a. The
restrictions placed upon food and beverage businesses
were “unique” and “would affect all three Penn
Central factors.” Ibid. The dissent opined that
 24

amongst the facts and circumstances surrounding 140

Executive Orders and dozens of MDHHS orders, there
were complex facts that warranted this case
proceeding past the pleadings stage. Ibid.
The confusion is evident. Each Michigan opinion
considered the same facts. But they produced widely
conflicting opinions that lacked any consensus about
how to apply the Penn Central factors to those facts.
With regard to character, it is appropriate to
consider both Mount Clemens and Gym 24/7. The
Court of Appeals in Mount Clemens adopted its Gym
24/7 opinion as precedent, and in both, character was
evaluated independent of the property’s specific use.
At the same time, Mount Clemens took issue with the
Gym 24/7 analysis and further relied upon a second
distinct interpretation of what this Penn Central
factor means. When taken together—the Mount
Clemens Court of Claims decision and the Court of
Appeals affirmation, plus the precedential Gym 24/7
decision and the Court of Claims opinion that it
reversed, and the Mount Clemens Michigan Supreme
Court dissent—there are five different and conflicting
evaluations of the character of the same regulation
and the same facts under Penn Central.
Interpretation No. 1. The Court of Claims in Mount
Clemens held that the public purpose of the regulation
transcended any takings implications because the
regulations were enacted to protect the public health
and stop the spread of COVID: “Takings juris-
prudence instructs that valid regulations promoting
public health, safety and welfare are not compen-
sable.” App. 37a. Consequently, it did not reach the
Penn Central factors.
 25

Interpretation No. 2. Before the Court of Claims in

Gym 24/7, the government made substantially the
same argument on the same facts. However, the
Court of Claims in that case held the general public
purpose of the regulation to be insufficient. Because
the government failed to produce any evidence as to
why the specific property at issue was subject to
closure, the trial court denied summary disposition
and allowed the petitioner’s Penn Central case to
proceed to discovery. The Gym 24/7 Fitness, LLC v.
Michigan, No. 20-000132-MM, 2020 WL 6050543, at
*3 (Mich. Ct. Cl. Sept. 24, 2020).
Interpretation No. 3. The Court of Appeals in Gym
24/7 reversed the trial court using a different evalu-
ation of Penn Central’s character prong. It engaged in
the Penn Central balancing test. However, while
acknowledging the lack of any evidence supporting
the government’s shutdown order of the fitness
centers, it held that general considerations of the
public health so heavily tipped the “character” factor
in the government’s favor that it justified dismissal of
the regulatory takings claim. The Gym 24/7 Fitness,
LLC, 989 N.W.2d at 863.
Interpretation No. 4. The Court of Appeals in
Mount Clemens adopted the Gym 24/7 decision as
precedent. App. 19a (“Even if one could argue that the
Court in Gym 24/7 Fitness intermingled, to some
extent, concepts of taking and governmental neces-
sity, Gym 24/7 Fitness is binding caselaw regarding
how to view the COVID-19 regulations in Michigan.”).
Yet despite the court’s view that it was bound by Gym
24/7, it also concluded that “caselaw supports” that
“the government’s purpose in making the restrictive
regulations is not pertinent to a regulatory-takings
analysis under Penn Central.” App. 17a (citing Lingle,
 26

544 U.S. at 544). Thus, the Court of Appeals below

reviewed a second alternate analysis of the character
factor. Without any factual findings, and contrary to
Petitioners’ allegations in their complaint, App. 80a-
81a, the court found that the regulations’ impact was
spread evenly amongst Petitioners and the general
public because “the actions challenged here applied to
all similarly situated property owners.” App. 18a.
Interpretation No. 5. The Michigan Supreme Court
dissenters below incorporated their opinion from Gym
24/7. App. 26a-27a. That decision disagreed with
how the Gym 24/7 Court of Appeals opinion viewed
character. Gym 24/7 Fitness, LLC, 10 N.W.3d at 450
(“The Court of Appeals also improperly analyzed the
third factor, the character of the governmental
action.”). Instead, the dissenters viewed the
regulation along a spectrum, with physical takings at
one end and regulations that equally burdened all
citizens on the other. Id. at 450-51. The Executive
Order was “in the middle of this spectrum,” and
definitely burdened the Petitioners, but the dissent
could go no further absent more evidence. Id. at 451.
These widely divergent opinions, addressing the
same facts, demonstrate the utter lack of clarity and
consistency with respect to the character prong of
Penn Central.
Regarding the other Penn Central factors, the
opinions in Mount Clemens echo those adopted in Gym
24/7. App. 26a-27a. The Michigan Supreme Court
dissenters believed that the character prong “may” be
relevant but that economic impact was the most
important factor. Gym 24/7 Fitness, LLC, 10 N.W.3d
at 448. They also opined that it was “questionable” for
the Court of Appeals to weigh the first two factors less
 27

than the third factor. Ibid. Conversely, the Court of

Appeals in Mount Clemens (and Gym 24/7) held that
character was the key factor and that the others had
minimal importance. App. 14a-15a; Gym 24/7
Fitness, LLC, 989 N.W.2d at 863.
The incorporated Gym 24/7 dissent also was less
definitive than the Mount Clemens Court of Appeals’
as to whether economic impact weighed in the
Petitioners’ favor. Compare App. 14a with Gym 24/7
Fitness, LLC, 10 N.W.3d at 449. While both the
dissent and the Court of Appeals weighed reasonable
investment-backed expectations in the petitioners’
favor, the dissent did so as a factual matter, Gym 24/7
Fitness, LLC, 10 N.W.3d at 450, whereas the Court of
Appeals resolved it as a legal determination. App.
14a.
The vagueness of Penn Central also creates judicial
conflict in terms of the courts’ role in applying the
Penn Central factors to the facts of a regulatory
takings case. The Michigan Supreme Court dis-
senters interpreted Penn Central’s ad hoc test to mean
that once the factors were sufficiently pled, the case
moved onward to discovery. App. 27a-28a. As they
stated in the incorporated Gym 24/7 decision,
“further factual development is also necessary to
determine the proper weight to be given to each factor.
I fail to understand how the Court of Appeals could
possibly analyze—let alone determine what weight to
give—each of the Penn Central factors without a full
understanding” of the facts.” Gym 24/7 Fitness, 10
N.W.3d at 451. Conversely, the Court of Appeals
below viewed its initial role under Penn Central more
expansively, requiring it to weigh the facts only as
pled and render a judgment as a matter of law. With
Penn Central silent as to the definition and proper
 28

application of all these legal criteria, the lower courts

are in need of clarity. A rule of constitutional law that
creates materially disparate decisions based on the
exact same facts—differing not only in the final result
but in how the final result was achieved—is one that
strongly warrants this Court’s review.
C. A viable solution based on the
traditional adjudication of property
rights
The absence of concrete guidelines erodes the rule
of law. No one knows what a regulatory taking
actually is, nor the scope of protection provided by the
Fifth Amendment’s Takings Clause. Conflicting legal
decisions are inevitable because Penn Central’s
factors cannot answer how far is too far in any way
that offers guidance to future disputes. This nullifies
the function of stare decisis and underprotects
property owners’ fundamental right to use. Courts,
property owners, and government regulators are left
adrift.
A takings test grounded upon the property owner’s
market-based, reasonable rate of return is one solu-
tion to restoring the traditional understanding of the
scope of real property rights and remedying the
problems caused by Penn Central.
The reasonable rate of return played a substantial
role within Penn Central itself. 438 U.S. at 136 (“the
law does not interfere with what must be regarded as
Penn Central’s primary expectation concerning the
use of the parcel . . . not only to profit from the
Terminal but also to obtain a reasonable return on its
investment”); id. at 136 n.13 (“if an owner files suit
and establishes that he is incapable of earning a
‘reasonable return’ on the site in its present state, he
 29

can be afforded judicial relief”); id. at 149-50

(Rehnquist, J., dissenting) (“The Court has fre-
quently held that, even where a destruction of
property rights would not otherwise constitute a
taking, the inability of the owner to make a reasonable
return on his property requires compensation under
the Fifth Amendment.”); William W. Wade, Sources of
Regulatory Takings Economic Confusion Subsequent
to Penn Central, 41 Envtl. L. Rep. News & Analysis
10936, 10942 (2011) (“Fundamentally, the Penn
Central test requires a showing that [distinct invest-
ment-backed expectations] have been frustrated; i.e.,
the investment is not earning a reasonable or
competitive return on the investment.”).
This principle echoes throughout other cases of this
Court and in lower courts. Pennell v. City of San Jose,
485 U.S. 1, 21-22 (1988) (Scalia, J., concurring);
MacDonald, Sommer & Frates v. Yolo Cnty., 477 U.S.
340, 350 (1986); Kirby Forest Indus., Inc. v. United
States, 467 U.S. 1, 14 (1984); Cienega Gardens, 331
F.3d at 1341-43; Fla. Rock Indus., 45 Fed. Cl. at 39;
Wheeler v. City of Pleasant Grove, 833 F.2d 267, 271
(11th Cir. 1987); Nemmers v. City of Dubuque, 764
F.2d 502, 504-05 (8th Cir. 1985).
The rate of return is a measure of the fundamental
right to the profitable use of property. That right was
recognized by English law and made its way into the
early common law of the states. See 1 Edward Coke,
Institutes, ch. 1, § 1 (1st Am. ed. 1812) (“[F]or what is
the land but the profits thereof[?]”); Green v. Biddle,
21 U.S. 1, 74-75 (1823) (“The common law of England
was, at that period, as it still is, the law of that State;
and we are informed by the highest authority, that a
right to land, by that law, includes . . . [the right] to
receive the issues and profits arising from it.”);
 30

Heinlen v. Martin, 53 Cal. 321, 345 (1879) (a fee owner

is entitled to “enjoy the fruits of the land” and the
rental value therefrom); Woodruff v. Neal, 28 Conn.
165, 167 (1859) (The rights of property include “every
use and profit which can be derived from it[.]”); Baxter
v. Brand, 36 Ky. 296, 300 (1838) (the rightful owner of
the land was entitled to “the reasonable profits of the
land” starting from the vesting of title); Stackpole v.
Healy, 16 Mass. 33, 34 (1819) (the common law rights
of property owners include “every use to which the
land may be applied, and all the profits which may be
derived from it”); Thomas M. Cooley, A Treatise on the
Constitutional Limitations Which Rest upon the
Legislative Power of the States of the American Union,
1160-61 (8th ed. 1927) (“any regulation which
deprives any person of the profitable use of his
property constitutes a taking . . . unless the invasion
of rights is so slight as to permit the regulation to be
justified under the police power.”).
The protection of this right reflects that “[t]he
framers of the constitution intended to protect rights
which are worth protecting; not mere empty titles, or
barren insignia of ownership, which are of no substan-
tial value,” including “all the essential elements of
ownership which make property valuable. Among
these elements is, fundamentally, the right of user.”
Eaton v. Bos., C. & M.R.R., 51 N.H. 504, 512 (1872).
See also John M. Groen, Takings, Original Meaning,
and Applying Property Law Principles to Fix, 39 Touro
L. Rev. 973, 986-89 (2024) (reviewing sources includ-
ing William Blackstone, James Madison, Founder and
Justice James Wilson, and Noah Webster). As a
matter of history and tradition, the rights to rents and
profits are therefore part of the possessory bundle of
rights inextricably bound to the property itself.
 31

Stevens v. Worrill, 73 S.E. 366, 367 (Ga. 1911); Allied

Credit Corp. v. Davis (In re Davis), 989 F.2d 208, 212-
13 (6th Cir. 1993).
This Court also has experience determining the
rate of return in takings cases pertaining to public
utilities. See, e.g., Verizon Commc’ns, Inc. v. F.C.C.,
535 U.S. 467, 481 (2002); Duquesne Light Co. v.
Barasch, 488 U.S. 299, 310 (1989); see Missouri ex rel.
Sw. Bell Tel. Co. v. Pub. Serv. Comm’n of Missouri,
262 U.S. 276, 287-91 (1923) (Brandeis, J., concurring).
While public utilities differ from free market
commercial enterprises, the Court’s ability to assess
when the deprivation of a reasonable rate of return is
confiscatory can help inform a revised regulatory
takings test. See, e.g., Stone v. Farmers’ Loan & Tr.
Co., 116 U.S. 307, 331 (1886) (“Under pretense of
regulating fares and freights, the state cannot require
a railroad corporation to carry persons or property
without reward; neither can it do that which in law
amounts to a taking of private property for public use
without just compensation[.]”); Covington & L. Turnp.
Road Co. v. Sandford, 164 U.S. 578, 594-95 (1896)
(allowing property owners to “make their proofs” to
show confiscatory nature of regulation that “destroy[s]
the value of the property for all the purposes for which
it was acquired”); Los Angeles Gas & Elec. Corp. v.
R.R. Comm’n of Cal., 289 U.S. 287, 305-06 (1933)
(“Just compensation is a fair return upon the
reasonable value of the property” and “judicial
ascertainment of value for the purpose of deciding
whether rates are confiscatory is not a matter of
formulas, but there must be a reasonable judgment,
having its basis in a proper consideration of all
relevant facts.”) (cleaned up).
 32

A reasonable rate of return test would answer the

question of “how far is too far” with clarity and
predictability. It is a known delineator but one that,
within the rate determination, allows for flexibility
and ad hoc determinations based upon market factors
and circumstances particular to the owner and the
regulation at issue. It identifies when a regulation, as
applied, has singled out a property owner to bear the
burden of public use. But at the same time, a test
grounded in the reasonable rate of return will
recognize that not every diminution in value arising
from a land use regulation gives rise to Fifth
Amendment liability. Goldblatt v. Town of
Hempstead, 369 U.S. 590, 592 (1962) (there is no
constitutional entitlement to the property’s most
beneficial use); Mahon, 260 U.S. at 413 (“government
hardly could go on if to some extent values incident to
property could not be diminished without paying for
every such change in the general law”).
The reasonable rate of return analysis is also
related to, but more precise than, Penn Central’s
economic impact and reasonable investment-backed
expectations factors. Thus, if it chose, the Court could
situate a rate-of-return analysis within Penn Central
and other regulatory takings cases.
Here, Michigan’s shutdown order forced
Petitioners to stop using their property for its
intended commercial purpose and instead use it as a
protective shield for public health. Obviously, “[t]he
requirement that compensation be made for public
use imposes no restrictions upon the power of the
state to make reasonable regulations to protect life
and secure the safety of its people.” City of Belleville
v. St. Clair Cnty. Turnpike Co., 84 N.E. 1049, 1053 (Ill.
1908). However, the failure to compensate the
 33

property owner cannot be squared with the traditional

understanding that commercial property’s primary
and defining use is that of generating income.
Accordingly, this case presents an ideal oppor-
tunity for this Court to provide a clear, consistent, and
uniform rule of law for determining “how far is too
far.” See Antonin Scalia, The Rule of Law As a Law of
Rules, 56 U. Chi. L. Rev. 1175, 1179 (1989) (the
adoption of a “totality of circumstances” test “is effec-
tively to conclude that uniformity is not a particularly
important objective[.] This last point suggests
another obvious advantage of establishing as soon as
possible a clear, general principle of decision:
predictability.”).
 34

CONCLUSION
This Court should grant the petition.

Respectfully submitted,
JONATHAN M. HOUGHTON
Counsel of Record
DEBORAH J. LA FETRA
Pacific Legal Foundation
3100 Clarendon Boulevard,
Suite 1000
Arlington VA 22201
(202) 888-6881
[email protected]
ALBERT B. ADDIS
Michigan Justice, PLLC
18 First Street
Mt. Clemens MI 48043
(586) 221-4100
Counsel for Petitioners
JANUARY 2025.