131 F. Supp. 3d 1088
E.D. Wash.2015Background
- King Mountain Tobacco Company challenged FETRA assessments levied on tobacco manufacturers, seeking summary judgment declaring them unconstitutional.
- The government invoiced assessments; companies wired payments voluntarily to USDA; nonpayment resulted in interest, not physical seizure.
- King Mountain argued FETRA assessments are (1) a per se taking (analogous to Home v. USDA), (2) a regulatory taking under Eastern Enterprises, and (3) violative of Due Process, Equal Protection, and the Unconstitutional Conditions doctrine.
- The court held an evidentiary posture on summary judgment and heard oral argument; the court previously set out factual/procedural background in a separate order.
- The court denied summary judgment and remanded to USDA/CCC solely for a hearing on the accuracy of King Mountain’s assessment amounts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Takings — per se (physical taking/monetary exaction) | FETRA assessments are a per se taking akin to Home where property (money) was taken. | Assessments involved invoiced payments; no government physical occupation or specific property seizure; taxes/fees not takings. | Denied — not a per se taking; no physical invasion or identifiable property appropriation. |
| Takings — regulatory (Eastern Enterprises) | FETRA imposes retroactive, substantial financial burdens like Eastern Enterprises. | Eastern is not controlling to convert general monetary liabilities into takings; FETRA targets no specific property interest. | Denied — FETRA is an obligation to pay, not a taking of an identified property interest. |
| Due Process (retroactivity/unfair burden) | FETRA remedies past industry conduct and thus is retroactive and irrational as applied to King Mountain. | Assessments are based on current quarterly market share, serve legitimate legislative purpose, and are rationally related to transition goals. | Denied — FETRA serves a legitimate purpose and is not retroactive as applied to King Mountain. |
| Equal Protection / Unconstitutional Conditions | FETRA treats smaller companies unequally and coerces cessation of commerce via burdens. | Assessments are proportionate to each manufacturer’s market share; no denial of benefit or coerced surrender of rights. | Denied — assessments are proportionate; no unequal treatment or coercion found. |
Key Cases Cited
- Home v. USDA, 135 S. Ct. 2419 (2015) (holding mandatory physical set-aside of raisins constituted a physical taking)
- Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005) (framework distinguishing per se and regulatory takings; Penn Central balancing applies when no per se rule)
- Eastern Enterprises v. Apfel, 524 U.S. 498 (1998) (plurality/concurring opinions on when retroactive monetary liabilities may implicate takings or due process)
- Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978) (establishing multi-factor balancing test for regulatory takings)
- Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) (regulatory per se takings when regulation deprives owner of all economically beneficial uses)
- Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) (physical occupation by government is a categorical taking)
- Koontz v. St. Johns River Water Mgmt. Dist., 133 S. Ct. 2586 (2013) (monetary exactions tied to a specific property interest can be treated as takings; taxes/fees generally are not takings)
- Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155 (1980) (certain appropriations of identifiable monetary funds held to be takings under specific facts)
- Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302 (2002) (discussing paradigmatic takings and regulatory takings distinctions)
- United States v. Causby, 328 U.S. 256 (1946) (government use of airspace implicating property rights)
- United States v. General Motors Corp., 323 U.S. 373 (1945) (government occupation of leasehold as a taking)