Wilcox Files Supreme Court Brief

Bryce J. Wilcox recently filed a Petition for Writ of Certiorari to the United Sates Supreme Court in a case alleging that the United States Government improperly took the property of numerous sugar beet growers without paying just compensation, in violation of the Fifth Amendment of the United States Constitution.

Lukins & Annis and Wilcox represent a number of sugar beet growers from central Washington who contracted with Pacific Northwest Sugar Company (“PNSC”) to process their 2000 crop into refined sugar. To ensure that they were paid by PNSC for their sugar beets, the growers obtained liens over their beets, the sugar that was to be refined therefrom, and all proceeds. These liens are recognized as “property” under both state and federal law. After obtaining these liens, PNSC received a number of loans from the United States Government, which also obtained lien rights. Despite the fact that the Government’s liens were obtained after the growers’ liens, the Government claimed to have “super priority” over the growers’ liens as a consequence of federal legislation. Because PNSC did not have the funds to pay the growers for their beets and the Government used the growers’ sugar and proceeds to repay its loans, the growers did not get paid.

When the Government physically seizes property (as for a highway or a park, for example), the Fifth Amendment requires that it pay just compensation. Similarly, when there is a serious, sustained physical invasion of property (as in the case of low overflying aircraft, for example), the Constitution requires payment of compensation equal to the difference between the market value before and after the invasion. Based on this rationale, the United States Supreme Court has previously held that the total destruction of lien rights by the Government is also a “taking” under the Fifth Amendment for which “just compensation” must be paid.

The central issue presented to the United States Supreme Court is whether the federal Government can dictate what constitutes “property” for a takings analysis under the Fifth Amendment. Historically, what constitutes property is left to the individual states. Here, however, the Government asserts that through prior legislation, federal law defined the extent of the growers’ property rights, not state law. Therefore, the Government asserts the growers never had any state-law protected property right in their sugar beet liens, as they were acquired after the federal legislation was enacted. If this position stands, it would allow the Government to legislate around the Fifth Amendment by redefining what constitutes “property” under state law. The growers have asked the Supreme Court to rule that state not federal law must be used to determine what constitutes compensable property under the Fifth Amendment, thus preventing the Government from legislatively limiting the Fifth Amendment. This is an important case with significant potential impacts on public policy and the relationship between states and the federal Government in addressing property issues. Click Here to read the petition.

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