The opinion of the court was delivered by: CALDWELL
William W. Caldwell United States District Judge
I. Introduction and Background.
The extent and duration of the quarantine as it applied to plaintiffs is not in dispute.
Their hatchery, "Case Farm Hatchery" is located in Brodbecks, York County, Pennsylvania. After the discovery of the influenza virus, the federal and state governments, through the United States Department of Agriculture and the Pennsylvania Department of Agriculture, imposed a quarantine on certain areas of York County on November 16, 1983. Thereafter, other areas of the county were added as the virus was monitored. Plaintiffs came within the quarantine on December 27, 1983, when a highly pathogenic form of the virus was discovered on a farm about fifteen miles away.
Plaintiffs' flocks, however, were never shown to have been infected and were never destroyed or depopulated. Nevertheless, the quarantine regulations imposed the following restrictions on plaintiffs' business activities. Plaintiffs were permitted to move poultry eggs for use as food which came from poultry not exposed to highly pathogenic influenza interstate and intrastate from the quarantine area, provided certain security conditions were met. They could also ship day old poultry inside the quarantine zone and were also permitted to buy hatching eggs outside the quarantine zone, hatch them on plaintiffs' premises, and sell the birds outside the zone but inside Pennsylvania. The quarantine on the plaintiffs was lifted on June 7, 1984. Other portions of York County were released from quarantine on July 27, 1984.
Significantly, the plaintiffs' business does not consist simply of selling table eggs and poultry for food. Rather, they almost exclusively hatch chickens, ducklings, guinea keets, turkey poults and game birds, and sell them as day olds. Ninety-five per cent of plaintiffs' business consists of selling day old birds via the mail to small backyard flock owners in the continental United States and occasionally Alaska, Hawaii and Puerto Rico. Five per cent of their business comes from the sale of table eggs, hatching eggs, books, poultry supplies and equipment. Plaintiffs purchase their breeding stock a year in advance so that they had incurred ninety per cent of their costs before the quarantine was imposed upon them. Their business is seasonal with the vast majority of it occurring between March and June each year.
A. Plaintiffs Have Failed to Set Forth a Valid Claim For a Taking Without Just Compensation.
The fifth amendment provides that private property shall not "be taken for public use, without just compensation." U. S. Const. amend. V. Recent cases have set forth the standard to be used in determining whether a taking under the fifth amendment has occurred. Three significant factors are to be considered: (1) the economic 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. Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 106 S. Ct. 1018, 89 L. Ed. 2d 166 (1986) and cases cited therein. See also Keystone Bituminous Coal Association v. Duncan, 771 F.2d 707 (3d Cir. 1985), cert. granted, 475 U.S. 1080, 106 S. Ct. 1456, 89 L. Ed. 2d 714 (1986). The Supreme Court has also emphasized, however, that there is no "set formula for identifying a 'taking' forbidden by the Fifth Amendment." Connolly, supra at , 106 S. Ct. at 1026, 89 L. Ed. 2d at 178-79. Instead, an ad hoc factual inquiry into the circumstances of each particular case is necessary.
The federal and state defendants, although filing separate motions and briefs, have essentially made the following common argument that no taking has occurred in the circumstances of this case. First, they emphasize that the governmental actions in this case were taken in the public interest and were valid exercises of the police power to protect the public health and welfare. The defendants point to the importance of the poultry industry to the nation's economy (Affidavit of Dr. Max A. van Buskirk, paras. 24-26) and the need as well to prevent avian influenza from spreading to other states. (Affidavit of Gerald J. Fichtner, para. 12). Under similar circumstances in the past, the Supreme Court has found the governmental actions constitutional and has rejected fifth amendment due process claims.
Second, defendants argue that, in any event, no taking has occurred here because, at most, plaintiffs were denied only one use of their property - sale of day old birds interstate, and intrastate outside the quarantine area. Plaintiffs were still able to use their property in accordance with the restrictions set out above. Defendants rely upon those cases which have viewed a plaintiff's interest, as a "bundle of property rights" and when only one "strand" of the bundle has been destroyed, there has been no taking. See Penn Central Transportation Co. v. New York City, 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978).
Finally, the state defendants argue that the character of the governmental action overcomes the plaintiffs' claim that a ninety-five per cent drop in sales effectively constitutes a taking of all their property rights in their breeding stock and hatchery business. This argument is tied into plaintiffs' reasonable expectations as to how the property may be used. The governmental action here was designed to further the public interest. "Since a property owner's reasonable expectations as to the possible uses of his property are always circumscribed by the limitations on its use that may be imposed by the state in the public interest," Keystone Bituminous, supra, 771 F.2d at 716-17, there can be no claim here that a taking has occurred regardless of the severity of the economic impact upon plaintiffs.
Plaintiffs argue that the validity, or lack thereof, of the exercise of the police power is irrelevant to the taking analysis. The emphasis should simply be on whether there has been a taking without just compensation. Discussing several Supreme Court cases, along with the Keystone Bituminous case, supra, and Florida Rock Industries, Inc. v. United States, 791 F.2d 893 (F. Cir. 1986), plaintiffs contend that the following considerations lead to the conclusion that a taking has occurred. First, the quarantine effectively denied plaintiffs the one viable economic use of their property, the sale of live chicks and other birds. Second, although there was no physical invasion of the property, there was an interference equivalent to such an invasion because plaintiffs' right to own breeding stock and produce hatching eggs meant nothing when plaintiffs could not ship interstate. Third, plaintiffs' business decreased in value 95 per cent. Finally, there was a frustration of reasonable, investment-backed expectations because plaintiffs had incurred ninety per cent of their costs before the quarantine was imposed on them and were fully expecting to conduct business as usual before defendants effectively shut them down.