BTW what follows is not legal advice, just my thoughts on this matter.
Our local mayor declared a state of emergency in Jackson, Tennessee, and today he ordered local bars to close, restaurants to limit occupancy at 50% capacity, and grocery stores and pharmacies to reserve the first hour of operations for customers 65 and older. My city is not alone in taking action; local governments across Tennessee and around the country have taken similar actions or likely will be. Can the government do this? When local governments order businesses to close, must the government compensate the businesses?
Unlike the president, state and local governments have the power to order businesses to close to protect the health of the people. This is called the police power. The police power rests with the states, and when the states create local governments, the states share this power with the local governments.
Under this authority, local governments can close businesses or restrict hours to prevent the spread of disease. Although the Fourth Amendment or due process might be implicated at some point, plaintiffs haven’t fared too well in similar cases. For example, plaintiffs filed lawsuits following local and state government quarantines in response to Ebola. See Liberian Community Association of Connecticut v. Malloy, 2017 WL 4897048 (D.CT March 30, 2017, Covello, J.); Hickox v. Christie, 205 F.Supp.3d 579 (D.NJ 2016). The courts concluded that the police power allowed the governments to quarantine these persons. But what about closing businesses?
The same principle applies. If it is necessary to protect the people from disease, the state or local governments can order businesses closed. Yes, the Fifth Amendment does have a clause that requires the government to compensate an owner when the government takes property for a public purpose. But the police power is a well-recognized exception.
When the government acts pursuant to its police power, the Constitution does not require compensation. See Patty v. United States, 136 Fed.Cl. 211, 213 (2018) (citing Mugler v. Kansas, 123 U.S. 623 (1887)). This does not mean that the government can avoid compensation by claiming it is acting under its police power. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). "The distinction between an exercise of the police power and a constitutional taking has been characterized since Mugler as 'whether the governmental action operates to secure a benefit for or to prevent a harm to the public.'" Id. at 214 (quoting Morton Thiokol, Inc. v. United States, 4 Cl. Ct. 625, 630 (1984)). The facts surrounding the government's actions are important in making this determination. Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978).
Based on the current situation, it appears that state and local governments have the power to take action to stop the spread of disease. The length of closures or other restrictions must be reasonable in light of the facts.
