Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 11

In an effort to protect the community from salmonellainfected eggs, the U.S. Department of Agriculture (USDA) issued interim regulations that restricted the interstate sale and transportation of eggs and poultry from flocks determined under the regulations to be contaminated. If a federal or state representative traced an outbreak to a flock, then the flock would be designated a "study flock." The USDA would collect samples from the study flock to determine whether the birds were infected. If any of these tests came out positive, the flock would then be designated a "test flock," and its movement in interstate commerce would be restricted. In addition, a number of birds from the test flock would be killed so that their blood and internal organs could be tested. If those tests came back positive in even a single bird, the flock would be deemed an "infected flock" until either the flock was retested with no positive results, or the flock's housing was depopulated, cleaned, disinfected, and repopulated with new birds.
In 1990, salmonella outbreaks were traced to three houses belonging to Rose Acre Farms, and flocks from those houses subsequently tested positive. As a result, the USDA labeled them "test flocks" and restricted their interstate movement. For organ testing, USDA officials removed and killed sixty hens from each of the three houses. At least one hen tested positive, so the houses were designated as "infected houses." Initially, Rose Acre attempted retesting to see whether the flocks would pass inspection; when that proved fruitless, Rose Acre began to depopulate and sanitize the houses. The houses were empty for long periods of time while awaiting USDA inspection. The restrictions on the three houses were not lifted until 1992. In the meantime, Rose Acre was able to sell the eggs from those houses (which comprised 43% of its total egg production) only to breaker plants where eggs are pasteurized for use in products such as cake mixes; the value of eggs sold to these plants is reduced by 10%. Rose Acre filed suit pursuant to the Fifth Amendment, alleging an uncompensated taking of its eggs and hens. Was this a "taking" for Fifth Amendment purposes? What result? [ Rose Acre Farms, Inc. v. United States , 559 F.3d 1260 (2009), cert. denied, Rose Acre Farms, Inc. v. United States , 130 S.Ct. 1501 (2010).]