Rose Acre Farms is large, family-owned egg producer headquartered in Indiana. It operates eight egg farms. In 1990 and early 1991, the United States Department of Agriculture (USDA) detected signs of salmonella on three of Rose Acre Farms’ farms. The three affected farms in total had approximately 307,000 chickens in 69 “layer houses.” USDA imposed restrictions on the affected layer houses for approximately 25 months requiring the diversion of nearly 700 million healthy eggs to a lower priced alternative market, resulting in losses exceeding $9.2 million. Rose Acre contended that available screening methods could have readily distinguished healthy from salmonella-infected eggs, but the USDA chose the over inclusive method of restricting all eggs from affected layer houses. Rose Acre brought a claim for a partial regulatory taking in the Court of Federal Claims for the lost value of the healthy eggs and the court found in favor of Rose Acre Farms. Rose Acre Farms, Inc. v. United States, 55 Fed. Cl. 643 (2003). The Court of Appeals for the Federal Circuit reversed and remanded for reconsideration of several elements of the Penn Central partial regulatory takings test. Rose Acre Farms, 373 F.3d 1177 (Fed. Cir. 2004).
A principal issue for the Federal Circuit was the definition of the affected property to be considered when conducting a Penn Central partial regulatory taking. The extent of the affected property is significant for the test because percentage diminution in value of the affected property caused by the regulation is a major aspect of the Penn Central test. The terminology from Penn Central indicates that the analysis is to be performed on the “parcel as a whole,” a phrase that gives little guidance in the area of personal property. Even in regard to real property, different courts have interpreted the phrase in different ways. The Court of Federal Claims considered the affected layer houses as the “parcel as a whole” and awarded recovery, while the Federal Circuit considered the affected farms as the “parcel of the whole” and indicated that there was little likelihood of recovery. Rose Acre petitioned the United States Supreme Court for certiorari. No. 04-1149 (U.S.).
NELF, together with Defenders of Property Rights, the United Egg Producers, and the Iowa Poultry Association submitted an amicus brief supporting the petition. NELF argued that the doctrinal confusion around the meaning of “parcel as a whole,” especially in regard to personal property, warrants granting certiorari to set standards for determining the extent of affected property under the Penn Central test. On June 6, 2005, the Supreme Court denied certiorari.