Huntleigh USA Corporation v. United States
United States Court of Federal Claims
No. 03-2670C (2005)
- Written by Liz Nakamura, JD
Facts
Huntleigh USA Corporation (Huntleigh) (plaintiff) was an airport security contractor that provided passenger and baggage screening services at 35 airports nationwide. Huntleigh provided its services under contracts with multiple major and regional airlines, which renewed in three-year terms. Huntleigh invested significantly in security-checkpoint infrastructure and workforce training to fulfill its contractual duties and provided its security services in full compliance with all federal laws. Following the September 11, 2001 terrorist attacks, the federal government (defendant) enacted the Aviation and Transportation Security Act. The act created the Transportation Security Administration (TSA) and federalized the entire airport security industry, which had previously been operated by private contractors, like Huntleigh. The act included a nine-month transition period, during which private contractors, operating under interim government contracts, would continue to fulfill airport security functions while TSA worked to replace private screeners with federal screeners. At the end of the transition period, TSA would be the sole provider of airport security services and all existing private aviation security contracts, including Huntleigh’s, would be eliminated. Huntleigh sued the government in the Court of Federal Claims, arguing that the act violated the Takings Clause because it appropriated Huntleigh’s contracts, goodwill, and going-concern value for public use without compensation. The government moved to dismiss, arguing that Huntleigh was not entitled to compensation under the Takings Clause (1) because the act was a valid exercise of the government’s police power; and (2) because Huntleigh’s property rights only existed subject to federal regulations, those property rights could also be eliminated by federal regulation.
Rule of Law
Issue
Holding and Reasoning (Margolis, J.)
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