Ruckelshaus v. Monsanto Co.

467 U.S. 986, 104 S. Ct. 2862 (1984)

 

RULE:

The inquiry into whether a taking has occurred is essentially an "ad hoc, factual" inquiry. The court has identified several factors that should be taken into account when determining whether a governmental action has gone beyond "regulation" and effects a "taking." Among those factors are: the character of the governmental action, its economic impact, and its interference with reasonable investment-backed expectations.

FACTS:

Respondent pesticide manufacturer applied for a license to sell and distribute various insecticides with petitioner U.S. Environmental Protection Agency. As part of the application process, respondent submitted various data and trade secrets, on which petitioner relied when considering other manufacturer's applications. Petitioner enacted regulations that would make respondent's trade secrets public and respondent filed suit, arguing that publishing its trade secrets would constitute a "taking," and it was entitled to just compensation. The lower court held that respondent was entitled to file suit for compensation under the Tucker Act. On appeal, the court reversed holding that a suit could be filed for only the portion of its trade secrets in which it had a "reasonable investment-backed expectation."

ISSUE:

Are trade-secrets property rights protected by the Taking Clause of the Fifth Amendment?

ANSWER:

Yes.

CONCLUSION:

The Court held that trade secrets were property that was protectable under the U.S. Const. amend. V, Taking Clause. The Court determined, however, that trade secrets were entitled to compensation only when there was a "reasonable investment-backed expectation," and found that only a portion of the data submitted was entitled to protection. The Court concluded by stating that petitioner was able to file suit under the Tucker Act for compensation, and therefore, refused to order just compensation under the U.S. Const. amend. V, Taking Clause.

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