Amicus Brief: King v. United States

In 2014, Congress passed a law allowing solvent pension funds to rewrite contracts under which they owed money to retirees, widows, and widowers whose rights to payment had vested years earlier. Private pensions had to go through a long voting process to rewrite vested pensions. As a result, some vested pensions were diminished by as much as $1,000 a month. In a long litigation, including some intervening statutes, a large class was certified of those who had not received the full amount of their vested pensions. They claimed that the government had "taken" their vested pensions in violation of the Fifth Amendment.

The Court of Federal Claims ruled that it was neither a physical taking (like when a house is taken to build a road) nor a regulatory taking (when property is regulated enough to be "taken"), and because it couldn't fit in one of those two boxes, it wasn't a taking at all. Now the plaintiffs are asking the Supreme Court to hear the case. The Manhattan Institute and Professor Richard A. Epstein have filed a brief in support of the Supreme Court reviewing the case. We argue that the Federal Circuit's decision illegitimately tries to force a financial taking into a category where it doesn't belong. Because the pensions were vested when they were altered, the taking occurred when a contract was essentially rewritten. It has long been a rule that contractual rights are a form of property, but the lower court ignored that principle. The Court should take the case to clarify how contractual rights fit into the Takings Clause of the Fifth Amendment.

Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Richard A. Epstein is the Laurence A. Tisch Professor of Law at New York University School of Law and a visiting scholar at the Manhattan Institute.

Trevor Burrus is a legal policy fellow at the Manhattan Institute.

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