In times of crisis, governments do things that fall outside—sometimes far outside—the norm and reduce or destroy the value of resources held by firms and individuals. Aggrieved owners may then sue the government, arguing that they are entitled to relief because the public action complained of amounts to a taking of their property. The financial crisis of 2008 and its aftermath have generated a cascade of such lawsuits, including highly publicized ones involving equity holders of Fannie Mae, Freddie Mac and American International Group, Inc.

Although derided as frivolous by some, a number of these suits have shown real staying power. That means that the Takings Clause of the Fifth Amendment to the U.S. Constitution (“[N]or shall private property be taken for public use, without just compensation”) has emerged as an important vehicle for evaluating government action during and after the 2008 financial crisis.

Julia D. Mahoney, Takings Claims in the Aftermath of the Financial Crisis, Harvard Law School Forum on Corporate Governance & Financial Regulation Blog (April 8, 2016).