Appeals Court Panel Rules Los Angeles Business Owner Not Entitled to Compensation After SWAT Team Destroys Shop; Owner Will Ask Full Court to Review

LOS ANGELES—Today, a panel of the 9th U.S. Circuit Court of Appeals ruled an innocent business owner whose business was destroyed by a SWAT team in 2022 is not entitled to compensation for the raid. NoHo Printing & Graphics Owner Carlos Pena, represented by the Institute for Justice (IJ), will ask the full court to rehear the case. 

In today’s ruling, a majority of the panel held that “public necessity,” such as getting a criminal off the streets, is an exception to the Fifth Amendment’s requirement that the government pay just compensation when it destroys someone’s property. 

“Getting a dangerous criminal off the streets is a legitimate function of the government, but if it must destroy innocent people’s property in that process, the innocent person should be left holding the bag,” said IJ Senior Attorney Jeffrey Redfern. “We’ll ask the full court to hear this case and make it clear that if the government breaks it, the government must buy it—even if what they were doing was a public necessity.”  

Carlos has owned NoHo Printing and Graphics for more than 30 years. In August 2022, a fugitive threw Carlos out of his shop and barricaded himself inside. Police arrived on the scene, surrounded the building, and began the raid, causing tens of thousands of dollars in damage and lost profits. After both Carlos’ insurance company and the city refused to pay for the damage, in July 2023, he teamed up with IJ to sue.  In March 2024, the lower court ruled Carlos was not entitled to compensation under the Fifth Amendment, leading him to appeal the case to the 9th Circuit. 

“I know the police had to get the criminal off the streets, but it’s unfair that I’m forced to pay for the damage they caused,” said Carlos. “I’m going to keep fighting in court to make sure what happened to me doesn’t happen to anyone else.”  

IJ is the nation’s premier defender of property rights. In June 2022, a jury ruled that the city of McKinney, Texas must pay nearly $60,000 to a woman whose home was destroyed by a SWAT team, following IJ’s lawsuit. IJ is also litigating a case on behalf of an innocent Indiana family whose home was destroyed by a SWAT team. Last year, IJ won a victory at the United States Supreme Court for a Texas rancher whose property was flooded by the government after it built a concrete barrier along a highway.