In the comedy film “Dumb and Dumber,” the two main characters, played brilliantly by Jim Carey and Jeff Daniels, trek across the country to return a briefcase that they believe was mistakenly left at an airport by a beautiful woman. On the way, they discover that the briefcase is full of cash, and agree that it is important that they return the money. Unbeknownst to them, the money was a ransom for the return of a kidnapping victim, and in the climax of the film, Carey and Daniels’ characters are forced at gunpoint to open the briefcase by the kidnappers.

Out of the brief case tumbles hundreds of slips of paper, marked simply “I.O.U.” “What is this? Where’s all the money?” asks one of the criminals. “That’s as good as money, sir. Those are I.O.U’s.”

While this scene is funny, it speaks to a broader point of justice. If you are going to borrow money, you ought to be prepared to pay it back. This is the point enshrined in the takings clause of the 5th amendment of the U.S. Constitution which declares in part, “nor shall private property be taken for public use, without just compensation.”

In other words, if the government needs to confiscate property for an important public purpose, it must compensate the owner for the loss. In Dumb and Dumber, the characters did not have a particularly persuasive reason to spend the money, but the U.S. government has faced a number of pressing public challenges that required the confiscation of private property.

For instance, during World War Two, the government acquired more than 20 million acres of land to build defense plants and other essential war facilities. After the war, the government knew that both as a matter of economic necessity and as a matter of national security, we needed to build an interstate highway system connecting the country, coast-to-coast. To facilitate the mammoth undertaking it engaged in more than 750,000 separate takings of private property.

Examples of the federal government taking property abound. Even NASA benefited from government takings of private land; the Cape Canaveral launch site was originally taken from private ownership in order to help the space race.

In each of these cases, the government’s actions were an understandable response to an urgent public need, and the individuals whose land was taken were compensated. While every property owner was not perfectly satisfied, the government generally made a good-faith effort to pay owners a fair market value for their property in cold hard cash, rather than vague IOUs.

This stands in stark contrast to public takings throughout history. Roman emperors, feudal lords, even the British monarchy in colonial America, could take property without just compensation. It was in part due to these experiences that the 5th amendment was added to the Bill of Rights. The principle established by the takings clause is clear; sometimes property must be taken for an important national need, but owners must be fairly compensated for their losses.

In the midst of the financial crisis of 2008, such a need was made apparent; without quick action, the national economy could collapse. The government took a number of emergency actions, including the now-infamous bailouts of some of the largest financial institutions in the country. But we allege it also engaged in massive public takings under the 5th amendment.

As the government rushed to loan funds to major financial institutions in order to prevent them from becoming insolvent, it took the opposite tact with two private, shareholder-owned companies, Fannie Mae and Freddie Mac.

Fannie and Freddie fulfilled a crucial need in the market for mortgages in the United States, buying mortgages and mortgage-backed securities from other financial institutions and guaranteeing them for investors. The companies had originally been established by the government, but had since been privatized, raising capital and issuing stock like any other publicly traded company.

Unlike many other financial institutions, Fannie and Freddie had largely avoided the riskiest subprime loans and mortgage-backed securities built on that debt. However, beginning in 2001, Congress and regulators took steps that encouraged the companies to take on more and more questionable assets, including subprime loans.

Despite these actions, both companies had less exposure to toxic assets than did other financial institutions. However, as the financial crisis worsened, the government decided to place both companies into conservatorship, effectively nationalizing them.

In quite possibly the most lopsided loan arrangement of all time, the government would be given senior preferred shares and the right to purchase up to 80 percent of the companies at a price of $.00001 per share. These actions, while perhaps necessary as part of a broader plan to save the global economy, made the common stock held by shareholders effectively worthless overnight.

One would assume, then, that the government compensated stockholders for their losses. After all, their property was effectively made worthless by the government’s actions, actions that were admittedly necessary to save the economy. However, in this instance, the government did not compensate shareholders, which is why we have now filed a lawsuit on their behalf.

We think that the government’s actions were effectively a taking under the 5th amendment. Except instead of taking land or physical goods, the government seized financial assets by devaluing the common stock held by investors. Investors have not been compensated for that taking, and have instead been forced to write off nearly their entire investment in Fannie and Freddie as a complete loss.

We are confident that we will prevail in this case. The constitution is on our side, and we suspect that the government ultimately will agree with us that a stack of IOU slips is not sufficient in this case; real compensation must be given.