A cancer survivor who won a court battle to force a Texas city to pay up after SWAT wrecked her house while chasing an armed fugitive has been dealt a new blow by a federal appeals court.

The 5th Circuit Court of Appeals ruled last month that it was necessary for police to use armored vehicles, explosives and toxic gas to resolve a July 2020 standoff in Vicki Baker's home and that she should not be compensated for the damage, reversing an earlier federal court ruling.

Lawyers from the Institute for Justice, which represents Baker, have asked the court for a re-hearing and are prepared to appeal to the Supreme Court if necessary. 

Vicki Baker looks at photos of the damage to her McKinney, Texas home.

A SWAT team destroyed Vicki Baker's McKinney, Texas, home in July 2020. Despite a federal jury ruling the city owes her nearly $60,000, Baker hasn't received a dime yet. (Courtesy Institute for Justice)

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Baker had retired to Montana during the summer of 2020 and the sale of her house in McKinney, Texas, was almost final. Baker's adult daughter was at the home on July 25 when a handyman Baker had hired two years earlier stormed in with a teenage girl he had kidnapped.

Baker's daughter fled the house and called police while Wesley Little stayed inside with the 15-year-old girl and a backpack full of guns.

Police surrounded the home. Little eventually released the teen, but refused to surrender, telling police he "had terminal cancer, wasn’t going back to prison, knew he was going to die, [and] was going to shoot it out with the police," according to the 5th Circuit ruling.

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So a SWAT team moved in, smashing Baker's brand-new fence, firing dozens of tear gas canisters through the walls, windows and roof, and using what Baker described as a "bomb" to blow off the garage door. The goal, police later told her, was to confuse their target.

"They call it shock and awe," Baker previously told Fox News.

Little had already killed himself by the time police entered the house. 

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Most of Baker's personal possessions had to be thrown away because they were soaked with tear gas. Her daughter's Chihuahua was in the house during the assault and was left blind, deaf and so sick that he eventually had to be put down, Baker said.

Baker's insurance policy, like most, excludes damage caused by the government, so she tried to file a property damage claim with the city. Officials refused to pay, citing qualified immunity, a doctrine often used to shield police and other government agencies from being sued for violating people's rights during the course of their work.

So she sued the city with the help of the Institute for Justice, which argued police seized Baker's home under the Takings Clause, just like with eminent domain when the government might take someone's home to build a road. Her lawyers argued the city had a right to seize the property, but that Baker should be fairly compensated.

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The city offered to pay "the full amount of damages" to settle the case during a pre-trial conference, according to court records. But Baker's team refused to settle unless the city also changed its policy so homeowners "wouldn't have to file lawsuits to get compensation in the future," Institute for Justice attorney Jeffrey Redfern told Fox News.

A federal judge ultimately agreed Baker should be compensated, and a jury awarded her $59,656.59 in damages.

But the city appealed and an Oct. 11 decision from the 5th Circuit reversed the previous ruling.

"As a matter of history and precedent, the Takings Clause does not require compensation for damaged or destroyed property when it was objectively necessary for officers to damage or destroy that property in an active emergency to prevent imminent harm to persons," the court wrote.

But the city never claimed in court that such a necessity justified an exception to pay for damage, meaning Baker's lawyers didn't have the opportunity to argue against it. As a result, the Institute for Justice is asking the court to re-hear the case and plans to appeal to the Supreme Court if the 5th Circuit declines, according to a spokesperson.

Cancer survivor Vicki Baker looks at the camera, wearing a blue shirt, earrings, and a pearl necklace

A federal judge ruled that Vicki Baker should be compensated for the "taking" of her home during a police standoff, but the 5th Circuit Court of Appeals reversed that ruling. (Courtesy Institute for Justice)

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The city of McKinney is pleased with the ruling which "upholds a longstanding legal precedent that protects McKinney taxpayers from having to pay property damages arising from lawful police actions," a city spokesperson told Fox News in an email.

"The Court found that the McKinney PD did everything proper in the Baker case," the statement continued. "At the same time, the City recognized the unique effects on Ms. Baker when it offered her the full amount of her damages. Regrettably, she rejected the City’s offer."

Redfern said Baker will still get paid eventually, because she won her first court case under both the U.S. Constitution and the Texas Constitution. The appeals court's reversal only applies to her Fifth Amendment claim.

"It will have to wait until the case is totally over, but at least interest accrues while the judgment is unpaid," Redfern told Fox News. 

If the appeals court reverses course and sides with Baker, it would create a split decision with the 10th Circuit in Colorado, which previously ruled local police did not have to compensate a man whose house was destroyed during a gun battle between officers and a shoplifting suspect.