On June 23, 2021, the United States Supreme Court held in a 6-3 ruling written by Chief Justice John Roberts in Cedar Point Nursery v. Hassid, 592 U.S. ___ (2021) (Opinion), that a California regulation that grants labor organizations a “right to take access” to an agricultural employer’s property in order to solicit support for unionization by requiring the employer to allow union organizers onto their property for up to three hours per day, 120 days per year, constitutes a per se physical taking under the Fifth and Fourteenth Amendments that warrants just compensation.
The decision is definitely controversial. One pro-property rights professor declared that “Americans across the political spectrum have reason to be happy the Court denied the government sweeping power to mandate uncompensated invasions of private land.” (Ilya Somin, “Supreme Court’s Cedar Point property rights decision protects both sides,” The Hill (June 23, 2021)(link).) However, other commentators are deeply concerned about the problems that could arise after Cedar Point:
[This decision] opens a Pandora’s box of terrible possibilities by casually throwing out decades of regulatory takings precedent in favor of an extremist, potentially limitless view on the rights of property holders. And it will be decades before most people even realize how much damage was done here. (Elie Mystal, “Yesterday’s Union-Busting Supreme Court Decision Was a Segregationist Throwback,” The Nation (June 24, 2021)(link).)
Or, as another commentator opined: “With Cedar Point, the Supreme Court has handed business owners a loaded gun to aim at every regulation they oppose.” (Mark Stern, “The Supreme Court’s Latest Union-Busting Decision Goes Far Beyond California Farmworkers,” Slate (June 23, 2021)(link).)
This article examines the factual and procedural background of the Cedar Point case; the Court’s takings law prior to the decision; the holding issued by the Court and responses by the dissent; and the potential implications of the majority opinion on the ability of governmental entities to access private property for a variety of reasons.
II. Factual and Procedural Background of Cedar Point.
The California Agricultural Labor Relations Act of 1975 (“Act”) gives agricultural employees a right to self-organization and makes it an unfair labor practice for employers to interfere with that right. (Labor Code §§1152, 1153(a).) Based on the self-organization rights of employees under the Act, the Agricultural Labor Relations Board (“Board”) promulgated a regulation that provides “the right of access by union organizers to the premises of an agricultural employer for the purpose of meeting and talking with employees and soliciting their support.” (8 Cal. Code Regs. §20900(e)(1).) That regulation allows a labor organization to “take access” to an agricultural employer’s property for up to four 30-day periods in one calendar year. (8 Cal. Code Regs. §§20900(e)(1)(A)–(B).) Two organizers per work crew (plus one additional organizer for every 15 workers over 30 workers in a crew) may enter the employer’s property for up to one hour before work, one hour during the lunch break, and one hour after work. (8 Cal. Code Regs. §§20900(e)(3)(A)–(B), (4)(A).) Organizers may not engage in disruptive conduct, but are otherwise free to meet and talk with employees as they wish. (8 Cal. Code Regs. §§20900(e)(3)(A), (4)(C).)
Plaintiff Cedar Point Nursery is a strawberry grower in northern California that employs over 400 seasonal workers and around 100 full-time workers, none of whom live on the property. Plaintiff Fowler Packing Company is a Fresno-based grower and shipper of table grapes and citrus that has 1,800 to 2,500 employees in its field operations and around 500 in its packing facility. None of Fowler’s workers live on the premises.
Believing that the union would likely attempt to enter their property again in the near future, these plaintiff growers filed suit in U.S. District Court against several Board members in their official capacity. The growers alleged that the access regulation effected an unconstitutional per se physical taking under the Fifth and Fourteenth Amendments by appropriating without compensation an easement for union organizers to enter their property. The growers requested declaratory and injunctive relief prohibiting the Board from enforcing the regulation against them. The District Court denied the growers’ motion for a preliminary injunction and granted the Board’s motion to dismiss on the ground that the access regulation was not a per se physical taking because it did not “allow the public to access their property in a permanent and continuous manner for whatever reason.” A 2-1 panel of the Court of Appeals for the Ninth Circuit affirmed. By a sharply divided vote, the full Ninth Circuit denied rehearing the matter en banc. The U.S. Supreme Court granted certiorari.
III. Overview Of Supreme Court Takings Law Prior To Cedar Point.
The Takings Clause in the Fifth Amendment provides “nor shall private property be taken for public use, without just compensation.” (U.S. Const. amend. V.) The Takings Clause is made applicable to the States through the Fourteenth Amendment. (Chicago, B. & Q. R. Co. v. Chicago, 166 U.S. 226, 241 (1897).) It does not prohibit the taking of private property, but instead is designed “to secure compensation in the event of otherwise proper interference amounting to a taking.” (First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 314-315 (1987).)
The “paradigmatic” taking that requires just compensation is a “direct government appropriation or physical invasion of private property.” (Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005).) That category of “physical takings” cases “requires courts to apply a clear rule.” (Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 323 (2002).)
The Court has also recognized “regulatory takings” that may be compensable under the Fifth Amendment. The original statement comes from Justice Holmes, who wrote in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922): “[I]f regulation goes too far it will be recognized as a taking.” The Court has recognized four (4) different theories under which a government regulation may be challenged under the Takings Clause.
Two types of regulatory takings are deemed per se takings. Those are (1) where government requires an owner to suffer a permanent physical invasion of her property (see e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435-438 (1982)); and (2) where regulations “completely deprive an owner of ‘all economically beneficial us[e]’ of her property.” (Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992).)
For regulatory actions that do not involve those two per se takings, the Court has applied two other alternative approaches. The first non-per se approach to regulatory takings is the factored analysis in Penn Central Transportation Co. v. New York City, 438 U.S. 104, 124 (1978), where courts examine the economic impact of the regulation, the extent to which it interferes with investment-backed expectations, and the character of the governmental action. (See e.g., PruneYard Shopping Center v. Robins, 447 U.S. 74, 83 (1980).) In the majority opinion in Cedar Point, Chief Justice Roberts noted that “this Court has generally applied the flexible test developed in Penn Central” to determine “whether a use restriction effects a taking.” (Emphasis added.) (See also Lingle v. Chevron U.S.A., supra, 544 U.S. 538-539 [Penn Central factors are “the principal guidelines for resolving regulatory takings claims that do not fall within the physical takings or Lucas rules” (emphasis added)]; Palazzolo v. Rhode Island, 533 U.S. 606, 633 (O’Connor, J., concurring) [“Our polestar instead remains the principles set forth in Penn Central itself and our other cases that govern partial regulatory takings” (emphasis added)]; Koontz v. St. Johns River Water Management District, 570 U.S. 595, 621 (2013) (Kagan, J., dissenting) [“[c]laims that government regulations violate the Takings Clause by unduly restricting the use of property are generally ‘governed by the standards set forth in Penn Central Transp. Co. v. New York City, 438 U.S. 104, (1978)’” (citations omitted)(emphasis added).])
The second non-per se approach to regulatory takings involves the heightened standard of review in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994). Under Nollan/Dolan, “a unit of government may not condition the approval of a land-use permit on the owner’s relinquishment of a portion of his property unless there is a ‘nexus’ and ‘rough proportionality’ between the government’s demand and the effects of the proposed land use.” (Koontz v. St. Johns River Water Management District, supra, 133 S.Ct. at 2591.) The factored analysis in Penn Central is considered more favorable to the government, while the Nollan/Dolan scrutiny is generally more deferential toward property owners.
IV. The Court Holds In Cedar Point That California’s Access Regulation Is A Per Se Physical Taking.
The key issue in Cedar Point was which takings analysis should be applied to determine whether the challenged access regulation constituted a taking under the Fifth Amendment. The District Court, the Ninth Circuit and Justice Breyer (in dissent) held that the Penn Central factored analysis should apply. The majority disagreed. Writing for the majority, the Chief Justice explained that the “essential question” is:
whether the government has physically taken property for itself or someone else – by whatever means – or has instead restricted a property owner’s ability to use his own property. [Citation.] Whenever a regulation results in a physical appropriation of property, a per se taking has occurred, and Penn Central has no place.
The Chief Justice reasoned that “[o]ur cases establish that appropriations of a right to invade are per se physical takings, not use restrictions subject to Penn Central.” He further explained:
The access regulation appropriates a right to invade the growers’ property and therefore constitutes a per se physical taking. The regulation grants union organizers a right to physically enter and occupy the growers’ land for three hours per day, 120 days per year. Rather than restraining the growers’ use of their own property, the regulation appropriates for the enjoyment of third parties the owners’ right to exclude.
The Chief Justice stated that the “right to exclude” is “‘one of the most treasured’ rights of property ownership,” “is ‘a fundamental element of the property right,’ and is ‘one of the most essential sticks in the bundle of rights that are commonly characterized as property.’” Thus, he concluded, “government-authorized invasions of property … are physical takings requiring just compensation.”
Contrary to the Ninth Circuit and the dissent, the majority in Cedar Point held that the access regulation was a taking even if the appropriation of the property owners’ access right was not permanent or continuous. The Chief Justice explained:
The government here has appropriated a right of access to the growers’ property, allowing union organizers to traverse it at will for three hours a day, 120 days a year. The regulation appropriates a right to physically invade the growers’ property – to literally “take access,” as the regulation provides. Cal. Code Regs., tit. 8, §20900(e)(1)(C). It is therefore a per se physical taking under our precedents.
The Chief Justice added that “we have held that a physical appropriation is a taking whether it is permanent or temporary,” and “we have recognized that physical invasions constitute takings even if they are intermittent as opposed to continuous.”
The majority rejected the argument that latitude toward temporary invasions is a practical necessity for government in our complex modern world. The Chief Justice responded: “With regard to the complexities of modern society, we think they only reinforce the importance of safeguarding the basic property rights that help preserve individual liberty, as the Founders explained.”
In dissent, Justice Breyer was joined by Justices Kagan and Sotomayor, and argued that the access regulation “does not ‘appropriate’ anything; it regulates the employers’ right to exclude others.” Justice Breyer added:
[O]ur prior cases make clear that the regulation before us allows only a temporary invasion of a landowner’s property and that this kind of temporary invasion amounts to a taking only if it goes “too far.” See, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 434 (1982). In my view, the majority’s conclusion threatens to make many ordinary forms of regulation unusually complex or impractical.
The dissent argued that there must be a permanent right of access or occupation, rather than a temporary limitation on the right to exclude, before a per se taking automatically arises. Justice Breyer concluded that “[a] regulation that provides temporary, not permanent, access to a landowner’s property, and that does not amount to a taking of a traditional property interest, is not a per se taking. That is, it does not automatically require compensation. Rather, a court must consider whether it goes ‘too far’ under the Penn Central analysis.” He added: “[M]ost government action affecting property rights is analyzed case by case under Penn Central’s fact-intensive test.”
V. Implications Of The Court’s Decision On Various Governmental Demands For Access To Private Property.
In dissent, Justice Breyer considered “the large number of ordinary regulations in a host of different fields that, for a variety of purposes, permit temporary entry onto (or an ‘invasion of’) a property owner’s land.” The majority opinion addressed that consideration, and the warnings from the defendant Board that treating the access regulation as a per se physical taking will endanger a host of state and federal governmental activities involving entry onto private property. The responses to those warnings in the majority opinion provide a dimly-lit window into how the Court may respond in future cases to at least four types of government demands for access to private property.
A. Private Property Opened To The Public.
First, the majority distinguished PruneYard Shopping Center v. Robins, supra, 447 U.S. 74, which held that there was no compensable taking where the California Constitution protected the right to engage in leafleting at a privately owned shopping center. Chief Justice Roberts rejected the argument expressed by the dissent that PruneYard shows that limited rights of access to private property should be evaluated as regulatory takings rather than per se takings. His rationale was that, unlike the growers’ properties in this case, the property in PruneYard “was open to the public.” He explained: “Limitations on how a business generally open to the public may treat individuals on the premises are readily distinguishable from regulations granting a right to invade property closed to the public.” In that context, the Chief Justice cited Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 261 (1964) as “rejecting [the] claim that provisions of the Civil Rights Act of 1964 prohibiting racial discrimination in public accommodations effected a taking,” where the Act was authorized by the Commerce Clause power. In Heart of Atlanta, the Court relied, inter alia, on Legal Tender Cases, 79 U.S. 457, 551 (1870), which held that congressional acts authorizing the use of paper money as the legal tender in the payment of all debts were not prohibited under the Fifth Amendment, because the Takings Clause “has always been understood as referring only to a direct appropriation, and not to consequential injuries resulting from the exercise of lawful power,” and because the Takings Clause “has never been supposed to have any bearing upon, or to inhibit laws that indirectly work harm and loss to individuals.”]) An open question after Cedar Point is whether that “direct appropriation” vs. “consequential injuries” dichotomy will play a part in future cases involving government access to private property.
The majority in Cedar Point certainly made a significant distinction between private property that is “closed to the public” and private property that is “generally open to the public” in determining whether a governmental appropriation of the right to invade is a compensable per se taking. That distinction may address the concern of some commentators that the case before the Court threatened “to blast a giant hole through the heart of anti-discrimination law,” including federal law that forbids “stores, restaurants and other public accommodations to refuse service on the basis of a customer’s race,” and state laws that “protect LGBTQ persons from similar discrimination.” (Aaron Tang, “Just one Supreme Court case could blow up unions, child protection and anti-discrimination law,” The Washington Post (March 18, 2021)(link ).) However, the difference between a private property that is “closed to the public” and “generally open to the public” may not be altogether clear, and will certainly be explored in future cases.
B. Trespasses v. Takings.
Second, Chief Justice Roberts addressed physical invasions by government onto private property that amount to a trespass, rather than those that constitute a taking, and reaffirmed that the Court was not jettisoning the “traditional trespass-versus-takings distinction.” The distinction rests on the governmental intent. The Chief Justice not only distinguished “isolated physical invasions, not undertaken pursuant to a granted right of access,” but also quoted Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. 327, 329-330 (1922), as follows: “‘[W]hile a single act may not be enough, a continuance of them in sufficient number and for a sufficient time may prove [the intent to take property]. Every successive trespass adds to the force of the evidence.’” (Brackets in original.) In Cedar Point, the Chief Justice held that there was no “mere trespass” because the access regulation “grants a formal entitlement to physically invade the growers’ land.” Thus, it appears that, under the majority’s view, the more often the government causes a physical invasion of private property, even without a formal determination of an intent to invade, the more a taking will exist since the evidence points to an intent on the part of the governmental entity to enter onto private property. The dissent was not convinced. Justice Breyer asked: “[W]hat will count as ‘isolated’? How is an ’isolated physical invasion’ different from a ‘temporary’ invasion, sufficient under present law to invoke Penn Central? And where should one draw the line between trespass and takings?” That ambiguity and line-drawing will need to be clarified in future cases.
C. Traditional Common Law Privileges Exception.
Third, the majority in Cedar Point recognized that “many government-authorized physical invasions will not amount to takings because they are consistent with longstanding background restrictions on property rights.” The court mentioned “pre-existing limitation[s] upon the land owner’s title,” “abat[ing] a nuisance” on the property, as well as traditional common law privileges such as public or private necessity, arresting or enforcing the criminal law under certain circumstances, and reasonable government searches that are consistent with the Fourth Amendment and state law. According to the Chief Justice, there was no such limitations here because “no traditional background principle of property law requires the growers to admit union organizers onto their property.” However, Justice Breyer asked “[j]ust what are [traditional common law privileges]?” He further asked: “Do only those exceptions that existed in, say, 1789 count? Should courts apply those privileges as they existed at that time, when there were no union organizers? Or do we bring some exceptions (but not others) up to date, e.g., a necessity exception for preserving animal habitats?” Justice Breyer is correct in pointing out the ambiguity in the majority’s “traditional common law privileges” exception. The question then, is how narrowly will the majority apply that exception in future cases. Certainly the Chief Justice’s strong position regarding the importance of the property right here will play a part in the answer to that question. He wrote:
We cannot agree that the right to exclude is an empty formality, subject to modification at the government’s pleasure. On the contrary, it is a “fundamental element of the property right,” [citation], that cannot be balanced away. … With regard to the complexities of modern society, we think they only reinforce the importance of safeguarding the basic property rights that help preserve individual liberty, as the Founders explained.
D. Access As A Condition Of Receiving “Certain Benefits.”
Fourth, Chief Justice Roberts also explained that “the government may require property owners to cede a right of access as a condition of receiving certain benefits, without causing a taking.” He includes “benefit[s] such as a permit, license, or registration on allowing access for reasonable health and safety inspections.” In such situations, the government must satisfy the heightened scrutiny of “essential nexus” and “rough proportionality” under Nollan/Dolan. The Chief Justice explained: “When the government conditions the grant of a benefit such as a permit, license, or registration on allowing access for reasonable health and safety inspections, both the nexus and rough proportionality requirements of the constitutional conditions framework should not be difficult to satisfy.” The access regulation here is unlike standard health and safety inspections because the regulation “is not germane to any benefit provided to agricultural employers or any risk posed to the public.” Thus, the Chief Justice’s discussion appears to limit the “certain benefits” language to benefits enjoyed by the property owner, and not general benefits for society as a whole. That is consistent with the majority’s application of the Nollan/Dolan scrutiny to cases falling within that “benefits” exception. However, ambiguities remain. Justice Breyer asked in dissent: “[W]hat is the scope of the phrase ‘certain benefits’?” He notes that “[m]yriad regulatory schemes” based on benefits “depend upon intermittent, temporary government entry onto private property.” Therefore, Justice Breyer further asks: “So, if a regulation authorizing temporary access for purposes of organizing agricultural workers falls outside of the Court’s exceptions and is a per se taking, then to what other forms of regulation does the Court’s per se conclusion also apply?” Thus, significant ambiguities remain after Cedar Point regarding the constitutionality of temporary access for government inspectors to perform health and safety inspections that are designed to protect workers or renters that are invited onto the private property by the property owner (even if the general public is not allowed), where the “benefit” to the property or its owner is not readily apparent, and where the inspections are designed to protect those workers and renters. Future caselaw will need to flesh out that ambiguity.
By tying the right of access to a permit or license that satisfies Nollan/Dolan, the Court may alleviate the alarm that some commentators had that the outcome in Cedar Point could threaten “state laws that permit child protection inspectors to make unannounced home visits” or hamper “nursing home visits and food safety inspections.” (Tang, supra.) Prior to the decision being issued, unions and others had argued that “ruling for the businesses could threaten regulations that allow the government to access private property to conduct workplace health and safety inspections, among other things.” (Kate Cimini, “Supreme Court limits California union recruiting in favor of property rights,” CalMatters (June 24, 2021)(link).)
After the Court’s decision was issued, one commentator stated that the decision nevertheless “undermines the broader legal framework that permits the government to impose all manner of regulations on private property, including workplace safety laws and nondiscrimination requirements.” (Stern, supra.) Other commentators exclaimed that the ruling “could make it more difficult for the government to allow temporary access” in areas other than union organizers seeking to reach workers. (Ariane de Vogue and Veronica Stracqualursi, “Supreme Court rules California must pay private businesses to allow union access,” CNN (June 23, 2021)(link).) Nikolas Bowie, Assistant Professor of Law at Harvard University, similarly opined: “Antidiscrimination laws ‘take’ employers’ ‘right to exclude’ workers of color, pregnant workers, and LGBTQ+ workers. Antiretaliation laws ‘take’ employers’ ‘right to exclude’ whistleblowers and workers who complain of harassment. Fair housing laws ‘take’ landlords’ ‘right to exclude’ renters of color, families, and renters with vouchers. Rent control laws ‘take’ landlords’ ‘right to exclude’ renters unable to afford market rates. Endangered species laws ‘take’ landowners’ ‘right to exclude’ conservationists. Environmental laws ‘take’ landowners’ ‘right to exclude’ inspectors who are needed to enforce their restrictions.” (Bowie, Niko [@nikobowie] Twitter, June 23, 2021 (link).)
Those examples cited by such commentators may include private property that is open to the public, and may include scenarios in which there are “certain benefits” that are provided by the governmental agency in exchange for which the private property owner must allow access to the property, provided the access that is demanded satisfies the heightened scrutiny under Nollan/Dolan. However, in cases where third parties are invited on to the property by the owner but the property is still not considered ‘open to the public,’ such as single-family or multi-family housing or employment on private property, will a future Court conclude that involuntary government inspections involve restrictions on the “use” of private property that are governed by the factored analysis in Penn Central? The decision in Cedar Point is not clear.
These exceptions to the general rule that were described by the Chief Justice in Cedar Point significantly limit the impact of the Court’s holding that “appropriations of a right to invade are per se physical takings, not use restrictions subject to Penn Central.” However, even Professor Ilya Somin, who believes that “Cedar Point is a major step forward for constitutional property rights,” recognizes that the scope of the exceptions listed by the Chief Justice to its holding “isn’t entirely clear and will likely be a subject of future litigation.” (Somin, supra.)
Defending the “right to exclude” others from private property as “‘one of the most treasured’ rights of property ownership” and “‘one of the most essential sticks in the bundle of rights that are commonly characterized as property,’” the majority in Cedar Point held that “government-authorized invasions of property … are physical takings requiring just compensation.” However, many questions remain about the scope of the holding in the decision. The case certainly opens up new questions regarding the legality of many government inspection regimes involving private property.
Glen Hansen is Senior Counsel and Daniel Cucchi is Senior Associate at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.