[co-author: Nathan Ferris]
A ruling from the U.S. Supreme Court this week may have altered the landscape of takings claims by expanding the scope of physical takings. Since the landmark case of Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), landowners claiming that a government regulation amounted to a taking had to show that the regulation went “too far” under a multi-factor balancing test. But on June 23, the Supreme Court held that “[w]hen a regulation results in a physical appropriation of property, a per se taking has occurred, and Penn Central has no place.”
The case involved a California labor regulation that allowed union organizers to “take access” of an employer’s property for up to three hours a day, 120 days per year. Two produce growers sought an injunction after members of the United Farm Workers union entered (or tried to enter) the growers’ property to speak to workers. The Supreme Court held that the access regulation is a taking because it “appropriates a right to invade the growers’ property.” The opinion reversed decisions by the trial court and the Ninth Circuit, which had held that the regulation was not a per se physical taking because it did not allow permanent and continuous access. Instead, the lower courts held that the farmers’ claim was really for a regulatory taking, which should be analyzed under Penn Central’s multi-factor balancing test.
The Supreme Court disagreed. It drew a distinction between physical taking and regulatory takings. The “central question” is “whether the government has physically taken property for itself or someone else—by whatever means—or has instead restricted a property owners’ ability to use his own property.” Writing for the majority, Chief Justice Roberts explained that it does not matter “whether the government action at issue comes garbed as a regulation (or statute, or ordinance, or miscellaneous decree).” In other words, if there is a physical appropriation, the Penn Central test does not apply.
Three dissenters—Justices Breyer, Sotomayor, and Kagan—worried this distinction may sweep in many takings claims that were previously analyzed under Penn Central. The dissenters gave examples “ranging from examination of food products to inspections for compliance with preschool licensing requirements.” They argued that “large numbers of ordinary regulations” that “permit temporary entry onto . . . a property owner’s land” may be deemed per se physical takings.
The case is Cedar Point Nursery v. Hasid, No. 20-107. The opinion is here.
The Ballard Spahr Eminent Domain team will continue to monitor how this case affects regulatory takings claims. We are happy to assist if you have any Eminent Domain issues.
