In a 6-3 opinion written by Chief Justice John Roberts, Cedar Point Nursery v. Hassid, __ U.S. __ (2021) (Case No. 20-107), the Supreme Court issued a major property rights decision in favor of landowners in a case addressing California labor union organizing laws that allow union organizers “access” to agricultural employees on employers’ private property.  But despite popular media accounts, the case is only nominally about labor laws.  Instead, it is principally about takings under the Fifth and Fourteenth Amendments, and it confirms that governmental entities may not force landowners to allow unwanted third parties to trespass on their private property.  In the clear words of the Court, “[w]henever a regulation results in a physical appropriation of property, a per se taking has occurred, and Penn Central has no place.”

As we have written in several prior posts, at 5:00 a.m. in the summer of 2015, during California’s strawberry harvesting season, union activists entered Cedar Point Nursery’s property in reliance on the California Agricultural Labor Relations Act.  The statute allows union organizers to enter the property of agriculture businesses for three hours at a time, 120 days per year, to recruit potential new members.  The organizers entered the nursery’s trim sheds with bullhorns in hand, distracting and intimidating hundreds of Cedar Point employees who were in the midst of preparing young strawberry plants for shipment.  During the same summer, the organizers also attempted to enter the property of Fowler Packing Company, a family-owned grower and shipper of fresh produce.  Fowler denied access and was charged with violating the access regulation.

Cedar Point and Fowler responded to the disruption of their businesses by challenging California’s labor regulation as a violation of the Constitution’s Fifth Amendment, which bars the government from taking private property without compensation.

Under the Supreme Court’s takings cases, the government commits a physical taking when it uses its power of eminent domain to condemn property, when it physically takes possession of property without acquiring title to it, and when it occupies property.  These sorts of physical appropriations are the “clearest sort of taking,” and the Court has long assessed them using a simple, per se rule requiring the government to pay for what it takes.

But under the Court’s more recent cases governing use restrictions, “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.”  To determine whether a use restriction effects a taking, the Court generally applies the flexible test developed in Penn Central Transportation Co. v. New York City, balancing factors such as the economic impact of the regulation, its interference with distinct investment-backed expectations, and the character of the government action.

The Eastern District Court of California ultimately rejected the growers’ argument that the access regulation constituted a per se physical taking, reasoning that it did not “allow the public to access their property in a permanent and continuous manner for whatever reason.”  In the court’s view, the regulation was instead subject to evaluation under Penn Central.  A divided panel of the Court of Appeals for the Ninth Circuit affirmed, but the Supreme Court reversed and remanded.

The Court majority—Chief Justice Roberts and Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett—relied on a line of physical takings cases to broadly hold that “government-authorized invasions of property—whether by plane, boat, cable, or beachcomber—are physical takings requiring just compensation.”  And the Court reasoned that “[t]he essential question is not . . . whether the government action at issue comes garbed as a regulation [but rather] 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.”  With the framing, the Court held that “[t]he regulation appropriates a right to physically invade the growers’ property—to literally “take access.” . . . It is therefore a per se physical taking under our precedents.”

The majority also recognized certain limitations to its clear general rule, such as conditions on the grant of a benefit such as a permit or license on allowing access for reasonable health and safety inspections and longstanding background restrictions on property rights such as prohibitions against nuisances.

Justice Breyer filed a dissenting opinion (joined by Justices Sotomayor and Kagan), focused on the notion that “the majority’s conclusion threatens to make many ordinary forms of regulation unusually complex or impractical.”  California’s labor regulation does not “appropriate” anything, according to the dissent, because the access it grants union organizers does not amount to any traditional property interest in land; it regulates the employer’s right to exclude others: “[H]ere we have a right that does not allow access at any time.  It allows access only from ‘time to time.’  And that makes all the difference.”

The Court majority rejected the dissent’s “distinctive view of property rights,” including its premise that the regulation cannot amount to a per se taking because it allows “access short of 365 days a year.”  The majority noted that the right to exclude is “one of the most treasured” rights of property ownership and reasoned that “[t]here is no reason the law should analyze an abrogation of the right to exclude in one manner if it extends for 365 days, but in an entirely different manner if it lasts for 364.”

The majority also explained that while the property rights protected by the Takings Clause are creatures of state law, no one disputes that the growers would have had the right under California law, without the access regulation, to exclude union organizers from their property.  Because the access regulation took that right from them, the state cannot absolve itself of takings liability by appropriating the growers’ right to exclude in a form that is a “slight mismatch” from state easement law.  Under the Constitution, property rights “cannot be so easily manipulated.”

The majority further explained that its own understanding of the role of property rights in our constitutional order is markedly different from that of the dissent and it could not 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” that cannot be balanced away.

The Court majority agreed with John Adams, who wrote that “[p]roperty must be secured, or liberty cannot exist.”  And as the Court itself recently stated in 2017 in Murr v. Wisconsin, “protection of property rights is ‘necessary to preserve freedom’ and ‘empowers persons to shape and to plan their own destiny in a world where governments are always eager to do so for them.’ ”  Under Cedar Point Nursery, government-sanctioned physical invasions of private property are categorically compensable under the Takings Clause.