For the past 45 years, California’s Agricultural Labor Relations Board (ALRB) has promulgated a regulation requiring producers of agricultural products to give union organizers access to their property.  Access is limited to four 30-day periods per calendar year.  Organizers can access the property one hour before start of work, one hour after end of work, and one hour over the lunch break.  In 1976, the California Supreme Court held that the regulation did not constitute a taking of producers’ property.

The United States Supreme Court recently granted a petition for certiorari in a case challenging the ALRB’s regulation.  In 2016, two producers sued the ALRB, primarily on the theory that the regulation established an easement over their property for the benefit of union organizers and hence constituted a per se physical taking, requiring compensation.  The District Court dismissed the complaint and a divided panel of the Ninth Circuit affirmed.  Over a strong dissent by eight judges, the Ninth Circuit denied rehearing en banc.

The growers argued that the regulation was a per se taking because it allowed a permanent physical invasion of their property.  The panel opinion rejected that theory, because the alleged invasion was not “permanent and continuous.”  Rather, it was limited to three hours a day for not more than 120 days per year.  The opinion also held that the right to exclude others was merely one strand in the bundle of property rights.

The dissent argued that the relevant Supreme Court precedents were cases involving the National Labor Relations Act (NLRA).  The key precedent here is NLRB v. Babcock & Wilcox, a 1956 opinion holding that the employer must allow union representatives onto its property if, but only if, the circumstances of employment made it impossible for reasonable union efforts to communicate with the employees.  Because the producers’ employees did not reside on premises, the growers argued that the union could easily contact them after hours.

The producers’ petition largely ignored Babcock & Wilcox.  Its principal argument was that the Ninth Circuit had adopted a bright-line test that no taking occurs unless the easement allows “random members of the public to unpredictably traverse their property 24 hours a day, 365 days a year.”  That holding contradicts the Federal Circuit opinion in Hendler v. United States holding that “permanent physical occupation” does not require the occupation to be “continuous and uninterrupted.”  In Hendler, the D.C. Circuit found that the government had taken an easement when it periodically entered on plaintiffs’ land to service some pollution detection wells installed on the property.

The petition also asserted that the issue was likely to arise in many more future cases than in the past, due to the Supreme Court’s recent ruling in Knick v. Township of Scott.  Before Knick, property owners alleging a taking by a unit of state government had to sue in state court before they could seek relief from federal courts.  The res judicata effect of the state litigation meant that federal review was rarely possible.  With the demise of the state limitation requirement, federal courts will face substantially more lawsuits over takings.

The petition also argues the practical consequences of the Ninth Circuit’s holding.  The Supreme Court has held that the right to exclude others is a fundamental element of the bundle of sticks that make up a property right.  Under the Ninth Circuit’s approach, the petition argues, the stick becomes a twig.

The Ninth Circuit’s continuous use rule would, petitioners argue, make it entirely too easy for a unit of state government to evade its obligation to pay just compensation for a taking.  The state could limit the easement solely to daylight hours.  Or it could limit a beach access easement only to the months of May through October.

The state’s response stressed that the limits on the rights of access afforded to union organizers:  no more than three hours a day for no more than 120 days.  They are also limited to non-working areas of the premises.  The opposition argues that the case defining physical taking, Loretto v. Teleprompter Manhattan, dealt with television cables permanently attached to the premises; and Loretto refers to a permanent physical occupation of property.  It also asserts that a case involving a beachfront easement, Nollan v. California Coastal Commission, also requires a permanent and continuous right to passage i.e., round-the-clock passage.

The opposition argues that Hendler  is readily distinguishable because the wells the government installed on plaintiffs’ property were permanent.  The periodic visits by government employees to service the wells were ancillary to that taking.  The opposition cites Boise Cascade Corp. v. United States, a subsequent Federal Circuit case, which found no taking in the occasional trespasses by government employees to investigate the habitat of spotted owls.

The opposition asserts that Knick is irrelevant, because state courts have long been adjudicating these kinds of claims and petitioners point to no inconsistent state decisions.

The Court’s takings jurisprudence is by no means clear, and we regard this as a fairly close case.  The Ninth Circuit’s holding that only an easement in use 24/7 can satisfy the permanence requirement is clearly too broad and makes it far too easy for governments to evade payment of just compensation.

We think the key to the outcome is a close reading of Nollan.  The Nollans owned oceanfront property which they desired to develop.  The Coastal Commission approved their development plans contingent on the grant of an easement allowing the public to cross their property on the ocean side of their seawall.  The Court held that this constituted a taking requiring just compensation.

Justice Scalia’s majority opinion did hold that a permanent physical occupation occurred when the public was given “a permanent and continuous right to pass” over the Nollan’s property “so that the real property may continuously be traversed.”  Contrary to ALRB and the Ninth Circuit, that did not mean the easement was available for use 24/7.  As Justice Brennan’s dissent observed, depending on the weather or the season, “public passage for a portion of the year would either be impossible or would not occur on appellant’s property.”

Our sense is that the Court will find that the access rule does amount to a taking.  If a union were to fully exercise its rights under the rule, it could occupy petitioners’ private property for 360 hours a year, 20% of a normal work year.  Moreover, the rule allows access for four months out of the year for each set of union organizers, so if more than one union exercised its rights, the easement conceivably could last much longer than just four months.  Even with these limitations, the regulation itself is permanent.  That seems to us like a permanent easement even if it is not used every day of the year.

We also anticipate a fairly narrow opinion.  Some critics of the Court’s decision to hear the case have worried that it might allow property owners to exclude governmental health and safety inspectors.  We think that such inspections are much more like Boise Cascade than the ALRB’s regulation, temporary and episodic and intruding on property for far less time than the ALRB regulation.

Some commentators have also suggested that a ruling for the producers would jeopardize governmental efforts to impose safety standards on buildings such as earthquake protection or fire alarms and sprinkler.  Those requirements fall under the much looser category of regulatory takings, not physical takings such as an easement.

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